The IoT Ecosystem Matures and Focuses on B2B, Industrial, and Enterprise Solutions

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2Q 2017 | IN-4572

Of the more than 500 companies included in ABI Research’s recent analysis ranking system integrators, value-added resellers, and partner program members, 59% received a high Internet of Things (IoT) maturity grade, which is double the number that received a high ranking when ABI Research first analyzed these ecosystems back in 2015. There are thousands of companies operating in the fragmented IoT marketplace, so the companies analyzed are just a snapshot of the overall market. These partner programs help address this by helping end users navigate technology and supplier choices. Partner program parents are establishing more effective ecosystems, offering members access to training and certification programs. These programs better enable members to not only provide IoT solutions but also to be a better representative of the partner program itself. These member companies offer a myriad of hardware, connectivity, and value-added service solutions across a wide range of verticals.

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A Growing and Maturing Ecosystem of Partners

NEWS


Of the more than 500 companies included in ABI Research’s recent analysis ranking system integrators, value-added resellers, and partner program members, 59% received a high Internet of Things (IoT) maturity grade, which is double the number that received a high ranking when ABI Research first analyzed these ecosystems back in 2015. There are thousands of companies operating in the fragmented IoT marketplace, so the companies analyzed are just a snapshot of the overall market. These partner programs help address this by helping end users navigate technology and supplier choices. Partner program parents are establishing more effective ecosystems, offering members access to training and certification programs. These programs better enable members to not only provide IoT solutions but also to be a better representative of the partner program itself. These member companies offer a myriad of hardware, connectivity, and value-added service solutions across a wide range of verticals. 

Value-Based Partner Engagements

IMPACT


These IoT partner program ecosystems stem from the more traditional partner programs that served mainly as a strategic tool used to reduce the cost of sales to partner program parents by moving the sales point to their channel partners. The traditional partner program parent-member relationship was based on a volume-based partnership, but with IoT, this is shifting to more value-based partner engagements. While the number of companies joining these ecosystems is growing, nearly three-quarters of listed organizations are members of only one or two partner program ecosystems. This is due largely to the fact that partner program parents and members need to work together more closely to establish long-term relationships with customers that go beyond the initial sale of sensors and other related hardware and achieve long-term connectivity with value-added services and solutions.

Parents and members need to benefit from partnerships, certification programs, specialized training, and sales support, and networking events help provide this mutual value. The Microsoft Azure Certified for IoT program and the ThingWorx Ready Partner Program are just a couple of the certification programs that give partner members the knowledge and branding necessary to target and serve new and existing customers and markets. Specialized training and sales support programs are one tool parents and members use to drive value as IoT training is becoming an integral part of business development. Members need to be aware of how to utilize and embrace new technologies as well as how their solutions fit together within the larger ecosystem. The Powered by ThingWorx Partner Program is focused on equipping partners from a technology and operational standpoint, supporting partners with software, development tools and support, and access to go-to market programs. Finally, events like Microsoft’s Azure Conference allow partners to create closer relationships with both Microsoft and other partner connections, which help companies to jointly identify customer pain points and to create solutions addressing those needs.   

A B2B and Industrial Focus

COMMENTARY


The companies operating within these ecosystems are offering primarily business-to-business (B2B) solutions to enterprise clients who are looking to utilize IoT solutions to increase sales opportunities and decrease operating costs within specific vertical markets. These ecosystems focus more on the industrial than on the consumer side of IoT, and that reflects the overall market as the consumer side of IoT has struggled to achieve mainstream use and adoption.

It is also beneficial to identify which vertical solutions companies are targeting more because that means they are encountering a higher demand to deliver solutions within those applications. There has been a roughly 40% increase in the number of companies offering manufacturing, industrial, and enterprise IoT solutions, whereas the average vertical market segment saw only a 30% increase. The largest increase came from the hospitality industry, which is partially due to increasing demand from hotels to develop solutions that not only monitor and automate building processes but also offer guests personalized digital experiences.

While it is important to identify which vertical markets companies are increasingly targeting, it is equally significant to look at the vertical markets which have the largest number of companies currently offering solutions. The digital transformation in the healthcare industry continues to grow as healthcare providers, governments, and patients look to reduce costs and increase the level of patient outcomes; 45% of listed organizations offer some form of a healthcare solution, which is higher than any other vertical. Smart utility management continues to grow in popularity among utility providers, municipalities, and customers as a means of better utilizing and monitoring resources; 37% of listed organizations offer energy and utility solutions. Factory automation and smart manufacturing are being driven by a need to optimize the supply chain in order to increase both productivity and quality; 35% of listed organizations offer manufacturing solutions. Companies looking to benefit from the ongoing digital transformation should focus on these vertical markets but also not lose sight of various niche opportunities they can take advantage of.       

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