6 Red-Hot Verticals With The Biggest IoT Opportunities For Solution Providers

Vertical Opportunities

As solution providers eye Internet of Things opportunities, they are looking not at technology itself – but at vertical markets.

"New markets start off as verticals, and the only way to address a vertical is through a channel partner," said Pat Moorhead, president and principal analyst of Moor Insights & Strategy, a tech analyst firm based in Austin, Texas. "The IoT is huge for verticals. … Vendors [like Dell and Cisco] are rapidly expanding their channel play to go after these niche markets."

A recent exclusive survey by CRN highlighted the vertical markets in which up to 241 solution provider respondents are seeing the biggest Internet of Things opportunity. Following are the six verticals with the most IoT opportunity for the channel.

Health Care

Solution providers see the health-care market as the vertical with most IoT opportunities in the next 18 months, according to 23 percent of respondents.

IoT solutions in the medical field are primarily aimed at integrating connected medical devices and analyzing data to enhance the operations behind health-care organizations.

For example, Watertown, Mass.-based solution provider BlueMetal, an Insight company, said its biggest IoT application was when it worked with Weka Health Solutions and Microsoft to digitally manage and track vaccine inventory, helping more people be protected against diseases.

According to market-research firm Markets and Markets, the global IoT health-care market will grow at a compound annual growth rate of 38.1 percent to $163.2 billion in 2020.

Manufacturing

Manufacturing is another major vertical opportunity for solution providers in the next 18 months, according to 16 percent of respondents.

"Manufacturing and retail are our biggest verticals, especially big manufacturers who are looking to increase reliability and reduce energy consumptions cost," said Serge Haziyev, vice president of technology services, at SoftServe, a Ukraine-based IT service provider.

The manufacturing industry has a lot to gain from IoT technology, including improving operational performance and asset management – and solution providers play a big role in helping clients set up the tools for connected operations, asset tracking and predictive analytics capabilities.

Building Automation

Building automation is the vertical with the third highest opportunity for solution providers, according to 13.7 percent of respondents.

Solution providers are seeing more opportunities in pulling together heating, ventilation and air conditioning systems – and, more importantly, ensuring there are no security gaps between these systems.

Michael Oh, chief technology officer and founder of TSP, a Boston-based solution provider that specializes in home automation, said he works with vendors like Savant and Lutron to build and implement home automation designs. Oh said that the home automation segment was an area of growth for his company, and is set to grow to around 30 percent of TSP's business in 2017.

Finance/Insurance

The financial and insurance markets are lucrative verticals for the Internet of Things, according to 12 percent of respondents.

For instance, financial services organizations can use IoT solutions to better understand customer behavior and provide more personalized service. Meanwhile, in the insurance industry, automobile insurance providers are offering customers a better rate based on their actual driving habits using sensors connected to the car – as opposed to their demographic profiles.

"We see IoT in places you might not expect -- in insurance," said Pete Karns, vice president of IBM's IoT business, said. "We're seeing a lot of demand in insurance as insurance companies seek to better understand their consumers and commercial clients."

Logistics

According to 12 percent of solution providers, logistics is a market that will hold ample opportunities for the Internet of Things.

Logistics – which includes warehousing supply chain operations or freight transportation – can benefit in many ways from IoT, including operational efficiency, safety and security, and customer experience.

"Logistics will become more Wi-Fi enabled, particularly with delivery functions, so that companies can monitor and log their trucks' mileage data," said Nico Genet, director of IoT and co-founder of Strategic Mobility Group, a Schaumburg, Ill.-based company.

Retail

According to the survey, 8.3 percent of respondents said they saw the retail space as the greatest IoT vertical opportunity for their company.

Internet of Things retail opportunities revolve around improving the customer experience, through products like location-based beacon technology, which retailers can use to interact directly with customers as they enter the store. Department stores like Lord & Taylor already use Apple's iBeacon technology to deliver personalized promotions to customers.

"We see retail as a good industry that will be spending extra tech money on [IoT]," said Greg Dixon, chief technology officer at Greenville, S.C.-based distributor ScanSource. "Customer analytics is a big [application] for finding out how much people spend in stores, the number of people in stores daily, and how much time customers spend in a certain zone of the store."