IoT: Turning Products into Services

To meet the expectations of today’s customer, companies must move beyond products into services — from a product experience to a subscription experience. They have to create services that can learn and adapt based on behavior. Services that can improve themselves autonomously. Services that can be truly customized.

Sure, there will always be an actual physical object involved, but the point isn’t to ask “What can an Internet–enabled device do?” but rather “What do customers really want, and how can I deliver that as an intuitive service, rather than a stand-alone product?”

Nestisn’t just a thermostat remembers your heating patterns after a week, it’s a central nervous system for your house that tells you when particulates are in your air, or raccoons are in your yard. An Autonet Mobile connected car isn’t just a vehicle with a 4G connection and a map (something you can get with your phone, anyway). It’s a diagnostic system on wheels that tells your garage to schedule an emissions-level check or lets you know when your teenager is driving too fast.

The next eighteen months will see a tectonic consumer shift towards connected devices, from automobiles to homes to wearables. To meet the demands of today’s consumer, companies will need a clean break from their old product-based business models. They will need to reinvent themselves as subscription-based platforms.

There will be as many failures as successes, and here at Zuora we’re very excited to be right in the middle of it. We’re having conversations with some of the best and biggest manufacturing companies in the world. Because ultimately IoT is not just about extending a product’s capabilities. It’s about creating a world where a product is not a product — it’s a service. Arrow did it. Lowe’s did it. And trust us, many others are coming.

Originally published at www.zuora.com.