Monetizing The Internet of Things: Creating a Connected Customer Experience

Rich Becker, Industry Solutions

Today’s Presenters

Rich Becker IoT Solutions and Strategy Leader

Chris Kuntz VP, EcoSystem Programs

ThingWorx  is  the  1st  Applica4on  Pla6orm  for  the  Connected  World™  –  one  that  combines  the  key  func4onality  of  Web  2.0,  social  media  and  Connected  

Intelligence™,  and  applies  it  to  any  process  that  involve  things.    

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Rela4onship  Business  Management  

Agenda 1.  Introductions 2.  The “Shift” to Subscriptions

3.  IoT – Market Trends & Impact on Product Companies 4.  IoT – Harnessing the Shift

5.  Subscriptions & Connected Products Monetization Strategies

6.  Q&A

We build modern, flexible and easy to use enterprise software (RBM) that enables

companies to manage all aspects of their relationship with their subscribers

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Rela4onship  Business  Management  

6.8 Billion potential subscribers on mobile, social and web.

71% of consumer spend will be on access, not ownership.

By 2018,

- 2014 McKinsey Global Media Report

The world has shifted to the Subscription Economy

Customers today have new expectations

Personal Real-Time Immediate fulfillment

On Going Value

Memorable Services

consumer goods

communication

healthcare Internet Of Things

technology

education music entertainment

Every industry is

shifting

Winners are delivering the Subscription Experience

Personal Real-Time Immediate fulfillment

On Going Value

Memorable Services

Relationships start with with the “Subscriber Identity”

Name Email Twitter

TRADITIONAL RECORD

SUBSCRIBER IDENTITY RECORD

Phone Company Facebook

Purchases Products Local Pricing Promotions Adjustments

*Usage metrics (outcome based billing) *Add-Ons, Associated Products or Provisioned Assets *Service Requests, Inquiries, Exchanges *Service Programs *Consumables, Training, & Programs

Payment history Refund history Lifetime Value Renewal Value Aging balance

The Subscription Experience Requires Relationship Business Management

Commerce Billing Finance

RBM

Transformational across a business

5 Clicks 4 Hours 3 Days < 180 Days

Change Pricing Send 3M Bills Shorten Close Launch New Product

Pricing flexibility Operational Scale Revenue Automation Technical Agility

CMO COO CFO CIO

Payment Gateways

Taxation

Mediation

Provisioning

Relationship Business Management (RBM) Ecosystem

BILLING FINANCE

Recurring & Usage Rating Taxation

Intuitive, Accurate Invoices Global Payment Collections

Revenue Recognition Accounting Close

GL Integration Reporting

COMMERCE

Product Catalog Quotes and Guided Selling

Commerce APIs and Checkout Pages Subscriber Lifecycle Management

PTC IoT is

Transforming Every Industry

consumer goods

communication

healthcare transportation technology

public safety wearables entertainment

IoT is transforming

every industry

New Capabilities of Smart, Connected Product

New Capabilities of Smart, Connected Products

VALUE REDEFINED

HARDWARE

SOFTWARE

EMBEDDED

CLOUD

PRODUCT

SERVICE

Improve Customer

Experience

Leverage data from connected

products for improved service,

support and usability

Optimize Business

Processes

Combine real-time data with

existing systems to increase efficiency

Differentiate Offering

Increase pace of product and

service innovation

New Revenue Streams

Unlock new business models and realize new

value-add opportunities

$ Value is Created with New Capabilities

© 2014 ThingWorx

Communications Elements

Internet Mobile Networks

Device Clouds

Wireless Provisioning

The Network

Connect

Application Enablement

BUSINESS LOGIC 3D STORAGE

ENGINE

REST APIs

SERVICE INTEGRATION

COMMUNICATIONS

MASHUP BUILDER SQUEAL 3RD PARTY TOOLS

Sensors, Devices & Smart Products Enable

Apply

Applications

Cloud  Services   Business  Systems  

Value IoT Solution Framework

© 2014 ThingWorx

Communications Elements

Internet Mobile Networks

Device Clouds

Wireless Provisioning

The Network

Connect

Application Enablement

Subscriptions Selling a Service Usage-based Billing Service Contracts

Cloud  Services   Business  Systems  

BUSINESS LOGIC 3D STORAGE

ENGINE

REST APIs

SERVICE INTEGRATION

COMMUNICATIONS

MASHUP BUILDER SQUEAL 3RD PARTY TOOLS

Sensors, Devices & Smart Products Enable

Apply

Monetize

Zuora: Subscription Billing Platform

IoT App Store

•  Accelerates platform

adoption through global sharing of IP

•  Improve IoT solution time-

to-market through application “assembly”

•  Creating additional

revenue streams for Apps, Extensions, etc.

