Special Report: Finding Opportunity in the Internet of Things

Special Report: Finding Opportunity in the Internet of Things

Is there a channel opportunity in the Internet of Things?

The Internet of Things. It’s the latest buzzword that evokes images of self-regulating thermostats, health monitors and refrigerators that let you know when the milk goes bad. But it’s more than that: IoT is projected to be a $7.1 trillion—yes, trillion—market worldwide by 2020, according to IDC.

And it’s a market that will encompass all corners of industry, from consumer to high-end manufacturing and just about everything in between. Which means plenty of opportunity for the channel in myriad ways.

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First, The Background

The concept behind IoT is not new. Machine-to-machine interaction has been happening for many years. RFID tags have automated inventory control, with robots pulling inventory to restock shelves or fulfill customer orders. The automobile industry has used sensor-laden robotic arms to ensure assembly lines run smoothly and automatically stop if there’s a problem. The list goes on.

Traditionally, however, the data from these machines was simply collected and stored for data mining later on, not providing much in the way of value beyond a specific data point.

“In machine-to-machine it didn’t matter if things were expensive, proprietary and built for a specific application,” said Brian Partridge, vice president of Mobility Research at 451 Research. “The way data was used is different than what we think for IoT—it was not real-time.”

Fast forward to today, and advances in chip design and manufacturing have made for better platforms and better connectivity, taking the machine-to-machine concept well beyond its initial purpose. Add in data analytics and you’ve got a technology powerhouse that combines intelligence with automation—think a vending machine that senses when it’s running low on a particular snack and sends a message to the inventory control system, which adds a supply of the snack to the route driver’s next batch to be restocked.

Another example: Imagine a robotic welding arm in an assembly line that automatically senses when a sprocket in one of its joints is about to fail, then sends an alert to a robotic mechanic, which replaces the sprocket proactively, preventing the whole assembly line from shutting down.

“Right now the single biggest application is in the area of preventive maintenance, wherein pieces of equipment have the ability to connect through the cloud and combine with predictive analytics to predict when something is going to fail,” said John Mason, general manager, Global Midmarket at IBM.

It’s About the Network (and the Software, and the Services)

At first glance, it would seem that IoT is all about the analytics. But it’s more than that. IoT starts with sensors that capture the data. And that needs a robust network to house the sensors and handle the increase in data traffic quickly and efficiently. Beyond that, software is necessary to extract the data, while services (think data scientists) interpret the data in a meaningful way.

All of which involve the channel.

According to, “Sizing Up the Internet of Things,” a report published in 2014 by CompTIA, hardware and software will drive most channel partner opportunities in IoT—at least in the near term. “With so much data being transmitted, robust networks will be a critical part of any strategy around IoT,” the report noted.

Down the road, services will become more important to a channel partner’s toolkit as IoT implementations are more ubiquitous.

“Where the market is today there aren’t as many services opportunities as there are software and hardware opportunities just because we’re still at a consumer-oriented stage,” noted Tim Herbert, vice president of Research & Market Intelligence at CompTIA. “But as we’ve seen time and time again, consumer examples are adopted informally by enterprises and evolve and become more business-like.”

IoT Opportunity 2.0?

Ask just about anyone and they’ll tell you IoT is still in its infancy. Or, as Jeff Hewson, sales director of the Data Technologies Group at Carousel Industries, predicts: “Mass adoption is still a couple of years away.”

Still, there are some IoT projects underway. VectorUSA, a privately held solution provider based in Torrance, Calif., has worked with customers in the shipping and logistics and the grocery/perishables industry to use IoT to track inventory using RFID tags. In the instance of the food/perishables customer, all inventory was tagged with RFID sensors so older food was taken off the shelf first, reducing spoilage and saving the company money.

“They’ve been able to reduce their spoilage from 10 percent to 6 percent,” said Mark Allen, director of Technology and Business Development at VectorUSA. “That’s real, measurable savings.”

But although IoT projects still are the exception rather than the rule, that doesn’t mean the channel can sit back and wait for it. Rather, now is the time to get started finding a place in the IoT ecosystem, whether it’s prepping customer networks or gaining the skills to effectively interpret the deluge of data.

“You have to make sure you have a resilient, redundant network to run all the IoT applications,” Hewson said. “If I’m dealing with an enterprise and anything changes the traffic pattern on their network, that network needs to be more robust. And that’s an opportunity for us to sell more hardware, services, etc. It’s all opportunity. More traffic equals more work.”

“VARs have to skill up for the opportunity,” 451’s Partridge noted. “At the end of the day it’s about selling the concept of IoT as a business enabler for their customers and potentially adding value around those services themselves. So they need to understand the data science of it all. ‘What are the business problems I am trying to solve?’ Right now I don’t think the VARs have those skills themselves.”

Differentiating is the Differentiator

Another area where the channel has potential to shine in IoT is simply in finding the opportunities. As that “trusted adviser,” solution providers should know their customers’ business inside and out. The opportunity lies in taking that knowledge and finding ways in which IoT can solve a customer’s problem differently.

“When you look at the Internet of Things, the things themselves are not interesting,” said Dave Sobel, director of Community at MAXfocus and a self-professed IoT enthusiast. “We’re all focused on the ‘things,’ but that’s not where the opportunity is.”

Rather, he said, solution providers must ferret out areas where IoT will help their customers. “It’s about thinking of creative ways to start combining devices.”

“From a business partner perspective, having the technical capability and understanding how to apply it to a given industry in language that resonates with customer to solve their problem—that is the intersection of the technical skills and the industry knowledge where the partner will shine,” IBM’s Mason said.

Joerg Bienert, co-founder and COO of ParStream, a big data and IoT analytics platform company, sees a real need for the channel to help companies make the leap into IoT. “Right now, lots of corporations don’t know too much about it. They know the value and they know it’s important, but they don’t know what path to follow. So they need a lot of help from consultancies and systems integrators to design and implement best-of-breed IoT infrastructure,” he said.

Today, IoT is still at the low end of the left side of the bell curve. But, as with most things that can help a company perform more efficiently and effectively, saving it time and money (not to mention improve the customer experience), it’s only a matter of time before IoT permeates that space between high-end manufacturing and consumer. With a lot of planning and a little luck, the channel will be ready to seize the opportunity.

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