Internet of Things: Does it generate service revenues for organizations?

Many of you would think that Internet of Things (IoT) would generate service revenues for organizations. Surprisingly, a recent study of Capgemini showed that over 70% of organizations do not generate service revenues from their IoT solutions.


I am aware that a lot of you already wrote a blog about IoT, that is not unexpectedly since there are more connected devices then humans on the planet, so it is a very popular and upcoming topic. Everyday objects now have sensors whose capabilities might vary. This fundamental shift is leading to an Internet that is far grander in scale and opportunity than we previously imagined. I personally find the IoT world very fascinating. In my circle of friends I have heard a lot of people talking about the convenience of the Nest. The Nest thermostat measures user behaviour. The temperature can be adjusted automatically when someone is asleep or not at home. This also creates a user profile, which indicates how a person lives. In addition, Nest also offers a smoke alarm, and from 2016 it is going to support a smart lock within the system. Last Thursday, Achmea, the largest insurer in the Netherlands, had announced that they are working together with Nest, so that they can have access to the customer data. However, Nest denies that they are collaborating with Achmea. Would you have security and privacy concerns if you were using the Nest? I think a lot of people do. This is also one of the main challenges organizations have to face when they offer IoT solutions.


In a recent study of Capgemini the reasons why organizations are falling short in monetizing the IoT were highlighted. A combination of external and internal challenges make it difficult to generate service revenue for organizations (Figure 1).


Schermafbeelding 2015-10-02 om 14.21.23


In short, the main challenges are that most consumers are concerned that a connected appliance could result in data breach of sensitive information. Second, only a few organizations offer IoT solutions that integrate with third-party products and services. Third, organizations need to augment their product management capabilities with the skills needed to develop and market services. When organizations succeed to cope with these three challenges service revenues will be generated.



Capgemini Capgemini Consulting Worldwide. (2014). Monetizing the Internet of Things: Extracting Value from the Connectivity Opportunity | Resource. Retrieved 2 October 2015, from

NU. (2015). Achmea geeft premiekorting voor data van klant. Retrieved 2 October 2015, from

NU. (2015). Nest ontkent samenwerking met Achmea. Retrieved 2 October 2015, from


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