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Internet of
Things
Business
Microsoft IoT Practice
Opportunity Playbook

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What is the Internet of Things? .................................................................................................................. 3

The IoT Opportunity ....................................................................................................................................4

Industry Opportunities ................................................................................................................................ 5

The Current IoT Landscape ...................................................................................................................... 12

Types of IoT Practice .................................................................................................................................. 16

Driving Revenue with IoT .......................................................................................................................... 17

What specific use cases should you start with?.................................................................................... 19

Identify Partnership Opportunities ......................................................................................................... 21

Understanding Customer Lifetime Value ............................................................................................. 23

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What is the Internet of Things?

The Internet of Things (IoT) describes the practice of interconnecting the physical world with
cloud services through the use of electronic devices, software and sensors.
IOT OVERVIEW
IoT applications can be described as Things (or devices), collecting data or events that are then used to generate Insights,
which translate into Actions implemented to help improve a business or process. An example is an engine (a thing), sending
pressure and temperature data used to determine if the engine is performing as expected (an insight), which is then used
to proactively schedule maintenance on the engine (an action). The end-goal of all IoT solutions is to take action on business
insights found through gathering data from assets.

“By gathering data from sensors instead of

people we can focus those people on more
effective and efficient things that drive value
-image from the Azure IoT Reference Architecture Guide back to our owner.”
Mark Bryant, PCL Construction

DISCOVER THE BENEFITS OF IOT

With IoT being a relative newcomer to technology trends, its benefits, to some extent, are unclear or misunderstood by many
existing or potential clients.
The implementation of IoT can help businesses realise many benefits, from improved productivity and increased profits to
deeper insights into how their products are being used. In fact, many organisations are already benefiting from automated
approaches to common workforce tasks that traditionally have been performed manually. From remotely monitoring sensors
anticipating maintenance needs to acting as a sales tool on a retail floor, IoT has the potential to directly impact the
bottom line.
At the root of these benefits is access to and analysis of more data. Data collection and analysis allows organisations
to become substantially more responsive.

IOT WILL ASSUME JOB TASKS, NOT NECESSARILY ELIMINATE THE JOB
An IoT solution should be perceived as an enhancement, rather than a threat, to the human workforce. Using IoT to
automate mundane or repetitive tasks that are typically performed by an employee allows for the customer to re-target
the focus of the employee to more fruitful tasks that directly target the bottom line and improve overall productivity.
As an example, a construction company building a high-rise deploys sensors to multiple areas of the building that report
on temperature, humidity and pressure. These readings were previously manually gathered by personnel. With the
implementation of the IoT solution, these employees are now freed up to tackle other tasks.

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The IoT Opportunity

Today’s biggest opportunities are enabled by data collected from connected technologies.
While IoT is a relative newcomer to the technology landscape, it is important to note that it is not emerging, it is already here!
IoT is a booming market which is growing at an incredible pace. According to research published by Zinnov, they estimate
IoT expenditures will increase from 201 billion USD in 2018 to 500 billion USD in 2023. Other lofty projections from large
companies such as Accenture, GE and CISCO predict that it will become a 14 trillion USD industry by 2030.
IoT Spend by Products & Services

Source: IoT Market Landscape, Zinnov, December 2018

In the near future, use of IoT will be assumed, and practices will differentiate by their skill in the pragmatic application of IoT.
Interestingly, the IoT market today is still largely open, with many organisations just beginning to understand the capabilities
and explore the use of IoT. Of the 743 survey participants in the MDC Research study, only 16% of partners reported having
an IoT solution in production today.

Source: Microsoft IoT Playbook Study, MDC Research, December 2018.

Interest in IoT solutions is experiencing a boom, even though actual IoT adoption by companies is still in its infancy. This presents a
huge opportunity for technology providers that can meet customer needs. By strategically placing themselves at the forefront of this
burgeoning market, partners with existing or new IoT practices have an incredible chance to take advantage of this wave of growth
and profitability, and to become leaders is a marketplace ripe with opportunity.
This playbook will assist you in taking the steps necessary to correctly establish and grow an IoT practice.

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Industry Opportunities
Irrespective of the industry, IoT opportunities are omnipresent and significant.
Adoption of IoT is widespread across many industries, and it continues to grow as the possibilities of IoT are better
understood. As you begin the process of building or expanding your IoT practice, it is important to evaluate the industry
or industries which your IoT services and solutions will address, taking into account your existing domain expertise and
skills. The industry or industries you choose to target matters for IoT because delivering complete end-to-end IoT solutions
requires a deep understanding of the needs and challenges of your target audience.

TARGET SPECIFIC INDUSTRY VERTICALS

IoT opportunities exist across a wide range of industries,
and existing IoT providers are taking advantage of these
opportunities. However, according to MDC Research,
over half of the partners interviewed with IoT solutions
currently in production target specific industry verticals.

This is an important aspect to consider when building and

growing your IoT practice. Focusing on a fewer industries,
or a single industry, allows you to learn more about the
specific challenges of those industries that can be
addressed by IoT, and more easily anticipate those
needs in delivering your IoT solutions and services.

Source: Microsoft IoT Playbook Study, MDC Research, December 2018

TOP INDUSTRY VERTICALS FOR IOT

While opportunities for partners with an IoT practice cut
across industry verticals, industry selection can be critical
in the IoT market.

