Where is the value potential of IoT? — Zuora

In other words, the explosion in smart connected devices is forcing organizations to change and consider new business models. In some cases, companies are giving away their physical product as part of a complete subscription-based offering. When packaged and connected, that offering (consisting of a product, software, training, consumables, support, etc.) represents a very different business model. Having the ability to support subscriptions with allocations for usage or outcomes is increasingly becoming an imperative .

If you are wondering how real this is, look no further than Apple’s recent announcement that it’s now essentially offering monthly subscriptions for a new iPhone every year. While some people are undoubtedly doing the math on the lifetime cost of their phones, many more of us are saying “finally.” No more negotiation of a bi-annual contract with my carrier for a subsidized plan, most of which I don’t understand.

What is really at stake here is the relationship, and Apple seeking to improve the digital experience of all of its customers. The company and its stockholders are well aware that 40% of all iPhones still in use are more than three years old. This represents a customer satisfaction problem and an opportunity to reach out with an improved experience. The question all product companies should be asking is: can this model work for us? Can a similar model help develop a better customer relationship? Cupertino seems to think so.