IoT Channel Chronicles: Alvarez Technology Group Doubles Down On Agriculture Internet Of Things Applications

Connected Farms Increase Productivity, Monitoring Capabilities

Luis Alvarez, president and CEO of Alvarez Technology Group, a Salinas, Calif.-based solution provider, is a channel leader who is generating revenue from IoT. Alvarez is working with clients in the agriculture vertical to implement connected sensors, helping them monitor crops and water utilization.

At XChange 2016, hosted by CRN parent The Channel Company, Alvarez stressed that IoT is "happening today," and it is opening a big opportunity for traditional VARs to jump in.

"The greatest opportunity [for IoT] is in the services side because that is really the differentiator for me in how IoT is going to be deployed in our clients' world," he said. "Whether you're in the SMB space or the enterprise space, it will be all about services."

Following are Alvarez's thoughts on how solution providers can monetize the Internet of Things based on his breakout session at XChange.

For more on the Internet of Things, check out the previous entries weekly IoT Channel Chronicles series.

Connected Devices Are Growing At An Explosive Pace

Alvarez: It's really about devices. Currently there are an estimated 22 billion connected devices. They estimate that in the next four years ago, in 2020, that there will be 50 billion devices – that's six devices per person on the planet. That's a lot of devices and connected things. … But I am sure that 50 billion is a vast understatement. I think its closer to 75 billion devices in the next four years. Just think about your own house, and how many IoT devices you already have. This is the first law of IoT: Anything that can be connected will be connected. And that's what represents the opportunity for us. Because our clients are connecting up more of their devices, and they are looking for more ways to use IoT to do more with less.

Customers Are Looking For Operational Efficiencies

Alvarez: What are [customers] looking for? First thing that clients want is cost savings from operational efficiencies. I'll give an example from my world – we work with a lot of agricultural companies … they manufacture these bags and plants where they bring in all the raw materials, they process these raw materials, they put them in a bag, they send them out, they get transported to the store.

It used to take about 200 people in a typical plant 10 years ago to manufacture half the product that most plants are producing today. Because of automation and robotics, 24 people now work at the plant, and they produce twice as much. The goal for most of my clients on the manufacturing side of agriculture is to reduce that head count by half, and increase the yields by 100 percent in those same plants over the next five years.

IoT Enables Better Information, Monitoring of Assets

Alvarez: The other thing our clients want is better information … we have a lot of data, but the problem we have is that data is siloed. Many of our agriculture clients use weather monitoring systems – they put sensors all over their field to monitor different reading of different weather-related climates. All that data is real-time uploaded to dashboards and the cloud, and they can pull out their iPads or smartphones and get that information. … [Another advantage is] better monitoring of assets. This is a real thing for people who have a lot of expensive equipment scattered around the country or internationally.

The Biggest Opportunity In IoT Is Data Analytics

Alvarez: From my perspective in agriculture, what that means for us is automation, sensors and business intelligence. That's what we're focusing on in agriculture. But what are the possibilities for us as IT professionals with IoT?

[Data analytics] is the biggest opportunity – helping our clients make smarter decisions based on giving them more actionable intelligence. Helping them aggregate all that data that they're collecting and doing something useful with it. we actually spun up a data analytics unit, it consists of a couple people right now, but we think that will be one of the fastest-growing areas of our company. Everyone we talk to, wants it. We held a session a few weeks ago where we brought in 20 or 25 agriculture leaders in our community and talked to them about data analytics, and in their survey form, almost every single one of them said I want to talk more about this.

Security Is A Problem – And An Opportunity

Alvarez: The problem with security and IoT is that they seem to be polar opposites right now. We worked with a lot of technology startups who are trying to introduce their products and services to the agricultural community – and security is the last thing they think about.

In [a roundtable I had] I was talking about precision farming, and I pointed out that all these sensors and devices they already had that are used to automate their plants and crops, those things are not secure. I asked … What would you do if you get a call one day that some hacker had taken control of your plant, and they told you that you can't produce anything until you pay me $1 million. Would you pay that? Everyone in the room said yes, because the loss would be so much greater. It scared them that could happen, it's not something they had thought about. So security is a real opportunity for us in the space.

Networks and Communications Another Opportunity

Alvarez: All these devices need to talk. Partnering with companies like Verizon Wireless, like we do, and other communications companies – those are opportunities for us to develop smart and secure networks for our client. Those companies are looking for us to partner with them. When we approached Verizon and told them we were stepping up an IoT practice in agriculture, I had VPs calling me. They are excited about this opportunity, they want to get involved – but they don't know how. They need us, because we have those connections to the customers, to make those introductions.

Standards Are A Challenge

Alvarez: One of the challenges in IoT is around the rules and regulations, and standards. There are currently six standards bodies that I know of. We take it for granted that Ethernet is Ethernet is Ethernet. But in the IoT world it's not as simple. There are various flavors of Ethernet, if you will. There are various flavors of standards, and they don't all talk very well. Unfortunately at the top of the pyramid of these standards, you have a lot of big companies, you have Microsoft versus IBM, Google versus Facebook, and everyone who is trying to figure out the standards. At some point it will all shake out, but it's a component.

Specializing Is The Key To Success In IoT For Solution Providers

Alvarez: The keys to success in IoT – you need to specialize. You need to figure out who are the customers that represent the greatest opportunity and focus on them. This isn't like deploying a small-business server, where it didn't matter where it was deployed … you need to understand your customer, you need to be able to talk their talk and understand the terms they use when talking among themselves. For that you need to specialize at least at first. As you get bigger, you can add more components.

How Alvarez Works With One Agriculture Application

Alvarez: So one of our clients is a greenhouse, called Floricultura. ... This company is based in the Netherlands and they grow seedlings and every day of every year, they ship 5,000 seedlings by plane to SFO. Those are picked up in San Francisco, driven to Salinas, where they are transplanted into dirt and grown. How it works is these little orchids are moved around by robots all around the top of the greenhouse, transporting these buckets of orchids. … the way it works is, they put the seedlings, the ones raised in water, in dirt, and as they get bigger … they drop the cups into a bigger cup and add more dirt. That part of it is all automated. It's all controlled by back end.

We have a managed service agreement with these folks… to make sure nothing goes down. These robots have to work.