Registered users can unlock up to five pieces of premium content each month.
Strategic Alliances |
NEWS |
In June 2019, Sierra Wireless and Microsoft announced a strategic partnership to provide full stack Internet of Things (IoT) solutions that leverage Sierra Wireless’ new Octave edge data orchestration solution with Microsoft’s Azure IoT Central. The solution will simplify the process of getting edge data to the cloud. This partnership is also notable because, in partnering with Microsoft, Sierra Wireless will migrate its existing cloud infrastructure from Amazon Web Services (AWS) to leverage Azure’s suite of cloud services. By combining Azure IoT Central’s application development tools with Octave’s device, network, and cloud Application Programming Interface (API) integration capabilities, both Microsoft and Sierra Wireless are hoping to target enterprise IoT customers and provide them with dramatically reduced solution development costs and Time to Market (TTM).
Other companies, meanwhile, are turning toward acquisitions to build out their own internal connected device service capabilities. In February 2018, Google announced the availability of Cloud IoT Core, its device management service. In combination with other services on the Google Cloud IoT platform, Cloud IoT Core provides an End-to-End Solution (E2ES) for gathering, managing, and displaying IoT data in real time. Google also announced around the same time that it was acquiring the Xively platform from LogMeIn for US$50 million. These two announcements are heavily intertwined, as Google’s acquisition will allow it to more easily and securely manage IoT devices in an effort to build out its cloud infrastructure to compete with other cloud computing players’ device management solutions such as Microsoft’s IoT Azure Hub and AWS’ IoT Device Management.
Integrate to Differentiate |
IMPACT |
Connected device services will continue to be seen by providers and end users as a necessary component of any end-to-end IoT solution. However, there is and will continue to be a commoditization of these services that will be driven by competition among existing service providers, the growth of standards in the market, and new device management solutions from existing cloud providers such as Google, AWS, and Microsoft. Due to the influx of solutions from cloud providers, gateway vendors, and other platform players, these platforms and services will be integrated with other components along the IoT value chain in order to differentiate provider offerings and provide end users with a fully capable end-to-end solution.
Within the market today there is a disintegration of the device-to-cloud value chain that results from the need for some end users to piece together specific components of different vendors’ solutions into one E2ES. As a result, many components of IoT solutions, such as connected device platforms, seemingly appear to function as their own individual products. However, most Connected Device Platform (CDP) providers integrate their offerings with other solution components, such as with connected devices or as a piece of a larger platform.
Coopetition in Action |
RECOMMENDATIONS |
Connected device services are being heavily influenced by growth within the broader IoT market, the shift to the edge, and the emergence of Low-Power Wide Area (LPWA) and 5G networks. While solution commoditization is happening, enormous value can still be extracted. The commoditization of these services can be avoided by combining them with other components of the IoT value chain in order to create a differentiated solution that drives value for both end users and providers. While these services are sometimes marketed as their own independent solution, they are more often than not integrated with vendors’ other value chain components in order to create solutions with unique value propositions. The real value in device management services is how they can be used to enhance performance in other areas of an IoT solution, such as when coupled with gateways or sensors or as part of a larger platform offering.
Additionally, companies like Microsoft and Sierra Wireless realize that they are able to more effectively expand the economic opportunity within the market by partnering together. Through these partnerships, IoT providers are able to leverage their partner’s existing resources and relationships while also significantly reducing any capital outlays that would have been necessary for the provider to build on its own. Providers can align some component of their solution with their competitor’s products to create a differentiated solution that their customers actually want and that avoids commoditization. As a result, partners achieve faster TTM and benefit from larger sales channels and greater regional coverage. These providers recognize that cooperation is as much an influence on their business success as competition is, and those providers that are able to find the find the right partnership strategies will continue to create new opportunities and drive overall market growth in this space.