Internet of Things innovation is diving hard and fast into the hype cycle’s trough of disillusionment (Check last August’s Gartner’s Hype Cycle).  After all, we have a fridge that can stream video to my phone and…. okay not much going on really.  The real potential for IoT has been in the industrial and B2B space where big “dumb” machines could work together much better with a little “smart” tech.

The cultural quirk that has made innovation in IoT is the enormous emphasis on consumerization of new tech.  If the drone isn’t a personal flying car or the IoT can’t be purchased as a smart home upgrade, people have a tough time caring I guess.  So all the hype is focused on the B2C market while most of the potential for innovation is in the B2B space.

Enter the Hardware as a Service economy.

Having played in the IoT space with several early adopters as a consultant, this is definitely huge.  Essentially, we will see more smart hardware suppliers for both consumer and B2B markets enter.  Containers, logistics, irrigation, experience marketing all have immense potential for startups that can bear the risk of innovation and maintain the expertise of servicing and implementation.  That’s the heart of what makes this a no-brainer – “HaaS transforms an up-front capital expenditure into an ongoing operating expense, which also allows for more accurate cost/value comparisons” via TechCrunch

That’s three huge differences HaaS will make in IoT:

• Finance is Simpler: Companies don’t need to bear all the risk of innovation in tech they don’t understand.
• Accounting is Simpler: Companies don’t need to bear all the risk of investment in a massive purchase of tech they don’t understand.
• Economics is Simpler: Companies can more accurately trace the value-add to their ongoing operations investment, rather than calculating a BullShit ROI for projects based on tech they don’t understand