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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


Are you still wearing a watch?


A couple of years ago everybody was wearing a watch, nowadays we see more people wearing a smart watch instead. The degree to which consumers know what is available in the marketplace, including the precise attributes of different product and service offerings, has changed consumer behavior. Some consumers make their product choices based on an assessment of what product offers them the best fit and with all the current technologies consumers expect more practical functionality in their purchases. While smart watches provide features such as a camera, accelerometer, thermometer, GPS navigation, map display, SD cards and so on, it can also communicate with several other gadgets. With all these functionalities people can wonder ‘Why still wear a watch instead of a smart watch?’.

Each year Deloitte presents a Deloitte Watch Industry Study, a study based on an online survey, discussions with executives and a consumer survey which was conducted among people in China, France, Italy, Japan, Switzerland and the US. The fourth annual Deloitte Watch Industry Study revealed the following key findings:

  • Average price of exported Swiss watches peaked at CHF 730;
  • Pessimism hits four-year high;
  • External risks are back;
  • Smart watches taken more seriously;
  • Significant consumer interest in smart watches in China, Italy and France;
  • The rise of digital media.

In this blog I want to highlight the fourth key finding of this study. With the release of the Apple Watch in April 2015 a new era of the smart watches industry was arrived. Even though the Apple Watch is not revolutionizing in the genre of the smart watches it does have a special feature in contrast to other smart watches, the Apple Watch is positioned as a fashion accessory. The Apple Watch Hermès for example is equipped with high-end leather bands and a dedicated Hermès dial. This watch is sold in Apple and Hermès stores which confirms the positioning. But the major competitors like Motorola, Samsung, LG and Sony would be a fool if they did not react on this positioning. Therefore they have all individually started to take action. New models have been produced with more upmarket finishes, and features that are closer to traditional watches, for example by adopting a round form factor. These companies have also anticipated by producing different kind of versions, with the underlying idea that everyone should be able to find a smart watch of their taste. You can think of sport, luxury, man and woman versions, they are all available on the market. In my opinion in spite of all these new products, the market of smart watches is young and companies with traditional watches still have a window of opportunity to develop their own alternatives. For example I prefer an elegant watch, and personally do not see the added value of a smart watch next to a smartphone. Within the watch industry, the smart watches are seen as a competitive threat. The intensity of this perception has doubled compared to last year.

Schermafbeelding 2015-09-22 om 21.13.57

What do you think, will smart watches take over the traditional market for watches?


Read more about the Deloitte Watch Industry Study: