In-Depth

How Microsoft Partners Can Master the 'Internet of Things'

IoT is often mentioned as the next great market opportunity. It also happens that Microsoft partners are uniquely positioned to help their customers embrace IoT. The challenge is getting customers to understand that they've got an IoT problem.

• By Barb Levisay
• October 15, 2014

We've all heard the Internet of Things (IoT) is the next great service frontier. If that's the case and IoT is going mainstream, why aren't your customers calling you asking how you can help them connect and interpret all the data from their "things"? Or are they? The questions may not be framed as an IoT discussion, but your customers are surely grappling with an increasing number of data sources and trying to make sense of it all. A growing number of partners are turning those opportunities into IoT practices.

The IoT Primer
At a high level, the IoT refers to the ever-expanding number of devices and sensors that are collecting and transmitting data. As the amount of data being collected has increased exponentially, it has outpaced the practical application of that information. Organizations are struggling to house large amounts of data, as well as putting it to work.

As with most technology solutions, there are multiple levels to consider to solve the customer's problem. When you boil down the Microsoft IoT value proposition, it's pretty straightforward:

• There are a huge number of devices, machines, sensors and other "things" collecting data.
• The data needs to be gathered and stored somewhere.
• The data needs to be put into a context where it can be integrated, combined, analyzed and reported.
• In order for that data to be understood and applied to present and future decisions, it needs to be winnowed, organized and presented in a user-applicable form.

Microsoft's foundational solution to these requirements is offered through Microsoft Azure. "Azure Intelligent Systems Service provides the ability to connect all the sensors and devices to the cloud. From there we have the rest of the Microsoft assets that partners can tap to deliver a complete solution," says John Doyle, director of product marketing for IoT Industry, Cloud & Enterprise at Microsoft. "Partners bring the industry knowledge, with a deep understanding of the business requirements, to combine the services that deliver the end solutions."

Some argue that IoT is nothing new, and even Microsoft agrees that all the pieces to support IoT existed in the past. The difference is that previous solutions were disconnected, complicated and presented a risk in committing to technology that might not survive the long term. That stability is particularly important because most IoT initiatives are long term by nature. The longer you collect data, the more opportunity there is to learn historic trends that could affect decisions.

The Partner Experience
All this sounds reasonable and during the 2014 Worldwide Partner Conference (WPC) Microsoft showcased several impressive IoT projects recently completed by global partners. There's clearly interest in IoT at the enterprise level, but for the opportunity to be relevant to most partners, there needs to be interest from mid-market customers.

BlueMetal Architects, an application development partner based in Boston, is seeing an increase in the number of clients of all sizes dealing with IoT challenges. "Typically, there's some real-time monitoring out in the field, generating tremendous amounts of data. The problem that they're trying to solve is how to translate that data into something that's actionable," says Matt Jackson, general manager of BlueMetal. "IoT is helping our clients make sense of the data that they're capturing. How do you boil that down to something discrete enough that they can make decisions based on the data?"

"Often in the IOT discussion the client is trying to bring together multiple data feeds to consolidate them into a unified view," adds John Pelak, director for Devices and Mobility at BlueMetal. "By bringing that data together, a story can emerge that will help to make smart, real-time decisions."

"The ultimate goal is to correlate these data sources to identify patterns and try to be more predictive about it," continues Jackson. "For example, when one thing is happening in the weather and another thing is happening in energy usage, we can anticipate that something else is going to happen. Since we can anticipate, let's make some proactive decisions before it happens."

One of BlueMetal's IoT projects was recently featured on Boston.com's "Coolest Office Spaces in Boston." The client, EnerNOC Inc., provides a comprehensive suite of applications and services that maintain real-time balance between electricity supply and demand to utilities and grid operators worldwide. EnerNOC services also help businesses and organizations save money, earn payments and use energy more effectively.

The goal of the EnerNOC project was to combine analytics across data sources and replace outdated, difficult-to-interpret data visualizations. "There are tens of thousands of different data sources, so when someone is working in the Network Operations Center, you need the most important thing to stand out. Otherwise, all of the data kind of blends together," Jackson says. "The piece that puts it above is the visualization. This is where we can differentiate. A lot of people can wire the data sources together, but actually getting designers who understand usability makes the difference."

The result for EnerNOC was a full wall of displays that dominate the office space with visualizations that are as much art as they are information. A showpiece for potential customers and visitors, the displays earned EnerNOC the designation as a cool place to work.

"Partners can be successful by looking at the human factor," advises Jackson. "You tend to think about the devices, the Internet and connectedness of all the data. But the thing that makes it really usable is the human connection to the data. How the user is interacting with the data is much more important than how the data itself is interacting."

A Breadth of Partner Services To Support IoT
Microsoft sees at least four areas of partner opportunity in the emerging field of IoT services, including:

• Offer vertical solutions that integrate devices to the Azure Intelligent Systems Service and extend the value with industry-specific solutions and business processes.
• Develop custom UIs and applications that provide the monitoring and management of devices integrated with the Intelligent Systems Service.
• Deliver data analytics and visualization solutions to integrate disparate customer device data into a single platform.
• Provide proactive and reactive managed services, both remote and on-site to support IoT solutions.

