Tapping IoT's Emerging Opportunities: What It Will Take

By Michael Vizard
IoT challenges

In theory, at least, the Internet of things is going to add trillions of dollars in value to economies around the globe. In practice, though, it may take time for companies in the channel—many of which will need new skills and business models—to capitalize on the IoT phenomenon.

Market forecasts show a mixed picture.

In the optimistic camp are small and midsize businesses and managed service providers, 26 percent of which expect IoT to have a bigger financial impact on their business than any other IT trend, according to the findings of a recent study conducted by Vanson Bourne for AVG Technologies, a provider of an IT managed service platform.

A separate global survey found that nearly 65 percent of IT and business decision-makers have already deployed at least one IoT solution in the enterprise. Additionally, more than eight in 10 of those polled said IoT offerings will be the most strategic technology initiative for their organizations in a decade, according to the study, conducted by Forrester Consulting on behalf of embedded systems and service specialist Zebra Technologies,

Despite that enthusiasm, the IoT opportunity is still relatively nascent for the channel.

A recent survey of IT executives conducted by CompTIA found that, in terms of entities that would make the most money as organizations embrace IoT solutions, IT integrators and MSPs ranked third and fourth, after device makers and providers of analytics applications. But that same survey found that only 9 percent of the IT solution providers polled said they would definitely be in a position to make money from IoT in the next two years, while 23 percent said they would probably be in a position to do the same.

The primary issue, of course, is the fact that IoT involves not only mastering a broad swath of technologies, but also setting up of new business models. Many of the organizations likely to deploy an IoT solution have not figured out how they plan to actually derive business value from those investments, and the vendors that solution providers partner with are just beginning to get their IoT channel programs in place.

Cisco, for example, has been developing a portfolio of IoT certifications designed to create a vast ecosystem of partners capable of deploying Cisco technologies within an IoT environment.

SAP, meanwhile, just launched a raft of IoT applications that it plans to deliver via the cloud. However, the company is just now beginning to put the channel programs in place that would be needed to take those offerings to market on a global basis, according to Kevin Gilroy, senior vice president and general manager of global indirect channels and small and midsize enterprises at SAP. And even then, the number of potential solution providers with the skills necessary to take such offerings to market is likely to be fairly limited, he added.

"IoT is going to be an opportunity for a specific class of partners," Gilroy said. "It won't be a broad-based kind of thing."

In fact, IoT solution providers must be intimately familiar with the business processes that any IoT solution enables if they are going to succeed. As such, they will need to master everything, from deploying and managing the endpoint that collects data to the analytics applications in the cloud that make sense of all that information.

Given those requirements, while there is a lot of hype surrounding all things IoT, solution providers should focus mainly on business-to-business applications, Brendan O'Brien, the co-founder and chief evangelist for Aria Systems, a provider of tools for managing recurring revenue streams, said. "The real value is on the business side," said O'Brien. "That's where the money is."

Others contend that as far as the real IoT opportunity is concerned, collecting data is only a means to an end.

The real business value of IoT will be derived from the amount of actionable intelligence actually generated, said Puneet Pandit, CEO of Glassbeam, a provider of a machine learning analytics application delivered as a service. "Right now, we're dealing with the traditional hype curve," Pandit said. "But organizations will be looking for someone who can take all this data they have and turn it into actionable intelligence."

At the end of the day, solution providers of all sizes will be able to tap into a range of IoT opportunities. The only thing that is not clear is to what degree existing solution providers will be able to ramp up the expertise required to take advantage of these opportunities, versus the amount of business that will go to solution providers that were founded specifically to address the IoT opportunity.

Regardless of who delivers the solution, broad skills—from deploying and managing apps running on embedded systems to aggregating the data collected within an analytics app in the cloud, will be needed for solution providers to seize the IoT opportunity.

Michael Vizard has been covering IT issues in the enterprise for 25 years as an editor and columnist for publications such as InfoWorld, eWEEK, Baseline, CRN, ComputerWorld and Digital Review.


This article was originally published on 2014-11-25