Solution Providers Reveal The Hottest Areas For IoT Investment
IoT is one of the underlying technologies driving edge solutions. Here’s how savvy solution providers are helping customers use troves of data to realize their desired business outcomes.
As one of the underlying technologies driving the rollout of edge solutions, the Internet of Things market is expected to soar, creating massive opportunities for savvy solution providers that can help customers use troves of data to achieve their desired business outcomes.
Gartner forecasts that the number of IoT devices will triple from 2020 to 2030, growing at a compound annual growth rate of 11 percent to reach nearly 18 billion devices over that span. The fastest-growing segments are expected to be manufacturing, health care and smart cities, according to the research firm.
Meanwhile, McKinsey & Co. projects that the potential economic value that IoT could unlock globally by 2030 from both consumers and customers of IoT products and services will reach $5.5 trillion to $12.6 trillion.
While those projections won’t materialize immediately, solution providers that made our 2022 IoT Innovators list pointed to several areas they plan to focus on for IoT success.
1. IoT Security Is Key, Particularly In OT
By 2025, 25 percent of edge networks will be breached, up from less than 1 percent in 2021, a trend driven by the continued convergence of enterprise IT and OT environments, according to Gartner, and much of that convergence is being delivered through IoT.
For Kevin Lynch, CEO of Denver-based security-focused solution provider Optiv, the prospect of a high-profile OT attack in the U.S. looms large.
“My prediction is we will actually see an OT [security] attack in the United States, certainly within 2023, of a magnitude that we will think of it as an act of war,” Lynch said in October during a keynote address at the 2022 XChange Best of Breed Conference hosted by CRN parent The Channel Company. “I think we are on the verge of seeing one in Europe faster than that, perhaps the first quarter of 2023.”
While many solution providers are more comfortable working in the IT market as they have done year in and year out, Lynch cautioned that those who ignore the OT security space will miss out.
“In 2023 and beyond, if you don’t have a strategy for playing in this space and winning in this space, you will be left behind,” Lynch said. “This market is going to wake up, and it’s going to be enormous.”
2. Helping Manufacturing Customers Do More With Less
The revitalization of manufacturing in the U.S. has been in the spotlight this year in the wake of product shortages driven by the pandemic and the passage of the CHIPS Act, which aims to bolster stateside semiconductor manufacturing.
While some solution providers told CRN they expect to see a boom in IoT business as those new plants start to come online, the factories already here are also rife with opportunity for solution providers, said Sam Hoff, president and CEO of Patti Engineering, Auburn Hills, Mich., an OT-focused solution provider that expects to see 15 percent to 20 percent annual growth in 2023.
Shortages of skilled workers are driving demand for manufacturing robots in markets that haven’t traditionally used them, such as food and beverage, Hoff said. In other cases, customers want to get more data and more life out of existing equipment, he said.
“There’s a lot of old equipment in these facilities, 20- to 25-year-old equipment that’s running a lot of these manufacturing systems, and they were never built to spit out data,” Hoff said. “What you’ll find is that the equipment might work fine, but the control system or the [programmable logic controllers] need to be upgraded. … So for pennies on the dollar, rather than buying a brand-new machine, you can upgrade your machine.”
3. Looking For Smaller Projects That Demystify IoT
In many cases, getting started with IoT isn’t as complicated as it seems, said Andy Timm, digital orchestrator at New Vision, a Bloomington, Minn.-based solution provider.
Customers don’t need millions of dollars and long, expensive engagements with a global systems integrator to roll out IoT solutions, he said.
For example, a quick-serve restaurant that loses $5,000 worth of roast beef every time its finnicky refrigerator goes out could benefit from a $20-per-month solution that utilizes a sensor to send a text when the temperature gets too high, he said, noting that “there’s an infinite number of those little solutions that either exist or could exist.”
“People are starting to realize that this isn’t some mystical new shift that we have to think about in business. It’s just recognizing that there are use cases everywhere,” Timm said. “Sensors can be put on just about anything, and the return can be very quick and simple, so I think the demystification of IoT is starting to happen.”