HOW TO FIND THERIGHT IoT PARTNER– IT TAKES TWO TO TANGO

SPONSORED BY AERIS

INTRODUCTIONThe Internet of Things is reliant on a complex mesh ofcompanies to enable IoT services. This brings in the capabilitiesof connectivity providers, application developers, IoT platformproviders and hardware and software vendors, to name a few.However, the IoT landscape is becoming so vast that it is nowimpractical to create partnerships for single deployments.What’s needed is a rapid way to bring pre-integrated systems,technologies, software and services together to serveenterprises as they engage with IoT.

Forming partner programmes is an obvious move. Companies that get involved inthese can form a deep understanding of each other’s capabilities and strengths andshare marketing and sales expenses to work more efficiently to the benefit ofcustomers. Partners can work to align products, develop roadmaps and formulate goto market plans. However, with research firm Vision Mobile reporting that there arecurrently five million individuals active as IoT developers, the question of who topartner with is becoming more and more of a challenge.

IoT partnership extends from tightly knit highly sector-specific arrangements thatinvolve a handful of specialised companies that have come together to address thedetailed needs of a particular vertical to giant alliance programmes that add up tolittle more than a web page with hundreds of member logos and occasional holdinghands at trade shows. The big alliances are looking to create an IoT ecosystem and dosome valuable work in promoting IoT to a wider market. The tighter, more targetedpartnerships are more sales focused and use greater sector understanding to bringproducts to market that address clearly identified needs within a subset of IoT.

A middle ground is also emerging of partners that have come together to create anIoT platform. This term can mean many things to many people but at its heart an IoTplatform comprises connectivity, hardware and software to enable an IoT service. Itmakes sense for partners that don’t have all these assets to come together to createthis platform and go to market with a consolidated offering. It is to be expected that

The author, SuzanneLancaster, is Europeanmarketing director atAeris

2 WHITE PAPER

more of these partnerships will be established, although participants will bedetermined more by their access to market than the superiority of their offerings.

There are no rules limiting who can partner with whom in the IoT arena. Almost dailywe see fresh announcements of collaborators joining hands. Recent examplesinclude HP Enterprise and General Electric, lift manufacturer Otis and AT&T, and SAPand Bosch. It’s clear that the range of organisations willing to partner to acceleratetheir business in IoT is enormous but it is emerging that enterprises havepreferences regarding which types of organisation they prefer to buy from.

A recent survey published by the Telecommunications Industry Association (TIA),entitled the ‘TIA Enterprise IoT Survey, 2016’ found that enterprises in the US placehighest value on implementation partners that can provide comprehensive, end-to-end services and support. Partners that offer hands-on, comprehensive servicessuch as system integrators and end-to-end service providers represent the topsegment of IoT partner choices for 59% of respondents.

That is symptomatic of the newness of the market with enterprises looking tomainstream IT brands to handle the IoT challenge for them. However, as the marketmatures, partner ecosystems expand and, in some instances, specialists havedeveloped strong services integration teams, software platform companies arestarting to become more recognised as suitable providers by enterprises. In fact theTIA survey uncovered that these types of organisation were selected by 16% ofcompanies as a trusted IoT implementation partner.

While companies report strong interest in taking the lead on IoT projects, the realityis that most enterprises will seek third-party partners to assist in the developmentand implementation of IoT solutions. Considering the high percentage of enterpriseengagements with systems integrators (SIs), it is consistent that 28% of enterprisesrank SIs as their top trusted choice of IoT partner. Despite this preference for SIs,enterprises are increasingly turning to comprehensive, end-to-end implementationplayers of the IoT vendor ecosystem as trusted IoT partners. As shown in Figure 1,the choices for trusted IoT partners focus on partners that have a broad set ofexpertise and tools to guide clients through the complexities of IoT projectimplementation and integration with legacy systems.

Figure 1: Enterprises choose comprehensive solution partners for IoT

Source: TIA Survey, 2016

3 WHITE PAPER

Systems integrator (e.g. Accenture, HPE, IBM, Wipro,Tech Mahindra, etc.)

IoT/M2M end-to-end provider using standardised cellulartechnologies (e.g. Sierra Wireless, Telit)

Business software platform company (Salesforce.com,Oracle, SAP)

IoT/M2M end-to-end solution providers that use low-costproprietary networks and technology (e.g. Sigfox, Ingenu,

LinkLabs, Freewave, Sonet)

IoT/M2M service provider (e.g. Aeris, Numerex, Kore, etc.)