Research from both Zinnov and MDC shows that

industrial manufacturing, government, technology and
automotive/transportation are the areas where the
majority of IoT spend and opportunity currently resides,
with manufacturing outpacing other industries by a wide
margin. According to Zinnov, these are also the areas
expected to see the most spending growth through 2023.

MDC’s research also places Europe and the United States

as the regions with the most perceived market
opportunity for IoT related services.
Source: IoT Market Landscape, Zinnov, December 2018

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The Manufacturing Opportunity PREDICTIVE MAINTENANCE

Chevron, one of the world’s leading energy companies,
As MDC and Zinnov’s research indicated, manufacturing is already had multiple sensors deployed in their
the largest industry for IoT spend. Downtime for industrial environment centred around controlling their facilities,
equipment can be prohibitively expensive, and industrial but they lacked insights on reliability and energy
IoT solutions can provide insights to help improve consumption. To help solve this issue they started
customer experience. a partnership with Microsoft to deploy sensors to heat
exchangers in order to supplement data already being
LEVERAGING BIG DATA FOR BIG SAVINGS
gathered by the safety and control systems. This data is
Rolls-Royce currently has more than 13,000 engines then analysed and used to prevent unscheduled outages
deployed in active service in commercial aircraft. and to optimise equipment cleaning schedules based on
A single disruptive event, such as unplanned maintenance, need rather than a time interval. This successful pilot has
could end up costing an airline over a million USD a the potential impact of millions of dollars a year in savings
day. Rolls-Royce is increasing customer satisfaction by when scaled to the entire organisation.
equipping each engine with thousands of sensors, capable
PROTECTING PEOPLE AND ASSETS THROUGH
of generating terabytes of data on long haul flights.
REMOTE MONITORING
This mountain of data is then aggregated and analysed to
provide actionable insights into engine performance and PCL Construction, a 112 year old company out of
operational efficiency. Advanced analytics help optimise Alberta, Canada, has taken a modern approach with
fuel economy, anticipate maintenance needs and avoid IoT technology. They utilise IoT sensors to monitor
costly downtime and delays. Furthermore, by leveraging temperature, humidity, pressure and air quality. They
cognitive services and machine learning, fuel cost also use IoT for menial tasks, such as tracking building
efficiency is being improved through the combination of materials at a job site and whether or not the lights were
existing forecasts, reference tables and historical trends left on in a specific area of the building. By employing an
with other factors such as flight path, weather and IoT solution, they’ve been able to redirect employees to
discretionary fuel. Fuel efficiency is one of the highest more important tasks, reduce warranty claims, improve
yielding areas their customers are targeting, making employee safety and greatly reduce IT infrastructure costs,
up 40% of their total costs. including a reduction of 2.5 million CAD a year on storage
and server costs.

BRIDGING THE GAP BETWEEN THE PHYSICAL

AND DIGITAL WORLDS
ThyssenKrupp embedded thousands of sensors in its
elevators and connected them to Azure to gain real-time
visibility in product performance and rapid, remote
diagnostic capabilities using Hololens. ThyssenKrupp
has been able to reduce maintenance costs and has
given their 20,000 technicians the ability to visualise
and diagnose problems prior to arriving on the job site.
While on a service call these technicians also have
access to hands-free technical documentation.

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The Transportation Opportunity

IoT can be leveraged in many ways in the transportation a portion of the winter, resulting in large amounts of rain
industry. Utilise IoT in a fleet of business vehicles by then a rapid refreezing. In 2010, this resulted in a sheet
predicting and monitoring maintenance needs, making of 2″ thick ice on the highways that was impenetrable
fixes before they become problems and proactively by chemicals, scraping and plowing for the duration of
scheduling the maintenance during downtime. Optimise winter. Had they been better able to predict the weather,
business routes by monitoring for road delays and they could have anticipated the ice and prevented it from
delivery unit location in real-time. Implement IoT to bonding to the road surface, avoiding the five-month ice
enhance traffic infrastructure and controls to assess road slick which greatly impacted maintenance and safety.
conditions and ease overall congestion. In 2013, ADOT&PF introduced sensors on trucks that
monitor conditions in the sky and on the road – thus
PREDICTING WEATHER AND IMPROVING
providing hyper-local telemetry of current conditions.
HIGHWAY SAFETY WITH HYPER-LOCAL
Along with historical models and this locally aware data,
TELEMETRY
they are now able to eliminate guesswork and accurately
Winters in Alaska are no joke, with snowfall of up to predict where crews will be needed and what type of
100″ and -80°F temperatures – every roadway treatment service should be applied. This has greatly increased
decision holds a lasting impact. The Alaska Department public safety and positively impacted the budget. Usage
of Transportation and Public Facilities (ADOT&PF) has of the hyper-local telemetry is not only useful in the
over 1,500 lane miles of roadway. Treatment can be winter, it’s also used during ‘orange-barrel season’ to best
expensive – and an error in judgement could impact predict windows of opportunity to schedule maintenance
safety for the remainder of the winter season. In the last work, dodging rain and snow flurry conditions.
6 years, Alaska has experienced warmth and rain during

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The Smart Spaces Opportunity

