The 5 Ecosystem Partners You Need in Your IoT Address Book | Internet of Things Forum | Kii

Phani Pandrangi is Chief Product Officer at Kii.

He explains the 5 ecosystem partners you need in the IoT at the IoT Forum 2015.

Slides, Video & Transcript below

Slides from Phandi Pandrangi’s talk at IoT Forum here

 

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Phani Pandrangi, Kii:

Okay, thank you everyone. So, we’re going to talk about ecosystems. I’ve been a product guy all along. I’m the Chief Product Officer at Kii. Let’s talk about ecosystems. So, basically, the way we’re going to go through this session is first we’ll talk about various IoT solution types because the type of the solution that you’re building affects, kind of, which ecosystem partners that you need and so on and so forth. Then we’ll talk about the decisions that you make when you’re building these products. Again, those definitions have impact. Lots of impact. And, that also affects which ecosystem partners you have to work with. And then, finally, we’re going to look at five ecosystem partners that are very critical for a lot of IoT scenarios. So, I’m going to have to run it from here.

All right. A little bit about me before we get started.

I’ve been a product guy all along. 18 years has been mostly product, but, even though I’ve been a product guy, I’ve realised that it’s not just the product or the platform that makes you successful. There are all these other things, some of which were mentioned in various sessions today that you need for you to be really successful. It’s not just the technology. It’s not just the product. So that’s something that I’m keenly aware of, and that’s what I’m gonna talk about today. So, here’s how you can contact me.

A little bit about Kii.

We are headquartered in Tokyo. Although, I’m based in the San Francisco Bay area, and I drive product from there. We have offices in various places: Japan, U.S., China, Spain, and so on. We were founded in 2007, and the product that I’m responsible for, that’s the only product that we have at the company, is the IoT platform. And, basically, the way to think about our IoT platform is there’s the Thing… It could be a thermostat. It could be a bulb. It could be a variable, whatever. And then there are various services that you want to provide, services and apps that go along with that device or thing. So, for you to bridge that gap, you need a lot of backend services, like cloud mobility, user management, data management, device management. So on and so forth. That’s what we bring in. So, we cloud-enable these devices, and then we provide you with all the backend services that you need to build the things services and the thing apps that go along that completely arrive the solution.

So, even though we are a platform company primarily, we do realise that we cannot just go to device manufacturers and say, “Hey, here’s a platform. Do whatever you want.” We realise that a lot of these device manufacturers, big and small, actually need a lot of ecosystem support that goes along with the building of the product using the platform. From that standpoint and because of our existing relationships in Japan and China, we have a lot of ecosystem partners that have been quite instrumental in the success of some of our customers. And that expedience also is something that I’m going to sort of present in this session.

So, before we go any further, let’s take a look at a typical IoT solution.

There are different types of IoT solutions. We’ll talk about that in a bit, but here’s many, many, like, smart phone variables, a lot of the solutions look like this. So, there’s the thing. Then there is some service that you want to offer along with it and then consumer or the end user, typically, interacts with the thing through apps. So, an example is a camera, and then a cloud DVR that goes along with that camera might be the service that you’re offering that stores things that are coming from the camera and then sends out notifications when events happen, things like that. And then the interface for the user is a camera app through which he is viewing notifications or doing that kind of stuff. So that’s just a typical IoT solution.

Now, the reason I am presenting this is every layer you need different types of ecosystem partners to make the whole IoT solution successful, even though, from a technology standpoint, you might be you might have engineers and architects working on different pieces of this. But in the end the entire IoT solution has to be successful and that needs different ecosystem partners at these different layers. Now, this is just one representation of an IoT solution, but there are various types of IoT solutions. And, as I was saying, which type of IoT solution you’re developing affects what kind of ecosystem partners you’d need.

So, I’m going to talk about these three types of solutions. I kind of call them smart device type solutions, then open platform type solutions and then inter-operability solutions. So, the smart device solutions are basically a lot of the smart phone variable type solutions kind of fall in this category.

1A is basically where the device is directly communicating with the cloud. So, there is some connectivity, and it could be through Wi-Fi or 2G, whatever. And 1b is the, usually, the variable solution which is basically communicating with the app paired to the phone and then it’s the app that is communicating to the cloud. And then 1c is a sort of a hub solution. A lot of smart phone automation solutions are, sort of, hub solutions where the thing is talking to the hub, and it’s really the hub that is doing all the cloud communication.

