I write a lot about the importance of building connected products with an eye toward also building out an ecosystem, because a connected device is really only as valuable as the other things it can work with. We’re very early in this phase, but these ecosystems are currently emerging in the enterprise world in the form of platforms provided by incumbents such as Honeywell, Emerson, Siemens, and more.
So, in my Everything is Connected event held this past Tuesday, I wanted to understand how companies were building out such ecosystems and what challenges they face. I asked executives from Honeywell, Intel, Zededa, and DevicePilot to offer their advice on building out ecosystems that work, including how to bring startups into the fold.
The first thing to do in establishing an ecosystem is to figure out a compelling business case, then to try and find one or more partners.
Each participant had different experiences when it came to choosing a business case. Ginger Smith, director of strategic partnerships at Honeywell Connected Enterprise, talked about how Honeywell and SAP’s recent partnership around smart buildings was based on a meeting between the two companies’ respective CEOs at Davos.
Irene Petrick, senior director of Industrial Innovation in the Internet of Things Group at Intel, suggested that companies find their business case with the business line managers who have a specific need. Petrick also recommended picking partners who have graduated beyond slideware and have specific use cases already deployed — and to be prepared to customize, since there’s never a solution that’s ready right off the shelf.
Regardless of how the partnerships get started, to work they need people who are committed to solving a problem across all levels of an organization. Petrick said people who can move freely between the tech and business teams to help define problems and communicate the technical limitations available are crucial. She called these individuals “bridgers.”
And according to Pilgrim Beart, CEO of DevicePilot, many companies that have built connected products or are in the process of building one might be surprised to discover that they are already part of an ecosystem. “An IoT product is not simply a product. It’s an ecosystem in its own right,” he said. “A lot of people have to collaborate to bring any one IoT solution into the market.”
The good news is that companies may be further along than they think in terms of understanding how to build these ecosystems. So what about creating relationships between traditional companies and startups?
Smith said that her group at Honeywell is working with two startups at the moment, and in general is looking for companies that are building a product that either isn’t competitive and can slot into the Honeywell roadmap and help it get to market faster, or one that customers are asking for that Honeywell doesn’t have. She admitted that many startups will likely find working with a larger company trying. Petrick was more blunt, noting that Intel is probably not as an effective a partner for startups because it is so big and has so many competing interests.
Differently sized companies are not the only challenge to building an ecosystem partnerships face. The point of establishing an ecosystem is to create a web of companies to offer services and products that provide more value together than apart. But figuring out how to charge customers for that value and then apportion that value among the partners is tough.
“Delivering value and harvesting that value is not yet appreciated in the IoT space,” said Beart, who thinks it will simply take time. “People are constantly trying to work out how to pass value down the chain, what to keep to themselves, and how to structure a business model.”
Petrick believes IoT also needs more infrastructure. She mentioned auditing ecosystem partnerships as an example of a challenge that doesn’t yet have a solution. “So I have a rev share agreement in a partnership, but I have to know who’s selling what, and to whom, and some of the auditing mechanisms aren’t really well-established or clear yet.” She noted that we tend to audit things that are easy to count, but in the IoT, those may not be the right metrics, especially when it comes to sharing data.
For more on the challenges and other advice around data sharing and even the contracts necessary for building out an enterprise ecosystem, please check out the videos of the sessions.