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The New Internet of Things VARs

By June 17, 2014Article

A new generation of value-added resellers (VARs) is emerging to capitalize on the rapidly expanding array of industry-specific Internet of Things (IoT) market opportunities. These companies are beginning to take generic IoT solutions and cater them to particular vertical market requirements. 

VARs have traditionally made a living customizing and integrating various vendor products to satisfy the needs of a specific segment of the market. Historically, the most successful technology and software vendors have encouraged VARs to convert their generic products and services into specialized solutions for various industries to extend the vendors’ reach deeper into those market segments. 

One of the misconceptions associated with the emergence of the Software-as-a-Service (SaaS) and cloud computing was that the ease of use of these “on-demand” solutions would disintermediate traditional IT and software channel partners, like VARs. The premise was based on the idea that enterprises and SMBs would be able to more easily configure the basic SaaS/cloud offerings to meet their unique requirements and not need to rely on VARs and integrators as they did in the past. 

While SaaS/cloud solutions are certainly easier to deploy than their legacy, on-premises predecessors, they still demand considerable customization and integration skills in order to satisfy specific business process requirements. Opportunistic companies recognized they could capitalize on this reality and create targeted solutions that pull together other SaaS/cloud services for particular industry needs. 

My favorite illustration of this new breed of SaaS VAR that has emerged to offer its own capabilities aimed at the pharma industry is Veeva. 

Now a new round of entrepreneurs is seeking to leverage IoT tools to do the same. An example is Drchrono, a Mountain View-based electronic medical record (EMR) company. Drchrono has developed a new application for Google Glass that it claims is the first “wearable health record.” The application allows doctors to store videos, photos and notes captured by Google Glass in a patient’s electronic medical record or in Box, the cloud-based storage and collaboration service. The application also makes it easier to share the information with the patient or other healthcare providers, assuming proper authorizations. In short, Drchrono is an IoT VAR focused on the healthcare industry. 

You can expect to see many more startups developing solutions aimed at addressing specific industry needs for Google Glass and other IoT platforms in the coming months. Other industries begging to be exploited by cloud-based IoT VARs include transportation and logistics targeting connected vehicles and the utilities industry where deploying remote monitoring and management systems can save millions of dollars and produce a bevy of new information services. 

In each case, the IoT VARs will offer some combination of original software, specialized integration skills and data analytics capabilities specifically designed to fill a gap within a particular industry’s business processes. 

The most likely IoT VARs to succeed will possess industry domain expertise and an ecosystem of tight business relationships within the vertical market they are targeting. 

Jeff Kaplan is the managing director of THINKstrategies,  founder of the Cloud Computing Showplace  and host of the Connected Cloud Summit focused on the IoT market on September 18 in Boston, MA.  He can be reached at

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