Now, depending on what kind of solution you’re doing, the ecosystem partners that we are talking about might or might not come into play. But keep this in mind. The open platform scenario of IoT is basically where the device manufacturer, this could be a big device manufacturer or a small start-up. But what they want to do is they just want to open up their platform for app development or service development from third parties because they don’t know how what works the best way to do these. So, they specialise in actually building these devices not so much on the cloud side or on the app side. So, they want to just to open up the platform. So, this is 2a, and 2b is, again, they’re opening up the platform, but not so much the functionality aspect. But maybe there is a device that is collecting a lot of data, like, for example, temperature, UV, whatever, humidity, those kinds of sensors. They’re collecting the data. They’re analysing the data. And then they want to make that data available to third parties to make some sense of it.

So, if you are a, for example, a device that’s making, that’s measuring humidity or whatever, UV and things like that, the device itself might not be in the cosmetic industry. But data that you’re developing could be very useful for the cosmetic industry folks. So, so that’s 2b. And, again, depending on 2a, 2b, again who you partner with, why they’re relevant could be quite different. And, finally, inter-operability. If you if you think about IoT space in general, I think right now we are at a stage there will be device manufacturers are trying to make the devices smart.

So, scenario one. And pretty soon there will be scenario 3, which is inter-operability. So, let’s first make the devices smart, and, then, we’ll make them inter-operable. And when it comes to inter-operability, there are, again, two scenarios. One is start off, 1b here is basically proximal inter-operability where the things that are within the same network are able to inter-operate, and this could be through all-join or various standards. And 1a is cloud-based inter-operability, where the inter-operability logic is actually in the cloud.

So these are all the types of solutions you are making that, that are possible. And there could be many, but these cover a lot. So, depending on what type of solution that you’re making there might be a lot of impact on on ecosystem partnerships. So, in terms of, like, like when you’re building these these kinds of solutions at each layer, there are several decisions that you make. And this is just during the building part, building phase. And, like, for example, what chips you use, what operating system, is it a Real Time operating system or is it Linux? Various decisions that you make at the, the thing layer and the cloud layer, standards, where it is hosted and so on and so forth. And, again, at the app layer, different decisions. So each of these have impact on the success of the IoT solution. How much of support that you can get from the developers, for example, who might be building other things on top of your product and so on and so forth. As I said, this just decisions during the building part.

Now, there are more decisions that you need to make. Once you are building the product, then around good market you have to think about Okay, what is my channel? Should I do direct sales? Is there an OEM sort of approach? What is my approach in India vs. US vs. Japan? And so on and so forth.

Then, there is monetisation. Is it, like, a I pay for this, but the user pays for this device once or is it that recurring subscription type of a revenue? And how do I get subscribers, if it is a recurring revenue? Are there existing subscribers that I can tap into somehow? So, there are various of these decisions as well.

Now, with that background, let’s take a look at different ecosystem partners and how this can affect your success.

So first ecosystem partner that I want to point out is platform. Obviously, I’m a platform owner so I think that platform is pretty important. Not just I think but I see that platform is very important because a lot of entrepreneurs really focus on making the thing and all of the back end stuff that comes from the platform, they really don’t have expertise on. Or they don’t have the bandwidth for. So, selecting a group platform to help them do these things is pretty important. Cloud enabling your device.

Then creating services and apps that go along with your device. Remotely managing the device is pretty important, too. Like, for example, I don’t know how many of you own Nest protect which is the Carbon Monoxide detector. After they sold millions of units of it, they had, they realised that one of the features was not working. So, they were able to remotely turn off that feature for everyone. So, being able to do that is pretty important for lots of devices. And then, how AlertX is pretty important as everyone says so.

The platform partner should be able to provide you all of these. As an example of the platform, of course, I’ll give a Kii example, because that’s our product. So, the typical platform is, it has agents that go into the firmware of the device. And that is established by the connectional communication with the cloud services. And the back end provides all of the device management, data management, user management kind of services. And then analytics. And then you have APIs to everything so that you can build your apps or additional services and things like that. So, that’s an example of a platform.

