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The Internet of Things is undermining product-based business models, according to Daniel Delorge (2/2)

The Internet of Things started out as a RFID chip that was put on the products. This communicates information pertaining to time and location to other objects. With this kind of data, the refrigeration service provider will be, for example, collecting data on when their consumers consume their refrigeration service, where they consume it, and what their consumption habits are.  There’s a real question on who owns the data.

Daniel Delorge
Daniel Delorge


I/ Who owns the data: the supplier of the consumer?

Today, there seems to be a consensus on the fact that the company generating the data owns the data. But this may change, according to Daniel. He thinks that in the future, data ownership will belong to the consumer. In other words, data will belong, not to the one that generates the data, but to the consumer.


II/ Examples of the Internet of Things

In any case, the refrigeration service provider may analyze the consumer generated data regarding the consumption of refrigeration services. They may very well approach to consumer with an original value proposition, such as: “we know you consume our services at a specific time, at a specific location, and we think that we could bring more value to you with a personalized service”. If the consumer really sees value in the new service, he may well decide to buy it.


Here’s another example of a value proposition based on the Internet of Things. Let’s imagine that the service provider deals with electricity. Collected data shows that the consumer gets home at a specific time on a daily basis. In the past, consumers would have had to purchase all kinds of products for electricity. These products may include lamps, TVs, and every other product that needs electricity to work in house.


Now the service provider will have access to all electrical related data. Thus, he may come up to the consumer with a value proposition that reads something like:

  • “We notice that your consumption habits are A and B.
  • We believe that we could help you decrease your consumption of electricity by 20%.
  • And we can offer you a service that will help you decrease your consumption.
  • This will help you reduce the cost of your electricity bill, and will take a percentage on your savings”

In this example, both consumers and the service provider are in a win-win relationship. And, it’s very possible that the consumer would decide to go ahead and purchase such a novel service.


So, these are the kinds of new business models that may be created in the future. Companies will migrate from a product-based business model to a service-based business model. The enabler of such a change is the Internet of things. It will provide data which, if properly analyze, may bring more value both to the consumer and the service provider.


This concludes a conversation I had with Daniel Delorge



Further readings:

  • For a great blog, on the Internet of Things, please refer to this blog, this one and this one
  • For a definition of the Internet of Things, please refer here and here



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