Logicalis: In future, customers will buy IT only to enable IoT
Logicalis beefs up European IoT operation after success in Latin America
Logicalis is ramping up its IoT offering in Europe, after three years of success in the space in its Latin America (Latam) business. Its chief digital officer Chris Gabriel says the trend is so important that in just five years, IoT will be the driver of all IT sales.
According to Markets and Markets, the IoT industry will be worth $157.05bn (£124.48) by the end of this year, a figure which will rocket 33.3 per cent (CAGR) to $661.74bn by 2021.
Logicalis has recently won its first big IoT deal in Europe - a multi-country smart cities initiative. Gabriel (pictured) hopes the deal will springboard its efforts with the technology in the region.
Logicalis has undertaken a range of significant projects since it officially launched its IoT business in Latam in 2013, from helping Rio de Janeiro and Sao Paulo become smart cities, reducing flooding in the latter by adding sensors to manhole covers; to large-scale agriculture projects (more details below).
Gabriel said that Latam was a good place to start as it is home to a number of emerging economies looking to reap the benefits of the technology. Although he acknowledged the European market is much different, he said the work done in Latam will act as an important springboard for its local efforts.
"It's not just a case that we will copy and paste into here," he said. "You've got to create something new. The response we got from analysts - significant ones - they believe we are in an incredibly strong position, because we started a while back. Simple things such as our partner ecosystem - while there are some similar logos in our [IT and IoT] ecosystems, 80 per cent of them are different. You can't build that overnight. We've done a load of proof of concepts; you have to build the capability and the reputation. By starting three years ago, in Latam we are in a leadership position. This allows me to enter the European market in a leadership position, not have to grow to it.
"There is lots of IoT activity going on [in Europe], but how much has the channel tapped into it? Very little. Having to cut your teeth with no experience, and from scratch, is going to be a real challenge for [others]. It puts us in a great position."
Cisco talked up the IoT opportunity for the channel at its recent Global Partner Summit in San Francisco earlier this month, urging partners to take advantage of the trend now while it was still at "the beginning of the beginning".
While now, IoT is being experimented with among some businesses, Gabriel said that in just five years or so, it will have become so significant that today's core IT products will become just additional add-ons for bigger IoT solutions.
"There is lots of IoT activity going on [in Europe], but how much has the channel tapped into it? Very little."
"If I wanted to make a wild claim and I fast-forward five years [I would say]: what is the only reason organisations will be buying IT? It's probably to deliver IoT-style line-of-business offerings. So in other words, the reason you will buy IT is to deliver [IoT]. If you look at the spending forecasts for IoT, it's significantly greater than IT. I think it's going to be a very blended channel and the line between an IT channel partner and an IoT channel partner has to blur. I don't think over the next 12 months, but over the next three to five years. It's a blended future.
"I'm going to need connectivity, I'm going to need a network, I'm going to need private clouds and AWS, but I am going to need them because I have a very digital business model."
IoT in action
Logicalis' Gabriel runs through some of the most innovative IoT projects the company has completed in recent years.
Manhole power
"We put sensors in manhole drainage grids in the street. I know some really good facts - there are 600,000 manhole covers in Sao Paulo. Somebody has to go and check that they are not full of rubbish on a rotating basis and it costs between $10 and $15 per trip to a manhole cover. But six per cent of them don't need cleaning because they are not full. But they don't get to the ones which do need cleaning in time so there is flooding in certain parts.
"By putting something as simple as a sensor in a manhole cover, you can reduce trips by six per cent; six per cent of 600,000 lots of $10 to $15 is a significant financial saving. And by using technology to stop flooding - and the ones which flood worse are in the poorest parts of the city - you massively improve traffic and the lives of people living there. I think with IoT, it's some of the really simple things which make a big difference. Smart manholes are really interesting.
Agriculture apparatus
"A field in Brazil can be the size of a county in Europe. They have agriculture on a grand scale. How do those machines harvesting massive fields connect? So we've developed a balloon system so we can float a communication hub over the fields which allows those smart connections to communicate. We've developed a weather balloon because drones don't work in those situations. So smart agriculture is really interesting and we are really proud of it.
Hospital help
"We've done smart public hospitals where we have wireless-enabled all the hospitals all the way down to putting temperature sensors in the fridges to make sure the blood is kept at a constant temperature. Simple things allow you to make sure [it's OK]. All fridges have sensors in them but you have to walk over to them. You might get power outages or a whole bunch of issues. The most unlikely, smallest sensor, in the most unlikely situation, is the one that delivers maximum impact."