Internet of Things (IoT) as a Service
LAST UPDATED: February 4, 2026 at 4:03PM
GUEST POST from Art Inteligencia
In the early days of the Internet of Things (IoT), the conversation was dominated by the hardware. Engineers and executives obsessed over sensor precision, battery longevity, and connectivity protocols. We were, quite literally, enamored with the “thing.” But as we move into a more mature era of digital transformation, we are discovering that the true value of IoT lies not in the silicon, but in the human outcomes it enables.
The transition from selling a product to providing IoT as a Service (IoTaaS) represents a fundamental shift in business logic. It is the move from a transactional relationship — where the connection ends at the point of sale — to a continuous, relational model. When we innovate beyond the device, we begin to design for the “Connected Life,” where technology recedes into the background to facilitate seamless, human-centered experiences.
From Products to Outcomes
Most organizations suffer from a product-centric myopia. They ask, “How can we make this toaster ‘smart’?” instead of asking, “How can we help our customers enjoy a more frictionless morning?” The “smart” toaster is a gadget; the frictionless morning is a service. IoT as a Service is about capturing the data generated by devices to provide proactive, predictive, and personalized value.
To succeed here, leaders must overcome what I call Organizational Friction. This friction occurs when legacy departments — built for shipping boxes — try to manage a recurring service model. It requires a new metabolic rate for the company, shifting from annual product launches to daily software updates and continuous customer success management.
“Innovation isn’t about the gadget in the hand; it’s about the invisible threads of value that weave technology into the fabric of a person’s daily life. If your IoT strategy starts with a sensor and ends with a dashboard, you haven’t built a service — you’ve built a digital chore.”
— Braden Kelley
Case Studies: Transforming the Connected Experience
Case Study A: Predictive Maintenance as a Safety Service
A global elevator manufacturer realized that their customers — building managers — didn’t actually want to own complex machinery; they wanted guaranteed uptime. By transitioning to an IoTaaS model, the company equipped thousands of elevators with vibration and heat sensors. Instead of waiting for a breakdown (and the subsequent tenant complaints), the system uses Agentic AI to predict failures before they occur. The service model shifted from “Break-Fix” to “Continuous Mobility.” Result: A 25% increase in contract renewal rates and a significant reduction in emergency repair costs, as technicians are dispatched with the right parts before the elevator ever stops moving.
Case Study B: The “Connected Health” Lifestyle Ecosystem
A leading medical device company produced high-quality CPAP machines for sleep apnea. However, patient compliance was notoriously low. They pivoted from selling a breathing device to offering a “Restorative Sleep Service.” By connecting the device to a mobile app that tracked sleep quality and provided personalized coaching, they turned a sterile medical obligation into a lifestyle improvement tool. They integrated with smart home lighting to gradually brighten the room during the lightest phase of the patient’s sleep cycle. By focusing on the human-centered outcome (waking up refreshed) rather than just the airflow, patient adherence increased by 40%, and the company created a recurring revenue stream through premium coaching tiers.
Reclaiming Time through Connectivity
A core tenet of my work on Temporal Agency is that we should design conditions where time stops bullying us. IoTaaS is a primary tool for this. When a home ecosystem manages its own energy consumption, replenishes its own consumables, and schedules its own repairs, it returns “cognitive bandwidth” to the human occupant. We move from being managers of our things to being conductors of our lives. Innovation in this space should be measured by the time reclaimed by the user, not the minutes spent inside an app.
The promise of the Internet of Things was never about smarter objects. It was about better lives. Yet far too many IoT initiatives stall after launch, celebrated as technical achievements while failing to deliver meaningful, sustained value.
IoT as a Service (IoTaaS) represents the necessary evolution. It shifts innovation beyond the device and toward the connected life—where technology quietly adapts to human needs, continuously improves, and delivers outcomes people actually care about.
As I often say, “Technology earns its place in our lives not by being impressive, but by being indispensable.”
Why Devices Are the Wrong Finish Line
When organizations treat a connected device as the end product, they lock innovation into a moment in time. Needs change. Contexts shift. Software ages. Hardware depreciates.
IoT as a Service reframes the device as a starting point rather than a finish line. Sensors, connectivity, and analytics become ingredients in an ongoing relationship—one where value compounds through learning, adaptation, and trust.
This model aligns directly with human-centered design. People do not want more features; they want fewer worries. They do not want data; they want clarity. They do not want control panels; they want confidence.
Case Study C: Rolls-Royce and Outcome-Based Aviation
Rolls-Royce transformed aviation services through its Power by the Hour model, an early and enduring example of IoT as a Service.
Rather than selling jet engines and charging separately for maintenance, Rolls-Royce guarantees engine availability. Embedded sensors stream performance data continuously, enabling predictive maintenance and real-time optimization.
The airline buys certainty, not machinery. Rolls-Royce aligns revenue with uptime, not repairs.
The breakthrough was not technical. It was philosophical. By shifting from product ownership to outcome delivery, Rolls-Royce redefined its role from supplier to partner.
Case Study D: Philips and Lighting That Learns
Philips applied IoTaaS thinking to lighting, offering illumination as a service rather than fixtures as assets.
Connected lighting systems adapt automatically to occupancy, daylight, and usage patterns. Data informs energy efficiency, safety, and employee well-being. Customers pay for performance and experience, not infrastructure.
This approach allows lighting systems to evolve alongside organizational needs. As buildings change, so does the service. Innovation continues long after installation.
The device disappears. The experience remains.
Human-Centered Principles for IoT as a Service
Successful IoTaaS solutions are designed around people, not platforms. They prioritize:
- Trust, through transparency and responsible data use.
- Simplicity, by automating complexity instead of exposing it.
- Adaptability, ensuring the service improves as contexts change.
When these principles are ignored, connected systems feel invasive or fragile. When they are honored, IoT becomes quietly essential.
“The ultimate measure of a connected system is not how much data it collects, but how much effort it removes from human lives.”
The Strategic Payoff
For organizations, IoT as a Service delivers more than recurring revenue. It creates learning systems that strengthen over time. It fosters ecosystems instead of isolated products. It transforms innovation from a project into a capability.
Most importantly, it keeps companies anchored to what matters: evolving human needs in an unpredictable world.
The future of IoT will not be won by the most devices deployed. It will be won by those who design the most meaningful connected lives.
Frequently Asked Questions
What is the main difference between IoT and IoT as a Service?
Traditional IoT focuses on the hardware and the data it collects. IoT as a Service (IoTaaS) focuses on the continuous value and outcomes delivered to the customer through that data, often shifting from a one-time purchase to a subscription or performance-based model.
How does human-centered design apply to IoT?
Human-centered design in IoT ensures that technology solves real human pain points rather than just adding digital complexity. It involves looking at the user’s journey and using connectivity to remove friction and increase the user’s agency over their time and environment.
What is “Organizational Friction” in the context of IoT?
Organizational Friction refers to the internal resistance a company faces when trying to move from a product-selling mindset to a service-providing mindset. This includes challenges in billing, customer support, and the rapid pace of software-driven innovation.
SPECIAL BONUS: Braden Kelley’s Problem Finding Canvas can be a super useful starting point for doing design thinking or human-centered design.
“The Problem Finding Canvas should help you investigate a handful of areas to explore, choose the one most important to you, extract all of the potential challenges and opportunities and choose one to prioritize.”
Image credit: Pixabay
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