IoT – Channel Ready?

The analysts continue to make outlandish predictions on the number of connected devices we are going to see in the market by 2020 but for the Channel there is still a sense of how do they get into this market in a meaningful way without getting burnt by low margins and lengthy support contracts. Here, David Dungay went out into the market and spoke to those who are making strides in Channel IoT (Internet of Things).

“Improved sales force morale isn’t usually a benefit that’s picked up on or talked about, but having a new and exciting solution to sell to customers is something that always gives sales people a renewed spring in their step.” Anton Le Saux, Head of M2M and IoT at Zest4

“Improved sales force morale isn’t usually a benefit that’s picked up on or talked about, but having a new and exciting solution to sell to customers is something that always gives sales people a renewed spring in their step.”
Anton Le Saux, Head of
M2M and IoT at Zest4

Explaining IoT to someone in a business that isn’t particularly technical is akin to explaining how to record Emmerdale on the VCR to anyone over seventy. If they don’t understand the underlying mechanisms now they aren’t likely to get their head around it, but why should they? Actually, the how’s and why’s aren’t necessarily important to understand. It’s the business benefits which customers need to realise. Do your customers need IoT in their business, but more importantly, do they know they need IoT in their business? This is the question which the market is divided on.
Anton Le Saux, Head of M2M and IoT at Zest4 commented “For some of the more forward-thinking partners and their customers, the benefits of IoT have most definitely been realised. But for the mass-market, I would have to say ‘No…not yet’. But here at Zest4, we’re always working hard to educate partners on the benefits of IoT and give them the confidence to take the leap.

We’re already working with a growing number of partners who have realised the benefits for themselves and their end-users, and they’re successfully supplying IoT solutions to their customer base. Our partners are enjoying increased long-term revenues, increased customer loyalty and, I would also have to add to that, a happier sales force.

Improved sales force morale isn’t usually a benefit that’s picked up on or talked about, but having a new and exciting solution to sell to customers is something that always gives sales people a renewed spring in their step. Selling the same old solutions time and time again can become a bit long in the tooth, so having a revolutionary new technology to talk to customers about that offers a host of additional rewards and benefits, most definitely gets them buzzing.”

David Samuel, MD of 24Seven, added, “The business benefits of IoT haven’t fully been realised, IoT is yet to take off in the way that it was originally anticipated to. They key things is for resellers and telcos to tailor products for their customers. IoT is still a foreign language to some, but it’s vital to customers.

Analyst firm Gartner has estimated the number of IoT devices across the world in 2017 to be around 8.4 billion, which by 2020 they’re forecasting to jump to 20.4billion. This suggests that over the next 3 years, if this is accurate, it will have the potential to boom.”
Bernie McPhillips, Sales Director at Pangea, says “Absolutely, many businesses, large & small, are seeing the benefits of deploying IoT Solutions. Research shows adoption of IoT has risen from 15% to more than 80% in the last 4 years, and almost 25% of IT spend is now on IoT. Solutions often have a swift and powerful return on investment, driving huge efficiencies through automation of processes and pre-emptive maintenance.”

Channel Adoption
The adoption of IoT in the Channel has been mixed to date but there are partners who have won some major deals already. However, where do partners sit in a complex value chain? Due to number of providers involved in delivering an IoT solution has a disconnect emerged preventing partners getting the revenues they deserve?

Nick Sacke, Head of IoT and Products at Comms365, commented, “To date, the channel has had little input into the evolution or adoption of IoT – and for good reason. How can a reseller possibly embrace the full, end to end implementation required? From diverse sensor technologies, a lack of network standardisation, large up-front costs, and the need for multiple vendors for just one solution, achieving an end to end IoT deployment has been deemed to be too big, too complicated and too high risk.

Instead, resellers that have been keen to become the first to provide IoT solutions to their customers have rebadged the IoT services from mobile carriers. Unfortunately, not only do these services do little to build on legacy Machine to Machine (M2M) offerings, they don’t maximise the true value of the technology. Furthermore, the major carriers are in many cases working directly with enterprises on the largest and most lucrative M2M deployments, so where does this leave resellers in a congested, price driven market?

It is no wonder that IoT has yet to truly take off with resellers. Where is the revenue stream? What is the value of investing in IoT knowledge and expertise when operators are taking by far the biggest piece of the pie? And where does that leave the vision of a connected world; of millions of sensors providing data that can be captured and analysed to drive new efficiencies, cut costs and uncover revenue streams?”

McPhillips commented, “There does not have to be disconnect if it is done the right way. It is very crucial in the modern world, to build these IoT partnerships. Synergy with the partners within your ecosystem will allow you to not only achieve your current goals, but also create a perpetual machine of ideas, projects, and positive energy in the long run. Partnerships have a different look and feel at every company because each one reflects the needs of a different set of customers. It is also important that the ecosystem revolves around the company’s core values, technologies, and product offering.

iPhone, Facebook, and Amazon are all leaders in their market, and all have wildly successful partnerships. This isn’t a coincidence. A partnership extends a company’s footprint and amplifies its market share, giving the company an undeniable competitive edge. BlackBerry and Myspace were once dominant players in their respective markets, but they were unable to compete in the long run—this was at least partially due to their lack of complementary products and applications.”

