SMEs: How can you join an IoT ecosystem?
IoT is complex and fast-moving and is not something a single company can handle solo. It would be too expensive and too risky, even for very large companies, and as such, is moving us away from single vendor proprietary technology stacks to a collaborative ecosystem model of interdependent IoT partners. But IoT ecosystems themselves can be highly complicated, comprising many layers and hundreds of players. The IoT ecosystems are also not static: as the IoT evolves, the ecosystems too will change, grow and develop.
This complexity means that it’s hard to define an IoT ecosystem. It could be an informal alliance of a couple of companies working together on a single project or a large-scale web-based marketplace, or anything in between.
Looking at an IoT ecosystem from a basic technology standpoint; there are the devices themselves, the IoT platforms that enable the connectivity between the devices, the communications infrastructure that connects the things and enables the flow of data, and the software that extracts value from the data and enables the end service. Each of these can be broken down into myriad components and categories. The customers themselves could also be considered part of the community, both the end users and the intermediate customers – i.e. the partners in the ecosystem.
Cisco’s Vice President of its Corporate Strategic Innovation Group, Maciej Kranz, outlines broad categories of horizontal, vertical and geographic partners in an IoT ecosystem, which provides a useful way to understand the big picture. The horizontal players supply the technology, be that network infrastructure, cloud computing, data analytics, security, device management… the list goes on. The vertical partners will be experts in their particular industry able to provide specific solutions to complement the horizontal technology. Geographical partners may be regional, national, local or hyperlocal, for example: Europe, UK, Yorkshire or Leeds. They will provide valuable insight into the local environment, regulations, economics and use cases.
Cisco worked with all three types of partners to create an IoT-enabled disaster management project in Glasgow. It was a horizontal partner and supplied the IT infrastructure, collaboration and security elements. Telford-based SME Bronze Labs was the other horizontal partner, contributing its IoT software. Italian company Leonardo was the vertical partner with expertise in aerospace and defence, while geographic partners Scottish Water and Glasgow City Council had intimate knowledge of the local area. The project simply would not have been possible without the collaboration of all parties.
SMEs with innovative products have a vital role to play in the IoT ecosystem. The government is committed to procuring more goods and services from UK SMEs: as of July 2017, 45% of the total £2.6 billion spend through the Digital Marketplace was through SMEs. But government also needs the larger vendors to help manage supplier relationships rather than having many individual contracts, and SMEs need the big guys to help them go after bigger contracts.
It’s not a one-way street: the big guys need SMEs. Although many large tech companies and telcos claim to offer end-to-end IoT solutions, they rely on partners to provide the more specialist elements of the service. And, while they have been busy buying up talent and intellectual property through mergers and acquisitions (M&A), these companies will never be able to cater for all the different IoT use cases, in all verticals, in all geographies. As such, they make it straightforward for partners to join their ecosystems, often simply by applying via a web-based portal.
But SMEs need to recognise that joining such an ecosystem is no guarantee of success. Those who sign up and then wait for business to roll in may be waiting for a very long time! A good approach is to research the different vendor ecosystems and identify gaps where your technology or expertise would be a good fit. Identify what it is you want to get out of an ecosystem and find those that are the right fit for you. Think about what enables your technology and target those providers. Find companies whose products complement yours. Piggyback on larger companies with correspondingly larger marketing budgets.
In a nutshell: wear out your shoe leather to make the right connections so you can build true partnerships that will deliver better outcomes than you could achieve individually. The very nature of the IoT ecosystem as a decentralised, distributed beast means that hard work will be required to get into the ecosystems that are right for your company. But, if your product truly adds value, then once you’re in, that hard work will have paid off.
For a comprehensive look at how IoT ecosystems work, you can download our insight report on Building Ecosystems.