Set to grow to Euro 2.4 billion worldwide in 2020
The global market for third party Internet of Things (IoT) platforms will show solid growth in the next few years, according to a new research report from the analyst firm Berg Insight.
Total IoT platform revenues are forecasted to grow at a compound annual growth rate (CAGR) of 32.2% from Euro 450 million in 2014 to Euro 2.4 billion in 2020.
Third party IoT platforms are relatively new in the market and display a great diversity in terms of functionality and application areas, the research firm stated. Berg Insight said that broadly speaking, most IoT platforms fall into one of the following three categories: connectivity management platforms; device management platforms; and application enablement platforms. These platforms enable companies and organisations to develop and deploy IoT solutions faster and at lower cost by offering more standardised components that can be shared across multiple solutions in many industry verticals.
The study showed that the world of machine to machine (M2M) communication is gradually moving from vertical single purpose solutions to multi-purpose and collaborative applications interacting across industry verticals, organisations and people, creating the IoT. However, Berg Insight said 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 interoperable solutions.
André Malm, senior analyst at Berg Insight, said IoT puts more emphasis on integration of sensors, devices and information systems across industry verticals and organisations to transform operations and enable new business models. He added: “M2M often involves highly customised solutions deployed within single industry verticals or companies to improve existing business operation. 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.
Malm continued: “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. 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.”
Adoption of third party IoT platforms is now growing rapidly, Malm concluded: “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 inhouse.”