IoT helps enable safer cities, by regulating traffic and Dublin City University (DCU), Intel and Microsoft, they
ensuring efficient emergency response times. At the same embarked on a project to improve fan experiences, safety
time, IoT can help smart cities improve service efficiency and reduce their carbon footprint, while at the same time
such as by identifying broken street lamps and optimising driving efficiencies and becoming more cost-effective.
bin lorry routes. Build smart buildings and offices by Strategically-placed sensors and gateways feed enormous
connecting devices to control room environments based amounts of data into Microsoft Azure. DCU researchers
on whether there are occupants and what the current then applied Azure IoT solution accelerators to define
conditions are, such as room temperature and humidity. dashboards for management and analyse the data to
provide actionable insights. These insights include:
IMPROVING WORKSPACE USAGE AND
PRODUCTIVITY • Measuring noise levels, to remain compliant
with parameters established by the county
Steelcase, an industry leader of workspace design,
• Wind monitoring, to ensure the safety of guests
looks to help companies optimise their office property
taking the 17th storey Skyline tour
investments. Many offices can see up to 46% of their
• Monitoring crowds to detect crowd movement
space going unused, and only 13% of employees being
and make event management aware of any
highly engaged in their work. By using infrared sensors,
health or safety issues
Steelcase implemented a system that provides real-time
• Maintaining the pitch using machine learning
insights with actionable results. By layering their expertise
algorithms to identify areas of the pitch to light at
with the data collected, they developed an immersive
specific times of the day for optimal growth. They
spacial experience to help shape a workplace where
also detect flood probability through the use of
people want to work. Integration with Office 365 also
water-level sensors in the drainage systems
allows for employees to locate one another and
determine the best places to meet, so they spend less
time searching and more time creating.
“This kind of technology and the understanding
APPLYING SMART CITY SCENARIOS of groups of people and how they’re moving and
IN A STADIUM MICROCOSM why they’re moving can be transplanted directly
Croke Park stadium has a capacity of 82,300 and is one out of the stadium into a city-wide environment
of the largest stadiums in Europe. It is home to the Gaelic – for example, helping to make our cities easier
games, the headquarters of the Gaelic Athletic Association to manage and safer places to live.”
(GAA) and hosts numerous high-profile international Professor Neil O‘Connor, DCU
sporting, cultural and music events. Croke Park is also
the first Smart Stadium. Together along with

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The Retail Opportunity

• Numi, the intelligent toilet that offers personalised
Determine the effectiveness of shop layouts, product settings from ambient lighting to Bluetooth music,
presentation, and inventory forecasts with IoT. By using along with a heated seat and foot warmer. It also
devices such as smart shelves, beacons, digital kiosks provides hands-free flushing and personalised
and mobile apps, retailers can ensure a positive customer cleansing as well as exceptional water efficiency.
service, effectively allocate staff and improve operational • DTV+ showering system allows users to adjust
efficiency. water temperature, control shower heads, body
sprays, music, lighting, steam and shower duration
SMART SHOPPING
using voice commands.
Coop Italia, Italy’s largest supermarket co-operative • Bathroom Heater is equipped with ventilation, light,
implemented a concept store in collaboration with heater and deodorising functions. It interacts with the
partners Accenture and Avanade. Leveraging motion connected bath, toilet and shower. For instance, when
sensors to detect shopper movements and engage with you turn on the shower in summer, the ventilation
them in the store with informational displays relative to turns on, but in winter, the heater turns on.
the product the shopper is interacting with. The system • Veil Lighted Suite offers illumination and colour
also ensures the retailer keeps the shelves stocked and changes that echo the timing of the sunrise and
analyses customer shopping patterns and buying choices sunset. The lights also automatically turn on when
to improve sales. a person is present, and off when they leave.
• Verdera Voice Lighted Mirror is a voice controlled
CONNECTING VENDING MACHINES TO THE
lighted mirror that allows dimming and brightening.
CLOUD
It also integrates with other Kohler Konnect products.
Mars Drinks, a global manufacturer of food products such • Sensate kitchen tap turns the tap on and off, and will
as M&Ms®, Snickers®, Doublemint® and MARS® bars, also dispense specific amounts of water (e.g. 2 cups)
is passionate about providing beverages to people in the using voice commands or hand movements. It also
workplace to foster ”Workplace Vitality™” to improve monitors water usage.
collaboration, well-being, engagement and productivity.
When implementing their first POC, they were able
The scalable, world-wide solution provides predictive
to develop an end-to-end solution in two months.
maintenance, monitoring and prediction of stock levels,
as well as route optimisations for service experts who
restock products.
“From zero to demo in two months is incredible.
SMART-HOME INNOVATION
We easily cut our development cycle in half by
Kohler, a manufacturer of kitchen and bath fixtures, using Azure platform services and infrastructure
is a digital leader in the smart-home revolution. They while also significantly lowering our
have developed an IoT system called Kohler Konnect startup investment.”
along with multiple consumer products, including:
Fei Shen, Kohler

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The Healthcare Opportunity

IoT is evolving the healthcare industry. Patients can be monitored away from the hospital and in their own home using
wearable sensors. In the hospital or medical offices, the use of IoT improves staff efficiency by tracking and managing
supplies, monitoring and providing equipment with proactive maintenance, as well as ensuring maximum patient comfort
and safety through the use of bed sensors and monitoring room temperatures.

