3 min read

Big channel opportunity seen in IoT boom: Study

Leadership

The adoption of Internet of Things technologies in Canada is still in its very early stages but the number of smart connected devices is poised to balloon from 28 million in 2013 to no less than 114 million in five years and this could be a great opportunity for the channel, according to a study by telecommunications company Telus Corp. and analyst firm IDC Canada.

As much as 13 per cent of Canadian medium and large sized companies have adopted IoT solutions as of this year, according to the Telus/IDC Internet of Things Study 2014. About 30 per cent of respondents said they planned to adopt IoT solutions over the next 24 months.

The survey, conducted from March to April 2014, covered 209 Canadian medium and large sized firms from across the country. One hundred twenty two IT decision-makers and 87 business leaders were queried on their organization’s IoT plans.

There are huge opportunities in the hardware and technology integration space for channel players, according to Jim Senko, senior vice-president of SMB and emerging markets for Telus.

“At the end of the day, the study indicates that we are in the cusp of a major growth point,” he told CDN. “This growth is due to a confluence of network stability, emergence of new devices and the ease of deployment and ROI (return of investment).”

“IoT requires hardware components and there is going to be increasing demand for expertise in installing there components and integrating them with applications and existing systems. Then companies will need managed service providers to monitor and maintain these IoT deployments,” Senko explained.

For instance in current IoT deployments in Canada, the survey found that in 28 per cent of the cases, cloud or hosted solutions are being used. Cloud computing is a natural fit for IoT since its inherent flexibility and scalability is well-suited to deal with the potential growth of IoT.

Another opportunity for providers lies in the distributed and mobile nature of IoT end points. Application connectivity will be needed across a varied set of locations with potentially fluctuating workload demands.

In Canada, 24 per cent of IoT deployments involved external providers that are used to manage the IoT platform or application. In 61 per cent of the cases, external cloud solutions were used. The remaining deployments used hosted solutions.

Another area that channel partners can make money from is security.

Ensuring security of IoT solutions was considered a “major concern” by 31 per cent of respondents and a “minor challenge” by 47 per cent of respondents.

“Securing the IoT is key as these deployments will be reinventing the physical business process,” the report said. “Organizations need to be proactive about security and this requires selecting the right partner that can fortify networks, devices, applications, data and other physical assets.”

Connectivity is also another IoT issue that providers focus on.

“Most IoT deployments involved both IT and line of business departments and the majority are considered relatively straightforward projects,” the study said, “Wireless connectivity, cloud computing and big data solutions are the underpinnings of IoT as organizations seek to manage large and variable workloads across a variety of locations and unlock value from growing sources of data.”

Other attributes of Canadian IoT deployments are:

  • The average number of devices deployed per organization in 5,220
  • 54 per cent of projects used both wireless and wire line connections
  • Wireless only solutions were found in 28 per cent of the IoT projects
  • Wi-Fi and 4G connectivity were most common wireless technology
  • Main platform or application deployed internally or on-premise found in 72 per cent of cases
  • Cloud and hosted solutions used in 28 per cent of cases
  • IT and line of business collaborate in 77 per cent of IoT projects

Other types of wireless standards like WiFi, Bluetooth, Zigbee, Message Queue Telemetry Transport (MQTT), 6LoWPAN (IPV6 over low-power wireless personal area network) are used in certain deployment scenarios.

Big data and analytics is another potential money maker in IoT.

The study found that 74 per cent of businesses are storing internally, data generated from IoT deployments. The study foresees constraints developing around big data storage as well as access to analytic tools that can make sense of the data and advance high-performance computing resources and skills.

Channel partners seeing to take advantage of IoT should act fast, according to Tony Olvet, group vice-president, research at IDC Canada.

“By the end of this year, a little over 13 per cent of businesses will have deployed IoT solutions,” he said. “But the ramp up will be very fast for the next two years.”

IDC predicts that IoT spending in Canada will shoot up from $5.6 million in 2013 to about $21 billion by 2018.

Olvet said channel players should watch of for IoT growth in areas such as:

  • Manufacturing
  • Oil and Gas
  • Distribution
  • Retail
  • Financial service
  • Healthcare
  • Government
  • Utilities

“There are so many vertical applications for IoT,” Olvet said. “What businesses are looking for is someone who can show them how to lead in their market and they’ll be relying on partners to get where they want.”