Intel’s Systematic Effort to Scale Industrial IoT

New Chessboard extends its IoT Market Ready Solutions play

Intel’s IoT Market Ready Solutions were an important step in addressing a highly fragmented supplier landscape. Now, the company has a new approach to its efforts in the Internet of things (IoT). Martin Garner explains how it works.

At IoT Solutions World Congress, I caught up with Rod O’Shea, global director for partners and channels at Intel’s IoT sales group. A few years ago, faced with huge fragmentation and technical complexity in IoT markets, his team led the move to work with Intel’s IoT Solutions Alliance partners to package up the components into finished products or systems. These packages were designed to serve leading use cases in the market, for example machine condition monitoring and asset tracking. They’re known as IoT Market Ready Solutions or as IoT RFP Ready Kits in markets where installers and systems integrators play a central role, such as surveillance systems.

This packaging and solution definition was a good move. Intel now has 175 Market Ready Solutions, which have been deployed almost 5,000 times, with over 90% having been installed more than once. The initiative will contribute over $100 million of consumption revenue to Intel’s IoT group in 2019, and it was one of the efforts that helped push the division past $1 billion in sales in the third quarter of 2019.

But, compared with the total addressable market, $100 million is still a small figure. Mr O’Shea explained how Intel is tackling the next phase of growth.

Intel’s new approach is known internally as the Chessboard. It involves looking systematically at how the top 10 use case categories apply in the top 10 sectors, which yields a 10 x 10 matrix of segments, shown below.

This is useful in four ways: assessing the market opportunity, looking at what systems exist to address the opportunities, working out how to serve the opportunities with IoT ecosystem partners, and helping to sell the solutions to end customers. To illustrate this, machine condition monitoring in healthcare is different from its use in agriculture. This is evident in the types of machine that are monitored, the technologies involved, the environment in which they operate, the partners who sell and support them and the way they are bought by customers.

Starting with the market opportunity, it’s possible, although often not easy, to estimate the addressable market for each segment. But, even with a qualitative estimation — large, medium or small — it’s a useful exercise to analyse which are the highest priority segments. After that, Intel can map its current 175 Market Ready Solutions, plus those in the pipeline, onto individual segments. This highlighted some inconsistencies, based on historic product planning, with some segments having multiple solutions and others being underserved. But it’s a useful exercise for thinking through any technical differences and similarities in product or compliance needs across segments. The Chessboard provides a helpful view, from the outside in, of what’s needed, which informs a product road map to address the underserved, but high-priority segments.

Perhaps the most interesting uses of the Chessboard are in the selling of IoT systems. The first step is internal, ensuring that sales teams have adequate training and support documents to address the different segments. It’s also valuable to partners: Intel says that its IoT Solutions Alliance partners readily plot their position on the Chessboard and find it useful for launching a discussion about adjacent sectors, or categories of use cases, as areas for potential expansion and how they would address those. Because an IoT solution often involves contributions from multiple companies, this approach helps in mapping out relevant partners in each segment at various levels of the stack for the system, for example sensors, communications, edge computing, cloud and more. In turn, this narrows down groups of players that could work together on delivering a system into a segment.

The Chessboard will also be beneficial in talking to end customers. This is because all end-user companies go on a journey with IoT projects, usually starting in a small way on a single use case and broadening out to others over time. Many customers are also involved in multiple sectors. So the Chessboard could be used as a scorecard, showing what a specific customer has done in IoT compared with peers in the sector.

I believe the Chessboard approach is a very solid and useful approach to dealing with a complicated set of market segments. It’s simple enough that companies can understand immediately how it works and place themselves on the grid, yet sophisticated enough that it has multiple uses internally and throughout the ecosystem, all of which will help build scale in the market to fuel the next phase of growth.

My only concern with the Chessboard would be if it became the main way of thinking about the market, to the exclusion of others. There are three aspects to this scenario.

Firstly, I see three growth vectors in industrial IoT: more customers, more projects per customer, and more value per project. The last of these involves continuing to work on an existing project to look at new forms of analytics, artificial intelligence and integration with other systems, so as to embed the system more deeply into customers’ operations. This aspect is not represented in the Chessboard but is potentially a significant source of revenue growth for IoT players.

Secondly, there are many sectors and many use cases. The Chessboard’s focus on 10 use case categories and 10 vertical markets is a great start, but it doesn’t show the whole picture.

Thirdly, and finally, frameworks like this can take on a life of their own within companies, becoming the main frame of reference for product planning and other business decisions. This happened, for example, with Nokia’s segmentation of the mobile phone market, which was so entrenched in the organization that it became a substitute for thinking. It was one of the reasons Nokia didn’t respond well to the arrival of smartphones with touch screens. Like Nokia’s segmentation, the Chessboard will be a good servant but a bad master.