DIAGNOSING DISEASE WITH IOT high numbers is that people fail to report their symptoms
to their doctor until it’s too late. Ruppiner Kliniken,
Roche Diagnostics, an industry leader of in vitro
ccc.Center for Connected Health Care UG and partner
diagnostics (IVD) uses its IVD portfolio to help clinicians
ixto GmbH established an IoT solution called the
detect diseases, determine causes, monitor patient
Digital and Analog Companions for an Aging Population
progress and improve outcomes. An estimated 60% of
(digilog). This solution involves wearable sensors that
the world’s medical decisions are made with the support
collect readings like ECG data and blood pressure. Using
of IVD. Roche has developed a series of devices to aid
sensors, physicians can have a more accurate view of the
in clinical chemistry and immunoassays, urinalysis,
actual health of the patient, and can identify early-on if
point-of-care testing, patient self-testing and laboratory
lifestyle changes are required. Patients and physicians can
automation. Through the use of IoT, Roche Diagnotics is
utilise a smartphone app or web portal to see dashboards
able to remotely monitor and manage IVD assets
and KPI’s built with Microsoft Power BI, giving an in-depth
distributed over a large geographical area. This allows
overview of the patient’s heart and overall cardiovascular
for the monitoring of customer supply usage, and
system health.
predictive maintenance capabilities. By monitoring the
activities of the customer, Roche is able to recommend
additional solutions to improve efficiency and “We can analyse very large amounts of
provisioning at the customer site. information to get a real-time understanding
of a patient and understand where that person
MONITORING AND IMPROVING is heading, from a health perspective, based
CARDIOVASCULAR HEALTH on their current path.”
More than 17 million people in the world die of Professor Kurt J.G. Schmailzl, Ruppiner Kliniken
cardiovascular disease each year. The reason for these

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The Natural Resources MONITORING INDOOR AIR QUALITY

Johnson Controls, the original developer of the electric
Opportunity room thermostat in 1885, has developed a new top of the
line modern thermostat named GLAS, which is the first
Using IoT to obtain insights on equipment performance of its kind to monitor both ambient temperature as well
allows customers to predict and optimise its utilisation, as air quality. With an emphasis on creating a better user
maintenance and support – thus improving efficiency, experience that is also secure, they decided upon using
saving energy, reducing waste and reducing costs. IoT the Windows IoT Core operating system for GLAS,
also increases the safety and efficiency of work crews reporting up to Azure. They also utilised Xamarin to
by closely monitoring individual and local working implement mobile applications on all platforms. GLAS
conditions. supports both homeowners as well as building managers
by continuously analysing data and providing alerts if air
ENSURING SUSTAINABILITY
quality strays from desired parameters.
Farmers Edge is a global leader in decision agriculture,
and has thousands of IoT devices providing telemetry
“Security is a key factor for us as we follow this
to cutting edge machine learning and artificial
trend of integrating more solutions into on-
intelligence algorithms, to help customers maximise
premises equipment and putting processing
productivity and profitability. With a growing population,
power wherever it makes the most sense –
Farmers Edge is using IoT to ensure sustainability in crops.
whether it’s on the device or the cloud. One of
With deployments of sensors on combines, a custom
the reasons we selected the Microsoft platform is
weather network and soil sampling devices allow farmers
the ability to connect Windows 10 IoT Core with
to introduce variable rate technology that provides
Azure and ensure secure connections.”
recommendations on where to apply fertiliser for higher
yields, determine the optimal day to seed, whether Paul Mulcahy, Johnson Controls
a chemical should be applied, when it should be applied
and what crop type should be going down in order to
maximise ROI come autumn. ROI is calculated based on
market conditions or estimated based on how the crop
is expected to perform.

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The Current IoT Landscape

As you begin your IoT practice, one of the first things to research is the current IoT landscape. You should evaluate current
application offerings and use cases for IoT. You can also investigate the types of products and services organisations are
currently building and selling, and how those are being used across various industries. Each of these aspects can help
influence your decision on the type of IoT practice you build, and the types of products and services you will provide.
We will also take a look at several barriers to IoT adoption among customers that you should be aware of as you begin
your practice.
As you review the current landscape, think about the skills and industry-specific knowledge your team already has, and
how that can be applied towards providing IoT products and services across various industries.

IOT APPLICATIONS & USE CASES

The application of IoT technologies may be limited only by your imagination and ingenuity, but to provide some insight into
how IoT is being successfully and profitably applied today, MDC Research asked partners about their production applications
and customer use cases. Their responses reveal that the most popular reasons for using IoT today include automation,
monitoring and data analytics. In addition, the most popular use cases are remote monitoring, predictive maintenance
and connected factories.

Source: Microsoft IoT Playbook Study, MDC Research, December 2018.

It is interesting and important to note that the majority of responses suggest the survey participants are working mainly
in the industrial space, and there is also a large and growing market for direct-to-consumer IoT products.

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These applications and use cases are further broken down in five major categories by Zinnov. Percentages indicate the
proportion of total IoT investment across each category.

