As IoT businesses look to bring products to market, they need to accelerate the design to deployment process, assure compliance and optimise costs. These activities rely on specialised people, dedicated facilities and deep knowledge of global markets. For most, whether they’re established corporations looking to digitise their business model using IoT or a start-up looking to bring innovation to the market, assembling all these skills, capabilities and capacity is out of reach. The alternative is to shift tasks to an original design manufacturer (ODM).
These typically take away the pain of a discrete process or have deep understanding of a single geographic marketplace but what’s really needed is a global ODM that can handle multiple processes from design through manufacturing to testing, validation, certification and launch. Delivering that end-to-end, global capability is the goal of Joe Peterson, the chief executive of Ikotek, a US-headquartered IoT ODM aiming to streamline the product introduction process for IoT companies large and small.
Peterson has more than 27 years of industry experience having worked at Motorola, Siemens, Gemalto, Telit and Inseego. He most recently held the position of vice president of IoT Sales for North America at Quectel Wireless Solutions where he spun out and launched Ikotek as a US entity to serve the global ODM needs of the IoT sector as it matures into a mass market. Here, he tells IoT Now why the market needs a global IoT ODM and how Ikotek can help companies accelerate their launches, optimise costs and handle the complexities of certification.
IoT Now: Why has Ikotek been established now and what are the drivers in the IoT industry that encourage enterprises to look for an ODM service provider?
Joe Peterson: Until Ikotek, there has not really been a true US-based IoT ODM that is focused on serving the mid-market. There are number of legacy ODMs that have significant penetration and a lot of feet on the street but we have found these are not purely IoT focused and tend to pick and choose only high volume IoT projects targeting only the top two or three customers.
We can support those organisations too but we feel there’s a much broader need out there for a US-based IoT ODM to serve the mid-market. Our goal is to offer an extensive ecosystem of resources and help our customers bring products to market quickly and cost-effectively. We’re certainly already doing this.
IoT Now: What capabilities does Ikotek have that make it stand out from the other joint design manufacturer (JDM) and electronics manufacturing services (EMS) providers?
JP: Our team is purpose-built for IoT ODM, JDM and EMS capabilities. We’re registered and incorporated in the state of Delaware and we’ve brought in individuals with the experience of doing full system solutions. We focus on system level designs and full product level designs and we’re also ensuring products are certified. We’re a one-stop-shop for design, development, manufacturing and certification and all of that is done on a global basis. We cover the world with design centres and manufacturing capabilities in all regions and have IoT experts available at every step of the way.
IoT Now: Would you say that customers are driven by the need to accelerate their time-to-market, by the shortage of IoT-specific technical skills in the market, or possibly both?
JP: It’s a combination of both. Time-to-market for everybody nowadays is even more critical that it has been in the past because competition is fierce. There are always new entrants coming in who want to try and take over and be a step ahead of companies that have been an incumbent for years. In some areas, the race is on for innovators to get to market first and have such a lead they can dominate the sector.
In either case, a lot of companies now don’t want to bring resources in-house to build hardware. They want to focus much more on their platform and services and have somebody else on the outside do the design and development for them. That results in a tight collaboration with the likes of Ikotek so that we build the hardware to their specifications.
IoT companies are driving their core business focused on recurring revenues enabled by connectivity and their platform services and that’s why we exist. Companies don’t want to have hardware engineers on staff when product lifecycles are long and innovation is driven from platforms and software.
Our ability to keep a broad scale of the types of IoT devices under development means we’re constantly sharpening our experiences and understanding of where things are headed. We’re constantly bringing in the right resources, experts and capabilities. In the second quarter of this year alone, we added 140 new engineers and we continue to hire which means we have the ability to bring in the competency to stay ahead of where the market is going. We can therefore ensure that we get our customers to market in a quicker fashion, but also that we do so while keeping ahead of the technology shifts to support innovative customers using the latest technologies.
IoT Now: Is it fair to say that in general, there is a shortage of technical skills available on the market? Is that something that you have found as you as you build the business?
JP: I would say that skills exist but the challenge is whether you can get that many people into an organisation and whether you want to carry the burden of the cost? Most enterprises struggle to recruit at volume or afford the wage bill focused on a limited number of products or devices.
For us, we can attract skilled people and combine them across our business. This means we quickly can assemble a team of experts for a specific project and support our customers’ needs comprehensively for the duration of their project. We’re staying ahead of the curve by building teams of engineers and experts across every step of the IoT value chain – from hardware and software engineers to platform and testing experts. That’s in contrast to a lot of companies who might have to go out and constantly try to hire to make sure that that competency exists inside their organisations.
IoT Now: How important is it to offer a complete portfolio of services so a company could come to you and get everything from design through to certification and not have that headache when it comes to hardware?
JP: I think having the one-stop-shop capability is a very key component to what makes Ikotek stand out amongst the competition. A lot of companies today need to outsource because projects come and go. A lot of times, you’ll see that certain companies will develop a solution and it’s one that they’ll keep in the market for four or five or maybe even ten or 20 years. If they’re not constantly innovating for example in the hardware, they’ve got a bloated organisation with staff who bring little value to the business at substantial cost. Whereas, if they outsource to Ikotek, we can be that extension for them for the period of time that they need us in all of the disciplines across design, development, certification and manufacturing. They could just give all of that to Ikotek as a one-stop-shop, and then don’t need to worry about right-sizing resources.
When customers come to us, they know that from top to bottom, the individuals inside our organisation, which make up a broader team, have all those competencies, and they don’t have to worry about lack of expertise that they might not have in-house and constantly have to hire for.
IoT Now: Outsourcing is usually a way to be quicker, but it’s typically expensive for customer organisations. How have you structured Ikotek to ensure quality and speed can be delivered, but the price is still appealing to customers?
JP: We address cost optimisation through our global structure and setup. Being a US-headquartered organisation means we’ve got a staff of individuals here, a management team, and also across the globe, whether it’s in Europe, Americas or Asia. We’ve distributed the resources accordingly and appropriately to first make sure that we manage to the local requirements of the region, but also in terms of finding competence centres that keep us cost competitive. We ensure our global presence matches the needs of our customers. IoT Now: What are your plans for developing Ikotek’s business? JP: We continue to build our organisation and competencies across commercial and technical teams on a global basis. We’re now set up in the US, Europe and Asia and we’re growing out our broader organisation in each region to ensure we can support all our customers’ needs across every step of the ODM process.
IoT Now: How do you see the trend towards this kind of outsourced approach to IoT? Do you think that IoT hardware development will continue to become more prevalent?
JP: We see a strong trend for IoT hardware design and manufacturing services. A lot of the design wins that we have today are from long-time, well established and very knowledgeable IoT companies. The fact that they’re trusting Ikotek, to take on everything from design all the way through to manufacturing and certification, says a lot. It means Ikotek is validated by some of these longstanding IoT companies who have traditionally always owned their own hardware development. This is a clear sign that validates who we are, our business model, customer value and the plan we have in place.
We believe we’re on the edge of a large volume move towards IoT ODM. It’s just in its infancy right now, but IoT is a very fragmented market and that has made it difficult for a lot of players to enter the market. We know how to manage the fragments and have scale and resources to handle the huge growth of connected devices. The market is massive and is only going to continue to grow.
We’ve seen the scale of growth and many of the new use cases that continue to be brought to life. As the new entrants come, a lot of them have the great concepts and innovation, but not necessarily the knowledge and in-house resources to do that. Outsourcing design and development is becoming a much broader practice than it’s ever been and we’re in the right place at the right time to make our customers’ ideas reality.
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