Smart VAR Age Of Intelligence Summit: Where Solutions Providers Can Start With IoT

By Christine Kern, contributing writer

At the Smart VAR Summit: Age Of Intelligence — IoT, Cloud, And Mobility Convergence, powered by ScanSource, Zebra Technologies, and Business Solutions, a panel discussion focused on the Internet of Things (IoT) from a solutions providers’ perspective.

Business Solution Magazine president Jim Roddy moderated the discussion with panelists Larry Walsh CEO and chief analyst with the 2112 Group; Tom Bianculli, VP, technology office, at Zebra Technologies;  Jill Stelfox, VP and general manager of Location Solutions at Zebra Technologies; and Greg Dixon, CTO and technology evangelist at ScanSource.

The following is an edited transcript of the discussion during the event held October 14 to at Lincoln Financial Field in Philadelphia, PA:

Roddy: A recent article I read equated IoT’s potential to flying cars and robotic dogs, which, as we all know, don’t exist today, so they never took off. But the same article said IoT is like TV in the 1950s, meaning it’s everywhere. It’s all over the place. That’s really confusing for resellers who are trying to get a gauge on how this technology fits. Can you talk about which verticals, which applications do you think IoT is going to impact the channel first?

Walsh: I disagree. We do have robotic dogs and we do have flying cars. They just haven’t been commercialized yet. But that’s like the development of the television industry. It went through an evolutionary process where it became practical with each generation. If you look at this flat screen monitor in front of us, when flat screen televisions, LCD and plasmas first came out ten or fifteen years ago, they were $5,000, $7,000 apiece. Now you can pick it up in Walgreen’s when you’re getting your prescription.

As the technology evolves, the cost comes down and it becomes more economical and more feasible. They become more malleable in terms of adoption. I think that what we’ve been talking about all morning isn’t so much that we have a medium, because if you really want to stretch the television analogy out, the television has been around since the early 30s. But you need an infrastructure to attach to it. You needed programming. I was watching a documentary the other day, about the Munster’s. They were talking about how they brought expert producers in. I’m thinking, “At that point, mainstream television was only 15 years old. How much of an expert and veteran could you have been?” But now we do actually have that. As time goes on, that’s what will happen. I think the same thing — the people sitting here in the audience — will be those experts. In five years’ time, it will become not necessarily old hand, but it will become more commonplace, and we’ll be able to imagine and implement more.

Roddy: Where do you think IoT is going to impact the channel first?

Bianculli: I think the more operational efficiency-driven examples are the first places we’re really seeing adoption. The more progressive customers — it’s moved towards top line opportunities around basket conversion. Retail, I think, is the classic one, where they’re looking really hard at not just operational efficiency but at engagement inside the store.

Something we’ve talked about with a lot of CIOs and retail, the core of it is really about online analytics in the offline world. If you think about online, you have all kinds of information. If I put something in my cart online, if I took it out of my cart, you know what website it came from, you know how long I hovered over a product but didn’t add it to my cart.

Then you go into the physical world, and you really don’t know about any of this visibility. I can walk into a store, I can competitively shop with my mobile phone, find competitive pricing, walk across the street to Panera Bread and order it on Amazon, and the retailer has no idea that I even set foot in their store.

That idea of smarter environments, that’s where a lot of the conversation is going. It’s more nascent than the operational ones, but it’s more topline-oriented. We’re seeing, again, more progressive retailers say, “Give me those online analytics for the offline world. Instrument my store. Show me where people are dwelling. Show me how long they’re interacting with my customers.”

They’ll be able to tell has something come down from the shelf, and if the customer abandoned it. Highlight that abandoned basket, so I can intercept it. If they’re standing in front of maybe not the $300 TV at Walgreen’s but the 4K ultra HD, several-thousand-dollar TV at Best Buy, and they’re dwelling — these are real world use cases — they’re dwelling for 15, 20, 30 seconds in front of that TV, then have the system proactively page someone to intercept them, to convert that to a sale. Obviously they’re wrestling with some kind of decision while they’re standing in front of that item. Those are the places that we’re starting to see it take root.

Roddy: There’s IoT first, and then where is it next? Where it going to be, from a channel play?

