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Gartner At A Glance

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per month

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CONFIDENTIAL AND PROPRIETARYThis presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other intended recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Service Providers: Lead & Capture a Piece of the IoT Services Market

Denise A. Rueb

March 1, 2016

3 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Service Providers Globally – Already Devoting A LOT of Attention to IoT

Source: "Hype Cycle for the Internet of Things, 2015," 21 July 2015 (G00272399)

Innovation Trigger

Peak of

Inflated Expectations

Trough of Disillusionment

Slope of EnlightenmentPlateau of

Productivity

time

expectations

Plateau will be reached in:

less than 2 years 2 to 5 years 5 to 10 years more than 10 years

obsolete

before plateau

As of July 2015Digital Security

Licensing and Entitlement Management

Energy Harvesting

IoT Business Solutions

Things as Customers

Wearable User Interface in Logistics

Operational Intelligence Platforms

Connected HomeIoT Platform

Embedded Software and Systems Security

Event Stream ProcessingIoT Architecture

IT/OT Integration

iBeacons and Bluetooth BeaconsInternet of ThingsPredictive AnalyticsSmart Transportation

Wearables

Low-Cost Development Boards

IT/OT Alignment

Automobile IP NodesCloud MOM ServicesPersonal Health Management Tools

Operational Technology Platform Convergence

Operational Technology Security

Big Data

Enterprise Manufacturing Intelligence

Internet of Things Authentication

IoT-Enabled ERP

Real-Time Analytics

Wide-Area IoT Networks

Quantified Self

Managed Machine-to-Machine

CommunicationServices

High-Performance Message Infrastructure

Home Energy Management/Consumer Energy Management

IoT

4 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Go-to-Market. Focus on key vertical IoT business outcomes for your value proposition.

Engage at the C-level with emphasis on business vs. technology. Tap into existing client base to

gain market wins & experience.

Offering Portfolio. Build upon existing IP/assets to deploy IoT focused solution accelerators;

Place emphasis on big data & analytics offerings aligned with the IoT service offer; Be prepared

to offer alternative price models (e.g. risk sharing).

Skills. Plan to embrace a culture change. Staff the right IoT skills (OT, Data Scientists, IoT

Architects, UX Designers, etc.); Partner with the right skills if necessary.

Ecosystem. Seek partners that compliment your firm’s IoT strength; investigate emerging

companies with disruptive IoT technologies, skills, solutions; Consider new players that are not

traditional service providers.

Engagement. Apply a Mode 2 model with focus on agile, quick wins, iterative methods, and a

collaborative approach with business users for IoT solution design/development and deployment.

Recommendations for Seeking IoT Business Opportunity

5 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Manage your way through key challenges impacting IoT services go-to-

market success.

Understand what buyers look for when engaging IoT services.

Learn the critical success factors for developing a winning practice/service

portfolio for IoT Services.

Today’s Agenda

6 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Key challenges impacting IoT

services go-to-market success

7 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Many IoT Challenges that Impact Your Services Go-to-Market Success

Market Fragmentation

Standards & Regulations

IT/OT Alignment

New Engagement

Model

IoT Practice Alignment

Maturity of Service

Offerings

Skills & Expertise

Emerging Technologies

Vertical FocusBimodal: Mode2

8 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Many IoT Challenges that Impact Your Services Go-to-Market Success

Market Fragmentation

Standards & Regulations

IT/OT Alignment

New Engagement

Model

IoT Practice Alignment

Maturity of Service

Offerings

Skills & Expertise

Emerging Technologies

Vertical FocusBimodal: Mode2

9 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Many IoT Challenges that Impact Your Services Go-to-Market Success

Market Fragmentation

Standards & Regulations

IT/OT Alignment

New Engagement

Model

IoT Practice Alignment

Maturity of Service

Offerings

Skills & Expertise

Emerging Technologies

Vertical FocusBimodal: Mode2

10 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Polling Question #1: What is your top challenges to GTM success?

Select One:

1. IoT Practice Alignment

2. Bimodal: Mode 2 Engagement Approach

3. IoT Skills & Business Expertise

4. IoT Positioning with a Vertical Focus

5. Keeping Pace with Emerging IoT Technologies

11 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

What buyers look for when

engaging IoT services

12 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Buyer’s Question Business Objectives & Technologies to Master IoT

Business Strategy

IoT Platforms & Cloud Services

Enterprise IT Integration

IT/OT Alignment

Hardware Design/Integration

Communications Services & Networking

Security/Privacy

Embedded Software

Development

Business

Outcomes

M2M

Data Governance UX/Design

Price/Risk Sharing

IoT Ecosystem Solution Accelerators

13 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Key Areas Buyers Consider Barriers to IoT Efforts

Source: Gartner: (Feb 2016,n=382)

14 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Key Areas Buyers Seek from IoT Solutions

Source: Gartner: (Nov 2015,n=276)

Improve efficiencies and cost savings for business operations

28%

Enhance the experience of your

customers25%

Increase revenue by enhancing offerings

to customers20%

Optimize assets (utilization,

maintenance, etc.)19%

Improve workforce safety

1%

Other5%

Not clear yet2%

15 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Buyer IoT SP Checklist: Where Does Your Practice Apply?

