CRN Exclusive: How Real Is The IoT Opportunity? Solution Provider Survey Goes Beyond The Hype

IoT Is Gaining Traction, But Solution Providers Still Face Challenges

Vendors including Intel, IBM and Cisco have doubled down on their IoT strategies, tapping into the nascent market that research firm IDC says will reach a staggering value of $1.7 trillion by 2020.

But are solution providers reaping the benefits from this emerging market yet? CRN Intelligence, the research arm of CRN, conducted a survey of 240 solution providers earlier this year to find out how real the channel opportunity around IoT is today, how big it will be in the future, and what channel-friendly vendors need to do to help partners double down on the Internet of Things.

Following are 10 insights from solution providers about the opportunities and challenges they see with IoT.

1. Most Solution Providers Are Making Money Today With IoT

While the Internet of Things may be in its infancy stage, most solution providers interviewed are making money from it – only 15 percent of respondents said they are making no money at all from IoT.

However, the majority of respondents – 31 percent – said IoT makes up less than 5 percent of their annual revenue.

Other solution providers are finding more success in monetizing IoT. Up to 27 percent of respondents said their IoT business is between 5 percent and 10 percent of their annual revenue, while 21 percent said it made up between 11 percent and 30 percent of revenue.

A smaller portion of solution providers – 6 percent – said their IoT business makes up more than 30 percent of their annual revenue.

2. Most Solution Providers Recognize Future Opportunities For IoT

Most solution providers expect that the Internet of Things will present an opportunity for their company within the next 18 months, according to the survey.

Up to 47 percent of respondents said they see "minor opportunity" in IoT in the future, while 41 percent of solution providers said they saw a "meaningful opportunity."

Only 8 percent of solution providers said they saw a "huge opportunity" in IoT, and only 4 percent of solution providers said they see "no opportunity" for IoT.

3. How Can Solution Providers Make Money With IoT?

When asked which aspects of IoT will provide the greatest opportunity for the channel, respondents ranked sales of Internet of Things hardware and software as the No. 1 opportunity.

After that, the installation and maintenance of IoT hardware and software was ranked as having the second greatest opportunity for the channel, while IoT consulting services came in third.

Other top-ranked opportunities for monetizing IoT included sales of network infrastructure to support IoT deployments, IoT application development, cloud and data center automation, data security services, and sales of data analytics platforms and services to supplement IoT deployments.

4. Most Solution Providers Are Aware Of The IoT Opportunities Available For Customers

Most solution providers are aware, to varying degrees, of the IoT opportunities that are available and how they can tackle them and become further entrenched in the IoT market.

According to the survey, only 3 percent said they "strongly disagree" that they understand the IoT opportunities available, while 10 percent said they "strongly agree." The rest fell somewhere in between.

5. More Solution Providers See Higher Interest In IoT Solutions

The Internet of Things may be creating hype among vendors, but are potential customers as excited? More solution providers say that they are.

Forty-three percent of solution providers said customers are expressing great or significant interest, while 37 percent said they are seeing little or no interest at all from customers in IoT solutions. Twenty percent fell somewhere in between.

6. Partners Aren't Getting The Tools They Need From Vendors For IoT

Solution providers may be interested in the Internet of Things – but they aren't getting the right amount of "enablement" from vendors. This includes good products, technical and sales training, and marketing materials.

According to the survey, 49 percent of respondents said they are getting "too little partner enablement" from vendors, and 24 percent said they are seeing "no partner enablement."

Only 24 percent of respondents said they are getting "the right amount of partner enablement" from vendors for IoT opportunities, and 3 percent said they are seeing more enablement than they can utilize.

7. Vendors Need To Provide Partners With Better IoT Products, More Training

The majority of partners said they aren't seeing enough enablement from vendors – and the major issue is that they want better Internet of Things products.

Solution providers said that they wanted more technical and sales training from vendors, and more vendor-to-vendor technology collaboration. They also wanted more marketing tools and better data collection tools.

8. IoT Products Have Functionality, Integration Issues

When asked which aspects of vendors' IoT products need the most improvement, most solution providers listed the functionality of product offerings.

Respondents also said that products' ability to integrate with other products was an issue, while the cost and breadth of product offerings needed improvement. Finally, some solution providers said product management capabilities needed improvement.

9. Solution Providers Concerned About Security As It Relates To IoT

As the Internet of Things gains traction, more solution providers are growing concerned about security issues.

Seventy-two percent of respondents said they were leaning toward being "extremely concerned" about security as it relates to IoT, while only 10 percent learned more toward "not at all concerned."

Up to 18 percent of respondents, however, were in the middle of the two extremes.

10. VARs Think The Internet of Things Market Still Has A Few Years To Mature

Solution providers think that the overall IoT market still has a ways to go before reaching maturity, according to the survey.

Up to 50 percent of respondents think that the market will mature in two to 3.9 years, while 23 percent say it will mature in four to 7.9 years.

Fewer respondents think that the market will mature shortly – only 4 percent of respondents said the market is mature today, and 16 percent said it will mature in 1 to 1.9 years.

Meanwhile, only 5 percent of respondents said the market will mature in eight or more years, and 2 percent think the IoT market won't mature in their lifetime.