CONNECTED INDUSTRY CONNECTED CONNECTED CONNECTED

PRODUCTS 4.0 ASSETS LOGISTICS WORKERS

15-20% 15-20% 20-25% 15-20% 5-6%

Performance visibility, Enhanced visibility and Reduced downtime Efficiency and visibility Enhance worker
usage insights and transparency of due to predictive across the supply chain productivity and safety
precision marketing operations maintenance and
location monitoring

The major theme across the defined categories is increased visibility and insight into current operations through the use
of connected technologies. This falls directly in line with the results reported by MDC Research.

PRODUCTS OR SERVICES?
Another key decision you will make as you build your IoT practice is whether you will be a products or services organisation,
or possibly both. Services is currently the leader from a spend perspective, according to research provided by Zinnov.
They predict that IoT spending will increase to 500 billion USD by 2023, with IoT technology services receiving 54% of that
revenue. In the graphic below, they have broken down the spend between IoT technology products and services.
IoT Spend by Products & Services

Source: IoT Market Landscape, Zinnov, December 2018.

As with deciding the type of service provider your IoT practice will be, you can use this research to help drive the focus areas
of the products and services you intend to provide. In an MDC Research survey of 100 partners with IoT solutions currently
running in production, participants reported nearly half of their IoT-related revenue is derived from providing project
services, with managed services and packaged intellectual property services tied at 27%.

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Source: Microsoft IoT Playbook Study, MDC Research, December 2018

While this may imply that project services represent a bigger market, it can also mean opportunities exist to fill unmet
demand by providing either managed or packaged intellectual property services. We will explore each of these service
areas in more detail below, but for now it is important to give consideration to each of these as you evaluate potential
opportunities within the IoT market, and where your organisation might fit.
To further break things down, the table below, furnished by Zinnov, provides insight into the types of technologies,
products and services being employed today.

SENSORS & APPLICATION OPERATIONAL ANALYTICS

HARDWARE PLATFORMS INTELLIGENCE & INSIGHTS

• Sensors, smart devices, • Cloud-to-edge application • Real-time operational • Multi-source (ERP, IOI,
wireless, wearables, AR/VR development and workflow intelligence with predictive Weblogs, etc.) and enterprise-
devices, medical devices, etc. “sense & respond” engine analytics wide data analytics
• Protocol gateways, PLC • Distributed database and • Real-time work-in-process • Forecast and predictive
controllers, RTU and micro-services software tracking, analytics and analytics improving
SCADA systems architecture optimisation operations and customer
• Mobile handhelds, industrial • Real-time M2M and complex • Asset performance satisfaction
tablets, PDA and smart phone event processing (CEP) engine management (APM) • Artificial intelligence, data
devices • Open standards/SOA based • Machine learning and M2M science analytics to predict
• BLE, Zigbee, LoRa, RFID, UWB, software development automation exceptions
GPS, Z-wave, BACNet, platform • Near real-time actionable • Real-time collaboration
Modbus, etc. • Integrated mobility services decision intelligence, visual between trading partners
and reporting engine dashboards & alerts directly from operations
• Remote management • Real-time asset tracking • End-to-end supply
& monitoring device to reduce exceptions and chain traceability and
gateway services improve productivity compliance audits
• Security and policy services for • High availability, scalable and • Integrate real-time
authentication, authorisation robust (99.999% uptime) operational data to
and device integration solutions for industrial provide highly accurate
• Hardware and application environments business insights
independent software • Integrated security and policy
development platform services

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BARRIERS TO IOT ADOPTION

As you begin the process of establishing a new IoT practice, or growing an existing one, there are a few key challenges about
which you should be aware. Security, integration with existing technologies, and lack of clarity around a return on investment
are among the top concerns of customers considering the adoption of IoT solutions. Each of these barriers is addressable, but
you should be prepared to provide answers on how you will overcome them.

SECURITY INTEGRATION RETURN ON INVESTMENT

Secure transmission of data Integration with existing technologies Timeline around return on investment

SECURITY
Similar to other areas of information technology, security is one of the top concerns for customers when considering adding
IoT products and services into their systems. Because IoT solutions represent a powerful connection between the digital and
physical worlds, building secure systems is a necessary foundation for building safe systems. Addressing concerns around
security with IoT devices and data transmission is key to customer adoption and growing a practice. Among the partners
interviewed by MDC Research, security was listed as the top challenge in delivering IoT services, and among respondents,
encryption was listed as the most-used security measure. Understanding the security requirements of your target verticals
and being able to address those concerns will be critical in gaining, and retaining, customers.
INTEGRATION WITH EXISTING TECHNOLOGIES
Due to the relatively new introduction of IoT technologies, integration with existing technologies can still present difficulties
for IoT providers and customers. It can be helpful to take the time to learn more about typical implementation challenges
in your target industry verticals, as well as about emerging standards in IoT, such as those provided by ISO/IEC JTC 1.
Understanding your customer and their challenges can help you to offer more complete end-to-end solutions. A common
approach for this is identifying customer needs and introducing the concept of IoT solutions with a pilot or proof
of concept project that demonstrates how IoT integrates with existing technologies so the customer can safely realise
the benefits IoT can bring to their organisation.
RETURN ON INVESTMENT
As many customers are still trying to understand where IoT fits into their enterprises, there remains a high level of uncertainty
around the potential return on investment for IoT. With so many different use cases and applications of IoT, determining
when customers will see a return on their investment can be difficult. Making sure you understand where and how your
IoT solutions can provide strong returns for your customers will be important in your practice success. For example, remote
monitoring solutions can be a quick win in many industries, as they provide quick insights into ongoing operations, and
allow customers to respond quickly, without the need to tie the incoming data into existing systems.

