Intel Exec Talks About IoT Opportunities For Partners
In a private dining area of a futuristic hotel's basement floor, Intel executive Joe Jensen is sitting within a real-life example of how successful IoT projects require several partners to get the job done.
It’s early winter—two months or so before the coronavirus would become a global pandemic that has forced the shutdown of thousands of businesses across the U.S. But on this January day, Jensen is at The Sinclair, a building in downtown Fort Worth, Texas. Once home to the Sinclair Oil Co., the site has since been transformed into what Intel is calling the "world's first all-digital hotel." With touchscreens that control lighting and shades and Bluetooth sensors that detect room occupancy, the property was developed by hotelier Farukh Aslam, who wanted to adapt a historic building into a boutique hotel that is highly efficient and environmentally friendly.
"The challenge he had is that 'it takes a village,'" said Jensen, who is vice president of Intel's IoT Group and general manager of Retail, Banking, Hospitality and Education. "It takes a lot of partners to pull something like this off. And one of the things Intel's really good at is, because we're not actually selling directly to Sinclair, the partners are consuming our products, and so we can sit back and be that consultant."
In an interview with CRN, Jensen talked about how Intel works with partners on IoT projects, how IoT projects differ from traditional IT projects and what kind of opportunities partners can find in IoT.
"The first thing is, we see the companies that have domain expertise, a deep expertise, in what they're building as the ones who really succeed," he said.
What follows is an edited transcript of CRN's interview with Jensen.
How is Intel helping customer invest for the future?
The customers who are buying our products are OEMs, and they're building solutions for end customers in banking, hospitality, retail and education. And what we find is our customer base gets more focused in on near-term competitive issues, and if we step back and we take a look at a longer horizon, more like the Intel product development horizon, we're looking five years out and more at what's really changing and shaping the industry.
And we make a lot of investments with partners. We make investments with Intel Capital and startups to get all the right technologies in place to solve those needs. Probably more than half of my time is actually spent with people downstream — our OEMS — to really understand their business problems and then how we think Intel and the ecosystem can solve those challenges. The Sinclair is a great example of that.
What kind of OEMs are you working with?
There's the compute OEMs. HPE and Dell are great examples of that. There's a lot of use cases where you needed a slightly different kind of format or thermals or solution for an environment that's not going to be an office environment. And we have a very robust set of partners that build more purpose-built devices. It could be [that the] device is meant to be sitting outside mounted on a pole or something. One of the big strengths that we have is that we're very good at understanding what the solutions need to look like over time. We're very open with our partners and help them see that future. And we help co-invest with them to build those solutions out. So as the market starts to be ready to adopt, we've got ready-made solutions there.
How did Intel start working with Sinclair Holdings on this hotel?
I don't know the exact details of how the introduction started. But [Sinclair Holdings President] Farukh [Aslam] had a goal to have the world's most efficient and best environment hotel in terms of the guest experience and started looking at some of the automation possibilities. We have a really good local sales team here. They probably came in touch with him somehow.
The challenge he had is that "it takes a village" — it takes a lot of partners to pull something like this off. And one of the things Intel's really good at is, because we're not actually selling directly to Sinclair, the partners are consuming our products, and so we can sit back and be that consultant. We don't charge for consulting. We sit back and pull people together that can solve that problem. So the better we can understand the problems The Sinclair was trying to solve, the better we can go look across the ecosystem of partners and find the right players who can bring that together.
Can you go through some of the Intel technologies that are being used in The Sinclair?
Phase one is really on how do you get all the stuff integrated together. Where Intel brings real value is we're very good at collecting, managing and helping process data. And phase one is [about] getting it all up and running and getting the data going and flowing. Phase two is where we bring in a bunch of AI. And so we're just now getting phase one up and running, and phase two is, we'll bring that expertise in how does the hotel learn from its experience. How does it learn from each guest? And how does it then better anticipate how that guest is going to want to be served?
And I think that's where the magic and future of really anything in our space is, whether it's restaurants, hotels, shopping, even banking. People have no tolerance for friction today. They don't want to have any hassles. They want to have an amazing experience. They don't really want to pay a premium necessarily for that experience, and so we've got to find a way to deliver that amazing experience, but do it efficiently. And it's our belief that you can actually do both of the same time. Normally with an amazing experience, it means it has to be expensive, or it's kind of cheap and cheerful. And we think with the right instrumentation and AI, we can take all that waste out, which is true savings, and that same AI is going to give you that ability to deliver the experience to the customer.
Can you talk about the specific Intel products that are being deployed here?
