Arrow Electronics: The Biggest IoT Innovator You’ve Never Heard Of

The thing about IoT, says Anderson, is that it’s growing in previously unimagined ways. With all this new data comes new possibilities. Companies like Arrow have made IoT innovation more accessible to not only large corporations, but also small-scale innovators of the type found on Kickstarter and Indiegogo.

So how does Anderson describe the difference between a transactional customer and a solutions-based subscriber?

“I think at Arrow a customer is someone who buys a component or who buys a piece of technology that could make a data center,” says Anderson. “I think a subscriber is someone who is really interested in relationship with Arrow that is solving a specific problem and that could look like a subscription to monitoring. It could look like a subscription to one of our ‘data as a service’ capabilities or it could like somebody who has asked us to come along actually do design work for them.”

Anderson goes on to note that subscription-based businesses enable a lot more players in the innovation market, simply because they are able to build products that don’t cost a lot up-front. As long as they can continue to make their subscriber base happy, they can invest more money more in innovation and continue the virtual cycle.

Arrow’s founders probably wouldn’t have envisaged a future where entire segments of their product catalog would be treated as a loss leaders! Many of their customers give their new integrated products away for free, in order to kick-start smart, mutually-beneficial subscription-based relationships.

As Anderson notes, when you put sensors on everything you create data about everything. And that lets you charge in completely different ways: “For instance if you had a pacemaker that had sensors in it you could charge for a subscription for heartbeats! If you had shoes that had sensors in them you could charge for how many kilometers do you want to walk per month! Those kinds of business models never existed before.”

Today the IoT is making every single industry and every single company a potential subscription business model participant. “If you are a fan of innovation, you are fundamentally a fan of the subscription economy,” says Anderson.

Originally published at www.zuora.com.