Stelfox: I think one of the very practical things right now that we see is a simple use case around yard management, the ability to use either active or passive tags on the load and the truck, track that within the yard, coming into the yard, and then ultimately exiting. You’re able to increase throughput, in some cases, by 25 percent in any given yard, which is amazing.

Most of the yards today of our customers are really hemmed in by cities. That’s a solution where we’ve got hardware, software, and the ability to deliver managed services today. A partner could take that and implement it today.

Dixon: We think a lot about the retail vertical at ScanSource. It’s easy, I suppose, to see the immensity of that thing, and it’s trillions of dollars just in North America. It’s obviously a low-hanging fruit, if you were going to find one in this place.

In the retail store all that’s done just by honestly simple telemetry on a cell phone. When you walk in with your smartphone smart phone, it’s pinging the network — it’s sending out a MAC address.

Now I know. I’ve got a list of all of the MAC addresses that were here, and how long they stayed in the store, and which ones passed by the front of the store and didn’t come in. There are all sorts of amazing, cool things — that’s where it could be right now.

If you take that on to the nth degree, the next obvious step is to add an app to that phone. Now I can communicate with the person, on a personal level.

Retail, think about supply chain, the retail supply chain. I tend to follow things from where I see it on the shelf. Where did it get there, and where did it come from? There’s a whole retail supply chain application that ultimately winds up back on that big lot out there, where those trucks live, and how those trucks get loaded at that big distribution center.

If you just think about following a product through its lifecycle, from its beginning to its end, there are so many opportunities here for real time data that allows you to now close those gaps.

In the 50s, we talked about 50 percent reliability. But now, we talk about 80 percent. And the difference in 80 and 81 percent is a lot of money in a big operation. I pick the retail channel as a big, big opportunity.

Roddy: Let’s connect the dots. If I’m a reseller, how do I engage and make money with this?

Bianculli: I’m a big advocate, and the resellers that I’ve spoken to are big advocates of starting with what you have, not building a bridge too far. That’s one of the reasons why I’ve outlined that framework, from devices to things to environments. I think those are pretty logical steps.

If you’ve got devices today and you’re selling devices today, how can you attach a little bit of the Internet of Things, Enterprise Asset Intelligence magic, to that solution, and just start right there? We’re leveraging what we have.

But I think, both in terms of the operational visibility service, which is very specific to our printers and our mobile computers, but then also Zatar, which is a little bit further out of an investment on your part, but the ability to start then connecting things in general — I really love where Greg was going, around this notion of just following something through the supply chain and looking at the opportunity all along the way, and then asking those questions or looking at that gap between what should be and what is.

Symbol was founded in the retail vertical, and a lot of people had deliberation around which verticals to go then pursue in retail. The reality is, you start in front of the store with scanners and you go to the back of the store, and you realize you need mobile computers to manage the inventory.

You fall off the dock door and you’re in a truck and now you realize you need a WAN mobile computer, because now you’re outside the four walls, and then you follow that truck to a factor and there you are in manufacturing.

I think, in this evolution or wave or whatever we want to call it, it’s the same kind of thinking, just instead of being applied to a device-centric view of things, applying it to an outcome-centric view, so following those items as they go through the supply chain and starting with what you have.

Roddy: This is the core question of this conference — how do resellers engage and make money from this. Anybody else on the panel want to weigh in on that?

Walsh: I agree wholeheartedly with what Tom and Greg said. But we have a fundamental problem here. It’s not that the available technology or the reference architectures aren’t available. We can do this today.

But in order to follow the money, we need to understand the business models, the business operations, the business goals not just of today, but of tomorrow for all of our customers, and be able to architect solutions that go with it.

I’ve never liked this moniker of trusted advisor. I always thought it was overreaching and a bit too generalized, but everyone has heard this notion. Ten years ago, I did a study of end users, and we asked them what the propensity was for them to buy from companies like yours, their trusted advisor? Nine out of ten would either buy or highly consider your recommendation for purchasing. CompTIA recently came out with a study, and that number has now fallen to four in ten.

We need to do a better job of not just understanding the technology, but understanding the customer and what their needs are, and where the customer is going to go. If the customer doesn’t know where they’re going, we need to help them figure out where they’re going.

