IoT Channel Chronicles: Panel Of Solution Providers Discuss 'Velocity' Of IoT Opportunities

Channel Opportunities Across The Board

The Channel Company CEO Robert Faletra said IoT is "the next big wave" in technology for the channel during a keynote at XChange 2016, hosted by The Channel Company.

Among the participants at the roundtable were Luis Alvarez, president and CEO of Alvarez Technology Group, a Salinas, Calif.-based solution provider; Lawrence Van Deusen, director of network integration at Dimension Data, a Raleigh, N.C.-based systems integrator; Michael Lomonaco, director of marketing and communications at Open Systems Technologies, a Grand Rapids, Mich.-based solution provider; and Jason Waldrop, CEO of CWPS, a Chantilly, Va.-based managed service provider.

Following are excerpts from these four channel players about the opportunities for IoT for solution providers, system integrators and customers.

How do you start a conversation with people around IoT?

Michael Lomonaco: For us, it is about starting in our knowns, meaning our current customers. And absolutely having a conversation at the corporate strategy level – so not IT or product development – but corporate strategy with the chief strategy office. And understanding, asking questions about what they are doing, what they might want to do, and how they're looking at creating value for their business. We look at it as start small and then grow.

We're based in West Michigan … there's a few companies that create products you use in your workspace like chairs and desks, so a few of those organizations, they wanted to launch a connected piece of furniture, a desk – they wanted to understand the behaviors at the desk level… it was about what's the value? If they're doing that, and there's a good value, let's go.

What percentage of sales tend to be recurring revenue?

Lawrence Van Deusen: I would say a significant amount of recurring revenue because once the systems are in place, they need to be monitored, the data needs to be harvested, we need to have the insights, a platform that it sits on, the application needs to be continuously updated, new features introduced. You can start small and expand with solutions. We've encountered a lot of scenarios where we we've started off solving one problem, and it's easily led to a bigger opportunity to go in there and look at things more holistically.

What's the real opportunity for agriculture for IoT?

Luis Alvarez: It's pretty lucrative, especially in California, farmers are facing a confluence of events. Labor shortage, water conditions … these events mean they are looking for solutions to increase yields, increase production. The reality is that agriculture is now a big opportunity for technology. Between now and 2050 the population of the earth will grow by a third. The food yields need to grow by 70 percent to supply that amount of food, and the earth isn't getting any bigger.

Farmers are challenged to increase yields … and yet most of these companies are making money in the sub-5 percent net profit range. So we have the opportunity to help this increase happen.

What new opportunities does IoT present?

Jason Waldrop: I think there's entire new market opportunities out there for us. You talked about recurring revenue. [In the] physical security space, the models that we're looking at there are literally charged by the door reader per month for monitoring management per the doors. So you go in and install this … then take those analytics, and the big data play there, especially in big building. If there's a fire, we can see if everyone made it out the door, so those systems are being built today, and they all have a consulting opportunity for design, sometimes application work, and then a longtime recurring revenue stream as well.

What are some challenges as part of IoT?

Lomonaco: We're a fairly large organization and take pride in our sales team – we have about 27 sales reps – but one of the things we're trying to figure out internally is sales-led versus principal led, especially in this space. Is it a sales-led model or do you have principals that are going out and having very different discussions than a sales rep may have. That's a challenge, now you have thought leadership, maybe domain experts, versus very highly compensated, successful, driven traditional sales folk. The conversation is different; who you're talking to is different.

Is it surprising how quickly the Internet of Things is happening?

Van Deusen: We've been surprised by the velocity of the opportunities as they're coming to us now. Both our clients and vendors are saying to us, 'We need help in this space.'

We had a major brewery company – with a lot of consolidation in that industry, some players in that market that focus on supply chain analyzation of flow and meters, and just being able to understand that market is important. The opportunities we didn't even know existed are the ones surfacing now.

Should solution providers be concerned about not being in this space?

Alvarez: The Internet of Things is happening today. It's a good opportunity for us traditional VARs to jump in. In IoT, we have an opportunity and a challenge because the traditional world of IT is morphing. The traditional IT companies will change, the systems and number of devices will increase – but will become different.