But can we transport the camel to the right buyer? Do you have the right pallet for it? The right go-to-market (GTM) strategy is needed to ensure you have product-pallet fit to reach your buyers in a connected world.

How your GTM adapts for a connected world is as important as reimagining your product strategy through a business model and consumption-centric lens, not a technology-centric lens.

To see adapting our GTM, we need to look at how these IoT offerings are sold and bought.

IoT requires the convergence of IT and OT. Simply put, IoT = IT + OT

Hence, we will start by looking at channel partner structure in IT and OT worlds and then show them side-by-side to see the almost bewildering impact on GTM strategy when IT meets OT.

GTM Partner Types

Regardless of whether your company plays in IT or OT, it’s important to take a look at the players in any GTM partner ecosystem before we complicate the discussion with IT+OT combo issues in GTM.

While Cloud continues to challenge traditional models for GTM, knowing the basic taxonomy and partner types is essential before you adapt them for IoT-Cloud. So, let’s look at that first. (If you are a purist, note that I’ll be using the words channel and partner interchangeably in this article to refer to GTM partners.)

For any product maker, whether IT or OT, the GTM ecosystem looks like this:

Key points to note from this value chain view:

• Maker to Buyer: Left to right is the commercial and operational pathway for products to get to the right customers.
• Direct, Indirect, Tier-1, Tier-2: GTM channel is split into direct vs. indirect and tier-1 vs. tier-2; Indirect splits into tier 1 or tier 2 if an intermediary like a distributor is involved.
• Other Makers: Makers may sell to other makers. This is an OEM/ISV channel (also referred to as technology partner). Know that each OEM/ISV has its own GTM ecosystem facing buyers and it mimics the original maker’s GTM channel structure.
• ISVs: As your offer becomes cloud-delivered and accessible programmatically (via APIs), you will need to foster a software vendor ecosystem that needs to either run on your products or use your products to integrate with other solutions.
• Service Partners: The players in green are service partners who provide consulting (business and technology), resale, integration, and operational support and management (e.g. Managed Service Providers, MSPs). A given player might have multiple services practices that comprise their overall business (e.g. integration and managed service).

You will see different firms use different ways to describe and categorize these partner types. For example, Amazon Web Services simply clubs all the service partners under “consulting partners” umbrella. Some others might call them solution providers, and so on.

Be aware of the partner role and value-add when you develop your GTM strategy. Normalize the taxonomy for your business’s needs.

GTM for IT + OT

Having mapped out the generic ecosystem layout, let us now simply put the ecosystems for IT and OT makers side-by-side, for example, by pitting KUKA, the robot maker and Dell, the IT maker together.

For simplicity, I have collapsed the different GTM players inside the grey boxes rather than show every role from the prior graphic.

The picture suggests that IT Maker sells to IT buyer and OT Maker sells to OT buyer and the twain meets when IT and OT collides inside an organization to make the IT+OT solution work!

Intuitive? Perhaps. Sounds like a terrible idea? Of course, it is.

Such an approach will never get adopted or scaled for many reason:

1. It’s inefficient with so many B2B hand-off’s in the value-chain.
2. The onus to get the solution right falls on customer’s OT ops and IT ops.
3. Will you find enough KUKA-Dell talented people to make it all work?

Here lies the entire reason to rethink GTM strategy. You have to foster solution-thinking further upstream in the value chain. Not at the staging site of the customer. AND you have to foster collaboration across the value chain.

Selling scalable IoT solutions require collaboration across the value chain as well as up-front integration of the solution, long before it reaches the buyer.

The resulting picture looks like this:

It shows industry-level collaboration to create the right IoT solutions and take it to market.

Let’s be realistic too. It isn’t going to be all harmony all the way. While collaboration is essential, it will be forced on players in the value chain who are currently competitors, causing the dynamic that I call Frenemies and Knotted Value Chains. But eventually customer success will drive the right behavior.

Summary

I have barely scratched the surface of GTM strategy in the IoT world. We saw the complexity involved.

As the product itself is changing to become consumption-centric, the offer evolution is pulling traditional channel deliverables like support, management, and integration to the cloud, towards the maker, as part of the consumption-friendly delivery of the product.

There is a horizontal pull of deliverables towards the Maker and a concurrent need for vertical integration of expertise between OT and IT partners.

We can see why most organizations struggle to navigate this transition to consumption-friendly IoT and orchestrating the IT+OT ecosystem. It requires changes on multiple fronts at the same time:

1. Consumption-centric offer
2. Subscription financial models
3. Channel orchestration
4. And direct and indirect channel incentives, just to name the top challenges.

