Internet of things News

Partner Success In IoT Will Hinge On Navigating Issues Like Security, Pricing Models

Joseph F. Kovar

Solution providers need to get prepared to take advantage of the once-in-a-lifetime opportunity stemming from the oncoming Internet of Things avalanche.

That's the word from Stephan DiFranco, principle at the IoT Advisory Group, a San Mateo, Calif.-based consulting firm, to an audience of solution providers at this week's NextGen 2017 Conference & Technology Expo in Los Angeles.

DiFranco, who prior to founding the IoT Advisory Group held IoT executive positions at Cypress Semiconductor and Broadcom, said that between smart phones, PCs and tablets, the world has in the last 30 years deployed about 10 billion connected devices. That, however, that is only the beginning, he said.

[Related: Hitachi Combines Data Center Infrastructure, IoT, Big Data Capabilities In New Company: Hitachi Vantara]

"In my conservative estimate, there will be 10 billion new connected devices in the next five years," he said. "So it took 30 years to get to 10 billion devices, and now it will take five years to get to the next 10 billion devices. This is the largest change in the IT industry in years."

On the consumer side, DiFranco said devices featuring artificial intelligence will allow easy connection of multiple devices in the home. "My prediction is, the home hub will be Google Home or Amazon Echo," he said. "That will be the critical way you connect in the home. You will never have to press a button at home."

On the commercial side, DiFranco estimated there would be 4.4 billion devices in play by 2020, of which 3.2 billion will be vertical-specific devices. For instance, he said, a hospital might have 10,000 connected devices. "And people there have no clue about what devices they have and what they do," he said.

Early IoT adopters will likely be in the manufacturing and logistics, retail and point of sales, and hospital and extended care industries, DiFranco said.

"Why these three?" he said. "These are three industries that already have deployed devices in their old model. And they need to get the data from their devices. These industries use data, and are data driven."

DiFranco divided the IoT industry into five task-areas. Three of those tasks--data collection, the cloud platforms on which IoT applications are run, and the data analysis--will be done by such companies as Google, Amazon Web Services and Microsoft Azure, he said.

However, the system design and the integration of the connected devices will be treated like IT projects are handled today, he said. "Someone has to go into the hospitals and other places," he said. "This will be the biggest part of the industry. And there is no single company that will do this. We feel the IT VARs will become the IoT VARs."

DiFranco identified a number of issues that solution providers may need to be aware of.

The first is security, which will become an issue as more connected devices are deployed, DiFranco said. "You end up with a whole lot of things you will talk to," he said. "You know when a device is supposed to talk to you. You know what it's supposed to do. And if it doesn't do what was expected, you shut it down. Why? It becomes a risk."

Another issue becomes who owns the data generated by connected devices, DiFranco said. He cited the example of a large machine deployed by a company like Siemens or Heidelberg, which is typically leased to a customer and not sold.

In such situations, DiFranco expects ownership of the data will be divided according to the needs of the stakeholders in the data, and in particular to whoever subscribes to it. "Siemens gets the maintenance data, and the hospital gets data used for patient healthcare and billing," he said.

The pricing models related to IoT for the channel will also vary according to the platform used for a specific purpose, DiFranco said. These include charging a one-time fee or charging based on the number of messages or devices, on the feature set used, on the number of seats or users, or on the amount of data generated.

"I don't have the answer for how you're going to charge for IoT yet," he said. "Chances are you will end up repping one of these platforms, and you'll adopt its pricing model."

DiFranco ended his presentation with a look at Amazon's recent acquisition of Whole Foods, which he said was done for the data. It is possible to know almost everything about someone's life by looking at their grocery store purchases. "Food is the only thing we buy in retail that we buy the same thing week after week," he said.

DiFranco did a good job of highlighting the major changes taking place in the IoT market, said Joey Pomerinke, owner of North Bay Computer Repair, a Santa Rosa, Calif.-based SMB solution provider.

Pomerinke told CRN his company is just starting to look at how IoT will impact its services for its SMB customers, including the increased use of smart devices, automation such as lighting systems and temperature, and the use of devices like Amazon Echo .

"We're seeing big changes in areas like grocery stores, and customers are asking where the business is going," he said. "Customers are getting serious in every aspect. And DiFranco's take on how IoT is moving lines up with mine, but he gave me a few surprises."

DiFranco' s take on how Amazon might use Whole Foods to gather data is important, Pomerinke said. "It's an amazing image he put in peoples' minds," he said.

Joseph F. Kovar

Joseph F. Kovar is a senior editor and reporter for the storage and the non-tech-focused channel beats for CRN. He keeps readers abreast of the latest issues related to such areas as data life-cycle, business continuity and disaster recovery, and data centers, along with related services and software, while highlighting some of the key trends that impact the IT channel overall. He can be reached at

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