Luis Alvarez started what he calls the "IoT journey" after noticing that something unexpected was happening with some of his customers.
The president and CEO of Alvarez Technology Group, a Salinas, Calif.-based managed service provider, said two years ago his customers in the agricultural sector began asking for help with operational issues—such as analyzing soil and hydration metrics in greenhouses, or monitoring milk production in cows—instead of the back-end office issues they traditionally grappled with. Alvarez jumped on the opportunity and began working with customers to implement connected sensors in their fields, helping them monitor crops and water utilization.
Fast forward to today, and IoT solutions make up approximately 10 percent of Alvarez Technology Group's services business—and the executive gets two to three calls a week from vendors looking to partner with him, opening up opportunities for his business to expand.
[CRN Presents: The IoT Channel Chronicles]
"Vendors are actually looking for partners who can bring them opportunities," said Alvarez. "[Vendors] want to get involved—but they don't know how. They need us because we have those connections to the customers. We've always been a regional player, and now because of these linkages we have a future role as a global company."
Alvarez Technology Group is one of many solution providers leading the charge for customers and vendors in the burgeoning IoT arena. Although IoT is still a fairly nascent market, solution providers are already building practices around the technology and bringing in IoT revenue.
In a recent CRN Intelligence survey of 241 solution providers, 26 percent of respondents said 11 percent or more of their company's revenue currently comes from IoT-related products and services, with 12 percent saying IoT drives 21 percent or more of their revenue today.
Those figures grow as solution providers look to the future. More than 35 percent of respondents said IoT will contribute 11 percent or more of their company's revenue in 18 months, with 14 percent saying IoT will drive 21 percent or more of their revenue by that time, according to the survey.
Industry powerhouses including Intel, Cisco Systems, IBM and a host of others have been staking claims in the IoT space, which market research firm IDC predicts will grow to $1.7 trillion in 2020, up from $655.8 billion in 2014.
Channel partners with loyal customer relationships, comprehensive understanding of vertical markets, and in-depth managed services expertise are in prime position to drive IoT sales, said Stephen Lurie, vice president of IoT solutions at solution provider Zones, Auburn, Wash.
"We're on the front lines, we're getting the requests from customers," Lurie told CRN. "The channel is taking the lead in the IoT space, and vendors are starting to see that now."