Why partnerships are key to building Internet of Things solutions
In a recent Hurwitz survey of companies building IoT solutions, one key finding made a big impression on me: More than 90% of respondents work with one or more partners to develop and manufacture their IoT solutions. Looking deeper into the survey findings, I could find many reasons why companies are finding partnerships essential to their IoT projects. One of the most significant reasons is that most companies entering into the IoT market need to redefine their traditional manufacturing processes. This requires innovation at fast speeds in order to achieve first-to-market advantage. Therefore, partnering with an organization that already has experience in IoT development not only makes sense – it’s absolutely critical.
The Hurwitz & Associates survey, commissioned by Jabil, included more than 130 companies across seven industry segments, including retail, consumer electronics, commercial (smart buildings), residential (smart homes), consumer appliances, automotive and hospitality. The majority of companies had more than 500 employees. Survey respondents represented a variety of business roles including R&D, operations management, developers and executives (CIOs, CTOs and CEOs).
We asked respondents a number of questions about how they are partnering to bring IoT solutions to the market. Key survey findings about partnerships include:
- Over half (55%) of respondents leverage partners for both IoT device user interface and IoT device design. Only 11% of companies reported implementing all of the user interface and user device design without the help of partners.
- The majority of companies (62%) either consults with third-party engineering firms or outsources all engineering for the industrial design of their IoT devices. The remaining respondents performed all of the industrial design in-house.
- 42% of companies expect to use one partner that can aggregate a full solution. While a slim majority, 51% of respondents are using multiple partners for their IoT solution design, a high percentage of companies are working with a single partner.
- 51% of companies are using partners to manage either a portion or all supply chain management for IoT projects. Most companies that are using a partner to manage their supply chain (46%) are still managing mission critical supply chain components in-house.
Why is it critical for companies to develop partnerships to build successful IoT solutions? IoT solutions typically demand a new approach to design and companies don’t have time to make mistakes. The companies we surveyed were building IoT solutions that demand engineering expertise in multiple industry segments. For example, companies in every industry sector surveyed are looking at creating healthcare and building automation IoT solutions. Another example of companies looking beyond their areas of expertise can be seen within the hospitality sector. Hospitality companies that we surveyed have a variety of IoT solutions under development, including from solutions in the automotive, wearable, point of sale and mobile solution areas.
Another area where companies will look for partnerships is managing and storing IoT data. The incredible potential value of the IoT comes from the fact that data from connected devices will not sit in isolation – it will be leveraged to gather and trend critical data for the good of the business. The cloud has emerged as the primary deployment model for IoT data. The overwhelming majority of companies surveyed (87%) will leverage the cloud for IoT communication. To take advantage of the cloud many of the organizations surveyed will look for key technology partnerships.
Companies recognize that collaborating with design and manufacturing partners like Jabil can ensure that the development work meets time-to-market requirements and customer expectations. Click here to read the full Hurwitz & Associates report on the IoT. In the report you can review our full findings on the business value of IoT and how IoT has potential to impact nearly every aspect of business.