IoT business vision/strategy

Embedded software development

Comms. services and networking

Platforms and cloud services

Hardware design/integration

IoT Solution Design/Build

Enterprise IT integration

Security/Privacy assessment

IoT Managed ServicesIn

tern

al

Exte

rnal

Strategic consultancy

Digital agency

IoT platform vendor

Telcom/CSP

OT provider

System integrator

ERP vendor

M2M specialist

External ecosystem/business partners

OEM specialists…

Potential IoT service provider partners

Strong opportunity

Weaker opportunity

16 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Critical success factors for

developing a winning IoT

Services portfolio

17 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

The IoT Leader vs. Laggard Scale: How Does Your IoT Practice Align?

Leader Laggard

Organization Fit Formal practice

Aligned w/Digital Business Practice

Not a strategic offering

Services scattered throughout technology service

areas

Go To Market Strategy Vertical focus within a sector (sub sector

industries), e.g., Industrial (Manufacturing,

Transportation)

Technology and horizontal offerings

Strategic service plan that aligns with firm's

skills, capabilities

Offers a buffet of IoT services: “do it all"

Opportunistic versus strategic

Engaged by C-level, Sr. LOB leaders

Opportunities driven by client’s business drivers

& outcomes

Primary client contact with IT.

Opportunity driven by technology pilots

18 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

The IoT Leader vs. Laggard Scale: How Does Your IoT Practice Align?

Leader Laggard

Engagement Approach Implements a culture change, use of a Mode 2

engagement approach

Recognizes the necessary new skills such as OT

specialists, business data scientists, UX, and IoT

architects

Applies traditional IT approach on IoT engagement

Limited IoT expertise beyond IT related skills

IoT Ecosystem Recognize that no single provider covers all the

relevant IoT technologies & markets

Aligns ecosystem to vertical service offerings

Emphasizes on technology across many IoT

platforms

A menu of partners vs alignment with vertical

offerings

IoT Offerings Aligned with vertical/business focus

Emphasis on IoT analytic services

Places business outcome first with viable ROI

approach

Knowledge of OT/IT alignment requirements

Use of IoT solution accelerators

Focus on technology outcome

Traditional IT offering

Little to no use of IoT solution IP/accelerators

19 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Conclusion

20 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Internet of Things

Go-to-Market. Focus on key vertical IoT business outcomes for your value proposition. Engage at the C-level with emphasis on business vs. technology. Tap into existing client base to gain market wins & experience.

Offering Portfolio. Build upon existing IP/assets to deploy IoT focused solution accelerators; Place emphasis on big data & analytics offerings aligned with the IoT service offer; Be prepared to offer alternative price models (e.g. risk sharing).

Skills. Plan to embrace a culture change. Staff the right IoT skills (OT, Data Scientists, IoT Architects, UX Designers, etc.); Partner with the right skills if necessary.

Ecosystem. Seek partners that compliment your firm’s IoT strength; investigate emerging companies with disruptive IoT technologies, skills, solutions; consider new players that are not traditional service providers.

Engagement. Apply a Mode 2 model with focus on agile, quick wins, iterative methods, and a collaborative approach with business users for IoT solution design/development and deployment.

Recommendations for Seeking IoT Opportunity

21 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Recommended Gartner Research

Competitive Landscape: Service Providers Seek to Capitalize on the First Wave of IoT TransformationDenise Rueb, Eric Goodness, Jacqueline Heng (G00280150)

Predicts 2016: IT Services Innovations for Digital ServicesDenise Rueb and Others (G00293167)

Market Guide for IoT PlatformsAlfonso Velosa, Yefim V. Natis and Others (G00272398)

Best Practices in Exploring and Understanding the Full Scope of IoT Solutions Benoit J. Lheureux, Alfonso Velosa and Others (G002740104)

The Internet of Things Revolution: Impact on Operational Technology EcosystemsKristian Steenstrup, Dale Kutnick (G00275232)

Survey Analysis: Early Adopters of Internet of Things Poised to Market 2016 the Year of the CustomerChet Geschickter, Jim Tully (G00298428)

Kick-Start Bimodal IT by Launching Mode 2Mary Mesaglio, Suzanne Adnams, Simon Mingay (G00273955)

22 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.22 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Thank You

Contact: denise.rueb@gartner.com

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