IoT vendors should focus on business problems, not tech hype: report

IoT
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The exaggerated expectations created by IoT hype is playing a major role in how vendors approach the Internet of Things in 2018 – for better or worse, according to a study from Technology Business Research (TBR).

TBR’s ‘3Q18 Commercial IoT Market Landscape’ report says that vendors tackling the IoT space are succeeding by focusing on business problems, not transformation.

Shane O’Callaghan of TSM Control Systems – a customer of IoT platform develop PTC – explained it at PTC’s LiveWorx2018 in the most straightforward manner: “IoT is not a technology project; it’s a business project.”

TBR believes leading vendors are gaining market traction because they are molding their IoT go-to-market strategies around solving tactical business problems with solutions proved by case studies. Vendors that focus on technical aspects are unlikely to gain breakthrough success and will be relegated to being component suppliers to vendors more engaged with customers at a business-problem-solving level.

At LiveWorx 2018, PTC CEO Jim Heppelmann told analysts that PTC may have been looking too far forward, focusing on cutting-edge technology, and had trouble explaining IoT to customers and how its platform, ThingWorx, would improve outcomes.

Like PTC, some vendors appear to be caught between trying to evolve from a component-positioned, technical-messaging vendor and a vendor trying to solve business problems. And many vendors are struggling to rise above the messaging of more successful peers or put a unique twist on their solutions to differentiate them amid an increasingly saturated and hypercompetitive market.

In its 3Q18 Commercial IoT Market Landscape, TBR deeply examined paths vendors are taking to evolve, and among its findings is that an emphasis on partnering is one approach that most vendors use. Partners are critical because most IoT projects include components from several vendors, and very few of those vendors have a relationship with the customer.

Meanwhile, IoT is increasingly embedded in both hardware and software products from independent hardware vendors (IHVs) and independent software vendors (ISVs), respectively. IT vendors are leveraging large- and small-scale ISVs and IHVs to bring their technologies to a broader market beyond providing custom solutions.

Some vendors are narrowing their focus and messaging to verticals in which their expertise matches the challenges experienced in the vertical.

Also, some vendors are beginning to sell off underperforming business units or looking for attractive acquisitions in their areas of focus. TBR expects 2018 to be a year of consolidation and acquisition activity.

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