The channel is no stranger to the overhyped ‘next big thing’ and marketing departments delight in coming up with pithy catch-all labels for revolutionary technology. Now we have the Internet-of-Things (IoT) and the more expansive Internet of Everything (IoE) as the world’s largest networking vendor, Cisco has dubbed it.
Cisco claims IoE will generate more than $US19 trillion in profit in the next 10 years. That’s trillions. It also expects over 50 billion ‘things’ to be connected by 2020.
What’s the difference between IoT and IoE? According to a Cisco blog: “As the evolution of the Internet suggests, IoE [four pillars: people, process, data, and things] builds on top of IoT [one pillar: things]. In addition, IoE further advances the power of the Internet to improve business and industry outcomes, and ultimately make people’s lives better by adding to the progress of IoT.”
However, people often focus on components involved in IoT or IoE. But according to IDC research, the big slice of the pie – up to 70 per cent - is in the software and applications that take data from the device, analyses that data and prompts action.
The opportunities for sensors and M2M solutions are many and Australian firms have already made inroads in healthcare, retail, utilities, transportation and, of course, home and consumer. Connected cars, homes, hospitals, supermarkets and farms are already a reality.
Significant opportunity
Cisco chief technology officer A/NZ Kevin Bloch said IoE was a $19 trillion opportunity for the channel. “This is significant for the channel – to enable their customers to understand IoE, the value at stake for their (customer’s) business and how to derive this value.
“Although networking and connectivity is an integral part, IoE is not a product and the channel has the opportunity to uniquely define its value proposition in terms of services and solutions that will be relevant to their customers.
“It will be the channel partners who work the most collaboratively with their customers and vendors who will be the ones that win the biggest slice of the $19 trillion opportunity.”
Bloch said 2013 saw a healthy up take of IoE in the road and traffic sector and expected it to continue in 2014. “In fact, Cisco invested in Cohda Wireless, an Australian company which is a world leader in vehicle-to-vehicle [V2V] technology,” he said. “The US Department of Transportation recently officially approved the use of vehicle-to-vehicle communication technologies on public roads in America which is an important decision in relation to Internet of Everything.
“Another Australian company, Linfox, is pioneering IoE technologies in the logistics industry in Australia. Linfox is using M2M in many different ways to improve the efficiency of its fleet.”
Data#3 managing director, John Grant, warned of the pitfalls of getting caught in the “trough of disillusionment” in the Gartner hype cycle (a graphical representation of the life cycle stages a technology goes through from conception to maturity and widespread adoption).
“The industry keeps giving big labels to things and you have to be careful not fall for all the market hype,” he said. “There will be huge amounts of data and it’s really about organisations being in a position to make better decisions.”
He said it was another disruptive force which would create a more proactive business model. “But I am very mindful of the Gartner hype cycle,” he said. “Your question as a channel partner is when do you stop talking about it and investing in it.”
Fujitsu chief technology officer, Joseph Reger, said 2014 would be the year of the IoT. “Growth is driven by advances of technology in the area of sensors and communications, but also in the availability of Big Data analytics methods and Cloud computing capabilities,” he said.
“IoT ties the disciplines of Cloud, Big Data, social services and mobility very nicely together, it can thus play the role of the aggregator for existing technologies and business models. Aggregation almost always accelerates development.”
He said it would be a substantially growing opportunity for the channel, but warned of privacy and security concerns.
Flexera Software VP Asia-Pacific, Tom Canning, said IoT would herald a new revenue stream for the channel. “For the Internet of Things to become a reality, a whole range of ongoing infrastructure renewals and deployments are required,” he said.
“This is where the channel can benefit the most from demand from IoT environments: their expertise, which spans both hardware and software, is well-suited to managing projects that will typically involve integrating networks of sensors with the software needed to collect, share, and analyse the resulting quantities of new data.”
Pilot projects
According to Canning, IBM and Google were already leading pilot projects and would soon need channel suppliers on the ground. Channel players should start seeking out opportunities to partner with these larger players where possible, as well as up-skill into new areas such as sensor deployment and integration,” he said.
“So too, increasingly, will the healthcare sector, where software management and integration will prove essential for sensor data to be transformed into meaningful patient profiles and recommendations. “It’s in this software and analytics space – potentially even providing software management through an “as-a-service” model – that channel providers can develop sizable and sustainable sources of new revenue.
Channel Dynamics director, Cam Wayland, said IoT’s rise was the result of the maturation of a whole new set of technologies, but that it was still in its infancy.
“I think it still relatively immature,” he said. “It’s probably more 2015, but that doesn’t mean people shouldn’t pay attention to it.”
He said the successful implementations would result in the channel’s ability to show a return on investment for the customer.
“A lot will actually happen in 2014, but 2015 and beyond is where we will see the exponential growth,” he said. “The numbers are mindboggling.”
Gartner analyst, Kristian Steenstrup, said privacy concerns could create tremendous amounts of resistance, while the gap between engineering and IT could also slow down the proliferation of IoT.
“How much privacy are you will to give up to allow your vendor to help you shop better?” he said. “The other big question is how to get IT to work with engineering to exploit these opportunities.” Frost and Sullivan analyst Audrey William predicted the emergence of a huge ecosystem of partners to deploy IoT.
“Cisco, Apple, Google, IBM, Bosch, GE, Intel, Qualcomm are some of the companies expected to get more aggressive this year with wearable devices, smart home devices, sensors, wireless systems, sensors, monitoring devices,” she said.
“However it is important to understand that IoT does not just apply to one single player. There will be a huge ecosystem of partners involved in the deployment of an IoT project. Due to the complexity of the IoT, we can expect lots of partnerships and alliances with device manufactures, RFID companies, sensor related companies, wireless and M2M providers and telcos. Large global manufacturers such as LG, Samsung are also getting into this space.”
