IIoT Startup Falkonry Enters Channel With Machine Learning Tech

Falkonry, a startup operating in the industrial Internet of Things space, is making its first public move to sway channel partners to use its predictive analytics tools for industrial companies.

The Sunnyvale, Calif.-based company on Tuesday launched its global partner program, which aims to enlist OEMs, system integrators, distributors, resellers and referral partners to boost its operational machine learning software that can integrate with existing software stacks and help companies save time and money though predictive analytics.

Founded in 2013 by former C3 IoT executive Nikunj Mehta, Falkonry already provides its operational machine learning system to roughly 15 customers, which includes Global 2000 companies, according to Sanket Amberkar, Falkonry's senior vice president of marketing.

[Related: Industrial IoT Startup IoTium Hopes To Expand Vertical Footprint With $8.4 Million Funding Round]

Falkonry's software can help industrial companies improve operations, throughput, quality and safety while also reducing downtime by using an unsupervised machine learning technique that identifies patterns from time-series data. Once operators label each pattern to identify what happens before, during and after a machine breaks down and other events, the software begins identifying early signs of issues that require attention, and the system gets smarter over time.

Customers on average start seeing results in three weeks, which Amberkar said is far shorter than the 9-12 months it typically takes for data science projects to get started.

"Unlike some more generic tools, this has been designed to be used by the operations teams themselves. There is no need for them to hire data scientist consultants or need data scientists in the process at all, so think of it like a data scientist in a box," Amberkar said.

Falkonry's targeted industries include oil and gas, chemical manufacturing, power and energy, mining and metals and several sectors within manufacturing, including automotive, electronics, semiconductors and industrial equipment.

Starting out, Falkonry's partner program will focus on international growth, including in Japan, Korea, Latin America and Europe. On Tuesday, the company announced its first distribution agreements in Japan and South Korea with SCSK Corporation and Kolon Benit, respectively.

“The ability of Falkonry LRS to leverage existing time series data that most companies already have represents a tremendous opportunity for both Korean companies and Falkonry,” Jong-Chan Lee, the top executive of Kolon Benit's IT Services Division, said in a statement.

Amberkar said Falkonry won't formally start focusing its channel efforts in North America until the first or second quarter of next year. He said the company currently has two SI partners and two OEM partners that he couldn't identify. There are currently no reseller or distributor partnerships in North America, Amberkar added.

"We want to be mindful of avoiding channel conflict," Amberkar said. "We already have direct relationships with many customers, so we want to make sure there's sizable value we offer to them and vise versa."

Amberkar said he is confident Falkonry partners could account for 50 percent of bookings in two quarters.

Beyond Falkonry's machine learning capabilities, the appeal of its software is how it integrates with a customer's existing software and hardware stack – including Hewlett Packard Enterprise, OSIsoft, Google Cloud and Microsoft Azure – and how it doesn't require a separate user interface for daily uses, according to Amberkar.

"We aren't trying to sell you a different pane of glass to look at. It's fully integrated. The GUI only comes in when you're building," he said.

Falkonry's partner program provides sales, marketing and technical training, as well as discounts based on sales volume, according to Amberkar. He declined to say what kind of margins partners can expect on sales of Falkonry's software but said that the company doesn't control the price and that "it's very similar to what they get from a standard software sale."

There are also opportunities for partners to make money from providing services, as well as hosting Falkonry's software on their own servers for customer evaluation purposes, Amberkar said.

Falkonry is looking for partners who have existing relationships with customers in IT and ideally OT, as well, according to Amberkar. The company will also evaluate the partner's number of employees, customer count and names and revenue.

"If you have one channel partner, you want to make sure you can satisfy multiple locations within their territory," Amberkar said.

Falkonry has raised a total of $10.9 million in capital from investors, including Presidio Ventures, Basis Set Ventures, Start Smart Labs, Fortive Corp. and Polaris Partners. The company has roughly 35 employees.