A few years ago, the Internet of Things still felt like something from the future. Today, more than 27 billion devices are quietly collecting information on farms, inside factories, in hospitals, and even in our homes. And hidden inside all that data is a business opportunity bigger than the devices themselves.
The numbers tell the story: the IoT monetisation market was worth about $1 trillion in 2024. Over the next decade, it is expected to grow several times as companies realise they’re not really selling gadgets anymore; they’re selling the insights those gadgets generate. Take John Deere. Its tractors and sensors don’t just collect soil and crop data; they turn it into advice farmers can act on. Schneider Electric does something similar, using IoT data to help businesses cut energy use and stay on top of sustainability rules.
These examples aren’t outliers. They’re a preview of how businesses, from small startups to global manufacturers, will make money in the coming years. And for entrepreneurs, learning how IoT data creates value isn’t just helpful. It’s the key to building the next generation of products and services.
Subscription Models: The Recurring Revenue Revolution
In 2024, subscriptions became one of the strongest revenue drivers in the IoT world, reshaping how companies think about connected devices. Instead of selling hardware once, businesses are now building long-term relationships where customers pay for continuous service and improvements. You can see this shift clearly with Tesla and Philips. A Tesla buyer doesn’t just pay for the car; features like Enhanced Autopilot and premium connectivity come as monthly add-ons. What starts as a $90,000 purchase can generate thousands more over the years as new features roll out.
Industrial companies are doing the same. Their entry-level plans offer basic monitoring, while premium subscriptions include alerts before machines fail, smarter recommendations, and quicker support. Customers simply choose the level that fits their operations.
This steady stream of value keeps customers loyal and gives companies reliable income. Behind the scenes, predictive analytics helps them price these subscriptions fairly by linking costs to how equipment actually performs and how often it’s used.
Data Monetisation: Selling Insights as Premium Services
Among all IoT business models, data monetisation is growing the fastest. Over the next decade, data monetisation is expected to remain one of the fastest-growing areas in the IoT ecosystem. The idea is simple: connected devices generate massive amounts of data, and companies can turn that data into a product. Sometimes the data is sold directly to advertisers, insurers, or city planners. But the real money comes from turning the data into insights people will pay for. Instead of sending customers raw numbers, companies analyse the information and tell them what to do with it.
Picture a factory. Sensors track how machines behave, their vibration, temperature, or any unusual patterns. Instead of just showing this data on a dashboard, the system might send a warning before a machine fails, helping avoid expensive downtime.
Smart cities are another example. Traffic data can be sold to delivery companies. Infrastructure data helps city planners. Pedestrian flow information guides retailers choosing new store locations. The same set of data can earn money from several buyers, and AI can turn it into more specialised products like maintenance forecasts or consumer trend reports.
Farmers see huge value from this model too. Companies like John Deere use sensor data to tell farmers when to plant, how soil conditions are changing, or when pests are likely to appear, insights that can boost yields and save money.
All of this must be done responsibly, so companies use tools like anonymisation, data aggregation, blockchain records, and consent systems to make sure information is shared securely.
Usage-Based and Outcome-Based Pricing
For years, IoT companies made money the old-fashioned way: they sold devices, and that was the end of the transaction. But that model is quickly fading. Today, pricing is shifting toward what customers actually use and the results they get from it.
Usage-based pricing is now everywhere. Nearly three-quarters of IoT suppliers use it, and most expect it to keep growing. The idea is simple: customers pay only for what they consume. That could be data, machine hours, or even energy. It’s why cellular IoT bills look more like mobile data plans; you only pay for what your devices send.
Then there’s Equipment-as-a-Service. Instead of buying machines, customers pay based on how much they use them. The manufacturer keeps ownership, stays responsible for performance, and earns steady recurring revenue in the process.
Outcome-based pricing takes the concept even further. In healthcare, hospitals don’t pay for remote monitoring devices; they pay when patient outcomes improve. In factories, companies might skip buying an air compressor and instead pay for each cubic foot of compressed air they actually use.
The catch? Proving what outcomes came from the IoT system. That requires reliable data, clear analytics, and shared-risk agreements so both sides are invested in hitting the targets.
Cloud Infrastructure and Platform Ecosystems
In 2024, the cloud sat at the centre of the IoT world. Cloud-based deployments became the backbone of IoT infrastructure and powered nearly every other monetisation strategy built on top of them. Why? Because the cloud removes the biggest barriers. You don’t need your own servers. You don’t need expensive hardware. With a few clicks, companies can collect device data in real time, update software automatically, and manage assets from anywhere.
This is where platform models thrive. When developers can build apps on top of your IoT platform, you earn money from app marketplace fees, APIs, and premium tools. Big players like AWS, Azure, and Google Cloud dominate this space, giving startups the infrastructure they need without the cost or complexity of building it themselves. Platforms also feed on momentum: the more developers and users join, the better the platform becomes. That’s why early IoT platforms that built strong developer communities now enjoy a competitive edge that newcomers find almost impossible to match.
For startups, the cloud-first mindset is a game-changer. Instead of building data centres, founders can launch IoT products in weeks and only pay for the computing power they use. It cuts costs, saves time, and allows new companies to reach a global market almost immediately.
Hybrid Models and Future Directions
Successful IoT companies rarely rely on one way of making money. They mix different approaches so they can earn from hardware, software, data, and long-term results. Take a smart thermostat business: it sells the device upfront, offers subscriptions for premium features, shares anonymised data with utilities, and partners with energy companies that pay for proven reductions in electricity use. With several revenue streams in play, the company is less vulnerable to market shifts and earns value throughout the customer’s lifecycle.
New trends are pushing IoT monetisation even further. More customers now prefer paying for equipment as a service rather than buying it outright. Sustainability-related services are also rising, where IoT sensors help companies track carbon usage or participate in renewable-energy sharing programs. And as AI becomes more deeply integrated into IoT platforms, businesses can offer smarter predictions and customised insights that customers readily pay extra for.
But the path isn’t simple. Many companies struggle to tie pricing to the value customers actually feel. Privacy laws such as GDPR and CCPA add layers of responsibility. And unlike software-only products, IoT solutions often take years to build, requiring patient investors and long-term planning.
Still, the opportunity is huge. IoT data is becoming the most valuable resource these devices create. The businesses that win in 2025 and beyond will be the ones willing to experiment, combine multiple revenue models, measure everything, and keep refining their strategy until they find the mix that delivers value for customers and strong revenue for the company.
Want deeper insights into how data, innovation, and new business models are reshaping modern companies? Explore more expert analysis, entrepreneur-focused stories, and business strategy guides on Inspirepreneur Magazine.