The BlueMetal IoT projects reflect the legitimacy of this list. Along with the integration and visualization services they've delivered, managing the data has been something with which companies want help.

"Another big thing that comes with these IoT projects is the data management problem," Pelak says. "Partners have a great opportunity to help clients who are bringing these data sets together for the first time to properly manage that. Handle the ongoing operations. Handle storage and archiving. Those issues are a challenge for the client and a partner can offer them a full solution."

Pelak says that while each of their clients has unique requirements, they've seen a pattern emerge with a common need for some sort of consolidation hub, a service that pulls together all the data events and broadcasts them to the client's visualization devices. "We've always focused on project-based work, but when clients are taking on these types of deployments, they're usually not standing up a structure to support it. It provides us the opportunity for longer-term relationships to keep it up and running. The cloud platform is a natural solution for these kinds of applications," adds Pelak. "It makes sense to rely on Microsoft's heavy investment in cloud and leverage what already exists."

Microsoft's Doyle agrees, noting that managed services is generally part of every customer conversation in IoT projects. For the most part, customers don't want to take on data storage and management -- they want partners to handle it.

Azure provides the platform for a unified approach to delivering each aspect of the solution and can capture vital data for analysis with Microsoft tools like HDInsight and Power BI for Office 365. The introduction of the Azure Machine Learning solution gives partners a tool to offer predictive analytics to customers. Azure Intelligent Systems Service likely appeals to customers and partners alike in terms of stability and longevity.

As for the opportunity for partners with the actual device deployment, Doyle has seen two typical scenarios unfold. "There are brownfield projects where the devices are already out in the field -- and many of them older devices. Partners are assisting these companies by putting in gateway devices or connecting agents to the existing devices," says Doyle. "The second scenario is the net new greenfield opportunity where partners are often helping with the selection of the devices, as well as the data management and interpretation."

Ask the Right Questions To Uncover Opportunity
So how do you get the IoT conversations going with customers and prospects? While IoT is making business headlines, it's likely that most clients, unless they're in manufacturing, won't use the term.

"It is interesting that the challenges that our customers have are not unique or new," observes Reed Parker, general manager, D.C. and Federal, for Austin-based Catapult Systems LLC. "They are still trying to address the same kinds of challenges that they have been trying to address for years."

"We take the time and explore what issues the client is trying to solve regardless of the function, regardless of the discipline. The conversation may lead us down to a path to the [IoT], but it's not a term that is top of mind for them," continues Parker. "They can articulate the need. They know what the business issues are and they look to the partner to define a solution. Clients are less concerned with the specific technology platform as long as they believe that we understand what their challenge is and we are helping them solve it."

Discovery questions that focus on the data that an organization is collecting can get the conversations going. "We ask questions like, 'Do you have data that is being generated in the field? Do you have workers in the field? Do you have multiple data sources that you are having trouble correlating?'" says BlueMetal's Jackson. "We're not making it a technical pitch, but a pitch to the business and users who will be consuming the data."

The type of customer will certainly drive the conversation, as well, and IoT opportunities generally fall into one of two general categories, according to Microsoft. "We're dividing IoT into two areas. Inside the factory or the plant -- what's going inside the manufacturer or distributor or retailer," says Paul Ledbetter, senior product manager, Worldwide Manufacturing and Distribution at Microsoft. "And the second is outside the walls -- a B2B product or consumer product. A tangible thing."

Inside-the-factory opportunities include classic manufacturing machine-to-machine data collection and monitoring, such as productivity measurements and maintenance alerts. Predictive analysis can provide additional value to manufacturers or field service companies around issues like preventive maintenance. The consumer side includes issues like monitoring the product once it's in the customer's hands. One example is the washing machine that can deliver data back to the manufacturer about usage patterns that support new product design and proactive marketing.

Ledbetter says that there are four categories of questions that most customers ask in some form during initial IoT conversations: "What's going on in my industry, what are the trends? Are my competitors doing it now? How do we do it (and how much is it going to cost)? And, what is the ROI?"

An interesting point that Ledbetter makes is that IoT conversations tend to encompass more departments or divisions in the organization than technology projects have historically delivered. "We'll be talking to one division and they bridge us into other divisions of the organizations," explains Ledbetter. "With the completeness of the Microsoft solution -- from setting up reports in finance to shop floor ERP to marketing to devices -- customers will often have the 'Aha' moment. They say, 'I never connected the dots and realized that Microsoft and your partner channel could do all these things. Of course, Microsoft would be doing this.' The competitors like SAP and Salesforce can't offer the single platform solution."

Building the Team To Support IoT
Since its launch early this year, 230 partners have achieved the Microsoft Intelligent Systems competency. While not necessary to build an IoT practice, partners who want Microsoft to bring them into opportunities have to work the system. Aside from meeting the Microsoft requirements, what kind of resources do you need to build an IoT practice?

