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ABI Research Analysis Shows IoT Vendors Cutting Back on Channel Partners

Added to IoTplaybook or last updated on: 02/22/2019
ABI Research Analysis Shows IoT Vendors Cutting Back on Channel Partners

ABI Research shared some unusual news last November in a report that surveyed hundreds of companies about their IoT partner programs. Surprisingly, the study found, IoT vendors are cutting, not adding to, the number of partners they work with. Here are the first two paragraphs from the ABI Research press release:

In its recent analysis ranking 547 companies on their IoT service capabilities, ABI Research, a market-foresight advisory firm providing strategic guidance on the most compelling transformative technologies, finds that partner programs and their member companies are continuing to mature in their IoT offerings while simultaneously decreasing the average number of members per partner program…Partner program parents such as Amazon Web Services, Dell, and IBM are aligning themselves with fewer, higher-value partners who can better help end-users navigate the convoluted IoT ecosystem.     

“Size matters when it comes to these partner programs,” says Ryan Harbison, Research Analyst at ABI Research. “While it’s tempting for many of these partner programs to have the highest number of partners, eventually there’s a breaking point where the partner program is just as difficult for end-users to navigate the overall IoT ecosystem. As a result, the most successful partner programs today have focused on forging new alliances with a smaller number of like-minded and more established partners across multiple sectors to a broader range of customers.”

IoT Playbook contacted Harbison about the report via email. He sent us responses explaining in greater depth what his research found and how IoT integrators can fight this trend of fewer but larger reseller partners. Our questions and his lightly edited answers follow.

ABI Research Analysis Shows IoT Vendors Cutting Back on Channel Partners
Ryan Harbison, ABI Research

IoT Playbook: First off, is there still a significant market opportunity for 5- to 25-person IT/IoT integrators in 2019? What about 2020?

Ryan Harbison: There is still a market opportunity for smaller IT/IoT integrators in 2019 and 2020, primarily for small- and medium-size businesses who plan to but haven’t yet deployed any connected products or services and are turned off by some of the larger players. These SMBs might have smaller-scale projects that would be overkill for some of the larger global integrators. There will be opportunity for these smaller integrators, but most of their endeavors will be in non-IoT-related areas. 

IoTP: Many IT integrators are hesitating to jump into IoT. How high a hurdle does an IT tech services provider or MSP have to clear with IoT projects?

RH: There is a significant barrier to entry just in the level of skill and expertise needed to connect these essentially “systems of systems.” Many professionals are jumping ahead on the learning curve by using software and hardware development kits, but this is probably not enough for a large or even smaller-scale client engagement. Integrators can attempt to partner with some of the larger ecosystems in order to access training and certification opportunities. This was easier in the past few years than it is now as many of these programs have become much more selective. Integrators need to work on establishing use cases of solutions that they have added significant value to in order to prove themselves in a sense.

IoTP: How do IT firms that have no software skills get into IoT?

RH: That has essentially been one of the biggest inhibitors with IoT in general—firms were either software or hardware focused but IoT requires you to not only be both but also to be really good at both. For firms lacking software skills, there are software developments kits such as rapid application development tools, cross-platform development tools, and integrated dashboards. Additionally, these firms have the potential to partner with other firms or partner program ecosystems who complement their skill sets.

IoTP: What third-party software development or IoT analytics firms do a good job supporting smaller IoT integrators?

RH: Some that I am familiar with and have spoken with are Bug Labs, DGLogik, and FogHorn Systems. I know a lot of other companies might claim to be focused on small- to large-size businesses, but when it comes down to it, their SMB services are really just watered-down versions of their large enterprise solution offerings.

Our thanks to Ryan Harbison and ABI Research for sharing their time and expertise with IoT Playbook.