Partner Opportunities
So where are partners making the most ground in IoT? Are there undiscovered opportunities out there?
Samuel commented “The traditional and well-documented IoT sectors are still dominating. We’re seeing a lot of trackers, CCTV, pre-fibre connectivity and fibre back up devices being sold by resellers. For the most part, what they’re selling hasn’t been as diverse as was expected, with the focus being on traditional applications.”

We have also supported our partners to win business using bespoke IoT solutions such as smart streetlights, drains and even beer pumps. One of the biggest opportunities we see in the market for reseller is the connected car which gives fleet managers the ability to optimise the destination route to save on fuel costs while reducing the time in transit to help increase efficiency.
Le Saux commented, “Managed Connectivity solutions are increasingly being sold and are replacing traditional mobile data connections that tend to create more challenges than they solve.

Aside from Managed Connectivity, easy-to-understand products such as pre-Ethernet and cut-the-wire solutions are also being actively sold for applications such as temporary offices, failover plans and connectivity for greenfield sites. Vehicle telematics is another solution that is proving popular amongst Zest4 partners.

But what we’re also seeing now are partners moving into more complex IoT solutions. Having started off with these simple, end-to-end solutions, many of our partners have grown in confidence and are embarking on conversations about true IoT applications and solutions that will make a real difference to their customers’ businesses.”

Trends in IoT
There is no denying that IoT is re-shaping many industries, for the Channel the opportunities to get involved in this industry are numerous right now… and they will only increase as technology moves on. The major trends in the market are worth keeping an eye on as the technology is continually evolving which are presenting more opportunities.

Given the wide range of use cases the IoT will need to address, diversity of solutions and technologies is going to be a core characteristic of this market going forward. Licensed spectrum low-power wireless access (LPWA) technologies are coming into their own in 2017, following the standardization of several licensed spectrum LPWA technologies in 2016. Combined with the ongoing deployment of unlicensed spectrum LPWA networks, this should open up IoT opportunities to a host of new industries, and enable applications in new domains, due to the lower cost of LPWA deployment. LPWA will support low-cost, long-battery life IoT devices which can support a variety of low-bandwidth applications, from smart parking to asset tracking, but can also be reliably and securely integrated with and tracked by mobile network operators.

Ovum’s Top IoT Trends
-LPWA goes mainstream
-Service providers are diversifying connectivity offerings and reaching out to developers
-Securing the IoT becomes an enterprise and consumer priority
-Big data and machine learning will unlock new IoT opportunities, as processing moves closer to the ‘edge’
-IoT’s disruptive impact will drive the growth of new as-a-service business models

Sacke agrees that security has become a bigger priority in IoT, he said “Security is likely to be a hot topic in the industry over the coming months and we’re likely to see some people that unfortunately don’t do it right and suffer the consequences. This reiterates the importance of working with the right IoT provider to ensure end-users are supplied with a secure solution. Experienced providers will supply connectivity using private secure APN’s, secure VPN’s, SIMs with static Private IP’s, and data will only be visible in a secure managed portal.

Sadly, I do frequently see partners trying to cut corners with their installations which comprises security for their customers. Putting mobile broadband SIMs into IoT devices is a classic mistake but partners do it to try and save money.”
McPhillips says, “The timing to adopt IoT has never been better. Sensor technology has vastly improved and become cheaper at the same rate, as have broadband and mobile connectivity. Cloud storage is now standard for most companies and individuals alike, meaning we can store all that data generated, and analyse it in smarter ways using the tools created for Big Data analysis in last few years.

Customers will have an increasing propensity to buy IoT Solutions & it’s likely they will turn to the providers of their telecoms and ICT services first. The Channel is in prime place to maximise the opportunity, and have to be ready to have the right level of conversation. The tipping point will be when customers stop asking ‘why would I want it’ and start asking ‘why wouldn’t I?’”

IoT – The business benefits

Increasing productivity and saving time – Connecting existing sensors we can predict and report system health to reduce costly downtime, as well as collect valuable real-time analytics that can be used to improve efficiencies.
Optimising resources and reducing costs – GPS location and data gathered by real-time monitoring can help to optimise fleet routes to save on fuel costs while reducing the time in transit.
Crafting better user experiences – In marketing, IoT enables the smarter collection of customer data that can then be used in smarter ways to create targeted campaigns, tailored digital displays, and bespoke real-time pricing changes to increase conversions.
Protecting workers and the environment – Wearable technology can help workers perform tasks quicker and make less mistakes, whilst movement, activity, speech sensors, and real-time air quality data could keep them safer by identifying dangerous situations.
Creating new value added services – Many companies use IoT to sell services outside of their core offering to improve their customer operations.


Partner Comment

Tom Sime, MD of Exchange Communications
“Retail is one example where there is still an element of disconnect with the move towards greater connectivity. For example, while footfall is often measured in shopping areas, technology exists today through the IoT which could gather valuable additional information about customers and, indeed, their shopping habits.

Instead of merely estimating how many people have passed through a given area, we could potentially determine things like dwell time and demographics too. So much untapped potential remains.”

Ed Says…

To date, the complex nature of developing an IoT solution as stunted adoption in the Channel. Several providers in the market have worked hard to simplify the proposition for partners and make it a viable proposition. The Channel could play an instrumental role for businesses wanting to adopt the technology and they would do well to invest time in being able to cope with the questions when they inevitably come in. The new wave of Channel friendly ‘IoT as a Service’ solutions are set to transform the market in my opinion.

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David Dungay

Editor - Comms Business Magazine