Reading the Tea Leaves for IoT Solution Providers
Cisco executives expect the Internet of things (IoT) to be a $19 trillion opportunity by 2020. They also call it the Internet of everything.
McKinsey projects that IoT will be as much as a $33 trillion opportunity by the year 2025.
AT&T, Intel, Cisco, GE and IBM call it the Industrial Internet
Numbers and names aside, channel partners are always looking at opportunities ahead, and IoT is certainly as forward-looking as the cloud has been for the past dozen years. As they have with the cloud, solution providers wonder which IoT solutions and services could be most profitable for the channel and which partnerships will make the most sense. They are eyeing opportunities, ranging from IoT analytics platforms to helping to solve security challenges.
Yet some industry observers don't see IoT following the same path for the channel as the cloud has.
"There are some differences between the way Internet of things will take place in businesses and cloud did," CompTIA Senior Director of Technology Analysis Seth Robinson explained. "With cloud, you take a workload and put it into the cloud. It's the same function as it was when it was on-premise, but now you're using a cloud provider. With IoT, there is no current behavior to correspond to. This is something new. Something we haven't had before."
CompTIA Senior Director of Industry Analysis Carolyn April sees some similarity between IoT and the cloud. "People are panicking now as they were around cloud, but channel partners have figured out how to plug in," she said.
IoT Applications and Opportunities
April and Robinson agreed that the opportunities for channel partners are still about a year away.
"The low-hanging fruit, the initial opportunities, will be around what resellers already do, like selling and installing sensors and other data-gathering devices," April said.
Robinson concurred. "In the channel, some of the behaviors will be the same. The things they have strength in now will translate in the IoT. "
For example, network partners will need to prepare much more robust networks to support IoT applications, he said.
"But the real opportunities will come," April said, "in the next phases, which include managing those devices as in managed service engagements today. These make channel partners more 'sticky' with customers, managing and troubleshooting the devices and the networks they are on."
For the new IoT applications, "we're thinking about the use cases. Data collection, analytics, machine learning and more," Robinson said.
History: A Guide for Future IoT Partnerships
It serves to take a quick look back to gain some perspective on where the future IoT solutions and services for the channel will be, as well as the prospects for IoT partnerships.
Kevin Ashton coined the term "Internet of things" while working at Proctor & Gamble in 1999, but it has been later suggested that there will never be an Internet of things, simply because "things" don't have their own Internet. They use the regular Internet. Some have suggested that "things of the Internet" would be closer. And "things that interact with other things without human involvement" would be even more accurate.
If you're thinking that someday "things of the Internet" will outnumber people, wait no more. The number of devices connected to the Web exceeded the number of people on Earth as of 2008, and there will be more than 50 billion "things" on the Internet by 2020, according to Cisco forecasts.
IoT Solution Providers' Roles
"IoT is definitely going to be a massive market opportunity and will likely be managed or serviced by a different type of MSP. Maybe not an IT services company, but it could be an MSP that's providing services to monitor and manage smart buildings or any kind of device, any kind of gauge, anything that moves, anything that reports, etc., and then providing a portal and consolidating them all under a single pane of glass," said JP Jauvin, senior vice president and general manager of SolarWinds N-able, a provider of network and systems management software and services for managed service providers (MSPs) and others.
Michael Brinks, director of marketing for Denver-based MSP Synoptek explained, "The key is management of the devices. Something needs to be monitoring each device to make sure it's working."
Increasing the need for monitoring and management is the fact that IoT activity is always "machine-to-machine (M2M)" in which devices need to communicate with each other and with software—machines performing a task and sharing information about it with no human involvement.
"The Internet is not essential for IoT," said Michael Tennefoss, vice president of strategic partnerships for Aruba Networks, a division of Hewlett Packard Enterprise. "You don't have to leave the premises. Medical telemetry devices, infusion pumps, nurse call systems, these are all machines that need to be connected to other machines, and they never leave the hospital."
Tennefoss suggested that channel partners "look at the micro level. IoT includes copiers, printers, heart-rate monitors, WiFi tags, tracking assets." He describes everyday items sharing information with other everyday items.
Opportunity in the Space Between Quality and Cost
The management challenge facing hardware manufacturers, software developers, IoT networking specialists and others as more and more "things" are being attached to the Internet, from meshes of sensors to track everything to industrial controls to the lights, thermostats, sensors and door locks on homes, stems from quality issues.
If Rodney Dangerfield sat on the Internet Engineering Task Force (IETF), he would tell you "things don't get no respect." In fact, in 2011, the IETF approved the dedicated routing protocol just for these IP Small Objects networks called RPL, which stands for Routing Protocol for LLNs (which stands for low-power, lossy networks). No respect.
If low-power and lossy networks doesn't sound bad enough, here's how the IETF characterized the things that are being attached to them in their Request for Comment (RFC) 6550, issued in March 2012: "Low-power and lossy networks (LLNs) consist largely of constrained nodes (with limited processing power, memory, and sometimes energy when they are battery operated or energy scavenging)."
The actual networks themselves didn't fare much better in this RFC: "These routers are interconnected by lossy links, typically supporting only low data rates that are usually unstable with relatively low packet delivery rates. Another characteristic of such networks is that the traffic patterns are not simply point-to-point, but in many cases point-to-multipoint or multipoint-to-point. Furthermore, such networks may potentially comprise up to thousands of nodes."
The key point for service providers is that "these characteristics offer unique challenges to a routing solution," the RFC read. The best channel service providers routinely turn challenges into opportunities.
Immediate Opportunities for IoT Solution Providers
As you learn more about the kinds of "things" customers want to attach to the Internet, you can become more adept at tuning parameters in customers' networks to better accommodate these low-powered, lossy devices and networks. Making the devices better becomes far too expensive, far too fast at the scale we're describing, so the only solution is better code at the transport layer.
