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Imagine developing a groundbreaking Internet of Things (IoT) solution. You’ve invested months, if not years, and significant resources into designing and building your dream product and can’t wait to bring it to market.
Developing a product, however, is only half the battle; now, you need to monetize it. Even if your solution makes it into the hands of customers, your company may not be in a position to become profitable.
While tried and true, the traditional model of selling a product doesn’t always work, especially for IoT solutions that require ongoing support, updates, maintenance and more. It’s an all-too-common reality for countless organizations, ranging from startups to global enterprises.
So why do some IoT solutions thrive while others never even take off? I contend that, for many, it’s not about having a secret sauce. Instead, they should find their secret SaaS.
SaaS (Software as a Service) can help companies that are actively searching for ways to monetize IoT solutions and better serve them in an easy-to-use format.
Already a key part of the enterprise development stack, SaaS is particularly suited to IoT due to its ability to combine the benefits of customer experience and continuous data capture to generate recurring revenue streams, allowing business owners to quickly monetize new solutions and satisfy end-users.
But SaaS is not a simple plug-and-play environment. When leveraging it for IoT, organizations must identify if it is right for them, and what implementation challenges to expect.
SaaS is a full-service model that requires the right market fit and addresses the needs of customers, often for simplicity. Merely slapping a recurring monthly fee onto an existing product is not SaaS.
The growth of technologies like cloud has made SaaS and the IoT easier to deploy and far more accessible to end-users, reducing upfront risk. It’s a big reason why a large percentage of business apps used today are SaaS-based.
With SaaS, businesses can build brand loyalties and expand markets using curated services while supporting rapid scale and continuous development—all with less overhead and lower capital expenditure upfront for the customer. Additionally, SaaS requires less onboarding and training than previous models, allowing organizations to shorten their sales cycles and expedite new deployments. Some organizations even have reduced time-to-launch and time-to-customer usage when utilizing SaaS.
Finding the fight fit
SaaS may not be the right fit for all IoT solutions. To help understand where and how to use SaaS effectively, it helps to see why most traditional legacy models fail to fulfill the needs of the IoT. Sales processes can take too long to implement, and customer support can also be a challenge—particularly when the resulting product is too complex to deploy, integrate and use. It’s also much harder to keep track of individual licenses, which in turn hampers the ability to support continuous releases and updates.
If deploying a SaaS environment helps alleviate, or eliminate, most or all of these problems, this is probably a sign to move forward.
Overcoming implementation challenges
There will be challenges to devising an optimal SaaS environment, but most of these can be resolved with planning.
On the technology side, most legacy solutions are not optimized for SaaS, so making the transition will likely require an entirely new technology architecture, which can often lead to unexpected complications. A working IoT platform requires broad, seamless interaction between multiple systems if it hopes to deliver a high-quality user experience, and this is difficult to do with legacy services.
To avoid SaaS environments falling victim to improper planning, projects must be lean, carefully considered and phased in properly. Otherwise, the resulting setup can be different and more expensive from what was first envisioned.
On the business side, SaaS must be optimized around creating services that are easy to use, provide incremental value and are delivered by software. This can be unsettling for many organizations and may require the creation of an entirely new business model that disrupts longstanding practices.
With proper planning, however, organizations have been able to significantly reduce development. Once the determination has been made that SaaS is the right model, there’s no reason for delay.
Opportunities to increase revenues and market share are short-lived in the IoT, so the fortunes belong to those who can optimize services, incorporate value-added tools and capabilities, and foster integration with other services already in production.
For those thinking that they still need to maximize their return on legacy service models, the fact is that it’s never too late to transition to SaaS, particularly when it comes to supporting forward-leaning, next-generation services.
—Max Nirenberg is Chief Revenue Officer and managing director for North America at Commit USA.