Date post: | 20-Aug-2015 |
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Slide 1 − Zuora Confidential, not for distribution beyond intended recipientSlide 1 − Zuora Confidential, not for distribution beyond intended recipient
Why ZuoraZuora Provides a BluePrint to Succeed in the
Subscription Economy!
Revenue Relationships in The Internet of
ThingsBy Travis Huch
Confidential and Proprietary Information. Do not distribute beyond intended audience.
Agenda
2
• Why the IoT is bigger than any single trend
• The Five Revenue Relationships in IOT that
matter
• Every model for increasing revenue in IoT
• The Disrupters
• IoT devices from Kickstarter
• Success patterns for enterprises
• The challenges
• Summary
Confidential and Proprietary Information. Do not distribute beyond intended audience. 3
The World is Changing
Gartner Says the Internet of Things Installed Base Will Grow to 26 Billion Units by 2020 and is a $3.8 Trillion New Era
- Gartner Press Release 12/12/13
Confidential and Proprietary Information. Do not distribute beyond intended audience.
This is a Huge Shift – B2C
Connected Home
Connected CarConnected Self
Connected Consumer
Confidential and Proprietary Information. Do not distribute beyond intended audience.
Construction
Telematics
This is a Huge Shift – B2B Embedded Diagnostics
Building Control Systems
Slide 6 − Zuora Confidential, not for distribution beyond intended recipient
6
Twine Wireless Sensor
Zuli Smart Plug
Smart Things
StickNFind
The Kickstarter IOT Disrupters
Confidential and Proprietary Information. Do not distribute beyond intended audience. 7
Are You Building
A Device?
Are You Building A Way
To Have A
Relationship With Millions Of
Users?
Or
Slide 8 − Zuora Confidential, not for distribution beyond intended recipient
8
The Five Ways to Build a Relationship with Millions
(DON’T JUST BU ILD A DEV ICE )
1. Information As A
Service
2. Bundle Play
3. Pay As You Go
4. Loyalty Play
5. Device Only
( DATA P L AY )
Confidential and Proprietary Information. Do not distribute beyond intended audience. 9
Information Play
Traditional revenue came from large gene sequencing machines
Now able to leverage cloud for compute storage and contextual sharing
Subscription to consumables as well as the aggregated data from machines
Collaborative research /Comparative use
BENEFIT: Recurring revenues
that are increasing significantly YOY
#1
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Benefit: Nanthealth instantly
gains massive access to distribution and guaranteed revenue stream. 400+% YOY growth 98% adherence.
Bundle Play #2The device is a cap on a prescription drug bottle. Glows to remind the patient to take drug. If cap not opened, caregiver notified over the network.
Confidential and Proprietary Information. Do not distribute beyond intended audience. 11
Usage-based Insurance. The Metronome transmits your mileage. Costs $.03 to
$.06 per mile on average $30 - $60 per
month
Benefit: Urban drivers can save
an average of $400 per year
Pay As You Go#3
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Belly provides loyalty solutions that drive consumers into retail locations with incentives and offers. Repeat business is the best business.
Benefit: 7-11 benefits from
not having to engineer and manage its own loyalty solutions.
Loyalty Play #4
+ =
Confidential and Proprietary Information. Do not distribute beyond intended audience. 13
Nike FuelBand uses gamification and social media to drive customers to set goals, and connects them with the Nike community. The end user just buys the band
Benefits: Nike Inc’s
global revenues increase by 16% in 2012, its highest growth in 15 years
Increased customer insight
Device Only Play#5
Slide 14 − Zuora Confidential, not for distribution beyond intended recipient
DREAM BIG “Hey, I don’t want you to lose that dog I sold you. Let’s put a GPS collar on him.”
“Oh, I’ll just pick up Ironman from where Johnny just stopped watching on Netflix in the house and I’ll stream it to the back seat of the Yukon so he doesn’t miss the big fight”
“I’m just going to send you a new water filter for your fridge. The one you have in there is so gross.”
“My beacon picked you up on the way in Sally, here is your Americano just like you like it.”
“Travis, I don’t think you should keep going up this hill. You’re already at 155 BPM. “
Slide 15 − Zuora Confidential, not for distribution beyond intended recipient
Infinite pricing options
Success Patterns for Enterprises• Prepare for a business model transformation
• Leverage the usage data of how and when and where to improve the user experience and create a relationship
• Specialize on what you’re good at – you can’t build everything
• Think about tiered value as part of the architecture
• Build for change – future-proof your solution
• Enable customers to identify themselves as power-users. The who in the relationships are key
• Set a bar for success of recurring vs. one-time revenues for Year 1
Slide 16 − Zuora Confidential, not for distribution beyond intended recipient
BUT, There are Challenges• The systems to
manage inventory is not the systems that will manage the relationship
• Rate of change
• The new 2 tier distribution: Device sold on Amazon - The subscription sold direct.
• Churn
Slide 17 − Zuora Confidential, not for distribution beyond intended recipient
Infinite pricing options
And Inherent Complexity in IOT
• Hardware is different than the service
• Length of service period and contract
• Connectivity may be bundled • Notion of peak or seasonal
usage• Multiple Units of Measure
(devices, users, storage, etc• Different categories of buyers• The pricing you start with will
change!
Slide 18 − Zuora Confidential, not for distribution beyond intended recipient
Can you engage and manage at scale?
Can you change pricing in weeks?
Can you move from one basic unit to another (users, GB, devices)
Can you handle the use cases? (renewals, upsells, downsells)
Is sales part of the experience (quoting)?
International and regional pricing?
Will you support electronic payments?
Questions to Consider
Confidential and Proprietary Information. Do not distribute beyond intended audience.
Our Experience with Internet of Things
19
Confidential and Proprietary Information. Do not distribute beyond intended audience.
Autonet Mobile
20
• Remote start• Unlock • Find my car • Geofencing and breadcrumbs• Remote Diagnostics • In car WiFi for any application
Confidential and Proprietary Information. Do not distribute beyond intended audience.
Summary
21
• Business model innovation is as
important as tech
• Build a tiered value architecture
• Build flexibility into the system
• Focus on your core strengths – don’t
build everything
• How can you make the user experience
great?
Confidential and Proprietary Information. Do not distribute beyond intended audience. 23
Thank You! [email protected]
@travishuch
Let me know if you are interested in participating in our IoT panel discussion at
Subscribed 2014!