March 30, 2022
by Ezlo Admin

In IoT, partnerships may be a way to stay afloat in an ocean filled with competition.

Let’s put IoT aside for a while and think why businesses enter into partnerships? The underlying reason for most partnerships is to make up for something each partner lacks. You may have a prospective local company but lack the means to achieve national or global presence. Or, you may be great on technology but have a weak marketing arm. Or, you may have a brilliant solution but don’t have enough money to implement it. In all cases, you will be looking for a partner to provide the missing piece of the jigsaw.

The IoT industry is now on the rise, and the competition is fierce. There is no time to try to find the missing resources singlehandedly. If you cannot pull it alone, you should find a partner to join forces with to enter the market more quickly. Depending on the nature of your business and on what you expect from the partnership, there may be different types of partnerships:

OEM Partnership

This is a tried and tested model that has empowered technological commerce from the very beginning, and is becoming increasingly prevalent in today’s market. This is a great solution for companies who want to keep pace with the market by updating their product lines with the latest technology, but who don’t have the development resources to make it happen. By simply adding a ready-made OEM solution, the “marketing partner” in this relationship guarantees they have the technology they need to stay ahead in their marketplace. In turn, the OEM can take great advantage of the marketing partner’s presence in the marketplace, i.e. sales and distribution channels.

Talking about IoT specifically, the OEM/marketing partnership model is commonly used to turn home devices into smart, “connected” devices, but unlike OEM partnerships back in the day, this normally constitutes a lot more than simply adding a mass-produced chip into a home appliance. There is a whole ecosystem that underpins the smart home, including apps, communication protocols and remote servers.

For example, a lock manufacturer who wants to break into the smart-home market might use an OEM partnership for the following:

-An unbranded out-of-the box smart lock that they can rebrand and remarket as their own

-A chip/piece of hardware that enables their existing products to become “smart”

-An app that enables users to operate smart devices remotely

-Hosting for the app and device infrastructure

-Remote maintenance of devices via the app

-A general saving on R & D for their products

OEM Partners can integrate single components, units or even entire systems, including both hardware and software. With such partnerships, the product is released faster and with less investment, producing a far more competitive product.

Channel Partnership

A channel partnership describes the relationship between the solution manufacturer and the service provider. In this type of partnership the brand remains with the owner and there are no technological integrations. This is about installers and resellers partnering up with brand manufacturers to drive more sales for everybody. The installer or reseller introduces the brand partner’s products into their product lines and sells them to their existing clients. This is generally an easier sell than if the product and service were marketed separately, because now the client is able to enjoy the complete solution from just one transaction. Post-sale support may be provided by the original solution manufacturer, or the installer may receive specific training on the new products to enable them to carry out the ongoing support.

For the brand owner, channel partnerships are a great way of quickly expanding the reach of their services without actually opening new offices. By partnering with a reseller or installer, the brand gets presence in the partners’ locations with relatively low investment. The partners, in turn, benefit from the commission they get for promoting the brand products. In addition, the installer may gain a reputational benefit by cooperating with a well-known IoT manufacturer.

White-Labeling

Similar to an OEM partnership, white-labeling is a partnership between a technology provider with little or no outlet to the wider public and a marketing partner who already has a strong market presence. The difference here is that the complete solution is provided by the manufacturer and is simply rebranded to represent the brand of the marketing partner.

The manufacturer is able to cut their marketing costs to zero and so can invest more resource into R & D, while the marketer can focus their attentions on promotion instead of having to worry about developing, manufacturing and improving the product.

The manufacturing partner will profit from selling its solution despite having little or no marketing resources, while the marketing partner receives a complete solution with no outlay on development. In white-labeling partnerships, the marketing partner generally has nothing to do with technology whatsoever.

No matter what type of partnership you prefer, it is going to bring you closer to your ultimate goal of bringing your product to market faster and ahead of the competition, and If you can also save on cost and time in the process, your product will be all the better for it.

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