While COVID initially proved negative for IoT projects, Intel says that trend has turned around, and they are actively encouraging and supporting partners in developing or expanding IoT practices.
Intel projects that it is on track for a record year, with $75 billion in revenue expected, the highest in the company’s history. IoT [Internet of Things] has become a growing part of this. In part, that reflects a broader transformation from Intel’s business from a heavy PC focus to a broader range of more data-focused devices. However, it also reflects the growing value-add in the IoT opportunity.
“The opportunity for IoT is about $300 million worldwide,” said Lucas Martínez, Intel’s Channel Sales Director and IoT lead for the Americas. “It’s a big opportunity for every partner we have.”
Martinez emphasized that the IoT market has fundamentally shifted, from being focused on the installation and management of high volumes of low-cost, low-margin devices, to much higher value-add plays.
“The IoT business has been evolving, and COVID has just added another evolutionary step,” he said. “We’ve seen a mass acceleration in IoT as well as a shift in what it is. Five years ago, everyone said IoT was about small sensors at the edge. In our view, IoT became more of a complete solution, from edge to cloud, with the cloud being what IoT connects to, and with the edge becoming smarter and more powerful. Five years ago, we thought of it as sensors sending information to the cloud, where it would be processed, and then maybe sent back. Now we have AI at the edge, so those tiny small sensors are becoming smarter and more powerful.”
Martínez said that autonomous cars are an exemplary example of this trend.
“Some decisions go to cloud but some stay at the edge,” he noted. “You have to do that for time reasons, as well as latency and security.”
The impact of COVID on the IoT market was fairly complex, but after some initial negativity, Martínez said its impact is now trending strongly.
“The COVID situation accelerated digital transformation to an incredible degree, but initially, the top priority was getting people working, and schooling from home,” Martínez noted. “The next priority was keeping business operating in the new world. So some IoT projects were initially cancelled or delayed because of COVID. But then, more new projects began to appear. Because IoT projects are typically around 300 days, that meant that there was a gap in mid-2020, but since then an increased pipeline of products has appeared that will take place in 2021.”
COVID has created specific IoT opportunities to drive particular business results.
“We are seeing an increase of retailers getting self-service kiosks outside of their shops,” Martínez said. “In one project in Colombia, the kiosk scans arriving customers to see if they are wearing a mask. It then scans your ID to see if you can legally be in the streets or not that day – there it depends on the specific day. It then gives a green light or red light to entry.”
Martínez noted that IoT projects are also being designed to minimize human contact.
“You are having projects for robots to clean hotel rooms being developed to avoid having to put human cleaners into the rooms,” he indicated.
Martínez also emphasized that many of these projects are worlds away from many typical IoT projects of several years back, which had high volumes of low value devices which depended on huge deployments to make good money.
“Many big companies are now involved in smart infrastructure projects where they connect businesses and systems in real time with a single pane of glass,” he said. “These are an entire whole edge to cloud solution. That’s a massive investment. It’s not 1-3% margin stuff. The maturation of the industry has made it difficult to compete on margin because there are so many verticals and industries, from Smart Cities, to airports with passport scanner that does facial recognition. Even building management is now full of technology.”
Martínez said that the massive IoT channel growth involves three types of partners.
“One is our regular type of IT partner like Softchoice, Compugen or Insight who have IoT department, and we help them grow those,” he indicated. “Almost all of these solutions providers are getting into IoT. Some don’t call it IoT, if it involves Point of Sale products, for example, but it is. The second group is new IoT-focused partners in areas like digital science, but which are still IT companies. And the third group is the operational technology [OT] companies. which is where we think the big growth is. With these OT SIs, their key business is not tech but is something like surveillance or building management, where this changes what they do and how much they can charge. We see this group as a big portion of Intel partners in the future.”
Going forward, Martínez said he is seeing two types of challenges for traditional IT partners who want to start an IoT business or expand one.
“Every time I finish a presentation, partners ask me what to do next, and how do get started. The new Intel Partner Alliance and its connecting the different programs will help them with that. Another common problem is that they say they don’t have enough people in their company to understand IoT and sell it, and that investing in that is too expensive. So we are actively working with distributors to help the channels with resources. We are also tasking our own Sales Development Reps to act as salespeople for our partners.”