Why a separate canvas?
A connected device changes every block of the business model at once. The customer is no longer one buyer but three: the one who pays, the one who uses, and the one who installs. Revenue can recur, per device, per use or per outcome. And the costs recur whether the revenue does or not: connectivity, cloud, security, maintenance, support, and the tail of every device you ever sold.
Most teams can say what their product does. Fewer can say who pays, how much, and why they would keep paying. According to IoT Analytics (2024), only 41% of IoT commercialisations pay back within two years, and 55% of OEMs admit they routinely underestimate after-sales costs. That is not a technology problem. It is a business model designed after the product, not with it.
This canvas keeps the nine blocks you already know. It only adds what connected products typically put in each one, so you can see where yours is thin before the product ships.
How to use it
1
Start with the bottom row.
Fill in Revenue Streams and Cost Structure first. If the revenue does not recur and the costs do, the other seven blocks will not save you.
2
Then work outward.
Ask what the other blocks have to look like for the bottom row to add up.
3
Put a name in every block.
A block without a name is a cost line without an owner.
The nine blocks
In the order you know them. Under each block, what a connected product typically puts there. It is inspiration, not an answer: the canvas is still yours to fill in.
Key Partners
Who you depend on, and for what. A connected product runs on other people’s networks, clouds, chips and apps. Every partner is a line on your invoice and a risk to your uptime.
What connected products put here
- Connectivity providers: SIM and connectivity management, LoRa or NB-IoT networks.
- Cloud and platform providers: hosting, IoT hub, device management, analytics.
- Electronics and contract manufacturers: the board, the housing, provisioning and key injection at the factory.
- Installers, dealers, distributors, service companies: the people who commission and maintain the device.
- Integration partners: the customer’s ERP, field-service tool or MQTT broker, and the API on the other side that you do not control.
- Software and design partners for what you cannot hire for. Check whose IP the code is.
- Security, certification and legal partners that keep the product legal to sell.
Key Activities
What you have to do, day after day, to make the model work. Building a connected product is a project. Running it is an activity with no end date.
What connected products put here
- Running the fleet: monitoring, patching firmware and app, certificate and key management, cloud operations.
- Commissioning and onboarding devices in the field, and decommissioning them at end of life.
- Turning data into decisions: alerts, reports, predictive models, the one analytic the customer acts on.
- Support and field service, driven by users and contact rate.
- Selling the renewal to the installed base.
Key Resources
The assets your value proposition, channels, relationships and revenue depend on. Firmware and hardware are the visible ones. The platform, the data and the people who keep it running decide whether the model works.
What connected products put here
- The device and its firmware, plus every hardware revision still in the field.
- The platform: cloud, data pipeline, device management, the app. Owned or rented, and that choice sets the margin at scale.
- The data, and the contract that says who owns it.
- The installed base: how many devices, where, on which firmware.
- People and skills for the next ten years, not the next release: cloud, security, UX, data, support.
- Certifications and compliance: CRA, NIS2, ISO 27001. Legal to sell is a resource.
Value Propositions
What you deliver, which need it meets, which problem it solves, and how you bundle it. Connectivity is not the value. What the customer can stop doing, stop fearing or stop paying is.
What connected products put here
- Level 1, the device: a better product because it is connected. Remote control, an app, updates.
- Level 2, a service: monitoring, alerts, remote diagnostics, predictive maintenance, reports, remote firmware updates.
- Level 3, the outcome: uptime, hours of use, litres, kilometres, a guaranteed result. The customer stops buying the machine and buys what it does.
- Typical bundles: device with a free app · device with a monitoring subscription · device with a maintenance contract · device inside a pay-per-use contract.
Customer Relationships
What kind of relationship each segment expects, and what it costs you to keep. A connected product lets you see the customer after the sale. The question is whether you act on it.
What connected products put here
- Automated relationships: alerts, usage reports, renewal reminders, a notification before a failure. The product talks to the customer without a person.
- Self-service: the app answers the questions that used to become support tickets.
- A dedicated relationship on outcome contracts: a named service manager, SLAs, review meetings.
- Community and content around the device: training, tips, a user forum.
- The cost side: support scales with users and contact rate, not with devices. Good onboarding is the cheapest relationship you will ever build.
Channels
How you reach your customers, and how those routes fit together. With a connected product the channel does not stop at the sale: every device still has to be commissioned, paired and updated.
What connected products put here
- The installer or dealer who commissions the device. They decide whether the connected features ever get switched on.
- The app itself, after the sale: onboarding, feature discovery, upsell, renewal, a second device.
- The installed base: every device already in the field is an address for the service.
- Distributor and webshop for the hardware, app store and web portal for the service. The integration question: does the dealer earn anything on the subscription?
Customer Segments
Who you create value for, and which of them matter most. For a connected product that is rarely one person.
What connected products put here
- Three customers, not one: the one who buys (owner, fleet manager, purchasing), the one who uses it daily (operator, homeowner, patient), and the one who installs and services it (installer, dealer, field technician). Only one of them pays.
- The second-hand owner who inherits the device when the machine is resold.
- A data customer nobody sells to yet: a service company, an insurer, an energy supplier, a dealer.
Cost Structure
Which costs matter most, and which resources and activities are the expensive ones. The build budget is one-off and ends. The running costs are per fleet and have no end date. Most budgets only show the first column.
What connected products put here
- One-off build costs: electronics design and certification, firmware, cloud and backend, app and UX. They have an end date.
- Recurring costs, per fleet, no end date: connectivity · cloud and data · security and compliance · firmware and app maintenance · support and field service · device lifecycle operations · and the installed-base tail, everything above multiplied by every device ever sold.
- Each line scales differently: per device per month, per user, per event, per variant per year, or fixed whatever the fleet.
- The most expensive activity is usually people: support and field service. The most expensive resource is usually the platform licence once the fleet is large.
Revenue Streams
What customers pay for, how they pay, and how much each stream brings in. For a connected product this block has to answer one more thing: does the revenue recur as long as the costs do?
What connected products put here
- A one-off hardware sale, with or without a prepaid service term (“five years of connectivity included”).
- A subscription per device per month for connectivity, monitoring, data history or extra features.
- Usage-based fees: per hour, per litre, per kilometre, per message, above an allowance.
- Feature unlocks over the air, one-off or recurring.
- Outcome fees: guaranteed uptime or output. The customer pays for the result.
- Consumables and replenishment triggered by the device.
- Fees per event: commissioning, activation, ownership transfer, extended support after the support window ends.
- Data products for third parties: benchmarks, insights, aggregated reports.
How can we help with your IoT journey?
Get in touch with Pieter.
