By John DeSarbo, ZS
This year’s IndyCar Series concluded when Scott Dixon captured his fourth championship with a spectacular come-from-behind victory over front-runner Juan Pablo Montoya in the series finale. Dixon, who was in third place until the final race, flawlessly executed a clever strategy to take advantage of his competitors’ mishaps and seize the checkered flag. His performance showed that racing legend Al Unser had it right when he said, “Success is where preparation and opportunity meet.”
Today’s technology vendors who seek to capitalize on the enormous opportunities created by the Internet of Things (IoT) should also heed Unser’s guidance.
The race to capture the market for products and services that enable IoT solutions is just beginning. Vendors who develop and execute the right IoT strategy in the next 12 to 18 months will establish a leadership position in the marketplace, while those that stumble out of the gate will be forced to play catch-up as the industry embraces this next wave of innovation.
We have all heard the predictions from industry analysts: McKinsey believes that as many as 30 billion objects will be connected to the IoT by 2020.1 In June, IDC predicted that the IoT market will grow to $1.7 trillion over the next five years.2 While there is a massive amount of hype around IoT, it is clear that IT vendors have a tremendous growth opportunity — if they can develop products and services to help enterprises connect previously stand-alone assets and better utilize the data created as a result.
If history is in any way a predictor of the future, one thing is certain: Technology vendors will need to leverage channel partners to meet customer demand for IoT solutions, particularly in the small and medium-sized business (SMB) segment.
Consider a recent survey by AVG Technologies, which studied 1,700 SMBs in the U.S., Canada, U.K., Germany and Australia, and found that more than 60% of SMBs allocate budget for IoT solutions.3 To tap into this demand, vendors will need channel partners with solid customer relationships who have invested in the required sales, marketing and engineering capabilities to compete as an IoT solution provider.
A recent CRN survey found that more than 80% of solution providers generate some revenue from IoT-related products and services. However, for the vast majority of solution providers, IoT accounts for less than 10 percent of their revenues. Only about half of solution providers are planning for significant IoT-related sales over the next 18 months.4 In fact, most SMB customers feel the channel is behind the times. AVG Technologies found that less than 20% of SMBs feel their IT solution and service providers are “ahead of the curve” regarding IoT.
How can IT vendors bridge the gap between customer expectations and channel partner capabilities?
Many vendors will need to define and execute a new IoT channel strategy to ensure they have the right channel partners and the right programs to support those partners. To prepare for the IoT boom, vendors should consider five steps:
By following these steps, vendors will ensure that they have the right IoT channel strategy and are positioned for success as adoption of IoT solutions grows.
The race for IoT leadership is about to begin. Vendors, start your engines!
John DeSarbo is a Principal at global sales and marketing firm ZS. He is based in San Mateo, Calif., and leader of ZS’s Sales Channel Strategy and Management practice. DeSarbo has 20 years of consulting and industry experience focused on sales and marketing strategy and operations, and his expertise spans sales channel strategy and operations, channel analytics, partner program design and sales force design. Prior to joining ZS, DeSarbo held leadership positions at a multi-billion dollar IT services provider and several strategy consulting firms. You can view some of his most recent insights by visiting ZS’s high-tech blog, “Tech Bytes & Insights.”