Mobile operator (e.g. AT&T, Verizon, Sprint, etc.)

Engineering design firm

IoT platform company (e.g. ThingWorx, Autodesk, Xlvelly,Jasper Wireless, etc.)

We’re building it in-house

Not sure

28%

16%

16%

15%

9%

8%

3%

3%

2%

3%

0% 10% 20% 30%

What kind of organisation would you trust andapproach to help with IoT implementation

INGREDIENTS FOR SUCCESSFUL IoT PARTNERSHIPSAt its heart, an IoT partnership should bring to each partner in the ecosystem someinherent value or capabilities that aren’t in the other partners’ value proposition. Itmakes no sense for AT&T to partner with Verizon, nor would it make sense for JCBto partner with Doosan, for example because capabilities are replicated, notenhanced. A key question to ask is what additional value does a partner bring?

At Aeris, for example, we’re not a hardware manufacturer or OEM so when we lookat identifying partners to join our ecosystem we assess what differentiates them andwhat value we can add to their offerings. An ideal partnership is one that has valuefor all the participants. It has to be bilateral.

However, this is hard to establish and measure in some of the giant partnerships inthe market. Everyone wants to be a part of enormous partnership programmes butthose often don’t help smaller companies because membership of such programmesdoesn’t differentiate them in the market place and its hard for a smaller company todemonstrate how it helps a larger player enhance its offering.

If a large portion of the market is in a partnership programme, for customers itbecomes hard to attach value to that membership because it becomes anexpectation that a vendor should be a member. In essence it becomes table stakesfor starting a conversation, not a reason to start the conversation because of theclear differentiated capabilities of the provider.

WHAT MAKES A BAD PARTNERAs IoT matures, partnership approaches continue to develop and bad partnershipsstill occur in which neither side derives sufficient value to merit the effort it puts in.There are two areas that pose tremendous risks for organisations:

1. Not targeting partnership activity carefully. Most companies don’t have the resources to be a partner in any or all programmes they’re asked to join so organisations need to be selective regarding what they agree to participate in. Successful partnership requires a partner to be able to focus resources on what the partnership should look like and what will drive the return on investment and greater opportunities. Managing many partnerships fragments that focus and entails lots of background work to set things up, often without reward.

2. Expecting short-term gains. It’s understandable that a small vendor might view joining a partnership with a large enterprise as a means to access a whole new world of sales opportunities but this is unlikely to be the case. In order to gain attention within the partnership the vendor will have to invest in co-marketing, demonstrate commitment to the partnership and, for a small company, in a partner ecosystem of hundreds of companies, it will be costly and time consuming to get noticed at all. Long-term strategic work with a partner is a foundation for success so a strategic, rather than tactical, approach can be developed between the organisations. That means commitment to aligning marketing, services and offerings. In IoT there are very few opportunities for ventures focused on short-term gains.

4 WHITE PAPER

WHAT’S MISSING FROM CURRENT PARTNERSHIPSOne of the key elements missing from partnership programmes is the defining ofcore partners. A lot of partnerships have different tiers such as platinum, gold andsilver but don’t have a clear focus. For instance, a partner programme with clearlydefined core partners would be a healthcare industry partnership composed offounding partners: Network operator A, IoT Platform Provider B and SystemsIntegrator C plus market leading pharmaceutical company D. That would give thepartnership a clear focus and make it apparent to other organisations what the mainaims of the partnership are.

However, instead many partnerships are composed of logo exchanges involvinghundreds of partners with a large company leading the effort. There’s a lack of realfocus and, in the very large partner organisations, the sales people don’t haveenough at the lead partner don’t have the time to keep up with who’s joined. Thiscreates situation in which the company pursues a lead for an IoT transport relatedproject without knowing that it has specialist providers of IoT transport technologywithin its portfolio. The whole point of having partnership is therefore diluted and theparticipants’ efforts turn out to be worthless.

HOW STANDARDS HELP PARTNERING EFFORTSStandards across the board are a critical part of the IoT ecosystem and a vital enablerfor the market to move forwards. The siloed approach becomes limiting in howvendors engage with enterprises and for going after the strategic, long-terminitiatives. However, standards are still some time away from formulation andratification and there is nothing to base a foundation on at the moment.

