IoT and the channel: good news and bad news
By Sebastian Isaac, Business Development Manager at Rectron
The Internet of Things (IoT) is set to create new business opportunities by making business processes more efficient while at the same time making channel business a bit more difficult.
Much like cloud computing, which was also once a buzzword in the South African market, the IoT will become entrenched in business sooner than we may be prepared for – and it’s going to demand a change in the way we do things in the channel.
The IoT refers to a vast amount of interconnected devices that have the ability to communicate with each other through an open platform. These devices include network cameras, GPS navigation systems, ERP applications, tablet computers, wearable devices and everything in-between. The information that results from these connections will help businesses make faster and better decisions that save costs, improve productivity, increase revenue and speed up the delivery of goods and services to business and consumers.
The IoT offers many benefits to the channel.
Let’s consider a retail application. In a large retail store, sensors on product shelves will alert the ERP system if a certain product is running low or if a shelf is empty. The system will then notify the supplier of the stock levels. The supplier system will then check the inventory of the store against its sell out figures and inventory reports (Data Analytics) to ascertain whether this is true. If it is false, the system will dispatch an agent or merchandiser to fill up the shelves. If this is true then the supplier will send an automated order based on historical sales data to the store. At the same time a transportation company in the FMCG sector will use the IoT to achieve different results – for example, by monitoring GPS systems and cellphone networks, the company can work out routes that bypass areas with heavy traffic congestion, thus getting to its destination quicker, saving time and money through improved fuel efficiency and efficient route planning.
The magic happens when the retailer and transportation company’s systems start communicating with each other. As soon as stock runs low, the retail system can tap into the transport system to figure out the fastest route to the warehouse, ensuring shelves are restocked as soon as possible, which means fewer lost sales and, ultimately, higher revenue.
A recent Intel case study showed how an American trucking company used the IoT to improve its fuel economy by over 7%. This equated to a saving of more than 13 billion litres of fuel and 38 million tons of carbon dioxide.
So what’s the bad news?
Playing in the IoT sandpit means resellers need to be specialists in different fields – while this is possible to a degree, no single system integrator can make IoT solutions by themselves. Software application solutions, hardware solutions, cloud solutions, networking solutions and interconnectivity solutions must work together in order to get the best out of the IoT. System Integrators will need to turn these into industry specific solutions with different data analytics and applications which will need to be developed.
How do resellers thrive?
Resellers need to start diversifying by adding new resources and skills to their solutions portfolios or alternatively they may have to start developing strong partnerships with other resellers or key partners within the industry to be able to present a complete solution to customers.
One of the biggest challenges is that we have access to many vendors in the marketplace but they’re not yet working together optimally to further this vision. To address this, Intel has established an IoT working group along with Intel, Dell, Advantech and many other major players that are looking at creating a collaborative system. A key focus area will be on ensuring the different types of software, hardware, systems of systems, that are available in the market, have the ability to integrate with each other.
Security is another challenge – the market has not yet come to a consensus about how security will be managed when using the IoT. For example, we need to figure out how we will prevent sensitive information from landing in the wrong hands – flight plan information in the hands of terrorists, for example or your own personal information being sent without your knowledge. In the world of IoT this makes our current security risks in 2014, simple problems. To address this, one of the IoT Privacy Tech groups aims to achieve this by finding solutions to business and consumer privacy issues which will need to be addressed if this is to be adopted and accepted.
But for the IoT to truly work in South Africa there are bigger issues that need to be addressed, particularly our Internet infrastructure. The cost of bandwidth and connectivity is still high – and IoT is bandwidth-intensive. It’s up to the service providers, in partnership with the government, to work together to reduce the cost of bandwidth and infrastructure as usage increases. With current localized cloud infrastructure, there should be a way to make local bandwidth even cheaper to help boost local cloud services that are developed within the country. This in itself, may create a new wave of innovation that may drive local traffic at a cheaper cost to consumers, business, ISP, etc.
The Internet of Things is going to happen in South Africa. At Rectron, we see the IoT as something that will make it easier to do business with other resellers while improving management of the complete business process. If they want to thrive, channel players will need to revisit their business strategies and consider that they may be more successful when they collaborate.