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Platforms, present and future III

A graphical overview of IoT platforms. Notable the number of players and the subdivision in various categories. Image credit: Vinay Solanski, IIM Ahmedabad based on data from Zinnov Zones
  1. IoT Platforms

IoT are now in the hundred of billions so it should not be a surprise that the IoT platform market is huge and it is soaring (difficult to agree on a number since it depends on how you define an IoT and how you count them: a connected sensor is an IoT, right? Well all would agree to that. A smartphone has some 14 different sensors in it, each generating data that can be retrieved through the network -based on authentication and permission. We have 3.3 billion smartphones today in the world, hence we have close to 50 billion IoT embedded in smartphones…. However,  other people would disagree not counting them as such but as one phone-one IoT).

According to the Zinnov Zone IoT Platforms 2019 the market has reached 1.9 B$ in 2019 and it is expected to pass the 9 B$ by 2024, a CAGR of 35%.

The main players in the IoT platform space. As expected in the connectivity management platform we find the Telcos. Image credit: Zinnov Zones

There are plenty of IoT platforms, the Zinnov Zone 2019 report put the number to over 400, and again the number depends on how you define a count a “platform”. What is interesting is that we can cluster, as shown in the figure, the IoT platforms based on what they focus on (there are as one can expect several overlaps):

  • hw IoT/device management platforms
  • connectivity management platforms
  • IoT applications enablement platforms

In addition we have companies producing IoT (sensors and devices), companies providing storage and computation infrastructures for IoT and companies providing security tools and services for IoT. A quite extensive landscape. Notice that in the image in the area of sensors and devices we are missing the Chinese companies that as a matter of fact have the lion’s share in the production of IoT (most are based in Wuxi).

IoTs are the “physical” starting point of the Digital Transformation. They are the “tools” transforming atoms into bit (sensors). More and more products are designed to be connected and to generate data for remote monitoring as well as for building up services. This latter is a crucial aspect of the digital transformation business model, the one that fosters the creation of value, for both the product producer as well as for the ecosystems that can grow around a product.

The platforms become the enabler of value generation. The IoT/device management platforms space is populated by industries that have adopted the Industry 4.0 paradigm, like Siemens, and by software companies that leverage on the storage/computation infrastructure to host the virtual image of the IoT and of the data they generate (Digital Twin and its shadow). What is interesting here is that some of this companies are seeing IoT and IoT platforms as a way to change their business model.

At the connectivity management we find, as expected, the Telcos. The problem for them has been to embrace IoT not as usual clients. I remember the heated discussion in Telecom Italia at the turn of the century when it was already clear that IoT will become “network users” among those who spearheaded their support and those who saw them as very low income generators and as such to be turned down as independent “clients”. That was a mistake, and it is getting clearer and clearer today as the value of the “consolidated” clients is decreasing. The value of IoT is not increasing but their volume is, making up for the tiny revenues generated by a single instance. Besides, controlling the IoT would have meant to be in the position of playing the role of intermediator towards the application and services. Telcos are now scrambling to offer connectivity services tailored to IoT but they may have lost the bigger opportunity of becoming the infrastructure to manage them and leverage them towards service providers.

The biggest business slice is in the applications platforms ane here we find companies offering horizontal (like MS, AWS, …) or vertical service support (like Siemens for Industry 4.0, SAP for enterprise management…). And of course, we have companies that support both segments (like IBM).

About Roberto Saracco

Roberto Saracco fell in love with technology and its implications long time ago. His background is in math and computer science. Until April 2017 he led the EIT Digital Italian Node and then was head of the Industrial Doctoral School of EIT Digital up to September 2018. Previously, up to December 2011 he was the Director of the Telecom Italia Future Centre in Venice, looking at the interplay of technology evolution, economics and society. At the turn of the century he led a World Bank-Infodev project to stimulate entrepreneurship in Latin America. He is a senior member of IEEE where he leads the Industry Advisory Board within the Future Directions Committee and co-chairs the Digital Reality Initiative. He teaches a Master course on Technology Forecasting and Market impact at the University of Trento. He has published over 100 papers in journals and magazines and 14 books.