Channel Forecast: Why it’s absolutely time to create a plan for IoT 

Last month’s Comms Dealer Channel Forecast insight session focused on the uniquely high value IoT market and outlined strategies to help resellers and MSPs take advantage of the intelligent mobile data opportunity within their reach. Put simply, IoT is here – and now is the time to fully consider its potential to boost your business.

Zest4 and Pangea are at the forefront of the burgeoning IoT and intelligent mobile data market and have stepped up efforts to help partners capitalise on a ‘record breaking’ opportunity that the channel is well-placed to realise. Furthermore, a proactive, far-sighted approach to IoT will ensure partners stand out from the pack. “The opportunity to differentiate is significant,” stated Bernie McPhillips (pictured left), Sales Director, Pangea. “This market is far from being saturated and there is an opportunity for partners to talk to customers in a completely different way. Not about saving money on data SIMs, but how IoT can help to build a more resilient and more effective business.”

According to Anton Le Saux (pictured left), Sales Director, Zest4, channel companies would be wise to accelerate their embrace of IoT so that it plays a pivotal role in their growth strategies. “Our most successful partners buy into IoT,” he stated. “Their commitment is key. But some partners fail because they ask their sales teams to treat IoT as an add-on to what they do. This does not drive intelligent mobile data deals. Our most successful partners understand the scale of the opportunity and are dedicated to realising that growth potential with our support. The number of partners I’ve helped get a sale over the line has been phenomenal. Commit to IoT – it can’t be an afterthought. The rewards are long-term and add significant value.”

Profound outcomes
Resellers and MSPs who are on board with IoT are experiencing profound impacts on growth and value, noted McPhillips. “Most traditional telecoms businesses are witnessing low single digit compound annual growth,” he explained. “Cloud is the exception with 15 to 20 per cent. However, the CAGR in IoT is over 26 per cent and that’s accelerating. Intelligent mobile data is now truly a credible alternative to fixed line and its flexibility means IoT is pervasive across all verticals.

“We no longer need to talk about what’s coming with IoT, we talk about what’s here and these trends are continuing into the future. We have 17 partners with contract values worth more than £1 million. Big opportunities like these come with complexity but they are within the channel’s reach.”

The IoT growth figures cited by McPhillips extend far beyond fast growth rates, simultaneously generating record breaking multiples. And he argues that it is time for the channel to wake up to these commercial realities. “Traditionally, telecoms firms are valued at six to eight times EBITDA (multiplier),” he added. “Perhaps 10 times for larger resellers. But there’s many examples of businesses in the IoT sector being valued at over 20 times EBITDA. From a growth and valuation point view there are compelling reasons to get into this market.”

Our most successful partners understand the scale of the opportunity and are dedicated to realising that growth potential

The ongoing headlong growth of intelligent mobile data solutions is being fuelled by a wide range of drivers; and it’s key to recognise how IoT technology can deliver data-driven insights that are fit for purpose across a broad scope of use cases in many settings – as well as driving resilience. “The level of resilience offered by IoT technology has increased significantly,” said Le Saux. “Multi-network SIMs provide access to four networks in the UK. But there is still, somewhere, a single point of failure. When using IoT technology we can put up to eight users on one SIM. The further away we take away that single point of failure the more critical connectivity can be, and the easier it is to sell a solution to an end user who stands to lose money by losing connectivity.”
IoT applications can prove to be transformational in a number of areas, delivering pervasive benefits and the market is becoming more receptive. “More people are realising that connecting things creates greater efficiencies,” added Le Saux. “But they’re not asking for IoT, most of the marketplace is around data SIMs and smart devices. A major customer driver is real-time information from devices and operating systems which enables them to manage their business more efficiently. Moreover, the number of security companies launching completely wireless solutions is also growing. We saw many wins in the security sector last year.”

Other big trends contributing to the growth in demand for IoT is the rise of eSIMs and iSIMs. “Within five years they will make up 70 per cent of the market,” stated McPhillips. “Various verticals are driving that expectation, including smart cities and autonomous cars. There’s far more pull from the market and we’re working on bringing these technologies to partners.”

Le Saux supported this observation with a similar emphasis. “End users have more knowledge about what they want from a connectivity solution,” he stated. “A year to 18 months ago we were having to propose a multi-network SIM. Today, 95 per cent of customers understand what they are and are asking for them. For partners who do not have IoT as their core business, that helps massively.”

To further boost IoT’s expanded use it is important for resellers and MSPs to raise the intelligent mobile data conversation to a broader and deeper context, otherwise end user organisations won’t fully grasp the nature of the positive impacts of IoT, and partners won’t capitalise on the growth opportunities within their reach.

There is a responsibility for the channel to grasp these solutions and make sure end users are aware that they exist

“If we avoid selling the term ‘IoT’ and start selling intelligent connectivity partners will get along a lot better,” commented Le Saux. “IoT means nothing to end users, but they do understand that intelligent connectivity is not just about connecting devices and generates relevant information that enables them to achieve their goals more efficiently. Customers can see data flows from machines and devices in real-time. That has to be a USP for the partner and a reason to buy for the end user. But it’s about articulating these solutions to customers.”

No brainer
Customers are becoming an irresistible force as they seek solutions for their business problems, and the channel is starting to understand that alternative solutions like IoT with an expected RoI are becoming a ‘no brainer’, says McPhillips. “Intelligent mobile data solutions are more versatile, more resilient, ultra-secure and commercially flexible. Not to mention the control and global mobility they can add to a business,” he added. “Therefore customers are embracing the technology but only when it is presented to them in a way that clearly illustrates these positive outcomes.

“There is a responsibility for the channel to grasp these solutions and make sure end users are aware that they exist. I urge resellers and MSPs to focus on IoT market potential, target sales people and give intelligent mobile data the business development treatment it deserves.”

Those resellers and MSPs who embrace IoT also stand to reshape the intelligent mobile data competitive landscape, creating the potential for new market leaders. “We need to help partners become world leading providers of intelligent connectivity services,” said McPhillips. “That’s where the scalability has come from, by making partners more independent in their pursuit of record breaking multiples that add huge value to their business. This opportunity is unprecedented and real.”

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