March 4, 2016
Written by Special Guest Blogger Isaac Brown, Lux Research
Just when you thought there were not enough Internet of Things (IoT) platform providers, three major enterprise information technology (IT) vendors released their own solutions for connecting devices to the cloud. Enterprise wearables are the interfaces between workers and the IoT. As a result, picking the right wearable is only one link for a successful system, which makes picking the right IOT platform and understanding that space equally important.
Microsoft released the Azure IoT Suite at the end of September, and Amazon followed with Amazon Web Services (AWS) IoT only a week later. Oracle completed the launch of its Internet of Things Cloud Service shortly after Microsoft and Amazon; meanwhile, the SAP HANA Cloud Platform for the Internet of Things has been around for the better portion of 2015. The space is also crowded with dozens of startups that offer similar capabilities for managing devices, controlling connectivity, building applications, and integrating into other systems. Many of the startups are doomed to fail, while a handful of the more capable companies will be acquired or succeed on their own.
Over the past month, Lux has spoken with VPs and General Managers in the IoT groups at each of the above vendors. To gain a better understanding of how they are approaching the IoT market, let’s first consider their leverageable assets and respective positions in the greater IT ecosystem. AWS is the dominant public cloud provider, with at least a 50% market share of the enterprise public cloud pie – customers regard AWS for its ease of deployment and scalability. Microsoft Azure is also a leader in public cloud services, holding a large market share in both infrastructure-as-a-service and platform-as-a-service offerings – many consider Azure’s machine learning capabilities best in breed. Oracle and SAP on the other hand hold massive market share for enterprise resource planning solutions, customer relationship management software, and a variety of other operational business systems. All of these companies provide numerous products and services beyond those listed above, but their IoT groups are pushing these assets foremost as competitive differentiators for their IoT offerings.
A key differentiator in these platforms is their horizontal vs. vertical positioning – in an hour long conversation with AWS IoT’s General Manager, Kyle Roche (formerly the CEO of IoT platform startup 2lemetry, which Amazon acquired earlier this year), we focused on the broad range of system capabilities, rather than diving into any detail about use cases. A trip to the AWS IoT website reveals similar positioning as a broad horizontal platform for connecting devices – it emphasizes how the platform works, rather than what to use it for. Our discussions with Microsoft have had a similar horizontal tone; meanwhile conversations with Oracle and SAP have been much more focused on application-specific solutions. A trip to SAP’s IoT site shows that SAP is laser-focused on use cases – there is no mention of how the platform works, rather it offers links directly to a handful of application-specific solutions including “Predictive Maintenance and Service” and “Networked Logistics Hub.” Lionel Chocron, VP of Industry & IoT Cloud Solutions at Oracle, told us that Oracle has built a set of horizontal capabilities that it applies to vertical solutions, explaining that “the goal is to turn the information and assets into business process. Oracle thinks about IoT in terms of business outcomes – we start at the business application level, and then work backwards to the device level.” One message was, however, common across all four platforms: each company was adamant about the overall functionality of integrating into its other proprietary systems. For example, although all of the platforms have a specific set of APIs built for plugging into Azure platforms, Azure IoT of course has the tightest integration into other Azure platforms.
Several strategic considerations are essential when choosing the right IoT partners. For example, if an organization is a heavy user of the various AWS cloud services, then AWS IoT might be the best platform choice, especially if the goal is to connect a broad range of devices that may scale up or down in number haphazardly. If an organization is hosted on and builds applications through Azure, and wants to apply machine learning across a broad range of incoming data streams, Azure IoT is probably a good choice, especially if many of the devices to be connected run Windows Embedded operating systems. If the goal is to better leverage incoming freight telematics streams, and an organization is already tightly integrated around Oracle applications like JD Edwards or Transportation Management solutions, then Oracle is likely the way to go. Organizations should make similar considerations when exploring the IoT platform startup landscape for partnerships – the leading device management providers like Electric Imp, Particle, Arrayent, and Ayla Networks have all cultivated specific partnerships with embedded hardware manufacturers. For example, if an OEM wants to deliver a Wi-Fi-connected product and it already ships products designed with Murata microcontrollers, then Electric Imp’s tight integration with Murata hardware might make it the ideal partner. Similarly if an organization has globally distributed assets that travel across international borders, platform providers with carrier-switching and mobile virtual network operator (MVNO) capabilities – like Wyless and Telit – might make for strong partnerships, especially if they already leverage subscriber identity modules (SIMs) from Wyless or cellular modules from Telit.
Isaac Brown is an Analyst on Lux Research’s Industrial Internet of Things team. Lux Research provides strategic advice and ongoing intelligence for emerging technologies. Leaders in business, finance and government rely on Lux to help them make informed strategic decisions. Through their unique research approach focused on primary research and their extensive global network, they deliver insight, connections and competitive advantage to their clients.