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The profit margins for the Internet of Everything are?

Channel Strategy

LAS VEGAS – Ask a solution provider or any other type of channel partner about what kind of money they can make with the Internet of Things or the Internet of Everything and you’ll be hard pressed to get a straight answer.

During the Cisco Partner Summit I was part of a panel discussion with five leading channel partners on the subject of monetizing the Internet of Everything. After listening to these executives speak glowingly about the Internet of Everything market opportunity and some of the great work they have already done I asked them point blank: Can you ballpark your profit margins for the Internet of Everything?

After what seemed to be a long pause and a few blank stares Sujeet Chand, the CTO of Rockwell Automation danced around the subject saying the Internet of Everything in the manufacturing sector has a value of roughly $3.9 trillion. Chand also told me that there is great growth in providing services for the Internet of Everything.

The panel also included Jasmin Jivraj, the president of Acrodex, a perennial CDN Top 100 solution provider based in Edmonton. Jivraj is one of the smartest executives I have ever met in the IT industry and she played it close to the vest saying that the Internet of Everything enables Acrodex staff to be creative with solutions and she see as a growing market opportunity.

And, the Internet of Everything is definitely growing. At the last Cisco Partner Summit in Boston the profit and value potential for the Internet of Everything was pegged at $14.5 trillion over the next 10 years. Fast forward nine months later and it’s grown to $19 trillion. In Canada in the last nine months the Internet of Everything has grown from $400 billion to $500 billion.

Probably the most honest answer I got from these solution providers came from Wayne Hull, a senior vice president at AGT International who said that his company’s revenues are over a billion dollars and all of it is from the Internet of Everything.

Since no one wanted to answer my question I turned to David DeAbreu, Cisco Canada’s channel chief and I asked him: Can you ballpark your profit margins for the Internet of Everything?

He candidly said he had “no idea.” And, maybe that’s the point here. I think solution providers are still struggling to develop a consistent profit model for the Internet of Everything because it’s such a new phenomenon in the marketplace.

Sure there is a lot of money to be made developing solutions for people, processes, data and things but how do you specifically put a price on these elements of the Internet of Everything. Secondly how does a solution provider work with customers and cities/communities to find budgets for the Internet of Everything or exploit the budgets that maybe flat?

One solution providers told me that smart garbage can, for example, maybe a cool product for people to have but only two companies in Canada would have the budget to make that a reality – Waste Management and GFL. All the other companies in that sector are either too small or make money through razor thin margins that a smart garbage can would be too risky to undertake.

DeAbreu added that the Internet of Everything is a wave that solution providers must focus on immediately or they would miss out on a huge revenue opportunity.

“There is a revenue stream there. No one’s quite got a handle on the margin potential, but it’s there,” he said.