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IT service providers must invest in IoT? Here is why…

IT service providers must invest in IoT? Here is why…

I think that every IT company these days is looking at IoT,

after all, it was said to be one of the most promising technologies for last, this and next year.

If you want to have a quick article about why this hasn’t materialized to its fullest… ,you might want to read the article of Bart Schouw (Chief Evangelist in the Office of the CTO at Software AG)

Ups and downs in the IoT landscape

Over the last years, I’ve worked with, (and for) several IT service providers and one thing is clear, everybody is still struggling.

Yes, there were some clear success stories, but way too few to call IoT an overall success.

This leads to ask the question “why” the sector is struggling and what are the next steps?

The answer can be found in the DNA.

Let me get you on the way:

Service providers, in general, are integrators, they have a to do list, a cascade planning, they work structured.

This is their DNA, this is how they got successful and where their benefits lay, but is it enough to remain successful in the IoT era?

IoT and “disruptive IoT” even more, is far from your typical integration project, often projects start with not much more than a concept, a pitch “and that is when it gets difficult”.

How do you go from “a pitch” to “a full deployment” including all the services that are needed to build and maintain a working solution?

If this path is clear than you need to check on which part of curve of Dunning Kruger, you find yourself on (no disrespect intended).

IT service providers are one of the building blocks of IoT projects but their exact role is not always defined.

While IT service providers play a crucial (and even leading) role in the process they never have all the component in house to bring the concept to fruition.

IT Service Providers need to be aware of their limitations and the impact it has on “the capability to deliver”.

As analogy, when surfing on a new surf spot (the water related one) it’s not always clear what dangers lay below the water surface.

While there might be no real sharks… but I’ve been stung a few times by jelly fish which left an itch and rash for months.

A jelly fish will probably be one of the last things you might think of as danger for surfers. (unless you surf)

Relating this jelly fish syndrome to IoT service providers, in a few bullets, might be the easiest way to put them in the spotlight.

Some of the unspoken elements that take IoT out of the comfort zone of IT service providers:

  • Building an IoT solution from scratch is 20 % technology and 80 % everything else.
  • The sales cycles are notoriously long for disruptive IoT.
  • IoT requires working with an ecosystem of other providers, innovation, legal, hardware developers, field services, monitoring centers, security firms, financial services etc…
  • A clear roadmap is difficult to set with lots of unknowns.
  • Revenue comes in the tail, rarely upfront and only if the client is successful.
  • Core IoT understanding and is hard to find).
  • Specific IoT development tools are missing.
  • Technology changes every new cycle.

There are a lot more pitfalls and a proper strategy needs to be put in place in order to mitigate these potential dangers (or at least identify them).

One example of the list above; Sales often sell and get a reward based on the sales.

This is what drives them. A long complex sales cycle with enormous potential but with unsecure outcome will trouble their minds.

that might result in follow reasoning:

Sales person: why should I invest 30 % of my time in a project that MAYBE gets completed in a year or 3 … Missing my other sales targets along the way… Reporting every month about the slow process in a project.

(Enough reasons to cool the enthusiasm for IoT in your sales team).

IoT is also not equal to IT.

It’s a bit similar to an engine builder that doesn’t have all the competences to build a car.

I’ve seen (and in the past also worked for) SP companies that invested in IoT, only to abandon it after a few years because it didn’t deliver. Sometimes they realize it’s too far from the core business or any other reason.

Others circled back to something which is closer to their core activity.

Reselling a portfolio of vertical IoT products as IoT entry point.

This has its own challenges but it adheres to the essence of what an IT service provider can leverage.

On the other hand, these products are often part of a crowded field of competitors, direct and indirect.

I do not dismiss focusing on reselling IoT as I think it is a good part of a strategy.

If it’s the only part of the strategy then it will bleed out over time because the IoT requirements will grow exponentially.

A Good IT service provider will be able to help with it’s customer strategy, avoiding the shadow IoT traps.

A single vertical solution without a strategy behind might do more harm than good.

As result of this, IT service providers need to define what they “need” and “want” to invest in.

What if an IT service provider decides not to invest in IoT?

It doesn’t bring fruits, it’s a big risk, it’s unsure, we don’t control the chain, we don’t have the competences, it takes too long. So let’s put IoT on hold…

On a practical level this makes sense but….

this is not looking forward and it feels a bit like turning a blind eye to the larger impact of IoT on the organization.

The future is one form or another of a “data driven organization” and lots of companies start to realize that IoT plays a crucial role in this transition.

The decision to work with an IT service provider will be, more and more, dependent on IoT:

“experience and ability to execute”.

So, investing in IoT, building experience today, putting vision and roadmap in place today is also investing in the overall success of the company on the long term.

That doesn’t mean burning all your resources today, IoT is not a sprint.

Some mind scribbles that need to be brought together…

  • Create your competence matrix.
  • Define your IoT framework together with vision and mission (not separately).
  • Remind yourself: There is no IoT without IoT devices.
  • Remind yourself: There is no IoT without IoT transformation and continuity services.
  • Put clear demarcation lines for your ecosystem.
  • Integration projects versus product development projects (IT versus IoT).
  • Remind yourself: Every IoT project might be different with a different partners.
  • Keep it simple, use a much “ready blocks” as possible and don’t try to reinvent the wheel if you’re trying to deliver a car.
  • Orchestrate, manage and outsource rather than insource everything.
  • Have patience / buy strategic projects where needed.


“Not investing in IoT” for an IT service provider is like “a major car company” that doesn’t want to look at “electric vehicles”.

I can not stop explaining how complex a disruptive IoT solution can be.

So, to become a player, you will need to simplify your own IoT architecture as much as you can (Integration tools, platforms, reference architectures).

You will need to become able to say “yes” to projects. You should get experienced enough to know when to say “NO“.

Both things take time.

Kris Van der Hoeven