(Image credit: NY Photographic)
I talk to a dozen or more companies involved in Internet of Things (IoT) every week. One thing they all have in common is their desire for the projected IoT volumes and revenues to come to fruition…the sooner the better. IoT has been a hot topic for a number of years now, and concerns over “where’s the revenue” have even caused the term “IoT Platform” to make a showing on the Gartner Hype Cycle of 2015. Truthfully, those of us who work in the IoT space are counting on huge revenues and a lot of connected devices–by 2020. One of the key questions I have been thinking about is how System Integrators (Sis) like Accenture, PricewaterhouseCoopers and Capgemini (the big guys) and smaller segment specific SIs will fit into the picture.
The big question facing IoT vendors today is how do we accelerate adoption and usage? The current revenues from “true IoT” sales into any target application segment are not huge. One of the most interesting things about IoT is the breadth of applications that can take advantage of IoT solutions. You name a vertical segment, and I can name an application that would be called IoT that is either being implemented or will be implemented in the future.
Hugely Diverse Set Of Applications
As an example, I put together a chart showing just some of the applications in major IoT segments.
|Manufacturing||Resources & Utilities||Retail||Healthcare||Government||Transportation||Consumer|
|· Facilities management
· Asset management
· Machine condition
|· Power Generation
· Large farm management
· Mine operations
|· Inventory management
· Supply chain control
· Smart shopper applications
|· Patient monitoring
· Asset tracking
· Personal wellness
|· Building automation· Lighting control
· Public transportation
|· Air traffic monitoring
· Fleet management
· Freight management
· Home Automation
· Home health care
|Copyright ©2015 Moor Insights & Strategy|
Each of these applications and segments has its own specific needs. If I’m a potential customer in need of an IoT solution, how do I go about finding something that fits my needs? The noise surrounding IoT solutions in the market is deafening. Try “googling” the term “IoT Platform” (Note: I tried this and got 4,330,000 results — your results may vary). And based on my experience there are over 200 credible vendors of what could be called an “IoT Platform”.
Let’s also consider the problem from the vendor side. Imagine that you are a provider of IoT platforms or even a networking vendor like Cisco Systems, Dell or Hewlett-Packard Enterprise. The base of potential customers is so large, how do even the largest vendors find those customers, engage effectively and then provide solutions in every segment?
My contention is that the secret sauce to IoT success is going to be System Integrators.
Little Knowledge And A “New” Customer Base
As many vendors are finding out, the customer base for IoT solutions may not be who they have traditionally calling on–from a few perspectives.
First, many purchasers of IoT solutions are from what we call the Operation Technology (OT) side of the house, as opposed to the Information Technology (IT) side of the house that has traditionally purchased products from these vendors. OT applications have been using Machine-to-Machine (M2M) solutions for years, but they have never really integrated their data into the corporate “whole”–the very definition of IoT. The OT people purchasing new IoT solutions have no history or relationships with the solution providers and don’t even know who they are.
Second, the solution providers have little direct expertise in the market segments into which they are selling. They may have some knowledge or understanding of the problems and issues, but they have little deep knowledge of the applications and the business.
Third, often in IoT a solution requires a variety of hardware and software, which does not exist from a single vendor. Even if a single vendor could solve the current problem, the goal for IoT solutions is to become a “system of systems” with data not siloed, but rather shared across the corporation. How does this data integration get accomplished?
All of the above issues can be resolved over time–but it takes time, money and resources to gain knowledge–and remember we’re trying to accelerate a market.
An Obvious Solution
Enter SIs, the simple solution to fill this gap. These vendors have been calling on targeted IoT verticals on the OT side of the house for years, developing relationships and delivering solutions. They are built for stitching together solutions from multiple vendors to solve OT problems. Their whole reason for existence is to fill this gap between vendors and targeted market segments. In my mind, it’s a simple equation: the hardware and software vendors with the most robust System Integrator channel will be the fastest to market, the quickest to revenues and the one to beat in the IoT game.