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Types of IoT Practice

Many IoT practices can be broken down into three broad From a technical implementation perspective, IoT
categories: hardware providers, system integrators solutions include many components that must seamlessly
and security practitioners. Below we provide a short integrate with each other and also with existing systems
description of each of these. This is not meant to be an all- and processes. Customers need a system integrator
inclusive list of the of IoT practices, but instead to provide to help them with end-to-end solution design and
a brief overview of common practice types to help you implementation.
decide what kind of practice you want to build.
Over time, build a repeatable solution that can be sold
HARDWARE PRACTICES as a paid service or product. Microsoft will help promote
your services via marketplaces so that you can start
Hardware is the foundation of IoT. Sensors and reaping a new ISV-like revenue stream. Target your
devices are what detect and feed data about the Office 365 and Dynamics 365 offerings through the
environment into IoT systems, so no IoT solution App Source and make your solution available to 100
is complete without hardware. Hardware experts are million users worldwide. Leverage Azure Marketplace
critical to bridging the gap between the digital and to promote your consulting services and specialised
physical worlds that define IoT. When designing and Azure-based applications.
developing hardware, special consideration is made
in the overall design to ensure quality telemetry INDEPENDENT SOFTWARE VENDOR PRACTICES
as well as physical and digital security. One way The adoption of IoT is also an exciting time for existing
to ensure these requirements are met is to certify ISV partners. Assist in the modernisation process to move
the device. Microsoft provides a certification
legacy systems to IoT and SaaS offerings for the customers
program that verifies developed hardware, and
and domains that you know best. It is a good decision
upon successful verification, lists the device in
to position yourself at the forefront of this technology
the Microsoft Azure IoT Device Catalogue. The
evolution as the forecasted size of the SaaS marketplace is
catalogue is indexed and searchable through
99.7 Billion USD by the year 2020, fuelled in part by the
a variety of filtering criteria making the discovery
IoT movement.
of your device by prospective customers easy.
Not all companies or partners have hardware SECURITY PRACTICES
expertise, so make your product and consulting
IoT technology receives a lot of scrutiny surrounding
services discoverable and available through the
security. As this is more of an emerging market, there
IoT Hardware partner programme (covered later
seems to be large discrepancies in the security skill set
in this book).
varying from company to company. Security areas range
SYSTEM INTEGRATION PRACTICES from IoT device manufacturing, hardware integration,
solution development, solution deployment, cloud
Customers digitally transforming their businesses with
operations, data security and privacy management.
IoT recognise that doing so requires a fundamental shift in
Some auditors may have expertise in some, and others
their business strategy and operations. Service integration
in all of these areas. A holistic portfolio for the above
partners can help customers successfully undertake this
areas is not required, but deep understating of your
transformation by serving as trusted advisors all the
specific area is a must.
way from solution design to implementation and
management. This can involve supporting, recruiting,
hiring training staff, engaging customers and monetising
your solutions, etc. Advisory services play many critical
roles in developing and implementing an IoT solution.

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Driving Revenue with IoT

As the IoT market continues to grow and evolve over the next several years, how your IoT
practice reacts to change and customer needs will be critical. Opportunities exists for new,
nimble market entrants to bypass established competitors that fail to move quickly enough.
Existing IoT practices can continue to take market share as they expand their offers and gain
deeper understanding of their customers’ needs.
There are multiple opportunities to drive revenue selling 1. Envision IoT: The first step in delivering IoT is to help
IoT-related solutions and services, and they can be found your clients envision the possibilities of IoT and what
in all sectors, ranging from automated predictive that could mean their organisations – helping them
maintenance, failure notifications and self-healing see a roadmap where IoT becomes more and more
procedures to policy adherence, such as ensuring a part of their daily operations and the benefits
hardhats and safety vests are being worn by personnel. this brings.
When thinking about revenue for your IoT practice, 2. Pilot IoT: The second step is helping your customers
consider the benefits of delivering complete implement pilot IoT solutions. Whether this means
end-to-end solutions. If your services stop at helping building and installing hardware prototypes or
them build the solution, what will their internal teams implementation of a proof of concept, the goal is
do when something goes wrong? IoT solutions can to allow your customer to see how IoT will work
be complicated, and a customer may not have the with their systems, and the benefits it can provide.
internal team capable of supporting them. Providing
3. Deploy IoT: The final step is helping your customers
management, monitoring and support for IoT solutions
deploy IoT solution into production and providing
creates a great opportunity for recurring revenue.
ongoing support for those solutions.
Additionally, with expertise in Big Data and Analytics, you
can help customers leverage their data to identify trends 4. Secure IoT: Security is one of the largest areas of
that can positively affect their business, thus increasing concern where IoT is concerned so offering security
customer satisfaction with your services. auditing and implementation services will go a long
way in establishing a successful practice.
To understand how to take advantage of these
opportunities, it is helpful to understand the high- As IoT becomes more and more integrated into the daily
level process for delivering IoT solutions, since the operations of an increasing number of organisations,
two are related. partners with IoT practices will be differentiated from
those who do not. IoT will not only create significant
opportunities for partners, but also give them
competitive advantages.

