io t commerce how to sell an app on four wheels

IoT Commerce or How to sell an App on four wheels?

Michael VaxPrincipal Product Managerhybris, SAP Company

Image: heimarck.com/wp-content/uploads/2015/01/Tesla-Roadster-Interior-2016-Wallpaper-Car.jpg

IoT Products

are Different

RequireDifferent Business Models

NeedDifferent

Commerce Tools & Systems

You are in s/w business

“If you went to bed last night as an industrial company, you’re going to wake

up this morning as a software and analytics company.”

Jeff Immelt, CEO of General Electric, Minds+Machines summit, 2014

What OS Version is Your Car?• For Tesla the current OS version is 7.0

• Tesla has been updating vehicles through software downloads since 2012

• 7.0 adds new autopilot features that allow the car to stay in its lane, change lanes, and parallel park itself.

• This feature is in public Beta

• Auto-park in garage is on the roadmap for 7.1

• https://teslaos.github.io/ - open sourced on GitHub

CC BY-SA 2.0 Flickr

https://secure.flickr.com/photos/d_vdm/14748932994/sizes/l

CONSOLE SOFTWARE 2.29 - APRIL 8, 2015New Feature: Set-Top Box Sync Technology Discover SE consoles are now fully compatible with the largest selection of Cable TV, Satellite TV and IPTV set-top boxes in the fitness industryCONSOLE SOFTWARE 2.28 - JANUARY 12, 2015New Lifescape Virtual Courses including Panama Ride, Costa Rica Waterfall and Artentine Patagonia, BlueTooth heart rate monitors now compatible Apple Inc. products can now connect via BlueTooth to transfer workout data to the LFconnect app and use the device as a secondary workout displayCONSOLE SOFTWARE 2.27- AUGUST 19, 2014Bug fixes and performance improvements for all Discover SE & SI Tablet Consoles, and support for the FlexStrider Variable-Stride Trainer.CONSOLE SOFTWARE 2.26 - JULY 15, 2014Bux fixes and performance improvements for all Discover SE & SI Tablet Consoles, and support for the PowerMill Climber CONSOLE SOFTWARE 2.25 - MAY 27, 2014Flipboard added to on-console apps on Discover Tablet console (English Only) – app must be turned on in the systems configuration settings Welsh language added to Lifescape courses and on-demand content screens CONSOLE SOFTWARE 2.24 - MARCH 25, 2014Bluetooth data exchange for Android devices using LFconnect app Welsh Language added CONSOLE SOFTWARE 2.23 - JANUARY 23, 2014PaoFit, BullTrainer, Cardio Legend, and Kinomap images now included in the mobile app section on the console Stream Netflix, etc. from iPhone

Backend s/w

Frontend s/w

Partner Ecosystem

Adding Services

PRODUCT PRODUCT + SERVICE

+

For IoT Product We Know how it is Used

Che

ckou

t

?

For IoT Product We Know how it is Used

Che

ckou

t

From Mass Production to Mass Personalization

IoT Products

are Different


NeedDifferent


Subscriptions

PRODUCT PRODUCT + SERVICE

+

√Subscribe

Multiple Degrees of Business Model Innovation

BUY-ONCE PRODUCTS

PRICE

SUBSCRIPTION PRODUCT

PAY-NOW PRICE

FREE TRIAL

RECURRING PRICE

SUBSCRIPTION TERMS

USAGE PRICES

ENTITLEMENTS

NO

X MONTHS

NO CONTRACTS

X YEARS

Your potential customer base

One Subscription Plan is not enoughPr

ice

$

$$

$$$

Your potential customer base

One Subscription Plan is not enough

• Prime user base

Pric

e

$

$$

$$$

• Advanced users

• Occasional users

Consumption-based pricing is going

mainstream

Pay as you drive

Citroen offers a novel “pay-per-use” option with the C4 Cactus.

Source: europe.autonews.com/article/20140312/ANE/140319975/0/SEARCH

Insurance – Pay as you Drive

Source: https://www.metromile.com/blog/uber-driver-insurance-ab2293/

Cross-sell

Image from Essential Hospitality

Cross-sell based on order history

+ Usage Data

Image source: community.arm.com/

Cross-sell for IoT

Affiliates

Schedule Service & Part Replacement

Included Subscription for Detergent with 3 months free trial

period

Suggest Replacement

Machine

Advertise new Fabric Softener

http://www.fastcoexist.com/3039725/this-insurance-company-pays-you-to-walk

Turning Data into $$$$

Loyalty program - Rewarding Purchase

IoT Loyalty Program – Reward Usage

For calories burned

For energy saved

For miles driven and trips

shared

For every wash

Monetizing Partner Ecosystem

connected devices are point-of-sale for e-commerce, search boxes and app stores for services, and ideal place for discovery of a

purchase intent.