NEW CAPABILITIES OF SMART CONNECTED PRODUCTS The way products create value is changing

VALUE REDEFINED Improved customer experience and differentiated offerings

IoT SOLUTION FRAMEWORK CAPTURES VALUE Technology platform purpose-built for IoT with App Dev and Marketplace tools to drive value

Creating Value from the Internet of Things

PTC: Smart

Connected Products

IoT Infrastructure, Solution, Case

Studies

Joy Mining is a worldwide leader in high-productivity mining solutions that manufactures and markets original equipment and aftermarket parts and services for the mining industries.

Deployment results:

•  Anticipate equipment failures & efficiently respond to problems reducing equipment downtime

•  Optimize mining processes with new analytics to reduce the cost of resources & increase production

•  Manage the overall mining operation on behalf of the mine owner. Transition from pay per product to pay per tonnage of earth mined

“The future gains in productivity will come from system improvements, not just the product itself. This requires smart connected product systems that can monitor and optimize the full system performance.”

– Ted Doheny CEO, Joy Global

Innovation: Joy Global Transforms Business Model

All Traffic Solutions is the leading manufacturer of signs used by police departments and local governments to help understand and manage traffic.

Results:

•  Delivered an innovative solution for law enforcement professionals called the TraffiCloud

•  Faster time to market •  Rapid development of mobile UI •  Advanced data mining that All Traffic can now

offer its customers

“ThingWorx’s rapid application development environment and scalable platform allows us to extend our solution and deliver new services to our customers in ways that were previously impossible.”

– Scott Johnson CEO, All Traffic Solutions

Innovation: All Traffic Captures New Revenue Streams

 Usage-­‐based  Billing  

 Usage-­‐based  Billing  

Monetization Strategies

Subscription-Based Strategies & Case Studies

The Internet of Things

Connected Home

Connected Consumer Devices

Connected Car

Enterprise / Industrial Devices

•  Smart Energy, Utilities

•  Security, Surveillance

•  Automation & Control

•  Appliances •  Routers, Gateways

•  Telematics, Emergency

•  Fleet Management

•  Insurance, Tracking

•  Infotainment Head unit

•  Wearables •  Person, Pet

Tracking •  Health, Medical •  eReaders, Frames •  Gaming consoles

•  ATM, Vending •  POS, Digital

Signage •  Enterprise

Tracking •  Hand Held

Terminal •  Retail Kiosks, PoS •  Intelligent Digital

Signage

IoT

App Store

After Market

4 Monetization Strategies

Box

Data

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The “Box” strategy

Strategy 1:

S m a l l B o x

•  Design product •  Sell product •  Market price

Old World •  Design platform •  Consumer driven choice •  Revenue model

New World

B i g B o x

•  Design equipment •  Sell, install, train,

deploy •  T&M for service •  Bill for consumables •  Service Contracts

Old World •  Design platform •  Outcome based billing •  Consumables, service &

training based on outcome metrics & personalied programs

New World Box

What we learned from Life Technologies

From equipment provider to genomics as a service provider

Science is very close to a vaccine for malaria

Subscriptions are a major win for scientists

Favorite feature: Ability to have rate plans that include a bundled cost for hardware

Old Way

New Way

•  Equipment Cost •  Services •  Training •  Upgrades, etc.

Capital Equipment OEM Manufacturing

Opportunity? •  Cost/test •  Improve Flexibility •  Optimize Supply Chain

New Experience & Optimized Costs

Real Revenue Impact!

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The “App Store” strategy

Strategy 2:

Hardware + SW + Data = Customer Centric

applications

“ Y o u r ” A p p S t o r e

Offerings &

Provisioning

SUBCRIBER IDENTITY RECORD

Commerce Billing

Finance

App A p p S t o r e

•  Platform w/ OEM supported apps

•  Little or no updates •  One time fee

Old World •  Consumer driven platform /

device •  OEM + 3rd party apps developed •  Flexible revenue models

New World

The “After Market” strategy

Strategy 3:

After Market

A f t e r M a r k e t

•  Extended warranty options = one price fits all

•  Upgrades & continued relationship not supported

Old World •  Sign up for initial service or

outcome based on contract •  Aligned after market contract

to customer specific options

New World

The “Data” strategy

Strategy 4:

S m a l l D a t a

•  No collected data •  Customer collects

data if they want

Old World •  Data from connected

products •  Solution based programs for

consumers

New World

B i g D a t a

•  Analytic tools for collection & reporting

Old World •  Data from connected

products •  Outcome based on

applications created for customer solution

New World

Data

Use smart connected products, cloud solution, and new partners to transform business.

Sell & Support each customer as

Individual

Use IoT to enable new solutions for each customer

Replicate processes across all business

units

Transform internal processes & selling

channels

DELIVER A NEW EXPERIENCE

“Move 60% of current revenue to new “Digital

Experience”

“We are good at creating single invoices for $1Million, but to create a million individual invoices takes new thinking, new processes, and new systems.” - EVP of Digital Transformation

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Rela4onship  Business  Management  

Define the Future of IoT

May 4-7, 2015 Boston, MA

Q&A

Thank You