The Evolving Definition of Long-Term Electronic Component Storage
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Electronics manufacturers are forming alliances, partnerships and joint ventures in the global supply chain to tap sales opportunities for connected devices and better position themselves to service the growing market for the Internet of Things (IoT). The number of these alliances forged by OEMs, contract manufacturers, component suppliers, design firms and distributors has surged in recent months as manufacturers realize they need to collaborate with others in the industry to benefit from growing demand across sectors of the economy for IoT devices.
These partnerships are separate and distinct in structure and objectives from industrywide alliances, which are set up to establish standards that would govern the deployment and use of IoT devices. In the area of standards, companies, industry associations as well as regulators have teamed up to formulate and provide guidelines for enterprises serving the sector. These industry bodies include the Alliance for Internet of Things launched by the European Commission and other IoT vendors to create a “dynamic European IoT ecosystem,” as part of the European Union’s Digital Agenda for Europe initiative.
While industry associations like the above are critical to the creation of and proliferation of standards, many manufacturers are also expanding their network of partners well beyond these into relationships that could help them gain a good understanding of the IoT market and enable them to tap existing sales opportunities and create new ones. These alliances range from membership organizations set up at leading OEMs, software developers and semiconductor manufacturers to joint ventures and strategic partnerships for exploiting specific segments of the market.
HCL Technologies and IBM Corp. announced the latest of these alliances on Thursday, joining companies as varied as ARM, Alcatel-Lucent, Cisco, Intel and Microsoft, which have also formed strategic alliances with competitors, customers, suppliers and others within their supply chain ecosystem. Few of these alliances are exclusive, due to the wide range of market opportunities and in a nod to the fact market players are expected to run into thousands across multiple geographies.
In the case of India-based HCL Technologies and IBM, the companies plan to develop solutions for customers, explore and offer products that address key technology issues such as the integration of IoT devices, connectivity, data platform and data analysis. The HCL-IBM partnership will target specific industry segments, including industrial & manufacturing, smart facilities, inventory management and facilities management, the companies said.
"Building an extensive ecosystem around the Internet of Things, is imperative to the success of all complex Internet of Things client solutions," said Chris O'Connor, general manager of offerings, Internet of Things, at IBM in the statement referenced above. "Combining HCL's IoT design capabilities in hardware and platforms with IBM IoT Foundation platform, the result is a capability that generates new value across every segment we are targeting."
Intel, too, has been building such alliances for several years now although the chipmaker’s strategy involves bringing together many of its current customers into a closer relationship by encouraging them to join its Intel Internet of Things Solution Alliance. Intel said the group helps developers resolve key challenges in the development and production of IoT devices by offering leading-edge solutions, faster time-to-market, design and development expertise, a wide selection of more than 5,000 solutions anchored on Intel technology and architecture as well as long lifecycle product support. The Intel group boasts more than 400 members, many of them companies that already buy products from the semiconductor vendor, Intel said on its IoT Solutions Alliance page.
“Close collaboration with Intel and each other enables Alliance members to innovate with the latest Internet of Things (IoT) technologies, helping developers deliver first-in-market solutions,” Intel said. “Partnering with Intel Internet of Things Solutions Alliance members can help you reduce risk and lower development costs.”
Intel’s IoT alliance may sound like a sales and marketing gimmick but it’s a strategy that many other companies have deployed over the last five years as interest in connected devices surged. The companies that have rolled out group alliances or direct partnerships with individual enterprises insist this approach would help suppliers and customers with new product introduction programs by setting standards early and ensuring interoperability of the devices. The alliances aren’t limited to hardware makers, however. Software vendors, too, are forging similar engagements with manufacturers to ensure the connected devices are able to communicate with each other and harness the data generated.
Microsoft, for example, has its Microsoft Azure IoT Suite, which CEO Satya Nadella announced earlier this year. In a blog on the company’s website Takeshi Numoto, VP of Cloud and Enterprise Marketing, said the company wants “to help companies thrive in this era of IoT, delivering open, scalable platforms and services that any company, whether startup or the most established global enterprises, can use to create new value, right now.”
The Azure Suite focuses on the software side of IoT and is “designed to securely connect, manage and capture machine-generated data from sensors and devices,” according to Numoto.
Since launching its IoT Azure Suite, Microsoft has signed various agreements with companies outside its traditional market segments, including a partnership formed in July with wireless network monitoring services provider Jasper Technologies. Santa Clara, Calif.-based Jasper markets itself as a provider of IoT platforms to companies in more than 20 vertical markets and its customers include many of the leading players in data and wireless communications as well as automotive, industrial, machinery and food industry. Bringing together these widely different groups of customers and effectively serving them requires strategic partnerships, the company said.
Other alliances have brought together hardware vendors, software developers and communication services providers. Some of these alliances address economy-wide opportunities while others are limited to specific sectors. Last year, for example, AT&T, Cisco, GE, IBM and Intel teamed up to form the Industrial Internet Consortium (IIC) for electronic products such as sensors. The group said the IIC would focus on providing interoperability across “various industry environments” and help build reference architectures as well as facilitate the sharing of ideas.
"We are at the precipice of a major technological shift at the intersection of the cyber and physical worlds, one with broad implications that will lead to substantial benefits, not just for any one organization, but for humanity," said Janos Sztipanovits, E. Bronson Ingram Distinguished Professor of Engineering and Director of the Institute for Software Integrated Systems (ISIS), Vanderbilt University in a statement announcing the formation of the IIC. "Academia and industry understand the need to identify and establish new foundations, common frameworks and standards for the Industrial Internet, and are looking to the IIC to ensure that these efforts come together into a cohesive whole."
"The Industrial Internet builds upon AT&T's vision of enabling people to operate anything remotely, anytime and virtually anywhere," said Mike Troiano, vice president, Advanced Mobility Solutions, AT&T Business Solutions. "The IIC is an assembly of the world's leading technology innovators working to mobilize devices and machines around the world, whether they're in an office building or on a ship in the middle of the ocean. Together, we share a common goal of building a more connected world."
These alliances have become critical to winning in the IoT market because of the potential size of the sector and the wide range of economic segments it can touch, according to industry experts. Research firms have put the likely shipment of connected devices over the next several years in the tens of billions with projected sales also running into billions of dollars. Researcher IDC projects the IoT market would reach $1.7 trillion by 2020, up from $655.8 billion in 2014. Of this amount, the hardware part would represent about one-third.
"Despite the Internet of Things being a relatively new construct around the world for businesses and consumers alike, IDC research confirms the awareness of the value of IoT solutions is increasingly being recognized as transformative to business, governments, and consumers and the way each party experiences, operates, and innovates in the world. Visible trials and early implementations create a virtuous circle," said Carrie MacGillivray, program vice president, Mobile Services, IoT, and Infrastructure at IDC in a report released in June. "From smart meters and operational and cost efficiencies to smart buildings and smart home systems, end users are able to see and feel the tangible benefits of IoT. This will spur increased demand for IoT solutions around the world."
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