Third-party IoT platform market showing solid growth, says Berg
April 30, 2015
The global market for third-party IoT platforms will show solid growth in the next few years, according to a research report from analyst firm Berg Insight. Total IoT platform revenues are forecasted to grow at a compound annual growth rate (CAGR) of 32.2 per cent from €450m in 2014 to €2.4bn in 2020.
Third-party IoT platforms are relatively new in the market and display a diversity in terms of functionality and application areas. Broadly speaking, most IoT platforms fall into one of three categories – connectivity management platforms, device management platforms and application enablement platforms. These platforms enable companies and organisations to develop and deploy IoT services faster and at lower cost by offering more standardised components that can be shared across multiple services in many industry verticals.
The world of M2M communications is gradually moving from vertical single purpose products to multi-purpose and collaborative applications interacting across industry verticals, organisations and people. It is difficult to make a clear distinction between M2M and IoT, although the term IoT better describes the evolution of connected devices, with accelerating scale and scope, as well as higher focus on interoperability.
“M2M often involves highly customised solutions deployed within single industry verticals or companies to improve existing business operations,” said André Malm, senior analyst, Berg Insight, who added that the IoT put more emphasis on integration of sensors, devices and information systems across industry verticals and organisations to transform operations and enable new business models. “IoT focuses on gaining new insights from analytics based on data from diverse sources to support decision making, and improve products and services.”
Third party IoT platforms enable companies to focus on differentiation created by unique capabilities and insights from data rather than duplicating non-differentiating functionality such as connectivity integration, device management, data collection, storage and analytics.
“In the past, companies have often developed M2M solutions where connected devices sent data via a network directly to an application that handled data storage and processing, security and business logic”, said Malm. “These solutions normally required long development cycles and high cost, with little scalability and flexibility to handle a growing number of devices and evolving functional requirements.”
He said the adoption of third-party IoT platforms was now growing rapidly.
“Awareness of the product category is increasing at the same time as companies are realising the value of using a third-party platform rather than re-invent the functionality in-house,” said Malm.