Q&A: EAC Executives On How Solution Providers Can Invest In -- And Make Money From -- The IoT Craze

The $1.7 Trillion Internet Of Things Opportunity

We've all heard the crazy statistics about the lucrative Internet of Things market – research firm IDC says IoT spending will reach $1.7 trillion in 2020, while Gartner predicts 6.4 billion connected devices will be used in 2016. But where do solution providers fit in the big picture?

There are opportunities in the industry beyond just consumer-focused products, according to the executives running EAC Product Development Solutions, a Burnsville, Minn.-based solution provider.

EAC, which started ramping up its strategy around the Internet of Things based on PTC's ThingWorx platform two years ago, has a vision of how to make money from IoT through strategy services, connected product development, and overall scalable cloud IoT purpose-built platform development.

CRN talked about the IoT opportunity with EAC President and CEO Thane Hathaway, as well as Rob Miller, who is leading the EAC business effort related to product development for IoT.

When did the Internet of Things first come onto EAC's radar as something that you actually could make money from?

Hathaway: We've been involved for 20 years in efforts to improve product development, and connected systems were involved in that.

In 2013, PTC's acquisition of ThingWorx [to create the ThingWorx enterprise-ready platform for rapidly developing and deploying connected IoT solutions] nudged us in the direction of connected devices. In terms of the whole connected device piece of it, that has been around two or three years in the making.

Once you started looking more at PTC's ThingWorx IoT platform, and as it became connected devices were something you could profit from, what were the next steps for EAC?

Miller: The history behind EAC revolves around how we help companies in developing products. Now, we want to dig into IoT, connecting what we've done in the past with this new buzz around connected products.

We've started by talking about basics, stepping into innovation workshops, and helping customers devise specific projects that can be developed into proof of concept. We're also going into the IoT platform, where we're looking at product development and advising strategies. This has been part of our 20-year pursuit to talk about connected products.

What is your strategy around making money from IoT now?

Miller: IoT is made up of smart things, devices or equipment, and the platform is in place to leverage and connect the enterprise as well as processes behind IoT. Our strategy looks at these smart things and the tools behind them.

Our strategy is a three-legged stool approach revolving around the business strategy in place for enterprises. These legs involve the strategy, or the "why" of the stool, the connected things, or the "what" of the stool, and the platform, or the "how" of the stool.

Connected product development runs across IoT from data to connected things in the system. We want to help customers create a closed-loop process where products are telling you how they're being used. Customers can make more money with products, and collect more information with the products.

What do your customers think about IoT right now? Do you think most customers actually know what IoT is?

Miller: In terms of customers, they really run across the spectrum [in their knowledge]. That's part of our conversation with customers. We ask how many of their products are in the connected realm.

We did a presentation at LiveWorx [PTC's Internet of Things conference two weeks ago in Boston] where we were talking about the different levels of maturity of IoT. For example, in the first level businesses are able to connect a product but not do anything else with it. On the fourth level, businesses can make products that are almost autonomous, or systems are working together.

Across that spectrum of maturity, really the majority of attendees in the presentation weren't even connected yet. But many were saying, we're not connected but are interested and need a business strategy and help in the platform. Other companies weren't sure how to monetize from the Internet of Things.

How do you pick vendors to align with for IoT? How are the partner enablement efforts in the Internet of Things among vendors?

Hathaway: There's other pieces to the Internet of Things that are not as major in terms of hardware, like cellular service. The last two years the partners' role in solutions from the vendors has changed, as well as our ability to get training and more access to IoT products and solutions. I can say we've done the bulk of work on our own.

Partner enablement has definitely improved and there's an opportunity for partners and systems integrators and companies like ours. A lot of this opportunity is being defined or partners currently don't know about it.

Talk a little bit more about examples of IoT particularly in the manufacturing or industrial space.

Miller: At the heart of it, we're after a hands-on system that can pull in equipment from different manufacturers and deal with challenges on the manufacturing floor.

One IoT-based application monitors factory floors using basic, specific, simple-to-understand dashboards to aggregate information. This IoT system, which leverages PTC's ThingWorx platform, helps users navigate all systems right on the bleeding edge.

Our IoT demonstration pulled in off-the-shelf equipment that users are familiar with in the factory space -- robots and conveyers, each with its own bearings and sensors. These can be put together to form visual inspection systems, so pieces running through the process could find problems in the systems and can predict when the system would break. These factors help customers become proactive and predictive as opposed to reactive.

What verticals are seeing particular traction in IoT?

Miller: Beyond verticals like manufacturing, we're seeing a strong business approach around services. With remote pieces of equipment, if you can monitor a system of interacting parts to get the right person to that device with the right information, the servicing gets faster.

If someone can sell their generator or piece of equipment on a subscription basis, they can sell that to [create] different business models. That's the business strategy for new ways to approach the market.

Where would you say IoT is right now in terms of maturity as it relates to enterprise markets?

Hathaway: We see a large percentage of customers interested, but they don't know how to make money. They are interested in IoT and can visualize a platform, but are having a hard time figuring out where they want step in.

The amount of customers who are already thinking about IoT is surprising. Some are tinkering around in the lab and looking at where it is as part of their strategic plan. Customers are very interested but are still struggling with one part or another.

So what are you doing for those customers who don't necessarily have an IoT play but are interested?

Hathaway: We've been asking our sales force to ask a specific, simple question of customers with traditional solutions: What is your IoT strategy? And that simple question has led to really great conversations with parts of customer organizations that we may never have talked to in the past.

We are also holding executive seminars as a part of getting [IoT] to market. It focuses on more advanced opportunities for customers interested in learning more.

What long-term plans around IoT does your company have?

Hathaway: In the long term, it is the essence of what our company will be about. We're transitioning everything to be part of the IoT thread. We're helping companies transform how they manufacture and design products as a part of IoT.

IoT is the glue -- it's the thing that's transforming how customers design and service products, and in the long term it will revolve around everything we'll be doing.

Talk about any trends you're seeing in the IoT market overall.

Hathaway: When people think about IoT, they think about thermostats. That's interesting. It's neat. It will drive companies to develop better products. It will drive consumer demand. But that's only part of it. I don't think that's where the true value in IoT lies.

The true value lies in connected development and companies truly understanding how products are being used, connect in the files and analyze that data in a way where it's useful. That's where the true power is, that's where the bulk of our effort is – in the data and what you do with it. All that data going back is extremely useful for the manufacturer.

The connected light bulb is interesting but won't change the world. What will change the industry is what companies are doing with data in products.