The Internet of Things (IoT) is a critical next step for 21st century companies. But it’s also a complex, multidimensional transformation, demanding new skill sets, technologies, and business models. How to get started? Over years of working with companies at various stages in the IoT journey, I’ve developed a “recipe” for IoT success, with eight essential ingredients. Here is the first ingredient: Build an ecosystem of partners; learn and co-develop with them.

I’ve said it before—co-innovating with a wide range of partners is an essential part of a successful Internet of Things deployment.

You can’t do IoT alone. No one can. A single vendor can’t provide a complete solution, and similarly, it doesn’t make sense for any organization to try to develop a custom IoT solution for itself.

The emerging IoT ecosystem includes customers, other vendors, and startups, each of which brings its own skills, expertise, and relationships to the table.
The emerging IoT ecosystem includes customers, other vendors, and startups, each of which brings its own skills, expertise, and relationships to the table.

There are many reasons IoT is driving this shift from a single-vendor end-to-end approach to a partner ecosystem model. For starters, consider the speed of innovation in this space, the complexity of IoT solutions, the cost of custom solutions, and the need for scalability.

The industry is rapidly evolving into a world of partnership ecosystems and customer co-creation. Many companies are working together with customers to develop optimal solutions with horizontal reusable modules that are both open and interoperable. The result will be an open ecosystem of standards-based contributors of IoT solutions. I call this trend the co-economy.

But at the same time, if we are not careful, the partner ecosystem approach can also backfire and slow us down—it is complicated to work across multiple organizations with different cultures. And even when the solution is based on industry standards (which is essential), we still need to take care to ensure interoperability and integration.

So here are some practical steps you can take to approach IoT collaboration for success:

  • Set the right expectations: Be clear about what you are trying to accomplish, as well as where, when, and how.
  • Do your homework, but don’t overanalyze: Look for use cases you can apply to many customers with little customization, then, dive right in to experimenting and rapid prototyping.
  • Assemble the right team and set a clear framework: You need the right mix of viewpoints and perspectives, so put together a diverse team with complementary skillsets. Balance creativity with discipline, and establish guidelines for team communication and dynamics.
  • Pace the team: Start small, looking first at the four fast paths to payback I discussed a few weeks ago. After an early success, the team will be ready to tackle a bigger challenge.
  • Measure progress: Stay on track by establishing clear metrics and measuring KPIs.
  • Include users from the very beginning: Never assume you know what the user wants. Bring customers into the innovation process to give feedback on every prototype and iteration.
  • Embrace failure: Dare to try something bold and difficult. If you don’t risk failure, you will get mediocre, “me-too” ideas rather than transformative concepts

Okay, so how does this work in the real world?

One example is Cisco’s long-standing partnership with industrial automation and information provider Rockwell Automation. Cisco provides technology know-how in IT infrastructure, security, and collaboration, and market knowledge of the IT industry. Rockwell brings technology know-how in manufacturing automation, and market knowledge in manufacturing, transportation, mining, and oil and gas segments. By adding the industrial robot capabilities of Japan’s FANUC, we complete a solution that extracts data from robots and securely connects them with people, processes and things to provide insight into robot performance—all based on industry standards, of course. If a major element is still missing, then perhaps an eager startup can fill the gap.

Whatever the nature and duration of the partnership, it should focus on customers’ business challenges rather than each partner’s technical offerings. When the customer is at the center, the whole ecosystem benefits.

In upcoming blogs, I’ll share additional ingredients for my recipe for IoT success. Coming up next: how to attract and train new and existing talent.

Strategic innovation in the digital age is powered by people connected to the Internet of Things (IoT). Maciej Kranz has written a definitive guide on how to implement and capture the unprecedented value of IoT. The first of its kind, Building the Internet of Things,” gets past the hype to guide organizations across industries through the IoT journey. His book is available online at major retailers.


Maciej Kranz

Vice President and General Manager

Corporate Strategic Innovation Group