OEMs are increasingly leveraging the IoT to create new revenue streams and build stronger customer relations. This will not only boost their businesses, but also the overall IoT ecosystem.
The growth of the Internet of Things (IoT) has been so phenomenal that it has been estimated that by the end of the year, there will be nearly three connected devices for every person on the planet.
Much of this growth has, and continues to be, driven by Original Equipment Manufacturers (OEMs), which are able to leverage the technology to evolve their business from one focused on basic hardware sales, to one that can deliver complete, service-focused solutions.
This is achieved by integrating connectivity and software into their offerings, thereby allowing these organisations to develop new revenue streams, boost their own efficiencies, and – most crucially – build stronger and more effective customer relationships.
Ross Hickey, CEO and Founder of Trinity, a leading local IoT specialist, points out that IoT is about far more than merely adding connectivity to machines. It is, essentially, a complete redefinition of the OEMs approach to products and revenue. Moreover, this shift to connected products is no longer optional for these companies, if they wish to remain ahead of the market. This is because it has been predicted that more than half of all OEM products sold in 2026 will be IoT-enabled.
In today’s world, he suggests, the market leaders are not those that simply have a connected product – as today, this is no more than a ticket to the game. Those who win the game will be those that are able to create significant value from these solutions, and who are able to effectively communicate that value to the end-customer.
Real-time information
“Thanks to the addition of a software layer, these products are smarter than ever, and are enabled to gather real-time information. This could include such data as how the product is being used, its performance levels, and even the surrounding conditions. Additional data that can be provided includes aspects such as temperature variations, energy consumption, and general wear and tear,” he says.
“The IoT connectivity also enables the OEMs themselves to make adjustments to their products, such as software updates or even by modifying the solution’s function in a remote manner.”
Hickey explains that the overall benefits to OEMs are enormous, as they can shift from the traditional box-dropping approach of selling hardware to a continuous revenue stream, in the form of delivering subscription-based services.
“This is a logical evolution of their business model, as the continuous flow of data provided through the IoT sensors will deliver unique insights into how their products are used in real-world conditions. This connectivity will ensure real-time visibility into all aspects of the solution, while also enabling the company to develop a more direct relationship with its clients – which in turn should build much stronger customer loyalty.”
“Of course, tangible success can only be determined by the use these OEMs make of the data generated by their products. Deep insights into customer usage mean that OEMs can determine how these products are utilised, what inefficiencies they may have, and which features deliver the best value to the client. With this information to hand, OEMs can not only focus more effectively on relevant product developments, they can also position their service teams to more proactively assist customers.”
Turning data into actionable insights
The ability to anticipate and address problems before they arise will offer a clear competitive advantage, he states, noting that this will provide a boost to both proactive service and predictive maintenance.
“Those businesses that can take raw usage data and transform it into actionable insights will be in a position to assist customers to reduce downtime, while also creating new revenue streams for themselves – good examples of such revenue streams include offering access to premium analytics, implementing predictive service plans, and offering access to custom software,” states Hickey.
“At the same time, these OEMs should be embedding IoT data into their core business systems. Integrating CRM or ERP systems with IoT usage data will not only ensure a seamless customer experience – thanks to a granular level of customer information that allows for true personalised service – but will also put them in a position to proactively upsell to clients.”
Another advantage for OEMs is that IoT sensors can also be leveraged to deliver end-to-end visibility across the entire supply chain. Being able to track the movement of components, check inventory levels in real time, and identify potential delays or bottlenecks ahead of time will improve production scheduling, reduce disruptions, and ensure that products are delivered on time.
“As more OEMs integrate IoT into their product lines, the benefits will be twofold – not only will these companies be in a position to leverage IoT data to strengthen customer relationships, unlock recurring revenue, and build future-proof business models – but the broader IoT ecosystem will benefit and grow, innovate and evolve alongside it, opening yet more doors for evolving and improving the business.”
“What it boils down to is that the IoT is here to stay, and OEMs that aim for business longevity will need to do far more than simply connect machines – they will need to draw connections between technology, insight, and service innovation in order to successfully turn insights into outcomes, outcomes into revenue, and revenue into long-term business strategy,” concludes Hickey.