IT and Business Insights for SMB Solution Providers

IoT as a Service

When it comes to the Internet of Things, too many channel pros focus on the “things” rather than the even more profitable services they can deliver. By James E. Gaskin

THE INTERNET OF THINGS (IoT) is a hot commodity. Almost anything labeled “Internet of Things” will grab people’s attention these days. The problem for most channel pros is figuring out how to make a profit off today’s ever-growing catalog of sensors, gateways, smart light bulbs, and other inexpensive IP-enabled gizmos.

Benson Chan, senior partner at Strategy of Things, a consultancy in Hayward, Calif., recommends approaching the market from a different angle. “Think of an IoT project not as a product sale, but as a service sale,” he says, noting that unlike products, services produce a steady stream of ongoing profits.

According to Chan, the best way to turn IoT deployments into recurring revenue sources is to present them as solutions that help businesses get continually smarter over time. “When you collect data that gets analyzed for the customer, it provides more value,” he says, pointing to retail solutions that predict future sales and consumer traffic patterns as an example.

Channel pros with the vertical industry expertise to deliver solutions like that will do better in the short term, Chan continues, because they understand the customers’ problems and know the best practices and norms of the industry. “IoT collects data,” he says. “Resellers who can turn that information into insight for their customers are worth a lot.”

Fee for Service

If that doesn’t describe your business today, don’t worry. “No resellers have IoT down pat yet,” observes Avi Rosenthal, president of IoT Consulting LLC, in Ashburn, Va. Even so, some of his clients are leveraging IoT to offer services that would be difficult to provide any other way.

“Install an Observables IOBOT Router [from Observables Inc., of Santa Barbara, Calif.] in a home or small business, and it monitors all networked devices, like alarms, IP phones, door access controls, surveillance systems, and more,” says Rosenthal. “If you’re new to phones, for instance, the IOBOT helps configure the SIP details.”

“IoT collects data. … Resellers who can turn that information into insight for their customers are worth a lot.”


The insurance industry is investigating IoT solutions too, he adds. “OneEvent Technologies [of Mount Horeb, Wisc.] uses a combination of wireless sensors to measure factors such as temperature, air quality, and humidity,” Rosenthal notes. “Data analytics teaches them what is normal for a location. When sensors see changes, they send alerts about a fire or a flood.”

In tests, the OneEvent solution provided 20 minutes of warning that an incident was about to occur, versus three minutes for a smoke detector, Rosenthal adds. Many business owners would gladly pay a monthly fee to ensure their employees and customers have 17 additional minutes to escape a life-threatening disaster.

Finding the Convergence Point

Most MSPs and resellers are still learning about solutions like that at present though, adds Rosenthal. “Vendors are doing the same thing,” he says. “It’s an educational process right now. Take a look at your business plan, look at what you provide, and what your customers need. It’s often a short jump from what you do today to a revenue model.”

Be aware, however: IoT is still an emerging opportunity. Business models, enabling technologies, and potential services are appearing constantly. “Don’t get too far ahead of the market,” warns Chan. Partnering with software companies that serve the same verticals as you and growing into the space together is a wiser strategic path.

Rosenthal sympathizes with resellers new to IoT. “It takes some bravery to understand what they can provide, and learn about what more they can do,” he says. “There’s a convergence point of what they can do and what customers need. It’s an easy step to recurring services revenue when they reach that point.”

That journey begins with a first step, though, and the time to take it is now. “Experiment with IoT,” advises Chan. “Add IoT elements to projects doing something simple. Hone in on what works and focus on those areas.”

Rosenthal, who concurs, adds that not experimenting with IoT could have dire consequences. “This is the wave of the future,” he says. “Change or get left behind.”

Image: Pixabay

About the Author

James E. Gaskin's picture

JAMES E. GASKIN is a ChannelPro contributing editor and former reseller based in Dallas.

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