Who said life is easy when IT meets OT? It’s simply is exciting.

—–

First published at IoT For All, a leading technology media property dedicated to providing the highest-quality, unbiased content, resources, and news centered on the Internet of Things and related disciplines.

The post Rethink Your Go-to-Market (GTM) Strategy for IoT appeared first on The Cerebrus Group.

If connectivity to improve existing business operations is the sole purpose of IIoT, aren’t we squarely suffocating inside the dilemma-filled innovator’s box? Can we reimagine the killer app or the killer product? Luckily, we can. All we need to do is take a consumption-centric view of product strategy.

IoT enables us to take a consumption-centric view to creating new offerings

Consumption-centric Product Strategy

Historically we built products with a technology-centric view. For example, in the IoT world it amounted to thinking about how to integrate sensors and computers in our largely electromechanical products; how to connect them with the plethora of communication mechanisms available to us (3G, LoRa…); how data was exchanged etc. All that is needed. But that is still thinking of the offer from a technology-centric lens, not a consumption-centric lens. Kindle did it.

IoT Killer App and Kindle

Kindle didn’t subject us to worrying about connectivity, subscription to a wireless plan, or maintenance. Buy a digital book, read it, or buy a subscription and keep reading. Simple enough, but how shall we do it in our industrial world?

There are two ways to reimagine your connected products in a consumption-centric manner: 1) Change the consumption model of your existing product OR 2) Offer a new product or service via your connected product

The former is like offering a robot-as-a-service instead of selling a robot outright. The latter is like selling site-security for a warehouse and using robots to deliver it, or like delivering a book over a Kindle. Kindle isn’t the IoT product. It is a mere delivery mechanism.

Reimagining Offers: Dimensions of Consumption

To reimagine your offerings for a connected world, think about these dimensions of consumption for your offer, any offer. The following graphic illustrates this:

The dimensions convey the following:

• Mode: How the end consumer or user gets your product: it comes in a package, comes as a service on-demand, comes digitally, delivered as audio etc.
• Ownership: Whether they chose to own your product or buy rights to use when needed. e.g. lease vs. buy
• Operations: Whether they operated it themselves (“self-driven”) or had someone else operate it for them (“chauffer-driven” or vendor-managed vs. self-managed)
• Payment: Did they pay to use each time or subscribe to it?

The simple variations under M-O-O-P dimensions are shown below:

Let’s mix and match the above and see how existing offerings in the market use these dimensions:

• Leased Car: Mode 1 (Packaged), Ownership 2 (leased for term), Operations 1 (you are driving it), Payment 2 (periodic payments over term). i.e. M1-O2-O1-P2 consumption pattern.
• Lyft (since it is politically incorrect to use Uber as example these days): M2-O2-O2-P1 consumption pattern.
• Connected Robot for Zero Down Time: M1-O1-O1-P1 pattern. Assumed capex spend and managed by the enterprise owner. As ho-hum as you can get. No killer app here! (I suppose the robot can’t be a killer app, lest it violates the laws of robotics.)
• Cloud computing: M2-O2-O2-P1 pattern. Assuming it’s pay-as-you-use pricing for Infrastructure-as-a-service (IaaS).

…and so on and so forth for any product you analyze. This pattern of transformation is an easy key to re-vector your business model.

Killer Business Models, Not Killer Apps

Last week I came across a robotics startup that offers a site-security solution based on robots (like a monthly subscription to ADT or Brinks for home security in the US). So it’s not killer apps that are coming, but killer business models and killer solutions.

Let’s at least march towards making our products more consumption-centric, if not start delivering new services on top of our existing products. Time to get beyond the predictive-analytics-for-maintenance cliché and reimagine our offerings before someone else beats us to it.

—-

Visit TheCerebrus.com for more discussion on IoT and Digitization where we provide nuggets from our think tank. © The Cerebrus Group. All Rights Reserved.

The post IoT Killer App is NOT the Clichéd Predictive Maintenance appeared first on The Cerebrus Group.

Here is a look at how players from the world of IT and the world of OT (“operational technology”, loosely referring to industrial products and services sectors) are fishing in the venture landscape for investments and acquisitions. This has implications for you whether you are an entrepreneur, a venture investor, a corporate venture / M&A leader, or an investment banker.

The Simple World of IT acquisitions

We see acquisitions like the ones below often – a small software or hardware firm getting snapped up by an established IT player.

Countless examples of this play out across all parts of the IT stack, from network-server-storage areas to middleware to apps, data, and security. We all expect this: startups building horizontal (industry-agnostic) technology being acquired by large IT players.

