How to Build a Profitable IoT Business Model

Ian Marsden, founder and CTO of Eseye, argues that the rapid expansion of the Internet of Things (IoT) is now a point of no return. The proliferation of connected devices—ranging from coffee vending machines and warehouse robots to smart speakers and city lighting—continues to reshape industries and everyday life, powered by advances in artificial intelligence, machine learning and voice‑activated technology.

Take Facebook’s recent launch of the Portal, for example. Even if it does not achieve mass adoption, it demonstrates how plug‑and‑play IoT devices can transform communication, underscoring the importance of seamless user experience.

For original equipment manufacturers (OEMs) and any company that builds or sells connected products, this trend offers a dual benefit: a richer customer experience and new revenue streams. The challenge lies in making the journey from device manufacturing to deployment simple and profitable.

Customers Expect IoT Devices to Work Out of the Box

Delivering a device that “just works” is the gold standard for IoT product design. Users are reluctant to purchase or adopt devices that require complex installation or configuration. Even seemingly simple tasks—removing a device from its packaging, plugging it in and connecting to Wi‑Fi—often generate support calls.

Many manufacturers favor Wi‑Fi for its lower hardware cost and the assumption that connectivity is a customer responsibility. However, this mindset is outdated. Reliability, security and data sovereignty are critical, and Wi‑Fi falls short in each area.

Cellular connectivity (3G, 4G, 5G) offers a superior alternative. It provides uniform, globally available coverage, robust security managed directly on the device, and true out‑of‑the‑box connectivity without the need for user configuration.

Beyond user convenience, a cellular link gives OEMs and resellers accurate, real‑time data that can drive business decisions, support predictive maintenance and even enable new monetisation pathways through data licensing—provided this is done transparently and with user consent.

Remote, over‑the‑air updates via the telecom network dramatically reduce maintenance costs. Imagine the savings of pushing a firmware fix over 5G versus dispatching an engineer to replace a faulty roadside sign. Such efficiencies are essential as IoT adoption scales.

Why OEMs Still Rely on Wi‑Fi Despite the Benefits of Cellular

Manufacturers prioritize low design and maintenance costs, which Wi‑Fi modules offer. Yet this choice invites high volumes of support queries and raises security concerns that both users and OEMs dread.

Integrating a cellular module—whether through an eSIM or a built‑in SIM slot—lets manufacturers retain control of connectivity, guarantee near‑100% uptime and eliminate user‑related configuration friction.

Adopting cellular does introduce regulatory complexities: varying telecom laws, differences in 2G/3G/4G/5G availability, roaming rules and regional licensing. A detailed white paper, 5 Steps to IoT Success, delves into these challenges.

Moreover, devices often cross borders—manufactured in one country and deployed worldwide—requiring multiple network agreements and compliance checks. This global reach underscores the need for a specialised IoT services partner.

Forrester predicts the emergence of a dedicated IoT services industry that will shoulder these complexities, allowing OEMs and end‑users to focus on core strengths.

Embracing cellular connectivity is therefore non‑negotiable if the projected exponential growth of IoT is to materialise.

Businesses can get ahead by partnering with experts who can embed cellular capability into devices from the outset. This partnership enables new revenue streams, stronger security, and a superior customer experience—ultimately making IoT profitable.

The author is Ian Marsden, founder and CTO of Eseye