I²M²—The Future of Industrial Internet Monetization
follow the Upfront Monetization Method,
explained in the section above. Figure 9
illustrates the physical delivery and setup
with the upfront payment highlighted with
blue arrows and the usage payment with red
arrows. The latter is directly transferred
from the Operational User to the
Component Builders, not via the System
Builder.
A challenge for the Component and System
Builders is that they do not get paid instantly
for all of their research and development
efforts, which are used across components
and the system. And their profit is part of the
Usage Cost too. If the Operational User
decides to shut down the system too early,
they will never receive the income stream
from the Usage Cost. On the other hand,
there are no more “discounted” systems,
such as in cases where the original upfront
costs were too high and builders desperately
try to close the deal by offering to lower the
system cost. And if the system operates as
expected, all builders will receive an ongoing
usage revenue stream, which over time will
finally exceed the original payment of full-
upfront costs. In general, it provides a closer
bond between Builders and Operational
User in the sharing of risks and
opportunities.
A DVANTAGES AND C HALLENGES OF
THE D YNAMIC M ONETIZATION
M ETHOD
The biggest advantage for the Operational
User is the significant reduction of the
upfront costs traditionally paid before
collecting the revenue generated from
operating the system. The usage payment is
quite stable over time, so ROI can easily be
predicted and calculated.
Usage payments reduce the amount of
required loans and eliminate the additional
interest payments. In a government tax
model, usage payments will be frequently
paid as a cost of operation (comparable with
that for power and gas) instead of an
investment which needs a depreciation
calculation.
A challenge for the Operational User is that
he needs to know the potential Usage Costs
before he orders the system. This requires a
comprehensive Usage Cost simulation of all
components involved. The Dynamic
Monetization Method needs to provide a
mechanism to make such simulations as
simple and automatic as possible. Another
challenge is that any Component Builders
could simply increase the Usage Costs after
the system is delivered — keeping the
Operational User deeply dependent upon
these suppliers. As a result, the Dynamic
Monetization Method must provide a “smart
price table” system for all installed
components, which not only talks about the
current Usage Costs but also provides a
future price guarantee or a maximum range
of predictable price increase.
There are also advantages for human society
and the environment: Old systems are more
rapidly replaced with modern and probably
more expensive components because the
upfront costs will be lower. Savings in energy
or the reduction of payments for pollution
penalties can easily pay for the Usage Costs
of such components.
Expensive high-tech medical devices, such as
computed tomography (CT) scanners, are a
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March 2018