It’s unusual for technology vendors of sufficient size not to be the most powerful companies in any market space they enter – the mere fact that they’re there arranges other players into a “Google/Microsoft/Amazon against everybody else” formation.
That’s why, according to experts, the heterodox, wide-open IoT platform marketplace is so strange – it’s an area in which all the traditional powerhouses of IT are playing, but they’re not dominating market share the way they usually do.
Part of the reason for that is the sheer number of companies out there. Experts estimate there are anywhere between 300 and 700 companies that offer a product that addresses some part of the IoT stack, whether it’s basic connectivity, analytics or line-of-business application functionality.
“There’s a lot of variety both in the size of the vendors and of where they come from,” said Gartner research vice president Mark Hung. “The market is still fairly fragmented. So there’s not a clear leader, or even leaders.”
Moreover, IoT is a technology that touches the operational side of the business far more heavily than traditional IT. That means the megavendors have to play in the same market as companies that might have entrenched advantages over them – industrial giants like GE have existing relationships with their customers that can make it difficult for a traditional tech company to expand its presence in industrial IoT.
“Cisco’s not going to come in with a better predictive maintenance solution for GE wind turbines than GE is,” said Christian Renaud, IoT research director for 451 Research. “
This means that Cisco or Microsoft have a lot farther to go in order to get their product into this industrial IoT setting. Moreover, operational tech (OT) isn’t a cost center like IT – it’s where companies make their money, so the financial requirements are far stiffer for IoT.
Traditional IT companies are scrambling to gain more operational insight into industries like energy and healthcare, according to Renaud.
“Those are the people that they’re trying to provide solutions for, but they don’t understand those verticals in any depth whatsoever,” he said. “They’re grossly oversimplifying the ‘how the hell am I going to get the data off this 25-year-old piece of manufacturing equipment to get it to you in a protocol you can ingest’ issue”
So for the moment, big tech companies will have to settle for being part of the underlying pipeline, rather than the owner of the whole stack.
Nevertheless, operational tech companies like GE and Siemens aren’t going to have things all their own way in the IoT space. Big IT companies have a great deal of control over underlying infrastructure and are great at analytics, and even a modicum of integration into operational tech could make them a lot more compelling in enterprise IoT.
The strategy, then, is to enter into as many partnerships as possible. So what’s happening is an “interleaving” of OT and IT, leading to products like Predix being able to run on a Cisco edge router, or in Microsoft’s Azure cloud.
“It’s a much more promiscuous partnering strategy being deployed,” Renaud said. “A lot of these legacy OT vendors are beginning to partner with these IT vendors.”
Importantly, these partnerships are rarely exclusive – which helps ensure interoperability between a company’s existing infrastructure and whatever new IoT platforms it wants to embrace.
Open source, as well, is a major contributor to this diversity, and Hung urged businesses to embrace the model.
“Make sure that whatever solution you’re looking at is an open solution … that has a strong developer ecosystem around it, so you’re not relying on any single vendor,” he said.
The key to not getting lost in the shuffle of this chaotic and still-developing market is self-knowledge, Hung added. Identifying, with great specificity, what’s needed out of an IoT implementation should help navigate the rapids.
“You really need to understand what is the business problem that you’re trying to address, or what are you trying to enhance in terms of an existing solution to a business problem,” he said.