While Enterprise IoT Platforms Market Consolidates, Vertical Specialists and Market Leaders Advance Offerings

Kathryn Weldon – Research Director, Business Network and IT Services – Americas

Summary Bullets:

• Several high-profile vendors of enterprise IoT platforms disbanded their offerings in 2022/23 as products commoditized, margins shrank, and/or some platforms never generated sufficient revenue.

• However, the overall IoT market is still healthy. On the platform side, existing vendors are enhancing feature sets and vertical players are becoming leaders.

Since 2018, the size and scope of the IoT platforms market has grown. These platforms facilitate deployment and management of IoT projects and provide tools to develop and run IoT applications. However, high-profile dropouts that have disbanded their platforms have plagued the market recently. GlobalData has the position that this does not indicate softness in the IoT market overall. However, it does highlight a trend in which vendors blend IoT with adjacent solutions or use a third-party platform go-to-market approach rather than maintain their own expensive platforms, which may not yield sustainable margins.

Over the last six months, the most compelling changes in the enterprise IoT platform market were: the dropping out of Google Cloud IoT (to occur in August 2023) based on lack of revenues/profitability; the withdrawal of SAP’s IoT standalone PaaS in 2022, leaving only embedded IoT elements within the SAP Asset Performance Management; and IBM’s plan to wind down its Watson IoT platform service (by December 2023) focusing instead on offering IoT capabilities via its hybrid cloud solutions. In addition to these dropouts (which also include Ericsson’s sale of its IoT connectivity platform to Aeris), some of the other original leaders (as well as IT service providers with IoT solutions) have marginalized their IoT offerings, embedding them in vertical solutions, or combining IoT with big data and AI tools, positioning IoT primarily as a data collection enabler.

However, this turbulence does not mean these platforms are no longer needed. The remaining hyperscalers – i.e., Microsoft and AWS – are coming on strong and enhancing their platforms and partnerships as IoT remains a key technology with which to draw developers and enterprises. Vertical specialists such as industrial stalwarts Software AG Cumulocity, PTC ThingWorx, and Siemens MindSphere are also coming on strong, with good reviews for functionality, end-to-end applications, and contributions to positive ROI for their customers.

Public Announcements
Over the last six months, major public announcements from AWS, PTC, SAP, Microsoft, IBM, Siemens, and Software AG included the following:

  • Sidewalk, Amazon’s low bandwidth long-range IoT network, is now available to third-party device makers for integration. Anticipated initial use cases are primarily in the consumer space. AWS also launched AWS IoT RoboRunner, a robotics service for robotics automation that helps fleets of robots to work seamlessly together. In addition, AWS introduced IoT Core Device Location, which enables customers to select the appropriate location technology adapted for their business and engineering constraint; and Location Action, which routes latitude and longitude data from IoT devices to Amazon Location Service.
  • Microsoft has been gaining traction in key verticals for IoT announcing energy industry/sustainability deals with Snam and Vesta Wind Systems; and prebuilt, edge-to-cloud, retail-specific technology solutions for Walmart and Walgreens.
  • PTC and Volvo Group deployed an IoT network to make its factories smarter, reduce OpEx, and improve services with predictive maintenance based on LoRaWaN sensors provided by PTC Thingworx. PTC signed a definitive agreement to acquire ServiceMax, a leader in cloud-native, product-centric field service management software. The acquisition is expected to strengthen PTC’s closed-loop product lifecycle management offerings by extending the digital thread of product information into downstream enterprise asset management capabilities. In Q1 2023, PTC noted that IoT had reached profitability and that its digital thread portfolio was seeing double-digit growth.
  • IBM announced it will be decommissioning its Watson IoT Platform by December 2023. The company says it is “committed to industrial IoT markets,” and that “IoT platform capabilities remain a core component of hybrid cloud solutions for asset and facilities management.”
  • SAP has removed its standalone IoT ‘as-a-service’ from the market (as of January 2023) but will continue to use IoT as an embedded capability in its asset performance management portfolio.
  • Siemens announced that MindSphere has evolved into Insights Hub, which offers scalable cloud-based solutions and applications based on the collection and visualization of real-time data and analytic results in one centralized location. Insights Hub comes in three tiers, which progressively add more functionality such as a larger number of asset attributes and the ability to easily integrate IoT and analytics into enterprise systems and applications. Visual Explorer, Remote Services, and Predictive Learning can be added to any package.
  • Software AG Cumulocity IoT has named customers including: UK National Health Service in the UK (healthcare), Flexco (asset management), Mayekawa (refrigeration management), GeicoTaikisha (shop operations), Electric Racing Academy (racing), WAINS (pest detection), Nucleus3 (water access), Logicline (industry 4.0), Bega Cheese (supply chain optimization), PayPal, Nordex (wind energy), Lyreco (supply chain automation), E.ON (energy), Gardner Denver (manufacturing), and Nespresso (coffee machine vendor).

GlobalData updated its Competitive Landscape Assessment on the enterprise IoT platforms market on April 24, 2023. In the report (please see Enterprise IoT Platforms, April 24, 2023), AWS, Microsoft, and PTC are the Leaders with a ‘Very Strong’ rating, while Siemens is rated ‘Strong,’ and SAP is rated ‘Competitive.’ The criteria on which each vendor was rated include: analysis and reporting, app development; connectivity and device management, data services, ecosystem, go-to-market, packaging and solutions, pricing, and security capabilities.

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