Booming demand for integrated solutions powered by the Internet of Things (IoT) is creating exciting opportunities for IT channel partners to build new revenue streams. Leading IT industry analysts such as Gartner are proclaiming an IoT revolution that will lead to unprecedented innovation in the channel. Gartner lists IoT among its top 10 strategic technology trends for 2016.
What is IoT?
IoT is a catchy phrase used to describe a world of hyper connectivity in which people, processes and inanimate objects can identify and communicate with each other as never before. IDC, a market intelligence provider for the IT, telecom and consumer technology spaces, describes IoT as a “network of networks of uniquely identifiable endpoints (or ‘things') that communicate without human interaction using IP connectivity.” Essentially, anything that can be connected to the Internet will be a node in the IoT, and the range of IoT applications is as expansive as the technology, itself. Organizations will leverage a host of new technologies including low-cost sensors and actuators, RFID, wireless networking, cloud-based storage and computing, and big data analytics to better serve their employees, partners and customers.
Opportunities and Challenges
The opportunity is there for solution providers who master IoT technology to grow their businesses by implementing IoT infrastructure, mining the data captured by IoT connected devices, and offering new services such as remote monitoring and mobile device management. Unfortunately, not all solution providers will be able to capitalize on the opportunity. In order to position their businesses for IoT success, solution providers will need to invest strategically in these five key areas:
- Expand vendor relationships. Solution providers need to develop new partnerships with vendors who provide the technologies required to build IoT solutions. In addition to solidifying existing relationships with IT vendors that provide computing, storage, networking and enterprise software applications, solution providers also will need to establish new relationships with IT vendors that offer operations technology (such as sensors, actuators, material handling equipment and physical security) and consumer technology (including smartphones, tablets and wearables).
- Develop engineering skills. Many solution providers have not invested in the technical skills and resources required to implement comprehensive IoT solutions. They’ll need to either develop the skills in their existing teams, or hire new individuals who have experience working with operations technology and consumer devices, while also developing more sophisticated systems engineering capabilities.
- Market new capabilities. In the IoT race, differentiation will be key. The majority of solution providers currently struggle in creating their own brand that is independent of the vendors’ products and services that they sell, and as a result, they struggle to communicate their value propositions to customers. Going forward, it’ll be difficult for solution providers to credibly position themselves as “IoT experts” when customers view them solely as their “HP VAR” or “Microsoft reseller,” for example. As a result, they’ll need to invest in building their brand and providing evidence of their new IoT expertise and capabilities.
- Reach new buyers. The people who are evaluating and making purchasing decisions regarding IoT solutions often are outside of the IT organization. For example, in a manufacturing company, the individual who purchases an IoT solution might be a vice president of manufacturing or a vice president of distribution. In healthcare, the IoT buyer might be the vice president of hospital administration. Many solution providers have limited experience engaging with these roles or functions and will need to expand their account relationships.
- Offer compelling customer solutions. Solution providers will need to be able to clearly articulate the business impact of an IoT solution to their customers. Many businesses are allocating budget for IoT, but they still need help understanding how IoT will help them increase sales or reduce operating costs. The solution providers who communicate this effectively will be best positioned to capitalize on the opportunity. They’ll need to offer compelling customer success stories that demonstrate their new capabilities and the impact that IoT solutions have had on their customers’ businesses.
It’s clear that many solution providers will have difficulties overcoming these challenges. Building an IoT practice will require investment beyond solution providers’ typical resources, so strategically investing in the key areas outlined above will be critical for driving success.