Stelfox: I think one of the things that you can do is get educated quickly. Go to IoT events in your local community and learn more about these case studies, and become that trusted advisor for IoT with your customers.

The conversations that we get into are about use case solutioning and not the how to do it. It’s the what we’re trying to achieve, and then working through getting it done. The other thing I would say is a big part of getting to the answer is the analytics, and that’s all software.

You need to think about your ability to manage software, a partner to customize software with, because everybody’s analytics are different. If you’re doing a yard at Macy’s and a yard at Walmart, they happen to be both yards. Same data, totally different. You need to be able to customize how you do that, and I don’t mean customize in a code way. I mean customize how you deliver reports and how you talk to them in conversations. It takes education, I think.

Dixon: I like this start where you are. IoT is this great huge notion of things on the Internet, and it’s all wonderful, but if you’ve been in the business of implementing rugged mobile data terminals into a business environment, retail or manufacturing or warehousing, whatever it is, then those are things on the Internet.

But we don’t have to think of things to put on the Internet. Those are things that are there now. Instead of jumping ahead to some sensor device or talking through some magical communications standard that we don’t have yet, think about the things that you do have and get started managing those.

The IoT is not just about the utilization of the end device, but about collecting data and sharing that data. Ultimately, it has to create business intelligence. Zebra has a great brand-new tool. You’ve got to see it. I saw it up close and personal last week. It’s absolutely amazing.

But what it does is it allows you to go ahead and begin to gather data on a population of devices that we’re already comfortable with, already associated with, and be able to do something with that data.

Now, if I’ve established in my own mind and the minds of my technical and salespeople how it is that these things get managed and ultimately generate a business outcome, as the next generation of things come into the business, comes online, I’m already there. I’ve gotten a grasp on how this works.

When I add a sensor to a dumb thing, we like to say IoT is about making dumb things smart and making smart things smarter. In that regard, as those dumb things start to come online, you already have a platform, you already have a business model, and your salespeople are looking for the right opportunities. Your technical people know how to talk the talk. It’s just a great way to start. I say start now with what you have.

Roddy: Here’s a quote. “Underlying infrastructure components, such as hardware networking solutions, will be the most likely avenue to provide opportunities for solution providers.” Your thoughts on that?

Bianculli: I think longer term, that makes a lot of sense. That’s where things are going to go, particularly inside the four walls, whether it’s instrumenting a stadium, a cross dock facility, a warehouse, or a manufacturing plant.

You saw that a quarter of IoT is expected to come from manufacturing, largely inside, obviously, the four walls. I think that is the longer term play there. I think what Larry’s bringing up is really relevant, too, which is how are the business models changing as that infrastructure starts to get deployed?

We had some interesting, just right down to inside the four walls, retail example where we’re looking at the shelf and saying, “Okay, is an item in stock or not in stock?” There’s a number of ways of doing this and RFID, but a lot of things aren’t an RFID tag.

Take consumer product goods, like a product that’s on the shelf. We’re looking at a camera, looking across the aisle at the shelving, and being able to detect that there’s gaps in the shelving. The first thing the company that makes the product said to us is, “Guess who’s on the other side of the aisle?” Their competitor. That shelf is controlled by them. If you think they’re going to put a camera on the edge of that shelf to stare across, that’s not going to happen.

The idea of saying the retail is collecting all this data, that’s a whole new business model. If retail is collecting all this data, they can do with their shelves what they want. They can leverage that data for their own inventory information, and that’s an avenue not unlike the NFL data that’s collected and sold for fantasy football.

It’s an opportunity now to slice that data and sell it to the consumer product good companies, to give them, instead of sending a merchandiser in a car, to walk into that store every Tuesday to go look at the shelf and manage the replacement of the product, to be able to report that information up to a central place.

Dixon: It’s the law of unintended results. As you deploy this wireless network, you can put in just enough access points at just exactly the right place to manage all the wireless devices that you know are in there. Or, you can think forward and project a wireless network that would accommodate sensors and mobility and deices you’ve never anticipate.

That forward thinking, I think, is what that trusted advisor’s job is, to think ahead, don’t let you paint yourself into a corner, but let’s think about what we might be doing with this, and honestly not in five years or seven years. I think 18 months is the new three years. Three years is the new five. We have to really think short term here, as these things really deploy and develop.

