From the early days of Thingworx (PTC) and ILS (Telit) to the market today, the device-to-cloud IoT platform service market has changed dramatically. Early platform services included device connectivity and cloud integration, device management services, and simple alerting services.
Today, platform services have added drag and drop application development services, more sophisticated data, and device management services, and managed security services. Of four key supplier segments, software and services suppliers, a group that includes start-ups and cloud vendors, are expected to dominate revenue generation at nearly 67% of the total US$18 billion(€16.5 billion) IoT platform services revenues by 2026, according to a new technology analysis report by global tech market advisory firm, ABI Research.
The supplier segment that has had the most impact on the competitive environment has been the cloud suppliers such as Microsoft, AWS, and others, which offer their own device-to-cloud IoT platform services. “Cloud services have become the centre of gravity for any IoT project. This is in part due to cloud suppliers adding a range of IoT platform services that ease IoT solution development and add value to their core data storage and compute infrastructure services. Their influence in the IoT platform space is also because many IoT software and services providers have built their platform on cloud infrastructure and participate in cloud supplier partner programmes,” explains Dan Shey, vice president of enabling platforms at ABI Research.
The other key groups driving the market are system and subsystem OEMs (e.g., Siemens, GE, Hitachi), telcos and telco suppliers (e.g., Huawei, Nokia, ZTE), and device and gateway OEMs (e.g., ARM, Telit, Sierra Wireless). Vendors in each of these groups offer services to complement other strategic sources of revenue generation ranging from industrial equipment, telco infrastructure, chips, modules, and gateways.
“Industrial suppliers will see the highest APRUs for their device-to-cloud services. The other two supplier groups will see their share of revenues decline, but they will grow their share of IoT connections primarily due to platform use in LPWA-connected applications,” notes Shey.
Overall, revenue generation from device-to-cloud services will remain a smaller share of total IoT services revenues. However, these services will continue to play a critical role in application development. “Ultimately device-to-cloud services are a means to an end. Every supplier in the application development space will be drawn to the toolsets from IoT platforms to speed solution development, lower development costs, and drive lead generation to other products and services,” Shey concludes. Indeed, per analysis in the report, nearly 30% of enterprise IoT connections will use IoT platforms services for app development by 2026, up from 6% today.
These findings are from ABI Research’s Device-to-Cloud IoT Services: Analysis of Platform Suppliers in the Application-Driven IoT Market technology analysis report. This report is part of the company’s M2M, IoT & IoE research service, which includes research, data, and ABI Insights. Based on extensive primary interviews, Technology Analysis reports present in-depth analysis on key market trends and factors for a specific technology.