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In an MDC Research survey of 121 partners with IoT solutions currently in production – IoT accounts for 16% of all
organisational revenue, with a projection of nearly doubling that revenue in the next two years.

Source: Microsoft IoT Playbook Study, MDC Research, December 2018

Among those partners surveyed, the majority (72%) reported an increase in business profitability corresponding
to the implementation of IoT services, with one third reporting reaching profitability within one year.

Source: Microsoft IoT Playbook Study, MDC Research, December 20

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What specific use cases should you start with?

Remote monitoring is the predominant use case for customers that currently have an IoT Solution in production, followed
by predictive maintenance and connected factory. Partners can get up and running quickly using Solution Accelerators
provided by Microsoft on the Azure platform to from the basis of a pilot project or POC, or to be used as a reference.
Furthermore, hardware may also be simulated prior to procurement or manufacturing using the Device Simulator
accelerator. Each solution accelerator has been developed to adhere to the recommendations provided in the
Azure IoT Reference guide.

Source: Microsoft IoT Playbook Study, MDC Research, December 2018

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Azure IoT Reference Architecture and each has been

Where should you begin? designed to be scalable, extensible, modular,
understandable and secure as well as being fully
A critical requirement in any IoT solution is to have a staff
customisable to implement your exact requirements.
that is well-versed in the domain of the customer. Having
They are easily deployed to an Azure account using
domain knowledge puts your organisation in a position to
the Microsoft Azure IoT Solution Accelerators site,
identify potential gaps or enhancements that will benefit
or by using the command line. Utilise these solution
your customer’s processes and bottom line. The first step
accelerators as a starting point, or as a reference for
to ensuring a successful project is to have a domain expert
a from-scratch solution.
that is also versed in high-level IoT concepts.
Azure IoT Central is available to be leveraged if you wish
As for implementation, where you should begin largely
to have a SaaS solution where Microsoft manages all
differs based on the history of technology adoption of
cloud infrastructure for you.
your customer. If your customer has already implemented
an IoT solution, you need to verify that they are leveraging
REFERENCE ARCHITECTURE
telemetry data appropriately. By enhancing their existing
solution with dashboards, machine learning and alerts, The IoT reference architecture should be leveraged
there is a large possibility that further sensor/device needs in all projects, however it is very important to have
will be identified. a good understanding of these concepts when
In many cases, customers are not aware that IoT can be implementing a specialised custom solution
leveraged to automate and/or improve many of their from scratch.
existing processes. An IoT solution is typically introduced
to them via an upsell from another type of project. Many SOLUTION ACCELERATORS
of these projects deal with the Big Data problem, heavily
focused on analytics, machine learning and KPIs. It is Common IoT scenarios include Remote Monitoring,
important to identify how IoT device telemetry can be Connected Factory and Predictive Maintenance.
used to augment their data accuracy, pinpoint equipment If your solution generally matches these scenarios –
failure and improve business processes. they can be customised and leveraged to fit your
needs. The solution accelerators also include
Over the years, Microsoft and its partners have assisted
a Device Simulator accelerator that should
in bringing multiple IoT solutions to fruition. With this
be leveraged in all projects.
experience, they have provided an Azure IoT Reference
Architecture Guide to assist you step-by-step in building
an IoT system on Azure from scratch. AZURE IOT CENTRAL

Microsoft has also identified foundational common Build an enterprise-grade, scalable and secure
scenarios. Among these scenarios are remote monitoring, Azure IoT solution without the need for cloud
connected factory and predictive maintenance. These development expertise. Start in minutes and have
solutions have been extracted and provided to you a complete solution up and running in a matter of
free of cost as IoT solution accelerators. Each of these hours. This is a full SaaS offering, meaning that
accelerators has been built in alignment with the Microsoft handles all of the infrastructure for you.

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Identify Partnership Partner Across Domains

Opportunities
With an IoT practice in particular, having partners with
expertise in other domains can be lucrative. A compelling
example of this is in security. A security partner is already
established, experienced and considered an expert in the
Partner to Partner security domain. If you partnered with a security partner,
you would gain domain expertise in a very complex and
With an IoT practice, not all partners will rapidly evolving domain. The security partner would also
benefit by gaining experience from your IoT capabilities –
or even should do everything themselves. such as cloud management, network and/or software
It is critical that partners learn to seek out expertise. Partnering together will often lead to an IoT
solution that could goes beyond mainstream approaches.
other IoT partners to fill gaps in their Establishing this a successful partnering relationship also
practice – from missing talent to expertise
in building custom PCBs.
It is tempting to want to do everything related to your
business, but the fact remains you will never have enough
time. This is a primary reason to seek out compatible
partners that can help you to:
• Complete your solution
• Build credibility
• Partner for infrastructure
• Leverage joint marketing
• Add-on to sales
• Broaden your customer base
Finding the right type of partnerships is key to finding
success in today’s competitive market. Some partner
combinations meld together well to create success.
To help you find the right mix, here’s an example of
a partner recipe we know works:
ISV + channel-based MSP partners = international success
Find out what’s in it for the Partners and customer and the
secret of success.
increases your chances of obtaining future projects as
an experienced IoT partner on projects originally sourced
by the security partner that you’ve already established
a relationship with.

