XChange: The 'Fractured' Internet Of Things Market Desperately Needs Channel Players

Vendors are popping up left and right to build the gateways, sensors and services needed for the Internet of Things, but it is solution providers who will be pivotal in pulling these components together into a solution for customers.

That was the message from Stephen DiFranco, principal of IoT Advisory Group, to solution providers at the XChange Solution Provider 2017 conference, hosted by CRN parent The Channel Company. The channel is the missing puzzle piece that will pull together the "fractured" IoT market, he said.

"The good thing about IoT is that it is fractured enough that it needs [the channel] desperately," DiFranco said. "This is a market with a lot of players, but it lacks an adviser who sits down and listens to the customers and pulls all the parts together."

[Related: XChange: Solution Providers Need To Go Back To Consultative Roots To Keep Up With The Cloud]

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As the IoT opportunity becomes more clear – research firm Gartner predicts 20 billion devices will be connected by 2020 – manufacturers are investing more to create the various components supporting IoT, including sensors, modules, gateways and analytics tools.

However, customers need much more than these components – they need control over nodes, management of their gateway, provisioning of updates and storage capabilities, according to DiFranco. And, most importantly, he said, customers need solution providers who can listen to their specific needs and problems, and address those needs with a solution leveraging products from an array of vendors.

Part of the challenge in the IoT ecosystem is that it is not made up solely of traditional vendors such as Cisco Systems and Dell, he said. New companies are cropping up with highly vertical IoT offerings, including SiteWhere, Telit and Ayla Networks.

These companies develop highly specialized products, such as gateways and sensors, that are helpful for solution providers working in certain verticals – but many have yet to establish a channel relationship, or even realize that the channel exists, said DiFranco.

"You've had relationships with the Cisco's and Dell's of the world – but the next world of IoT is a relationship with vertically focused companies," said DiFranco. "The problem is that these companies have no idea who you [solution providers] are. They need to get to know you."

Another challenge for the channel is that solution providers aren't sure how to start building out their IoT businesses. Solution providers can begin by choosing a primary vertical in which to deploy IoT solutions, based on their current customer base, said DiFranco.

"The typology for IoT is different from vertical to vertical – for instance, a smart coffee pot has a different typology than a smart city," he said. "Pick a vertical, and from there you can pick partners for which gateway, software applications and security tools you'll use."

Scott Langdon, owner of Connectivity Source, a Raleigh, N.C.-based Century Link partner specializing in cable, integrated access, data and SIP services, said he thinks the Internet of Things will be "exploding in the next few years, as companies try to better utilize resources."

"It's where the future is … it's an interesting dynamic to be part of," he said. "It's so new that I have to be investing in it. I sell bandwidth pipes, and my whole market has changed from a traditional market of phone system vendors to security cameras as more devices become connected."