Roddy: Here’s another quote: “We should take the opportunity to build security into these systems. Doing this from the start ensures an easier and more viable long-term solution.” Since I alluded to it, the NFL has data. The next thing is someone going to try to steal it? Can you talk about how important is security with this quote?

Stelfox: I think there’s a lot in the press about insecurity of IoT devices at home, things like the Nest getting hacked at your house and things like that. We had no security on those tags over the air when we got into the NFL. We had been using them in industry, and who would want to hack a paint hangar painting a plane? That’s boring. But now, all of a sudden we thought actually, you know what? Somebody coming to the Eagles stadium could bring a laptop and steal data, right out of the air.

In that trusted advisor role, you have to think about the effects of security on the network itself. It takes more bandwidth to send things securely, it costs a little bit more money to do it securely from the beginning, from a server compute perspective. But think about those things now, because once it’s out, you’re done for. If that data ever got in the clear, we’d be done. You’ve got to plan ahead of time.

Roddy: This quote comes from a VAR executive we interviewed for Business Solutions Magazine. “I believe, in the future, it’s possible we could be involved in troubleshooting Nike sneakers and other wearable technologies as the world moves towards the Internet of Things.” Are VARs really going to do this — picture you’re driving trucks to a location. A guy takes off his shoe, can you mess with it? I guess it’s possible, but what about the probability of that?

Dixon: Well, I don’t know what’s possible or probable. They may be two different things. But I go back to the NFL player example. We’ve tagged the shoulder pads and we’ve figured out how to make that work and it goes through the washer and it does what we want it to do. But all those other things about replacing the referee — yes, we could replace the referee. We could, but do we want to do that? Do we really want to do that?

As this comes down to people and IoT, it has to scale it. If it doesn’t scale, it’s never going to really be good. The data’s not worth a whole lot. There are a lot of really cool ideas that just aren’t going to scale, because of privacy issues and we just live in a different world than we’re used to.

The people who come to IoT conferences probably aren’t the people who need to come to IoT conferences. It’s your sales team who are going to be talking to customers, and they need to be ready to see what an IoT opportunity could look like, should it exists, and how does that apply to this particular company who I know very well? Until you get those two things together, you’re never going to make a dollar on IoT.

Roddy: One last quote: “Convergence doesn’t just equal the intersection of technologies. It’s also the collision of VARs all now vying for the same business.” Is this a race to be first? Are the folks in here who are getting the IoT education, are they going to be a step ahead, and is it really folks fighting over that same business?

Bianculli: I think there is a pretty small number of examples. We had this conversation internally quite a bit, actually, where being first was an advantage, necessarily. A lot of times, there are customers that you deal with all the time, that are looking to prove out use cases.

The idea is to be there at the right time, to be able to identify what those opportunities are. I think the field is plenty big. One common denominator we seem to be coming back to across all the discussions is vertical-based, a deep understanding of your customer is really what this — and being able to consult with that customer on what the total solution is.

That’s really what the competency is all about. One owner of a startup told me that a lot of these IoT applications are going to be a sum of niches; it’s what’s going to comprise the overall opportunity.

If it was a step function and it was one giant blast radius, then yes, not being first would be a challenge. But it’s going to be a sum of smaller opportunities that all pull together to change the world.

Stelfox: I totally agree that being first is not necessarily key. If you are in the device business now, people will always need that. That’s not going to change. The question is, are you going to make a choice to move from that to the other areas and become IoT?

What I personally have seen is that there is a better, more stable revenue model, if you move. What I would also say is this is a little bit of the Wild, Wild West, in terms of what are the revenue models.

The NBA, for example, did a different revenue model over their sport view vision data, and they’re redoing everything this year. There’s going to be a whole new system in the NBA going forward, because what they did was give away all the data. They didn’t realize how important it was.

Then, everybody else made money. Well, that can’t be, so they’re changing. I would say the business models are changing. Stay really close to your customers. Pick one lighthouse account and do something. That’s what I would say. Start.

For additional coverage of the Smart VAR Summit, visit http://www.bsminfo.com/solution/smart-var.