Product as a Platform

The value of your platform to a partner and the likelihood of their developing to it is directly proportional to the amount of business the partner is able to capture through

the platform. http://pragmaticmarketing.com/resources/becoming-a-platform

IoTProduct

API

SDK

Dev. Community

Revenue Sharing

With different ways to monetize their

solutions IoT makers can now afford

a negative BOM (bill of materials), by

subsidizing the cost of hardware

with the revenues from bundled

services

IoT Products

are Different


NeedDifferent


Flexible Catalog

SERVICES DIGITAL PRODUCTS

PHYSICAL PRODUCTS

Bundles

MULTIPLE PRODUCTS

PRODUCT + SERVICE

DIGITAL & PHYSICAL PRODUCTS

FLEXIBLE PRICING

PAY-NOW PRICE

FREE TRIAL

RECURRING PRICE

SUBSCRIPTION TERMS

USAGE PRICES

ENTITLEMENTS

NO

X MONTHS

NO CONTRACTS

X YEARS

Term frequency & length Renewal type Cancelation

SUBSCRIPTION TERMS Frequency Cycle type Cycle day

BILLING CYCLE PLAN


Subscriptions

Flexible Pricing & Subscriptions


• One time price(s)• Recurring prices• Consumption based prices

Subscriptions – Recurring Prices


• Multiple periods:• Free trial first month - $0• From 2nd to 4rd month - $5 • $3 afterwards

Subscriptions – Consumption Based Prices


• Usage Units:• API Calls• Km Driven• Customer accounts

• Multiple Tiers:

$15

$10

$5

1-30 Users

30-100 Users

100+ Users

Subscription Billing & Management

SUBSCRIPTION BILLING PROVIDERS

Billing & Payments• Recurring billing• Usage based billing• Billing frequency• Billing date• Middle cycle upgrades &

cancelation• Financial reporting and revenue

recognition• Different payment methods



Account Management• Billing account• Payment details• CC Expirations• Change payment method• Billing history



Subscription Management• Active subscriptions and terms• Subscription renewal• Upgrade / Downgrade• Cancelation• Pause/Resume• Self-Management

“THE INTERNET OF THINGS (IOT) IS TURNING MANY MANUFACTURERS OF "THINGS" INTO

FIRST-TIME SOFTWARE VENDORS THAT NEED LICENSING AND ENTITLEMENT MANAGEMENT

(LEM) SOLUTIONS”GARTNER, INC.

ENTITLEMENT IS A RIGHT TO ACCESS A BENEFIT OR SERVICE

ENTITLEMENT CAN BE

METERED - 20 GB of storage- 100 km free

OR NON-METERED- Access to a premium feature

Entitlements as a Link Between Products & Services

ONSITE MAINTENANCE EACH QUARTERACCESS TO KNOWLEDGEBASETRAINING FOR 3 EMPLOYEES

WARRANTY PREMIUM FEATURES

PRODUCT SERVICESENTITLEMENTS

SmartDevice

Services

Entitlements as a Link between Products & Services

PRODUCT SERVICESENTITLEMENTS

2 free appointments with Personal Trainer

Consultation with Dietitian

Access to Premium Reports

Entitlement Grants

Customer Support

Online shop

Marketing Campaign

Third Party Systems

GRANTS

Access Control & Metering

ACCESS CONTROL & METERING SYSTEM

USER HAS USED X…

Subscription Billing

USAGE DATA

GRANT/REVOKE ENTITLEMENT

Online Store Analytics

DOES USER HAS RIGHTS TO Y?

EXTERNAL SYSTEMS

Manage Entitlement

s

Order Orchestration

Shipment

Service

Download

Entitlements

EXTERNALSYSTEMS

Customer Support

Remote Monitoring

Replacement Parts

Service

Selling Additional Products & Services

Marketplace to Support Product as a Platform Model

Partners

Publish to MP

Revenue(x%)

Buy Partner’s Product

Buy device

Platform Owner

Customers

Marketplace

THANK YOUGetting in touch:

[email protected] de.linkedin.com/in/michaelvax

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