As a result, we'll see that the IoT will cause businesses to alter the relationship they have with their customers by transitioning from selling products to customers to selling services to users.
This is a fundamental shift in the vendor/buyer relationship. What was once effectively a "one-off" sale with a more reactive relationship through service warrantees and "best guesses" on when someone would need servicing, now becomes a service-oriented relationship where the vendor is working in real-time with product data. This will fundamentally change the relationship into a service cooperative so the customer's needs are anticipated and fulfilled resulting in an elevated experience. Besides adding features and value to the existing item, the IoT will present opportunities to sell additional services, which will drive incremental revenue and further solidify the relationship with the customer.
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Just as with the Internet we know, there will be a coming together of platforms and standards that make interoperability between manufacturers possible. Right now, there are some IoT fiefdoms forming as different platforms and products compete for customer acceptance. For example: Lowe's and Staples have both come out with their own line of connected home products, including lighting, door locks and security systems, as have independents like the Nest thermostat. And while all of these will compete for mindshare and market share, there will be a coming together that enables these "silos" to talk to each other. In fact, on December 9, 2013, the AllSeen Alliance was announced. Members of the alliance have pledged to use a common protocol that will enable disparate products to talk to communicate and inter-operate. Whether or not this brand new initiative will be successful remains to be seen, but the need is clear. There will be winners and losers in the race toward the IoT, but in general, lots of business boats will be lifted. Just look at the Internet we all know right now: there are almost infinite products and services competing, but they do so on a common technological playing field that ensures openness, innovation and new sources of revenue. The IoT is no different and we'll start to see it play out in a big way in 2014.
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What kind of products will we see connect to the IoT in 2014? We've already mentioned some consumer examples that are on the market now and will gain traction in the new year. In addition, there will be interesting specialized, light industrial and business-to-business applications such as blood-sugar readers that can track the history of your blood sugar, baby jammies that can measure if a child is maintaining a high enough body temperature and getting enough oxygen, irrigation systems that only turn on when and where crops need watering, connected Biomedical refrigerators in labs that automatically dispense reagents and restock themselves as needed, smart parking spaces that will show you an open spot right away, energy-monitoring solutions that ensure your office is energy efficient. The possibilities are limitless.
The Internet of Things can enable any business, large or small, existing or emerging to transform itself into services that provides a previously unheard of combination of results: increasing the bottom line while delighting customers like never before.
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— By Michael Simon
Michael Simon is the CEO of LogMeIn. Follow LogMeIn on Twitter @LogMeIn.