IoT platforms account for €15B ($17.6B) of the €250B ($293.3B) that will be spent on IoT in 2020.
The IoT platform market is projected to grow at a Compound Annual Growth Rate (CAGR) of 40% through 2020. IoT platforms account for €15B ($17.6B) of the €250B ($293.3B) that will be spent on IoT in 2020. The IoT platform market is projected to grow at a Compound Annual Growth Rate (CAGR) of 40% through 2020. Just 14% of IoT platforms are enterprise-ready according to Boston Consulting Group (BCG). More than 400 companies offer IoT platforms today.
Enterprise software & services (22%) and IoT start-ups (32%) offer the largest amount of IoT platforms today. 18% of IoT platforms are being developed and sold by industrial technology providers who are looking to shift away from their hardware-centric business models. Superior design, extensibility, intuitive user experience and incentives for developers to support their IoT platforms are what’s need to excel in the enterprise. BCG found that 65% of enterprise buyers have a strong preference for purchasing their IoT platforms from enterprise software and services providers.
The real test of any vendor’s IoT platform is to see if it supports application enablement, data aggregation and storage, and connectivity management. Ideally, IoT platforms orchestrate applications, data, devices, systems, and processes providing business strategists with a scalable framework they can rely on to accomplish long-term goals. In reality the majority of IoT platforms today can’t provide this level of support to business strategies. BCG found that a scalable enterprise-ready IoT platform provides application enablement, data aggregation and storage, and connectivity management. The following graphic provides an overview of core IoT platform requirements.
Just 14% of IoT platforms are enterprise-ready. IoT pure-play companies/startups lead all providers of enterprise-wide IoT platforms today. Enterprise software & service providers are next at 36% of all platform providers meeting all three criterion. In the next three years, the pace of IoT pure-play companies/startup acquisitions is going to accelerate as enterprise software & service providers look to gain needed new technologies quickly.
IoT platform providers who earn developer loyalty have the best chance of dominating the market for years to come. Creating an open source IoT platform supported by a vibrant, growing community that excels at knowledge sharing is the most effective strategy for attracting developers. Additional criterion developers evaluate IoT platforms on are the potential to gain platform knowledge and improve their career prospects, and availability of high-quality APIs and available tools.