IoT business opportunity in 2017: Are channel partners ready?

As channel partners mull over business moves for the upcoming year, many executives may consider IoT as a potential play — and for good reason.

“There is so much demand for IoT within SMBs [small and midsized businesses],” said Anurag Agrawal, CEO and analyst at Techaisle, a market research firm that closely follows the SMB market. Techaisle expects nearly three-fourths of midmarket businesses to adopt some form of an IoT initiative in the next year. At least one third of small businesses, which Techaisle defines as having one to 100 employees, will launch one or more IoT initiatives within their organizations.

“There are many different benefits of IoT that the SMBs are starting to see, and they’re starting to embrace it,” he said.

Traditional channel partners, such as VARs, system integrators and managed services providers (MSPs), however, “have not moved as fast to IoT as the end customer would like,” Agrawal noted.

That’s not necessarily the channel’s fault. For example, many firms continue to grapple with cloud computing, mobility and security, making IoT an impractical next step. Additionally, traditional vendors experimenting with IoT products opt to sell direct to customers. “[Vendors] are all experimenting, and the best experiment is to sell it themselves,” he said. “That, in turn, drives channel partners to say, ‘How do I learn by myself?’ They don’t have enough time to be able to do it.”

First steps to the IoT opportunity

According to Carolyn April, senior director of industry analysis at CompTIA, channel partners can think about IoT as a three-step trajectory.

The first step involves what partners “already know how to do today” — selling and installing hardware. Selling and installing sensors and data-collecting devices is a practical way to get started.

From there, partners can move up to managed services, proactively managing and monitoring their customers’ sensors and devices. “I think this could be a potential sweet spot for MSPs that start investing in that area today,” April said.

Partners can then harness and analyze the data collected from customers’ devices and advise customers on running their businesses. “That is really the cream of the crop right there,” she said, but added that the channel is “a ways off from this.” Only a segment of the channel will acquire this type of expertise, she said.

Charles Weaver, CEO of MSPAlliance, suggested MSPs may play a more vital role in IoT when security issues begin to emerge. “I think that IoT is going to be a major … problem-solver and then it’s going to be a major problem — in that order,” he said. He said we will likely see massive adoption, followed by breaches and attacks that will bring greater attention to IoT security.

But Weaver also noted that MSPs should start to explore the IoT opportunity. RMM tools in the market today can handle the task of monitoring IoT devices, he said. “If it’s connected to the internet, generally speaking, I think it can be monitored. If I was an MSP, I would be definitely looking at that for the future.”