For this reason small partnerships that are highly focused on pre-integrating productsand services and that have a clearly defined go-to-market approach are essential.This isn’t about small companies partnering with other small companies; it’s aboutlarge companies partnering with small companies as well. The only importantcriterion is that a partnership delivers value to its customers and to all its participants.

Standardisation at the moment is being led by two or three large partners comingtogether to go after markets and, in effect, setting internal standards within thepartnership. These efforts in turn will drive mid-sized and small partners tostrategically develop their offerings to integrate with these de facto standards. Wesee this pre- formal standardisation effort as a key driver for the IoT and also forpartnership programmes among IoT-related suppliers.

PARTNERING CHALLENGESThe main challenges facing companies are the resources they have available toparticipate in and manage their partnering activities. This is a less acute issue forlarger companies because of their greater resources but even they have to provethat partnering investment are generating some form of business value and return oninvestment.

5 WHITE PAPER

In essence, any partnership requires substantial resource commitment in the form ofcreating shared marketing collateral and messaging to set the partnership apart fromother marketing approaches. Activities such as running joint webinars to show howthe partnership works or attending events all cost marketing dollars and it isfundamental that such spend is directed where return in maximised.

Another key challenge is to ensure that all partners understand the long-term focus.Partnering is not about enabling quick wins, although they’re always welcome. Theconcept should be to create a partnership that can stimulate short-term successwhile keeping the long-term goals of all the partners in parallel. Some participantswill experience early wins while others will have to wait for longer term strategicplans to bear fruit. Successful management involves ensuring that all players remainin step and understand that their activities may bear fruit at different points in thematurity path.

Finally, the pace at which IoT is developing and the generalised immaturity of themarket means that change is a constant. This means that a partner programmecannot be too tightly formulated and partners must accept that programmes willneed continual customisation to respond to and shape market changes.

THE AERIS APPROACHAeris itself, in common with many specialised IoT companies, doesn’t have anofficial partner programme but it is in the process of building the right ecosystem ofpartners to address the needs of customers more effectively. Partnering has notbeen a core focus for Aeris until recently but we do recognise the value partnershipsoffer. In addition, we understand the power of utilising the reach of other companiesin our market place.

We are now focusing intently on enabling our partners to enhance their solutions,utilising Aeris platforms as part of their foundational solution offerings to the market.We see partners working with us in three ways:

A. Sell to: Partners can sell their product to us for packaging with other offerings to sell to our customers or vice versa where we sell our platforms to customers for them to package and sell to their customers.B. Sell through: Partners can sell their products through us, utilising us as a channel to our customers or vice versa.C. Sell with: Together we can sell our products as part of a joint go to market strategy that combines the strengths and value of all partners’ capabilities.

We believe that our open, flexible approach will enable us and our partners to gaingreater success as the IoT continues its development.

FIVE TIPS FOR SUCCESSFUL IoT PARTNERINGKeep an open mind regarding the direction of the partnership – your partners mayhave identified opportunities you’re unaware of.

Stay focused – ensure you keep a firm grip on what the partnership programme isdoing for your business, it’s no good having a great programme that doesn’t deliveryou business benefits.

Be patient – acknowledge that some partnership programmes will not result inimmediate wins but instead have long-term strategic goals that will benefit you.Be selective – just because a company wants you to join its partner programmedoesn’t mean it’s the right fit for your organisation.

Ensure fairness – a one-sided partnership that doesn’t benefit all the playersinvolved will end in failure so work to make sure all the partners are happy with thevalue they are receiving.

6 WHITE PAPER

CONCLUSIONThe rapid pace of IoT development means that the current market is highlyfragmented and no single vendor has all the answers to meet the market’sneeds. This, coupled with the lack of standardisation, has led to partnershipsspringing up to bring packages of functionality to market to make it simpler forenterprises to buy IoT solutions. That’s important to enable organisations to getoff the launchpad in what for many is still a very new area.

However, there is a danger that excessive partnering or partnering for the sakeof partnering ties up resources for little reward. Organisations should thereforebe open to partnership as a means to grow the market and their business butcautious to ensure that the partnerships they engage in are a good technical,organisational and market fit for their business and that real business valueexists. That value may not be immediately available for extraction but asuccessful partnership should have long-term strategic goals that are beneficialto all participants.

6 WHITE PAPER

www.aeris.com