COMMERCE OF THINGS

Monetization of Internet of Things

Seat belts

required in all

vehicles1968

First state

introduces

Seat belt law 1985

Airbag law goes

into effect1998

NHTSA requires

backup cameras2018

SMART TRANSPORTATION

estimated

reduction in

accidents and

traffic deaths

50%

SMART CITIES

70%

cost reduction

in city utilities

SMART CITIESArray of Things

• air temperature

• surface temperature

• sky color

• cloud cover

• barometric pressure

• carbon monoxide

• nitrogen dioxide

• sulfur dioxide

• ambient sound

• vehicle traffic

• foot traffic

• standing water

reduction in city

trash costs

40%

SMARTER WASTE MANAGEMENT

agriculture consumption

of the world’s fresh

water supply

70%

SMART AG

50%

prescribed medicines are

not taken as directed

SMART HEALTCARE

SMART PACKAGING

Every product will have

its own digital identity

SMART ONESIES

SMART SPORTS

SMART PILLOW

14SMART LAUNDRY

SMART LAUNDRY

PICTURESCreativity is the key to success in the future,

and primary education.

SMART FORK

FRIDGE SELFIES

18SMART TOAST

ABANDONMENTOF THINGS

WITHOUT MONETIZATION STRATEGIES

IoT PRODUCTS WILL FAIL

Digital River is a leading global provider of

commerce, payments and marketing solutions.

22+ years of experience

200+ payment methods

1100+ commerce experts

22 offices around the world

More than 240 countries and

territories where we do business

INTERNET OF THINGSISN’T A THING

IT’S A SERVICE.

+ + +

Wi-Fi, Bluetooth, ZigBee,

Z-Wave, Cellular, NFC

Connected Device

Provide value-added

services/subscriptions

Services

Data Storage,

Data Analysis

Data Aggregation

Enable, Test, and Optimize

Business Models

Commerce

INTERNET OF THINGS

One-TimeIndividual Purchases

FixedScheduled Purchases

AdaptiveRules-Based Purchases

AutonomousContext-Driven Purchases

COMMERCE OF THINGS

BUSINESS MODELS

Usage-Based

Billing

Professional

Services

Micro-Transactions

& Add-ons

Freemium Subscriptions Ad-Hoc

Purchases

CUSTOMERS PRODUCTS

FREEMIUMFreemium

• Free subscription

• Subset of

capabilities

Challenges:

• Offer enough value

for free

• Determining

premium service

• 5% rule

FREEMIUM

Freemium is a

means to an end...

Limited access to

the full experienceEliminate the risk of trying something new

FREE TRIAL

PRE-PAID SUBSCRIPTIONSPre-Paid Subs

• Low barrier to entry

Considerations:

• Payment frequency

• Promotions

• Ongoing price

Challenges:

• Higher transaction

costs

• Payment failures

• Renewal rate is key

to profitability

PRE-PAID SUBSCRIPTIONS

TRANSACTIONSSUBSCRIBERS

TERM-BASED BILLINGTerm-Based

• Billing cycle

separate from

commitment term

• Smoother revenue

streams

Challenges:

• Lower AOV

• Higher transaction

costs

• Reluctance to

commit

HARDWARE-AS-A-SERVICE

SCHEDULE & SUBSCRIBE

AD-HOC PURCHASE OPPORTUNITY

AD-HOC PURCHASE OPPORTUNITY

VALUE COST

USAGE-BASED BILLINGUsage-Based Billing

• Bill in arrears

• Pay for what you

use

Challenges

• Ongoing tracking

• Accounting disputes

• Bad debt,

collections

MEMBER-BASED USAGE BILLING

MEMBERS CUSTOMERS

ADD-ONS & MICRO-TRANSACTIONS

PROFESSIONAL SERVICES

RELATIONSHIP TRANSACTIONS

Customer

Success

Logistics IT &

Infrastructure

Payments &

Financial

Product

Development

Systems &

OperationsCulture Marketing

CHALLENGES

CUSTOMER

SUCCESS

CUSTOMER

SERVICE

STRATEGY

AcquisitionMembers vs. Customers

Customer Success vs. Service

Retention MonetizationCustomers vs. Products

Subscribers vs. Customers

Relationship vs. Transaction

Value vs. Cost

COMMERCE OF THINGS

Monetization of Internet of Things