Emergence of New Acquirers

Against the above historical backdrop, we’ve been seeing this new type of acquisitions by vertical-specific large and mega players. A very small sampling of them below.

The school of fish on the left is focused on applying IT to specific vertical industry or operational domain problems. e.g. wise.io for service tickets, SAIPS on AI for vision, ThingWorx for industrial IoT etc. Five years ago these ventures would still have been acquired by traditional IT players. Now there is competition for acquisitions from the industrial sectors.

The New World

The graphic below shows both the historic and new dynamic in perspective. Acquirers from quadrants 1, in addition to 2 are scouring the venture landscape, establishing outposts in Silicon Valley and other startup hubs, influencing startup direction and deal flow early, and competing with VC firms for control.

While the classic IT consumption by verticals from the traditional IT players continues (blue arrow), tech products all of a sudden find a new way to reach buyers directly through quadrant 1 vs. indirectly via quadrant 2.

Taxonomy: Small Fish and the Big Fish

Below is a generalization of the acquisition patterns and players by quadrant.

1. Big OT: Players not in high-tech sector (e.g. industrial manufacturing, services etc.) or part of their ecosystem
2. Big IT: Traditional tech players. Excludes Google, Amazon etc. who don’t fit in a particular quadrant here, but span quadrants 1 and 2.
3. Small IT: Focuses on horizontal hardware/software problems that are not industry specific
4. Small OT: Small tech players focused on industry problems. (e.g. AI for health or autonomous cars). Their technology focus could be IT or OT, but their problem domain is industry-specific (e.g. SAIPS for navigational AI, Airware in drone technology)

The Calculus of It All

Whether you are an entrepreneur, VC, corporate venture portfolio manager, or investment banker, the interplay across the players in these quadrants has become a key consideration in your day-job. For instance:

• Just as the supply of small technology firms have increased due to cloud, the potential suitors for startups have increased as well. Mature buyers from the OT world are investing in and acquiring from small OT and small IT quadrants.
• Vertical integration across IT and OT is a threat for incumbent OT players (e.g. Google in transportation and robotics, Amazon in health services) and IT players.
• Innovators dilemma problems galore in the big IT quadrant 2. Collectively, they aren’t providing or are unable to provide verticalized solutions while busy trying to stave off cloud competitors. That’s a battle on two fronts simultaneously!

Note: Apple’s acquisition of Lattice Data is another wrinkle in this whole landscape, given the way a corporate acquisition bypassed traditional VC route altogether. Lattice could have exited in quadrant 1 or 2.

The new digital trajectory of venture funding and acquisitions affects many aspects of a venture world such as:

• Product positioning: Are you simply an artificial intelligence software provider or an AI software provider for health?
• GTM: Who exactly is your buyer or channel to the end customer? Is your channel partner a vertical-specific solution provider or an IT solutions provider?
• Funding sources: Can you raise capital from traditional VC firms, corporate ventures in OT, corporate ventures in IT, or even Government?
• Potential exits: Are your suitors in the OT or IT world?

There you have it. The simplified view of the foraging and predatory habits of the various fish and its implications. It’s an exciting marine world out there!

The post Digitization Impacts the Trajectory of IT Acquisitions appeared first on The Cerebrus Group.

Digitization is complicated because we communicate in different wave lengths simultaneously. The technologists wax on about applications, data, converged and programmable infrastructure and fitting them in to a continuum from cloud to edge to mobile. They package it up in to hardware and software. The marketeers talk about cool products and services. The business people talk about transactional and subscription models of revenue; about core and context and how to leverage ecosystem for smarter buildout and smarter GTM. Consequently we end up with a mental map with a spectrum of rainbow colors.

How are we supposed to navigate through this maze? Should we close our eyes and focus on multichannel digital customer experience, some process automation, and a bit of data analytics, hoping that the rest takes care of itself? Or do we declare artificial intelligence to be our salvation and live in a virtual reality?

Well, you know we won’t. Every business has three core areas of value creation: the products & services (what we sell), the go-to-market (how we sell), and the development (how we build). Can we apply technologies to these core business areas? Can we apply technologies to change products and services in industries ranging from health, manufacturing, retail, energy and beyond to digitize them? Can we disrupt value chains and avoid being dis-intermediated? Can we improve our velocity and productivity in R&D? We can. It requires applying a business lens on digital.It requires us to work top-down from business to components of the business — technological and non-technological components. It requires us to think Business First with Digital Inside as shown below.

Here is to us navigating our way down from the North Star and not getting lost in the Great Bear during 2017.

The post Navigating the Digitization Maze appeared first on The Cerebrus Group.