How Will “Internet of Things” Change Business Models Forever?

Back to Blog  •  Posted on December 29, 2014 by admin


Internet_of_Things

Several trends of the present will govern how the Internet of Things–or IOT–changes business models in the future. Not long ago, each machine was different. The TV performed one function, while the radio performed another. With each passing year, the various functions of past machines are being consolidated. Newer devices do more.

We can already purchase Blue-tooth enabled light bulbs that double as speakers. We can already purchase elaborate home security and climate control systems operated from our smartphones. For the majority of human history, any business could be successful if it performed a specific function better than its competition. But we’re quickly transitioning into a society wherein success is dependent on a company’s ability to perform more than one function.

The IOT requires both the versatility of those businesses and the versatility of our devices. When it has both, it will change the world at a rapid pace.

The End of the Search Engine

Right now, we browse the internet with a mouse and keyboard. We use our touch-screen smartphones when a computer is unavailable. With the advent of information-based software such as Siri, Google Now, and Cortana, the search engine as we know it will become less viable for online advertising. After all, the Amazon Echo has escaped the prison of the smartphone in order to find a place on kitchen-tops and coffee tables. Soon this transition will become more pronounced, and we’ll start to do our online shopping by speaking directly with our devices instead of tapping away at the keyboard.

Google is the search engine king, but not for long. When people no longer perform traditional searches for information, Google will slowly become obsolete. After all, the information is already out there and companies like Amazon will find that markets no longer seek a computer to go online as they once did. Google will therefore likely need to find its own products and services in order to stay viable to these new markets. In the future, Google may become the king of AI software instead.

The Future Business Model of the IOT

Certain product lines will be connected to a specific company’s AI program. For instance, the car service Uber might be called via the Amazon Echo while Lyft might be summoned from Google’s version. Netflix could be on one; Hulu on another. Services accessible to your home might be decided by which company you support. Different companies will be competing for a pool of the most widely used services until a single winner rises to the top and monopolizes everything.

Right now, massive companies like Facebook, Google, Microsoft, and Apple are all in a mad dash to acquire artificial intelligence. How the IOT develops, and which business models are adopted in the future, is largely dependent on which company wins that race. Who will reign supreme over the IOT? Only time will tell.