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For many B2B companies, the Internet of Things (IoT) has become synonymous with the digital transformation megatrend – a way of collecting, analyzing and wielding data to deliver operational efficiencies and a better customer experience.

But the youthful exuberance of IoT, along with grand expectations, brings chaos and the potential for blunders.

Enter the future channel: consultants, integrators, service providers serving certain industries and geographies and specializing in various parts of IoT. They’re the pros who help deliver on IoT’s promise. Of course, it’s a nascent part of the channel today but will no doubt grow along with IoT spending.

And it’s a big spend, too. Companies around the world will collectively put $800 billion toward IoT projects this year, up 17 percent from last year, according to the IDC Worldwide Semiannual Internet of Things Spending Guide. IoT in the Americas alone will reach $335 billion in 2018. Over the next three years, global IoT spending will skyrocket to nearly $1.29 trillion.

Industries with the largest IoT spend are manufacturing ($183 billion), transportation ($85 billion) and utilities ($66 billion). In manufacturing, the primary IoT use case is in operations. In transportation, it’s freight monitoring. In utilities, it’s smart grids for electricity and gas.

Geographically speaking, the lion’s share of IoT investment will continue to happen in the United States and China. These two countries account for double-digit annual growth rates and over half of the spend, IDC says.

How much will flow through the channel? That’s up to channel companies. They’ve got a lot of work to do getting in shape for the IoT game. The average channel partner is an eight-person shop that might not have the wherewithal to go after new platforms such as IoT, says Forrester principal analyst Jay McBain, a 23-year channel veteran.

That’s not stopping tech distributor Tech Data from leaping ahead in IoT. Recently, Tech Data made a slew of IoT-related announcements, headlined by its agreement to distribute Cisco Smart+Connected Digital Platform. It has positioned itself as an educator and facilitator offering channel partners one-on-one consultations for growing their IoT business, industry-specific IoT design services, training, and advice on marketing to line-of-business executives – the new shot-callers in tech.

“The business opportunity for all ecosystem partners surrounding IoT is expansive,” says Michelle Curtis, senior manager of the IoT solutions group at Tech Data.

Given IoT’s expansive field of play, channel companies might be wondering where to position themselves. To this end, research firm Ovum has uncovered five key shifts driving IoT opportunities for this year and 2018:

  1. Low-power wireless access is taking root.
  2. Service providers are diversifying connectivity offerings and reaching out to developers.
  3. Security is rising to the top of the IoT agenda.
  4. Data analytics is moving to the “edge.”
  5. IoT-enabled transformational business models are evolving.

Underscoring these trends, however, is a severe lack of in-house IoT skills needed to pull off critical projects. If channel companies can get in IoT shape quickly, then they can fill the gap. The most sought-after skill or position is the IoT architect (not to be confused with the IoT systems architect). The IoT architect blends three fundamental areas of IoT: computing on the edge, application operation stack in the middle, and data analytics on the back-end.

“I’d estimate 90 percent of companies that need an IoT architect are not going to be able to find one,” Dan Graham, general manager of enterprise systems at Teradata, an analytics, data warehouse and data management company, told Zero One earlier this year. “The fallout is two-fold: You fail in your project or you find a systems integrator who can sell you those skills.”

Then there’s the question of who’s on your team. Which IoT vendors should channel companies align with? In April, Gartner named “cool vendors” in some of the hottest areas of IoT. These vendors are exploiting digitalization and the IoT to build the next generation of innovation, Gartner says. At the very least, channel companies should be scouting them.

Cool Vendors in the Internet of Things, 2017

  1. Seebo (design)
  2. Exosite (IoT platform)
  3. Rigado (gateway)
  4. Reekoh (integration)
  5. Hiving Technology (security)

Cool Vendors in IoT Edge Computing, 2017

  1. Camgian Microsystems
  2. FogHorn Systems
  3. Nebbiolo Technologies
  4. TopSpin Security

Cool Vendors in IoT Analytics, 2017

  1. Arcadia Data
  2. Optimal+
  3. Predii
  4. Predikto

Cool Vendors in IoT Solutions, 2017

  1. Filament
  2. SensorInsight
  3. Uptake
  4. ambyint

Cool Vendors in IoT Security, 2017

  1. Cyber adapt
  2. Lexumo
  3. Prove & Run
  4. ZingBox​

(Source: Gartner, April-May 2017)

Based in Silicon Valley, Tom Kaneshige writes the Zero One blog covering digital transformation, AI, marketing tech and the Internet of Things for line-of-business executives. He is eager to hear how IoT is impacting your business. You can reach him at tom.kaneshige@penton.com.