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Alexandre Mesguich

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Alexandre Mesguich runs the Enterprise Research division at Context, covering channel management services for the Storage, Servers, Networking, Security Hardware and Software industries.
By | Alexandre Mesguich 11th August 2014 10:19

IoT: Industry snakeoil or one-way ticket to fame and riches?

Channel firms should choose vendor weapons wisely

Is the Internet of Everything (IoE) just another tech buzz word in an industry known for marketing bluster? It is doomed to go the way of Service Oriented Architectures and Web 2.0?

If you think so, maybe you should take a peek around you. Cisco boss John Chambers said earlier this year it would have five to 10 times the impact on the world as the internet itself – providing a multi-trillion dollar opportunity, if analysts are correct. Elsewhere, Google appears to have nailed its colours to the mast with the $3.2bn acquisition of smart smoke detector firm Nest.

At CONTEXT we’ve also seen signs of a burgeoning opportunity for the tech channel with all things IoE related – but the key to success will be in choosing your technology vendor partners carefully.

It’s clear manufacturers are gearing up for something big, and part of that involves the customary hyping up of the market, but Gartner predicted as far back as last September that the IoE will create $1.9 trillion of economic “value add” by 2020.

It’s not hard to spot the opportunities for the channel – not only in the proliferation of internet-connected smart devices, but in cloud storage, processing, pipes and software needed to manage and enable the flow of data.

IP-connected CCTV cameras are a good example: one of the first IoE technologies to come of age over the past two or three years thanks in part to growing public sector investment in town centre surveillance. It created demand for the cameras themselves; specific types of network attached storage (NAS); and even Big Data and facial recognition systems developed to enable better crowd control and security.

The London Olympics also gave sales a massive shove in the right direction. CONTEXT recorded unit sales growth of IP cameras at a whopping 430 per cent from first half of 2012 to 2013 on the back of the Games. In Europe as a whole the figure stood at 157.7 per cent.

The stats from 1H 2013-2014 may seem underwhelming by comparison – a 55 per cent decline in the UK and up just 6.4 per cent in Europe, although this is more than likely because 2012-13 was such a special year.

I’d predict the second half of 2014 or next year will see sales getting back into positive growth, especially with the rise in consumer demand for such systems.

Other opportunities exist in the “smart home” space, with internet-connected TVs and audio equipment – not just in supplying these products for end users, but also the cloud storage and bandwidth needed to deliver content. Earlier this year the new 802.11ac standard was adopted, which will provide a major driver for upgrades as the IoE continues to demand ever greater bandwidth and faster access to data.

There’s even a push coming from the healthcare industry – where gadgets like heart rate monitors and internet-connected weighing scales are finding a new customer base amongst the elderly.

With this backdrop, it’s easy for channel players to get carried away and jump on the first IoE bandwagon they can find. We advise caution. Revenues will be linear so the need for education, training and associated services will be key to success in a very competitive environment with many new emerging vendors.

There are also opportunities with the big players – Cisco, Oracle, IBM etc – which have strategically positioned themselves to grow here as they know IoT will help fuel and consolidate other growth areas like cloud, mobility, security and social.

However, no one vendor can provide the entire IoT solution, so the channel needs to be smart in its choices. If you can associate with the right vendors, there’ll be a great opportunity to capitalise on this new era in ICT. There may even be a chance there to reinvent yourself as a cloud-ready infrastructure or software and services provider.

The real trick is in knowing which partnerships to foster and which to leave alone.

You want firms which are disruptive but which also have a strong track record, agile but with reliable products built to open standards – and a major focus on the user experience. Fail to tick enough of these boxes and your great leap into the Internet of Everything may leave you with a big fat nothing. ®

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