Will 2017 be a better year for the already fragmented Internet of Things (IoT) industry

IoT Platforms are getting commoditized and it’s happening faster than anticipated

Will 2017 be a better year for the already fragmented Internet of Things (IoT) industry

In the last two years, the IoT space has become extremely fragmented, with IoT standards being largely left undefined. And yet, there is a huge demand and need for IoT-based technologies that makes possible new business opportunities, bring down cost significantly and optimizes infrastructure.

One of the most commonly used terms ascribed to IoT in 2016 was definitely cloud platform, with interest peaking in 2016, as shown by the Google Trends report. And rightly so, Internet of Things (IoT) is emerging as a crowded place thanks to the rapid commoditization of IoT platforms, with leading software vendors Intel, GE, Cisco, Miscrosoft, HP, IBM, Amazon, SAP and Dell among others marquee names offering a broad IoT based cloud platform. While legacy companies are sizing up the IoT market, a lot of small players such as New York-based Temboo and Boston headquartered Xively are also offering IoT applications and Platform as a Service (PaaS) to enterprises worldwide.

What is an IoT cloud platform?

The IoT platform is the core of any internet of things system. It’s a technology layer, mostly deployed on cloud, that monitor, connects and controls devices as well take care of data collection. Ideally, an IoT platform consists of eight architectural blocks, starting from, Connectivity to Device Management, Database, Analytics, Visualization, Processing management and an external interface.

IoT platform offers a set of managed services on which customers can build a Software as a Service solutions (SaaS), in the case of Microsoft’s Azure, a SQL Database, DocumentDb and many more.  When it comes to Industrial cloud platform (IIoT), GE’s Predix and Siemen’s Mindsphere are widely used in manufacturing and production processes worldwide.

Most IoT platforms are tailored for three specific areas:

1) Connectivity management platforms

2) Device management platforms

3) Application enablement platforms

Why is IoT platform key enabler for growth?

The most crucial function of an IoT platform is:

1) Standardizing the key functions such as application development and device management. And a usual Platform as a Service package includes access to APIs, SDKs, templates, libraries and tools, built on cloud resources for scalability and public cloud for testing and development.

2) Access to advanced services such as connectors to back-office ERP, analytics, security and even blockchain pay-as-you-go. A company can further build implement their SaaS applications on top of the device cloud.

3) Providing a faster, easier, secure and scalable environment for building and deploying applications

Commodification of IoT cloud platforms

The IoT platform dominance started with IBM’s Watson IoT platform positioned as a “Watson for Everyone” that grabbed headlines all year long. Reportedly, Watson services up to 6,000 clients across retail, electronics, transportation and automotive among other verticals. From American Airlines to BMW, Watson has been snapping up big ticket clients who are reportedly sitting on terabytes of data.

According to news reports, there are over 400 cloud platforms in the market. And there is a rush to own the next IoT cloud platform with most major IoT cloud platform vendors offering end-to-end solutions — Data Analytics, Application Enablement Platform, Network Connectivity, Edge Computing and Management and Automation. If you lack the capabilities, the transition to IoT cloud is fueled by acquisitions, investments and partnerships and collaborations. Case in point was Cisco’s acquisition of Jasper Technologies, cloud-based IoT service platform. The acquisition strengthened Cisco’s IoT portfolio for delivering and accelerating IoT adoption for clients.

Undoubtedly, the IoT ecosystem is heavily fragmented with industry leaders following the buy, build and integrate strategy.  Microsoft’s Azure recently unveiled its industry-leading IoT solutions for manufacturing sector in India. The three IoT solutions are powered by three start-ups — Precimetrix, Teramatrix and Covacsis Technologies — will help the manufacturing industry gain a digital edge and get predictive insights. While Amazon had the first mover advantage in cloud, the AWS IoT platform has not made much industry buzz and earned competition from Oracle’s IoT cloud platform over speed capabilities.

IoT – Is standardization and Open Source the way out

While the IoT market has substantial opportunity, it is also marked by “new security risks and challenges to IoT devices and platforms, operating systems and even the systems to which they are connected” as a Gartner report cites.

2016 brought a wave of standardization and interoperability with the merger of AllSeen Alliance (provider of AllJoyn open source IoT framework) and Open Connectivity Foundation (that sponsors IoTivity open source project), operating under the banner of Open Connectivity Foundation (OCF). The AllSeen Alliance was formed by Qualcomm in 2013.  OCF is removing a certain degree of fragmentation in the IoT industry by specifying software protocols and bringing a clutch of legacy enterprises together – Cisco, GE Digital, Canon, Microsoft, Qualcomm, Samsung Electronics, CableLabs, Haier among other big players.

However, some of the big names that are missing from the collaboration are: Google, Apple and Amazon. Meanwhile, there is a dominant push by Amazon to build Alexa as the next voice-led Operating System for IoT.

New trends to emerge in 2017

1) Standards and associated APIs will become essential for IoT devices to communicate

2) Many IoT ecosystems will emerge and the next technical battle will be over smart home and smart cities

3) To support multiple ecosystems and standards, companies will have to develop variants and update products as new standards will evolve

Way Forward

Analysts point out that 2016 was the year of announcing new platforms, but much of that buzz has already died down. 2017 will be the year of mergers and acquisitions with big companies, by virtue of their size and scale will follow the buy and merge strategy, whittling down the numbers.

1) For the IoT industry to succeed and scale there has to be a common foundation. Vendors should emphasize their differentiation in areas such as in security and analytics

2) Open source collaboration is the key enabler for interoperability efforts.

3) The IoT industry should work towards developing a standard for data integration and APIs

The key takeaway for enabling enterprise IoT is open source collaborations and interoperability is the key to success. A case in point is global conglomerate GE that has reportedly set up a partner programme for Predix to increase the value of analytics in the IoT space. The overwhelming sentiment is for a neutral platform, where general standards can be developed for use in an open ecosystem and businesses can profit by offering SaaS solutions on top of it.



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