By: Jeff Wissink, Navint Managing Director

The Importance of Subscription Monetization models to the Internet of Things (IoT)

According to the Internet of Things Global Standards Initiative, the “Internet of Things … has been defined … as a global infrastructure for the information society, enabling advanced services by interconnecting (physical and virtual) things based on existing and evolving interoperable information and communication technologies.” To the layman, IoT means connecting anything and everything to the internet to collect data, enable remote control of the device, and other functions.

And in case you haven’t noticed, it’s everywhere. Consumer applications of IoT range from the Nest Thermostat in the house to the pacemaker embedded in the body. Industrial applications range from the monitoring and control of transportation systems, waste management, and even city-wide IoT applications that analyze things such as air and water quality, noise pollution, and transportation efficiency. When you combine cheap tech with innovative applications and other major trends such as data analytics, security, privacy, and yes – subscription monetization models, you’ve got an all-encompassing tech trend juggernaut. In fact, according to the McKinsey Global Institute, by 2025 “connected devices of various kinds will deliver benefits around efficiency, quality, and automation equivalent to a tangible economic impact” of between $3.9-11 trillion, the latter figure which estimates to be 11% of the global economy at that time.

But why are subscription monetization models part-and-parcel with IoT?

As Navint’s Subscription Services Director Steve Terry always says, “if your appliance could talk, what would it say?” The reality for now, at least, is if an internet-enabled appliance is going to say something, it’s likely to be a notification of some kind of exception that a human might care about.

“I’m working correctly. I’m working correctly. I’m working correctly. Oops…I’m broken!”

As a consumer of an appliance’s data, you are not typically interested that the appliance is operating normally, but rather only interested in certain exceptional events. If, then, the value to the consumer of the appliance data is in the notification of and/or actioning on certain exceptional events that occur over time, the correct way to monetize such value to the consumer is through a subscription. A subscription directly ties the ongoing consumer value to the monitoring relationship implicit in IoT.

With the explosion in the IOT economy, companies must be careful about how they establish pricing structures and underlying internal operational support to be able to effectively capture this opportunity without introducing operational friction as the company grows.

To learn more about Navint’s Subscription & Monetization service offerings, please contact Terry Flanagan at or visit us our Subscription Services section.