This is the channel's opportunity to take your TCP/IP skills to the next level where they can enable real-world, high-value, high-relevance solutions for customers. Compensating for the impracticality of improving "things" as they are connected to the Internet by improving their code stack is just one example of a business-relevant solution you can deliver going forward.
Perhaps the most important and certainly the most immediate opportunity for channel partners in preparing for the growth of the Internet of things is to help customers through the transition from IPv4 Internet addressing, which completely ran out of addresses back in 2011, to the much larger IPv6 address space. The addition of billions of more "things" to the Internet, each requiring its own IP address, will not be possible until there are more Internet addresses to be assigned. IPv4, the original numbering scheme, provided 430 billion addresses none of which remain. IPv6 provides 34 undecillion addresses, plenty to support such growth. But all users must be converted to IPv6 before that can be accomplished.
IoT Analytics and Security Solutions
Where do channel partners fit in Internet of things security and offering IoT analytics platforms and other solutions?
Aruba's Tennefoss advised: "It's right in the enterprise. Location-based services. Guiding contractors to machines in need of service and tracking the time spent rendering service. Guiding workers to safety in the event of emergency. Tracking inventory. Tracking physicians and health care staff on rounds to assure compliance, hand washing, visits to the pharmacy, all of these are IoT applications. For channel partners, this is a way of extending opportunities with customers they serve today.
Commenting on customers' exploding appetite for more data analytics, Tennefoss pointed out that "data is the new bacon"—that the appetite for more and bigger data just seems to keep on growing.
Marc Hoppers, director of technology services for Dallas-based channel partner Sirius Solutions, explained that the opportunity to manage data flow starts at the source. "There are many instruments out in the field measuring things," he said. "For instance, a manufacturer has smart machines sending information about their current condition."
When managing all this data, security and IoT data management are primary concerns, Hoppers said. "Depending on the applications used with the instrumentation, you may have differing security needs. An oil company doesn't want competitors or bad actors to get hold of their exploration data. A consumer doesn't want anyone getting hold of your personal info. There's a wide variety of data coming from various types of instruments in a wide variety of formats that needs to be transformed before aggregation."
Partner services around IoT instrumentation and data all lead to a key corporate value proposition: making better decisions, Hoppers said.
Tennefoss concurred. "There's tremendous added value in the data mining. Managed IoT or IoT as a service (IoTaaS). Analytics engines that mine this data, which is massively complex. There will be a big need for channel partners who understand business processes, a really specialized art."
Angela Beltz, vice president of the Cisco Solutions Group at Tech Data, noted: "Bigger partners are partnering with us on data analytics. There's an opportunity for channel partners to recognize where they can participate in new solutions and add data analytics, aggregation points, perhaps even set up on-premise where they can grab data right away for real-time analytics. Many end-customers don't know much about this. Partners can create a practice teaching customers to leverage the data to get the outcomes they're hoping for."
Beltz recommended that partners "come to know where to monetize. Partners are trying to create annuities and operationalizing IoT. Expand that a bit and look at opportunities around IoT and data analytics."
This speaks directly to the many channel partners who have added managed services to their business to create monthly recurring revenue annuities and who will find managing customer IoT services and the enormous quantities of data collected by them to be a substantial new source of income.
Key watchwords for partners will include "secure connectivity," Tennefoss predicted. "Bone up on security. It's going to be unacceptable to deploy these systems without security. And remember, more of these devices will be mobile. If you're just in the switching infrastructure business, go back and learn about wireless."
Data and security are the first things channel partners seeking to enter the IoT fray should focus on, CompTIA's Robinson said. The concept of data has taken on a new priority as companies grow more digital. Companies are treating data as a precious commodity. Security and privacy of data are more important than ever with all these massive hacks taking place," he added.
Tennefoss sees security as the IoT's best opportunity to generate recurring revenue. "As business processes get tied to reliable IT, you'll need proactive monitoring. Security will be required across the entire ecosystem to protect IT. As more devices exchange information with other devices, there will be a need for a lot more integration in the ability to deliver security in the IoT. Just an air gap will be insufficient. There will be a need to monitor both sides of the air gap. These are tremendous opportunities for channel partners."
The Importance of IoT Partnerships
Strong IoT partnerships will be paramount.
Vendors consider IoT "a large greenfield area," CompTIA's April said. "There's lots of blurring between the lines of IT and non-IT companies, so we're seeing a lot of convergence in this space."
She recommended that partners seek channel-friendly vendors "beyond the big guys" and see what they are doing in IoT.
"Collaboration is key, and we're working in close conjunction with our IoT partners and customers to realize the opportunity for the entire ecosystem," Jerry Lee, director of product marketing, data platform and IoT at Microsoft explained. "Specifically, our partners help tailor IoT solutions to meet the business needs of our customers, ensuring a solution integrates with their existing processes and systems."
Lee offered the following three best practices for selling IoT solutions:
--Developing internal practices around IoT will require cross-functional teams with different capabilities—including hardware, software and service development as well as business consultation, data analytics and more.
--You can't be everything to everyone. Define your core competency on a specific segment, vertical or area of focus in order to differentiate from others.
--Remember that some projects require partnering with others to deliver a solution; so a willingness to join different partner ecosystems is crucial.
No single vendor can do all this on its own, so it's best to turn to partners, Tech Data's Beltz emphasized, "More complex solutions mean lots of opportunity for those partners to monetize on their own."
Howard M. Cohen is a 30-plus-year IT industry veteran who continues his commitment to the channel as a columnist and consultant.