Some of the key characteristics that you should look for in this platform partner is:

It should work with whatever OS or chip that you have selected. It should work in a public environment or a private deployment. it should scale. It should be open. It should support your use case. So these are all important. So this is one partner that helps you during the building phase and of course on the operation side as well.

The next partner is a manufacturing.

So a lot of times I see device manufacturer type entrepreneurs who have a great idea of an IoT product. maybe they prove it out somehow, and then they realise, “Okay, what if I have to make a million units of this or, what if I want to just get 50 prototype units?” and so on and so forth. Then they start thinking about who do I know in China or Taiwan.

So, how do you actually make that connection is pretty important. For that, I mean, obviously, some of the incubators, accelerators, and even some good VCs, some of which were mentioned in the morning in one of the sessions, could help you there with that. Also platforms providers like us, like Kii, can also help you because we have developed that ecosystem support. Like, for example, hw track or Foxcon. We might help you or our partners can help you take your idea and produce a million unions of whatever that you’re doing.

The next partner that’s important for you is distribution.

So, this was mentioned in one of the sessions as well. Your product might be incredible, but if you don’t have the right channel or the right distribution it’s incredibly difficult to succeed. If you’re on your own for this, you really have to look at who is your target user and does this target user have any kind of subscriptions already that you can tap into? And can your IoT solution actually tap into that subscription somehow. And, for a lot of scenarios, especially smart phone type scenarios, that partner could be the ISP or the carrier because everyone of us have existing subscriptions, many subscriptions with those guys.

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And if your product can be distributed through them and you say, “Okay, if you pay me $5 more, in the subscription, you get this camera”. It’s constantly updated and then you can leverage all those services. It’s a much easier thing from an adoption standpoint for consumers. But, for you as the entrepreneur, you have to making this connection with the ISP or the carrier, it’s a tough challenge, but if you get in it’s much easier for you to distribute.

A big advantage of actually having a carrier or an ISP as your distribution partner is they have existing subscriptions so adding on more services is easy. And also, they’re made for recurring revenue kind of scenarios. So, if your IoT product is actually about recurring revenue or can be used in a recurring revenue scenario, it’s perfect. And also they typically have multiple distribution channels. It could be retail. It could be online and so on and so forth. And they have vested interests because there are only so many phone subscriptions that they can sell to consumers. If there are all these devices that give them more subscriptions, more revenue then they have really vested interest in making you succeed. So, it could be a very good partner.

Now, obviously, ISPs or carriers are not the only distribution partners. For some of the, some fitness type of products, your distribution partner could be a Nike or an Adidas or so on. But for a lot of smart phone products a carrier could be a good distribution partner.

So we’ve talked about a platform. We’ve talked about manufacturing and distribution.

Then connectivity.

So, connectivity is pretty important. Obviously, again, ISP or a carrier is a pretty important partner, but that’s a given that it’s a carrier or an ISP makes sense. But, as an entrepreneur, especially with I am going global, you have to think about global connectivity options. You have to think about unified connectivity.

Going back to some of the things Nigel was talking about yesterday from Stream Technologies. A lot of these kinds of things about; okay what is my global connectivity approach? What is my unified connectivity approach? What is my Sim activation and monitoring approach? All of these are pretty critical for you to think about. So yes a carrier or ISP is the right partner to think about here, but maybe there are some abstraction services that you can leverage to make the going global part somewhat easier.

So then there is the developers that are an important part of the ecosystem. For a lot of products, at the end of the day, it could be a thing but at the end of the day it is actually providing some services. Now, if you can expose those services, create APIs and so on, and make them available for third party developers, they could develop a lot of interesting things that you might not have thought about or you might not be focusing on. So, developers are a very important part of the ecosystem. Now, just having APIs or services doesn’t make your product a platform, per se. I see platform is a very overused term in IoT but I’m not saying every product has to be a platform. But every product can have APIs or services that can actually help people build interesting apps and services. But for that to happen the third party has to find these services interesting. So, before you go along this path, you have to think about, what is the benefit for the third party developer with these services? How are they going to monetise? Is there a path to monetisation for them, and if there is, then they’ll be interested.

If there isn’t and no one is interested, then other thing that you have to think about is if there are more and more of these third party apps and services, how is that going to help me, my product, my IoT product. That’s something for you to think about as well. And the third party products that people can create using your IoT solution could be, like in the hub use case that we were talking about, they could be hub app extensions. For example, Smart Things and things like that. There could be an extension that the third party developer creates that actually plugs into the Smart Things app for example.

