Despite past predictions of the “disintermediation” of the channel due to the advent of the cloud, the opportunity to unlock big data and capitalize on the Internet of Things (IoT) via the cloud is actually creating plenty of new business possibilities for value-added resellers (VARs), systems integrators (SIs) and other channel companies.
However, as in other segments of the IT industry, the biggest channel players face the toughest challenges responding to the rapidly changing cloud marketplace.
The IoT promises to spark another wave of changes that will impact the skillset requirements and go-to-market strategies for channel companies, as well as the economic models for success.
A survey of channel solutions” companies conducted by CompTIA last October, called “Sizing up the Internet of Things,” discovered a fundamental debate over the potential impact of IoT. Nearly half of the survey respondents believe IoT is more hype than reality (48 percent) and slightly more than half believe the IoT opportunities justify the hype (51 percent).
One major channel company that embraces the brave, new world of the IoT is Arrow Electronics. I recently attended the company’s IoT Immersions conference in Boston and was impressed with the format of the event, size of the turnout and vision of the company.
The event attracted approximately 1,000 people – a big crowd by Boston standards. The attendees were a mix of SIs, VARs, vendors and startups, along with enterprise IT administrators and software developers.
The impressive turnout at the event may not be surprising given the results of another recent survey by a popular publication focused on the IT channel, called VAR Guy. Ninety-one percent of the survey respondents said a variety of electronic infrastructure components, such as sensors and switches, will offer tremendous opportunities for solution providers looking to capitalize on the IoT market. These components are the “bread and butter” of Arrow’s product portfolio.
The Arrow executives I met during the Immersions conference clearly understand the competitive advantage they possess because of the vast array of electronic components, networking devices, computing systems and software applications included in their distribution catalogue, which are becoming the key ingredients of potential IoT deployments across a variety of vertical markets.
Although Arrow is in an advantageous position to capitalize on its distribution network, it didn’t kick off the Immersions conference with a bold executive keynote presentation or use the occasion to show off its latest innovations and solutions in “main tent” demos. Instead, it allowed its vendor partners to take the lead presenting their views about the latest IoT opportunities and challenges in a full day of focused breakout sessions. Arrow’s staff was also quick to highlight the partners’ offerings rather than boast about their own capabilities during the conference expo session.
However, behind the scenes Arrow’s executives shared with me a very clear understanding of the tremendous opportunity the company has to redefine its business from product distribution to information services.
First of all, the IoT market is the ultimate systems integration challenge because there are an infinite number of choices for piecing together an IoT deployment. Because Arrow’s product portfolio and vendor partner ecosystem encompasses many of these options, it is in a very good position to build an IoT interoperability and best practices library, which can guide the deployment process.
The company is also tracking every transaction to create valuable insights regarding customer adoption patterns, which will enable its partners to better target their product sales and support services.
This big data initiative will give Arrow a new marketing services capability that can elevate it above the day-to-day price wars of an increasingly commoditized, price-sensitive technology market and transform Arrow into a truly value-added business that will be even more useful in the IoT world.
Jeff Kaplan is the managing director of THINKstrategies, founder of the Cloud Computing Showplace and host of the Cloud Innovators Summit executive forum series. He can be reached at firstname.lastname@example.org.