Build New Business Model To Support IoT Apps

Tarhan said partners can create new business models to support IoT apps with ongoing costs to maintain support for cloud infrastructure.

"With an IoT app there will be cloud-specific infrastructure, and on top of that, consumers expect IoT to get better all the time – to get software updates, to improve," he said.

Tarhan's favorite way to address this problem is by building the service into the product price based on lifetime; "build it into your operational expense of your cloud," he said.

Partners can also monetize IoT apps based on advertisements or sponsors or make the ecosystem apps pay for access to the IoT solution. Finally, solution providers could charge monthly service fees for customers who are using the IoT app. But, Tarhan warned, "I don't think someone would pay a monthly service charge for Nest, so you have to be careful, because I don't think it would be a good option for some."