It is also quite common in the IoT space to leverage

partners for the hardware aspects of the solution.
Many of the partners interviewed leverage partnerships
to design, develop and manufacture their hardware.

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Make connections with Dynasource.com

It’s hard to beat the value of partner-to-partner conversations and networking. Luckily,
there are communities to help you expand your network and make an even bigger impact
on your business.
Dynasource is a global, two-sided marketplace that allows partners to connect with other firms that have complementary
expertise and capabilities. If you have excess capacity, increase your billability and profitability by finding partners that can
drive utilisation of your staff. If you lack the capacity, Dynasource can help you connect with partners that have the expertise
to enable and expand your solutions. If your customers are looking for a solution that is outside your particular expertise,
you can use Dynasource to find an expert that can provide that solution. By connecting through Dynasource and working
together, you can meet customer demand for needs across the Microsoft portfolio and grow your business.

TRANSFORM THROUGH COLLABORATION

After you’ve created a profile on Dynasource, you can search the Dynasource Microsoft Partner Community for qualified
resources that can collaborate with your team on an opportunity. This allows you to transform your cloud business and
expand your offerings at a pace that works for you.

INCREASE DEMAND FOR YOUR RESOURCES

Business is not always predictable but retaining quality staff is essential to your success. With Dynasource, you can make
your resources and capabilities available to partners who can utilise them today, making your workforce agile and billable.

GET STARTED NOW

In order to join Dynasource, all you’ll need is general information about your business. Once you create a profile, you can
search for other resources and jobs, as well as create and post your own. You can control the availability of your resources
and what level of information you would like to share about your capabilities. With the Dynasource premium membership,
you can request connections with other members and resources.

Resources
➔ Smart Partner-to-Partner Relationships
➔ A Recipe for Global Success
➔ Selling through Partners
➔ The right ingredients for partner-to-partner success

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 PAGE 23

Understanding Customer Lifetime Value

Customer lifetime value (CLV) is the revenue from a customer over the lifetime of their
relationship with you.
As most businesses have experienced within the tech • Customer Support: How much can I afford to spend
industry, a lifelong customer is of far greater value than to provide customer service to my customers?
any one-off transaction. It’s no longer enough for
companies to invest their time and resources into the
generation of single purchases. This is particularly true
in the IoT world, where your devices and software will be
tightly integrated with the customer’s systems. Given the
investment customers will make to incorporate your
products into their critical infrastructure, it is vital that
you to develop relationships and solutions that engage
a customer for life.
CLV is also a good way to guide and reward your sales
CLV allows you to step back and look at not just one sale,
team. Pay them more for bringing in customers with
not just one customer, but the customer base as a whole.
high potential lifetime value. By measuring and
It’s about defining the economic value of each customer
monitoring your cloud customer CLV, you can:
within that base and using that metric to make data-
based decisions. If you don’t know what a client is • Gain insight into your customers’ cloud consumption
worth, you don’t know what you should spend to get and usage.
or keep one. • Qualify for MPN cloud competencies that will help
you grow your business.
Knowing the CLV helps you make critical business • Help your customers reach their desired business
decisions about sales, marketing, product development outcomes.
and customer support. For example: • Leverage insight for cross-sell/upsell and proactively
• Marketing: What should my acquisition costs be? engage customers for extension opportunities.
• Sales: What types of customers should sales reps By increasing your customer adoption rates, you can
spend the most time on trying to acquire? increase your CLV, particularly with cloud customers.
• Product: How can I tailor my products and services The more employees you can get to use your service or
to my best customers? solution, the more likely you are to increase CLV. Here
are some ways to improve adoption:

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What do you need to do to be successful?

Key attributes of a successful adoption approach

Define a vision & identify Prioritise solution & create Commit resources & Measure, share success
business scenarios an adoption plan execute an adoption plan & iterate

A deep understanding of A solution that people A strategy to drive A benchmark, KPIs and
the business goals, as well love and that helps them adoption including success stories to help
as people challenges and achieve business goals and communications, readiness demonstrate success
needs to achieve them. get things done more and community. internally, improve
effectively. & expand.

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While it’s important to define and track Next Steps

your metrics, there are some simple
• Identify the customer lifetime value of your five best
things you can do to increase your CLV. customers.
• Identify your average customer lifetime value along
Your customer strategy must be built on a culture of
with your Microsoft contact.
customer success and tracking customer satisfaction.
• Identify actions to increase your average customer
The critical success factors when it comes to CLV are:
lifetime value.
• Being sensitive to customers’ emotions.
Learn more about CLV in the Modern Microsoft Partner
• Maintaining good communication.
Series eBook, Deliver Customer Lifetime Value. To model
• Listening to customer pain points. CLV as it relates to your business, explore the modelling
• Understanding that there are multiple layers to any tool available on the MPN portal.
one concern.
• Doing business with an understanding and empathy
for where your customer is coming from.

Guide: Optimise and Grow

Leverage the Microsoft resources available in
the Optimise and Grow guide, for details on
building customer lifetime value, executing
nurture marketing efforts, optimising and
growing from feedback, refining your
customer value proposition, growing
partnerships and measuring results.

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