Where we think things are headed is that everything's going to use more sensing and more analytics. And we saw processors. And so the more compute people want to do, the more data they want to consume and use and operate on, the more overall compute we'll sell. Some of it's going to land here in the hotel, with the NUCs going into the hotel — a gateway to the cloud. But then there's a tremendous amount of work that they're going to do in terms of analytics and AI in the cloud, and, of course, that will all be on data center compute or cloud computing.
I tell my team all the time, I'm not really worried about where the compute lands. We want to figure out for the customer where it makes no sense for the workloads they are trying to do. You'll see a lot of video workloads coming into retail, as an example, and computer vision.
You're probably not going stream with a customer in China that has 400 high-definition cameras in a grocery store — and it's about the size of a Walgreens. So it's not even huge. You're never going to stream 400 high-def video streams to the cloud, and so you want to be able to process that locally and understand real-time insights of what's important. And then you can send those insights up to the cloud for further analytics and processing. So where that workload lands is going to vary depending on what you're trying to accomplish.
How is The Sinclair's infrastructure different from a traditional IT infrastructure?
It feels like they started with a clean sheet of paper in terms of what the architecture of the hotel should look like, even down to power delivery, and they talked quite a bit about how they're delivering power. And that's really a transformative approach.
It's funny. I'm in the middle of building a house right now, and there's some building automation lighting control, and it's all traditional, and I've gotten electricians of that run miles of high-voltage wire all over my house. As this technology is demonstrating, it could have been way simpler and probably a lot cheaper if I had access to this.
So I think you know for me it's the starting from the ground up of "if I was going to build a hotel that was as efficient as possible and could deliver the best possible guest experience, how would I architect that?" And they started with that approach.
I think too often when we're working with existing players in these spaces, they're coming at the worldview of, “This is where I am today, and how do I do things a bit better?” And I think with The Sinclair, they stepped back and just said, "Hey, we're building a new hotel. There are always new buildings. But if we're going to build it new, what's our vision? Where do we want to get to?" And there are a lot of things that they're not talking about yet that they have plans to go deliver, which will take this to the next level. And the ability with the architecture we've helped them put together, they now have something that's scalable, and they can easily layer in new capabilities and new compute, bring in new sensors, bring in new actuation or output devices for the consumer.
What should Intel partners know about what it takes to work on IoT projects?
The first thing is, we see the companies that have domain expertise, a deep expertise, in what they're building as the ones who really succeed. Whether you're a company that's building intelligent sinks for bars and understanding exactly how you want to be able to run that environment and be able to deliver efficiency and savings, you need some expertise in how that works. If you want to run audio-visual and automate audio-visual, you actually need to come with a domain expertise in that space. RFID is a technology that's also really taking off. We're finding in RFID, you can't just be an IT shop. You've got to have RFID expertise to succeed. So the first thing would be, if you see an area that you're excited about, make sure you acquire some expertise in that discipline. And that's really key.
We started out trying to work with really large multinational [system integrator]-type companies, and for the most part, they don't have that deeper expertise, so they're going to subcontract to somebody who does. And we're getting the most traction and the projects that we see that are coming to fruition like The Sinclair are where they've gone out and found those best-of-breed experts and brought them together versus the "one throat to choke" general contractor.
What are the biggest opportunities for Intel partners in the IoT space?
The Intel partner ecosystem for IoT is amazingly robust. We've got a great program called Market Ready Solutions, where we take a solution a partner's built. They've demonstrated that it can scale in an actual production environment, and we bring that into our sales force. We'll actually go out and sell with the partner and proactively sell it. Our salespeople get commission on it.
We also recognize that oftentimes a full turn-key solution, like a Market Ready Solution, isn't the answer. And there's a step back from that called a RFP Ready Kit. With the RFP Ready Kit, partners develop a key piece of a solution, and it allows the [system integrator] or the partner to swap in a different component if their end customer has a different need.
What are the margin opportunities for Intel partners in IoT?
If you're just selling a hardware platform, we're seeing margin of 3x to 4x of what they're going to see in the PC business. So just in itself, there's a higher margin opportunity.
Now there comes some additional investment. You can't just sit in Taiwan and put a box out and sell it. You've got to have local engineering, local sales and support for those end users, but there's a big margin opportunity there. And then when you layer in software and services, the sky's the limit. The best players are delivering installation, 24/7 support, warranties that are extended four or five or ten years, parts distribution that's distributed so that you can have repairs and service up quickly.
It's a real opportunity. And if you think about it, you have a giant hotel or you've got a big project, you've got a giant machine, you're not going to sit and wait and be down for three to four weeks for something to show up and be fixed. You got to have that ability, and the spend you're talking for the IT piece is tiny relative to the overall production value of that solution. And so people are willing to pay more for that kind of robust security.