IoT platform market as seen by the analysts
I recently finished a small consulting engagement where the client asked me about if they should build an IoT platform.
I’ll give you the same advice I
gave them, but for free.
“Don’t do it.”
Let’s talk about the underlying
challenges with today’s IoT platforms. It’s a very weird market.
Think of it this way: for most types of platforms /
applications / solutions there is a Coke, a Pepsi, a Dr. Pepper/ Snapple, and a
National Beverage (who makes Shasta and other brands you may or may not have
heard of.) The IoT platform market, on the other hand, is made up of a bunch of
National Beverages.
This is clearly reflected in the Gartner Magic Quadrant, which in this case should be called the “Gartner Muggle Bi-Rant.” It has no magic, and every single vendor is listed in the bottom two quadrants.
Figure 1: Gartner’s Muggle Bi-Rant
Gartner cleverly did not include the two market leaders: Azure IoT Hub and AWS IoT. (What’s to gain by excluding cloud vendors?)
This is puzzling on so many levels. Do some customers want
an on-premise solution? Yes. Should that totally disqualify you from the
analysis? No.
It makes no sense, and the market is looking for another
solution to Gartner’s analysis, which is usually somewhat on-the-ball.
So, we turn to Forrester, which
definitely has a better IoT report.
Since we need to calibrate on the Gartner miss, we also
include Navigant’s analysis, which is also better than Gartner. This leads to a
dilemma. Whose report should we use?
I don’t know the answer, but we
made a chart reflecting the different vendors that are covered.
This is a look into which platforms are considered the top
ones by these analysts. While it does seem like the market is “looking for the
Coke,” the reports show what sorts of traction vendors have made to date.
Figure 2: Gartner/Forrester/Navigant IoT Venn Diagram
Should you use an IoT platform?
Yes. If you manufacture or operate devices, then yes, you
should be using an IoT platform. They allow for you to focus on higher-value
things instead of infrastructure and scalable services.
Should you build an IoT platform?
No. That is an unequivocal no. Unless you have a mandate to “quickly destroy as much
shareholder value as possible” you should not be building an IoT platform.
You have a ridiculously crowded field of marginal players.
Plus, it turns out that you need a lot more capital than you probably thought
in the beginning to put one of these platforms together.
If you are determined to be in this space, look to acquire
one of the existing marginal platforms whose investors are crying “uncle”. That
tells you all you need to know about whether the IoT platform market needs more
small competitors.
Should you build an IoT application / solution?
Maybe. There are plenty of IoT problems that need to be
solved. That means a solution can deliver value. The trick in IoT is to
leverage existing platforms and tools to focus on the specific customer need.
There is a tremendous ability to create societal benefit by
leveraging data from machines. Alternatively, delivering better service (because
of improved machine up-time or always having the right consumables, for
example) will allow companies to delight customers.
Methodology for selecting IoT platforms
There are a lot of IoT platforms
out there.
Here is our ‘unpatented’ methodology for determining the top
IoT platforms:
Read the Gartner report.
Think, “Hmm, this is not good.”
Read the Forrester report.
Think, “Good but it contradicts
Gartner.”
Read the Navigant report.
Think, “Good, but no one has
ever heard of them.”
Then look at the intersection between the three. You get
four platforms:
These platforms are definitely used by customers. But there’s
no Azure, and from personal observation of tens of product manufacturers, I
know that Azure is being used, evaluated or at least considered by virtually
everyone!
I have also run into AWS IoT, although not as much as Azure.
Because of AWS’s broad adoption, it would be foolish to not include it into the
mix.
Voila, we have our top
platforms!
Top IoT platforms
This analysis reflects what I believe to be the top IoT
platforms as of mid-2019. The market is likely to change a lot in the near
future. Today, Azure and AWS are in the first and second places.
Azure IoT platform
Most Microsoft shops should strongly consider utilizing Azure
IoT as their platform of choice for connecting devices. They are investing
heavily in this type of technology, and the IoT products integrate into the
broader Azure features. This means that customers using this solution can take advantage
of Microsoft’s Business Intelligence and security tools.
Azure IoT also has pretty good
device management.
If I were to ask for a single feature, it would be device
certificates by default. Yes, they are a pain, but I bet that Microsoft could find
a way to make them better. This would significantly improve the security of all
solutions shipping on Azure IoT. Note: that there is an option
to add device certificates, but it is work.
AWS IoT platform
I thought a few years ago that AWS was going to dominate the
IoT platform market. They were so far ahead, it seemed like AWS was going to
become the go-to for object storage, serverless computing, generalized cloud
services – and yes, IoT!
However, AWS is content to offer the building blocks for
putting together an IoT solution. It is the ideal solution for companies using
AWS for other things.
Suppose you have a company with a very developer-centric
culture. AWS can supply all sorts of functionality, and the AWS-knowledgeable
development team can build a solution on a solid base.
By contrast, if a company or department with a “non-developer
mentality” is considering using AWS for IoT, they should have a development
partner between them and the platform, or they will be very disappointed.
Customers using AWS IoT can take advantage of all of the other great services
and features of AWS. AWS IoT uses device certificates by default. (Unfortunately,
they
have very long expirations – 2049 – yes, that is thirty years from now!)
PTC ThingWorx IoT platform
PTC ThingWorx should be
considered for any manufacturing use case.
The founders had a ‘manufacturing-centric’ view of the world,
and that led them to create a product that is nearly perfect for this market.
Since the PTC acquisition, PTC has broadened the appeal for
more use cases. ThingWorx is very good for quickly getting a prototype/pilot
going. It is great for quickly making custom user interfaces to address device
management. ThingWorx is useful for on-premise use cases such as manufacturing
or mining, where cloud solutions may not be as practical.
In addition, ThingWorx is very extensible, which means that
there are often partner products to help overcome product shortcomings.
(Note: This author was
the first product management leader for ThingWorx.)
SAP IoT platform
SAP should be considered for use by telecom and energy
sector customers. Because of their strong industrial footprint, SAP is in the
mix, but particularly popular with their existing customer base. By contrast, it
seems relatively unlikely that non-SAP customers would adopt the SAP IoT
platform.
IBM IoT platform
IBM is another household name for other services that makes
an IoT platform for asset management, facilities management and systems
engineering use cases.
As with Azure, as we mentioned before, it’s likely that most
IBM IoT customers will be existing IBM customers that are looking to solve IoT
use cases. IBM has a big customer base, so that’s no small thing. Again, having
the vendor “reach” makes IBM’s IoT appealing to companies that have already
invested with IBM.
Oracle IoT platform
The Oracle IoT platform is more of a Platform as a Service (PaaS)
with some IoT features. Oracle’s IoT capabilities include agent libraries and a
software gateway enabling customers to connect their devices to the Oracle
cloud. Again, this is best suited for existing Oracle cloud customers.
Conclusion
Maybe you can tell from this analysis that the IoT platform market is full of “Shasta-like” platforms made by well-known vendors. Today most customers are unlikely to wonder far from the vendors that they do business with. In the near future we’ll likely see big changes in the IoT platform market.
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