There could be inter-operability types of apps or services that third party developers create, which make your product work with some other product. And, you haven’t thought about it but third party developers did. Again, on the inter-operability side. And, the third party developer might come up with the very interesting experience that you as a device manufacturer haven’t thought about. So that’s another reason why, developers, as part of this ecosystem, partnership, are pretty important. So, they help you with better options of your core product and also on going better engagement and that leads to better monetisation for them and for you.

So to conclude, in your journey as you’re kind of launching your IoT products, so you’re building, distributing, operating it, and amplifying it, there are all these partners that that we’ve talked about that come into play. As I mentioned, depending on the scenario of your IoT solution, some of these might be relevant and some might not be. But for a lot of products that I see from my vantage point, I see each one of these they’re pretty important. So, with that, I’ll be happy to entertain your curiosity if you have any questions for me.

Audience Question: Hello. It seems these days that everyone’s got a platform. I think there’s a phrase. A yappie or something. You get another platform or something. Say I was a start-up with a device. How do you attract start-up device makers above all the other platforms that are around? They’re all promising to do the same sort of thing. When I probably haven’t got any money. What to do about that?

Phani Pandrangi, Kii: Yeah, I think that’s a great question and that’s something that we see often. Our customers are device manufacturers. So, there are the big manufacturers like the Casio’s of the world and then on the other end of the spectrum are the little start-ups that are just getting started. They don’t have a ton of money to give us. So we have to actually help them make that money so that our platform is used more and becomes more relevant for them. So our approach, and that’s part of the reason why we are interested in developing the ecosystem partnerships that we have, is because it’s these guys who really need contacts into manufacturing, contacts into carriers and so on and so forth. So, our value proposition for them is, yes here’s a platform that you can build on because this is a necessary functionality for you anyway. Plus, we’ll help you get into this ecosystem, if you work with us and that way you’ll actually be successful and then of course we can, we enjoy the benefit as well because they are using the platform. But yeah, I mean, we are not saying we are differentiating on feature functionality. Like I said, everyone calls whatever they offer a platform. And I really hate that term, but, I have to use it, I have to come up with something else for, characterising what we do. But anyway, I think the feature functionality aspect is pretty important, and if it can drill down into our technology stuff, there are lots of differentiators and stuff. But that doesn’t, that’s not the thing a start-up guy would be thinking about a lot. I mean, they just need the functionality and they need it to be reliable. But, the other part, the ecosystem part, is pretty critical. And, us being in Japan and China, we were able to make many partnerships that are super, super useful for them. Another thing to note also is that, China as a market and Japan as a market, for a lot of people outside they might not have a lot of visibility or understanding. So, because of our strong presence there, that could be a very valuable thing for them as well, in them coming and talking to us. But it’s a good point. I mean, there are just so many platforms.

Audience Question: Oh, hi. My question is specific to manufacturing. So, you mentioned the start-ups to work with FoxCon. If the case, they have four classes of team, like, class one for Apple, class two for Fitbit. Do you think start-ups working at FoxCon makes sense?

Phani Pandrangi, Kii: Well, that’s another thing, right? There are lots of things that happen in China. There are lots of programs that are available in these even larger organisations. Others outside might not know. And because of our relationships, we are actually plugged into those programs. Like, for example, I just wanted to make, like, 500 prototype units. Now, not many people will know that that’s possible. It’s not just the millions of units. But it is possible to get that level because they have different programs for different types of, as you were saying, different types of customer, different sizes. But it’s important to have that relationship. Now, if you’re a guy sitting in a garage in Atlanta or Bangalore you’re, unless you make like 25 trips to China and kind of have many false starts and fail and fail and fail, you will not find the right partner to really succeed. But, again, if you are working with someone like us, we already have these relationships and we know that these guys also, I mean, they have the venture arms, they have the start-up initiatives, they have a lot of programs. They are also actively looking for interesting products. But if you just walk off the street and say, “Hey, I want 500 units made of whatever.” They’re going to say, “Who are you?” You know? So, proper introduction and proper channels, in this ecosystem, is pretty important as well.

Phani Pandrangi, Kii: Thank you guys.

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