Very few organizations tackle IoT initiatives solo. Most rely heavily on the expertise of partners, whether they are systems integrators, manufacturers or both. But what’s the best approach to partnering? Are some partners better than others?
To better understand how to pick the right IoT partners and how IoT is maturing, Nemertes Research Group Inc. conducted an in-depth study of 403 organizations around the world and how they deployed IoT.
Testing IoT partnerships with the scientific method
When it came to partnerships, Nemertes hypothesized that initially, organizations would follow a fairly common pattern when it comes to emerging technology and how to pick the right IoT partners. At first, companies would rely heavily on a single vendor R12; such as General Electric or SAP — that developed and integrated IoT technology. As components became more commoditized and organizations gained experience, they would move to working with systems integrators, rather than directly with vendors. Finally, the most experienced firms would work directly with multiple vendors, handling the integration in-house.
To test this hypothesis, Nemertes sourced a group of companies that had IoT initiatives that they considered successful. The organizations had generated at least $2.5 million in new revenue, saved at least $1.2 million in costs or improved business processes by 35.5%. Those figures represented the top third in financial or business performance based on Nemertes’ data.
How to pick the right IoT partners
Nemertes took a look at what these organizations were doing when it came to vendor partners. The study resulted in four distinct conclusions.
First, if a successful organization had partners at all, they were more likely to be working with value-added resellers (VAR) and integrators than their less-successful counterparts. Roughly 60% of both successful and less-successful organizations had some kind of partner, but 40.6% of the successful organizations — compared with just 20.3% of the less-successful ones — were working with VARs or systems integrators.
Second, the partnership landscape was fragmented. Although Nemertes provided a list of nearly 30 potential partners along with the opportunity to proactively mention one, the most common partner among both the successful and less-successful firms was “other.”
Third, some names did bubble up to the top. Cisco, IBM, Amazon and Microsoft were among the top five partners for both the successful and less-successful firms.
Fourth, not all partners were created equal. When Nemertes compared the partnership lineups of the successful and less-successful companies, there were two organizations that successful firms were significantly more likely to work with: IBM and Amazon. Twenty-one percent of successful firms were working with IBM, versus 14% of the less successful firms. For Amazon, the difference was even more striking; 18% of successful firms were working with Amazon, compared with just 10% of the less-successful firms.
Looking at the results holistically, Nemertes found that the initial hypothesis — that more successful firms would more likely work without a strategic partner — didn’t hold; however, more successful firms were twice as likely to work with a VAR. They were nearly twice as likely to be working with either IBM or Amazon than the less-successful peers.
If you are planning an IoT project, you should work with a partner, either VAR or a strategic vendor. If your organization is not currently working with IBM or Amazon, you might want to consider doing so.