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Over a year ago, global systems consulting and systems integration firm Wipro Technologies decided it was time to focus on the Internet of Things (IoT). The company formed a group to develop an "analytic stack" to target four verticals: global telecom and media operators, manufacturing, healthcare, and energy and utilities.
Wipro partnered with Axeda, a cloud-based software and services company for managing connected products and machines. Axeda's cloud platform acts as application middleware, allowing companies to connect assets to the Internet, take in and process information, and manage and build apps that connect back to those assets. Assets could include a device embedded in a car, a piece of medical equipment or an alarm system. Wipro decided partnerships like the one it has with Axeda are the key to success with IoT services.
"We're looking at an outcome-based or connected business transformation," said Alan Atkins, vice president and global head of IoT at Wipro Technologies. Wipro typically works with device manufacturers and is developing embedded solutions for after-market business, such as maintenance and warranty issues, he said. "With Axeda as a partner, we collect data, analyze that data and work out algorithms to predict outcomes and come out with … an end-to-end solution."
While not a new concept -- IoT has existed in the manufacturing realm for a long time -- the notion of compiling and analyzing data from devices and sensors has only recently begun to take off. For the channel, participating in IoT opportunities will require a big mindset change, and, as Wipro has found, partnerships with manufacturers and other providers.
Seth Robinsondirector of technology analysis at CompTIA
"[IoT] is a vision of how to bring together lots of different technologies to create new customer experiences, transform business models and enhance a provider's relevance in a business's transformation," said Tiffani Bova, vice president and distinguished analyst at Gartner. "So for channel partners, it is a significant shift to more high-end, advanced business process consulting and true system integration."
IoT touches people, systems, processes and things, and, "for the traditional channel, is way outside their comfort zone," said Bova.
Gartner predicts that the total economic value-add for IoT services will be $1.9 trillion in 2020 across a number of industries, led by manufacturing (15%), healthcare (15%) and insurance (11%).
Taking the first step into the IoT space
Opportunities exist for the channel, but they need to look at their strengths -- whether they're in hardware or in services -- and figure out what makes sense for them in developing an IoT play, said Seth Robinson, director of technology analysis at CompTIA. "People have to be cautious as they go into this. They can't think, 'The Internet of Things will be a new line of business for me,' but [rather] think of their business and how that can be expanded into an IoT storyline."
While CompTIA hasn't done any studies yet on whether channel partners are offering IoT services or considering moving into the space, Robinson said, "My gut feeling looking at the evidence out there is there's interest."
"People can smell the business opportunity, but at same time they're a little hesitant because of previous trends" where they have jumped in headfirst and found it's a little more difficult and complicated than they thought, he said.
Robinson said there is caution over whether IoT is just another buzz word and whether this will be a play for big vendors only. "It will take time to sort that out. We'll need to go through the descriptions of what's going on here and why it's important and what an end user might be trying to do with an IoT play."
The cloud will play a significant role, he said, and "is somewhat of a prerequisite for this." This is especially true in the small- and medium-sized business space, where smaller partners will not be able to build out an infrastructure themselves that can pull in and control data from a lot of different sources, Robinson said.
"They'll be able to have some play in this, thanks to the cloud," he noted, but added that most companies will likely take a hybrid approach as they build out infrastructure because of security and agility issues. Most companies will also mix and match on-premises systems with private clouds and public clouds for this new strategy.
Bova agreed, saying, "For partners, the first step to being able [to] deliver on the promise of IoT is to embrace more cloud, application development and consulting services and build hybrid solutions leveraging both on- and off-premise products."
The channel will also need to follow what happens with protocols around IoT, Robinson added, and there are discussions and consortiums forming to figure out which standards will catch on and enable the growth of IoT.
"There needs to be some protocols for all of these devices to talk to each other,'' he said. "It will be quite a bit of time here until we determine a winner, so from a channel perspective, if [they want] to get their feet wet … there are two options: jump in and dabble in all these IoT standards activities, and the other is to wait a while and see which will rise to the top."
'The Year of Channel Enablement'
Axeda is seeing "a ton of interest" from companies that want to build out applications to put on top of IoT devices, said Dan Murphy, vice president of marketing. "Internally, we've called this 'The Year of Channel Enablement.' "
Murphy believes the channel has started heading toward IoT opportunities and 2015 will be the year partners begin to offer actual IoT services.
"It does require a cross-functional set of skills [for systems integrators] to be really good at this," said Murphy. They will have to know about connectivity, security, how cellular systems work and modules, all the way up to building apps on top of a platform, he added.
Wipro, meanwhile, has forged ahead. Its client base has changed from traditional IT with the CIO as the main client, to machine to machine, "which is almost everyone but the CIO," said Atkins.
The CIO still owns data and has a role to play in helping others -- not unlike how the CMO and CSO monitor devices and do predictive analytics, as well as give feedback on how equipment is performing, work to spot an issue before a machine fails, and so forth. "By doing that, you can save a lot of costs in your organization,'' he said. "The question is, 'Do you need to have all the spare parts in stock or just the ones that are predicted to fail?' We can say, 'This machine will fail within four hours of operation, but it won't if you change this part now.' "
The channel can play a niche role in the operational-technology side of IoT if partners are able to actually monitor the sensors, systems, people and devices, said Bova. But, it could be a long road ahead.
"The channel, in many ways, is still struggling to find their way to building profitable cloud services, consulting and app development businesses," she said. "Leap-frogging that right to IoT may be a bit difficult unless the partner is 'born in the cloud' and already very comfortable with partner-to-partner collaboration and playing a participating role -- not 'owning' the customer, in this case."
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Esther Shein asks:
Is your company ready to offer IoT services?
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