As BlueMetal saw the emergence of IoT as a true service line, they made investments and adjustments. "We have taken the time to transform the practice around IoT. About a year ago we changed the name of the practice from Mobility and Phone to Devices and Mobility to reflect the concept of devices attached to networks of information," Jackson says. "We've also invested in building prototypes and sample visualizations."

230: The number of partners that have achieved Intelligent Systems competency since its launch early this year.

Discovery questions can get IoT conversations going:

• Do you have data that's being generated in the field?
• Do you have workers in the field?
• Do you have multiple data sources that you're having trouble correlating?

An unexpected benefit of an IoT practice may be employee satisfaction. At BlueMetal, employees have taken it upon themselves to devote professional development training time to IoT-related topics. Part of the appeal is that IoT projects, which tend to be medium and large scale, cross over disciplines including integration, devices, data and design teams. IoT projects provide employees the opportunity to work collaboratively and solve interesting challenges.

Catapult has found the same kind of employee enthusiasm. "IoT projects tend to be rewarding for consultants, as well as for clients," Parker says. "When you think about the keys to employee engagement, including meaningful mission and purpose, IoT projects deliver. The business challenges are fascinating and the projects cross over technical expertise and disciplines. We get to apply the art of what's possible."

For the potential payback, the investment in building an IoT practice is minimal. At BlueMetal, it has spent money on buying devices and provisioning services in the cloud. "It's been in the thousands of dollars and we're using the prototypes and visualizations to support marketing campaigns," says Jackson. "In the grand scheme of things, it's a small investment in terms of capturing a new market."

The Vertical Approach
Additional partner investment into IoT is likely to come in the form of building repeatable industry solutions. The obvious play for verticals is to put the pieces together -- from devices to visualizations -- for an industry-specific solution and take it to market. As most partners find, the repeatable solution usually comes as a result of building a solution for a single customer, which mitigates the cost. For IoT solutions, the managed service component, with recurring revenue makes for an even more compelling packaged solution play.

Several industries seem to rise to the top in conversations about IoT, including: government, government contracting, manufacturing, field service, retail and health care. While it may be stating the obvious, in order to capitalize on the Microsoft Azure IoT solution, the industry has to have a level of comfort with cloud-based solutions.

"One of the patterns that we see with our IoT clients is that they have some sort of data source that is external to the organization that is generating data and sending it back in," Jackson says. "Field enablement is one of the offerings where we've gotten traction. Situations where you have people out in the field and monitoring the devices in the field. Anytime you have a lot of systems outside of the walls that are generating data, then there is probably a good opportunity for IoT. They already have a comfort level with data in the cloud."

An example is insurance companies or building-management firms that are collecting data from the buildings that they cover. They have engineers that are out in the field checking on the devices in those buildings and collecting information directly from the HVAC system. The data is already outside the walls of the company, so they are more open to collecting and managing it in the cloud.

While there's much interest coming from the health care industry, it's accompanied by hesitation due to privacy concerns. There's no shortage of people who want to collect data, as evidenced by the explosion of personal monitoring devices, but sharing that data is another matter. "People love the idea that you have a device on your wrist so that you can go back to your computer and learn something about your health patterns. But when you move to the next level -- and ask those users if they mind if we take all of your data and combine it with others -- they are concerned about that," adds Jackson. "We are seeing a lot of interest from health care and fitness, but less actual project commitments because of the privacy concerns."

Taking Your IoT Message to Customers
As you consider building your IoT practice, marketing materials are coming online to help you educate your customers and get the conversations going. Microsoft has posted the "Create the Internet of Your Things" marketing campaign on Ready-to-Go, which can provide a foundation for your marketing efforts around IoT. The basic messaging of the campaign materials is, "Don't let the hype of IoT overwhelm you. Start small, tapping into the data you have," which makes sense and applies to a wide range of customers and prospects.

For those considering the pros and cons of expanding services into IoT, Catapult's Parker offers advice. "Be an expert in your clients' business. Be an expert in the technology. Know what your capabilities are and know what they aren't. If you can combine those two and develop the right partnerships, then you can hit the organic growth, which is critical. The opportunities are endless. There is room for a lot of players in this space. It takes creativity, but fundamentally goes back to the basics of consulting -- identify and define the business issue and solve it."

The IoT isn't just everywhere in the news. It truly is everywhere. Midmarket companies are coming to understand that they have to use data just as much as the big players. The cloud makes that not only possible, but affordable and easy. As a partner, your value to customers is in ushering them through the new trends in technology to help them compete more effectively in the connected world. IoT is not just a play for the global SIs working with manufacturers -- it's a play to build more value for your customers by helping them use the data they are collecting to improve their business success.

Related:

• Microsoft Describes 'Internet of Things' Vision, Issues Azure ISS Limited Preview
• Microsoft Partner Makes the Shift to 'Internet of Things'
• Microsoft Picks Startups for 'Internet of Things'-Themed Accelerator