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Will the Internet of Things Undermine Existing Channel Networks?

Posted By Jeff Moad, July 16, 2014 at 4:37 PM, in Category: Transformative Technologies

The trend toward adding intelligence to and connecting tens of billions of thing is predicted to create tens of trillions of dollars in new economic value annually by allowing manufacturers and others to understand faster and better how their products are being used and how their processes are working. By putting out smart products that communicate how they are being used and how well they are performing, for example, manufacturers will be able to offer directly to customers a wide range of new services that add value and may generate revenue on their own.

But, warn some, the IoT may also play a role in disrupting the existing relationships between manufacturers and their sales and service channel partners. As they add intelligence to and connect their products, manufacturers will increasingly be in possession of the kind of field-generated performance information that might previously have been collected by their independent dealers or service providers. Will manufacturers be inclined to share this information with channel partners? Or will they use that platform and information to launch new service offerings that may well compete with their channel partners?

On a recent conference call for members of the Manufacturing Leadership Council, PTC Vice President and General Manager Howard Heppelmann pointed to the example of Tesla Motors which is already disintermediating the traditional dealer network by providing remote diagnostics and other services for its smart electric cars. And Tesla is working hard to build its own network of service and sales centers that will, no doubt, use IoT-generated data.

What do you think? Will manufacturers use the IoT to disintermediate sales and service partners? Or will they strengthen those relationships by sharing information gained through IoT?

Written by Jeff Moad

Jeff Moad is Research Director and Executive Editor with the Manufacturing Leadership Community. He also directs the Manufacturing Leadership Awards Program. Follow our LinkedIn Groups: Manufacturing Leadership Council and Manufacturing Leadership Summit


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