IoT Platforms: A foundation for success

IoT platforms help to network, manage, and analyze internet-enabled devices; provide security mechanisms; and offer APIs and development environments that can be used both to develop IoT applications and to integrate them into the world of enterprise. As such, they are an important component of almost all new business models that link the physical with the virtual world.

IoT platforms can turn farmers into desk workers by displaying all the important data on their operations and farmland in real time and using the data to remotely activate and control their automated production facilities, such as feeders and milking machines. OnFarm is a four-year-old startup based in Fresno, California, that offers an online management system for agricultural operations. The OnFarm platform is based on Thingworx, an IoT development platform from PTC, to aggregate and analyze data from a wide variety of sources, such as humidity sensors in fields and operational data from agricultural machinery, as well as information feeds from weather services, production facilities, and a host of other sources. It can also control the production facilities remotely.

IoT platforms are turning f1 races into hybrid events involving both the physical and the virtual worlds.

Raising business models

IoT platforms can also turn elevators into passenger transportation systems with guaranteed service level agreements. MAX is a preventative service and maintenance solution built by Thyssenkrupp Elevators, on Microsoft’s IoT Azure Suite. It works in real-time and generates forecasts to ensure elevators spend 50% less time standing idle due to maintenance work, according to its developers. Not only does this platform enable Thyssenkrupp to limit downtime, it also reduces the amount of time people have to spend waiting for an elevator. In addition, it provides a stream of real-time data that can be analyzed to help the company improve its products. Preventative maintenance also supports planning and enables service technicians to be deployed more efficiently. It additionally allows Thyssenkrupp to create new business models. For example, treating elevator provision as a service with service level agreements based not only on meantime between failure but also the number of passengers transported per hour. IoT platforms are even turning race cars into speeding data projectiles and Formula 1 races into hybrid events involving both the virtual and the physical world. Honda R&D monitors 160 sensors in its Formula 1 race cars and analyses the data in real time with the help of IBM’s Watson IoT technology. This real-time data analysis helps race strategists, mechanics and drivers to improve both their own performance and their cars.

According to Forrester, IoT platforms are characterized by five basic functions when connecting IoT devices with enterprise IT. Source:The Forrester Wave: IoT Software Platforms, Q4 2016.

Elements of IoT platforms

These are just a few examples of what companies can achieve with the help of IoT platforms. All the scenarios are about increased productivity, more efficiency, more flexibility, greater innovation, and, of course, the new business models made possible by these platforms. IoT platforms are based primarily on standard IT functions that can be organized into powerful application systems by implementing connected sensors and actuators. This involves the cooperation of hundreds of IT workers, including automation specialists, mechanical engineers, and large-systems integrators. The platforms connect the physical world with the virtual world of IT, thereby enabling completely new data-based business models and value creation systems to arise. In a report, The Forrester Wave: IoT Software Platforms, market analyst Forrester Research describes the following fve standard functions of IoT platforms:
Connect: An Internet of Things device, for example a machine tool, a household electricity meter, or a wind turbine out at sea, must be connected with the internet and that link has to be managed. This usually involves the use of wireless technologies such as ZigBee, Z-Wave, or other energy-saving wireless personal area network technologies, but mobile providers also offer Machine-to-Machine (M2M) communication solutions that transport data via their mobile phone networks to corresponding data centers or the cloud.

Secure: Any integrated security devices and the sensitive data they transfer must be protected, so platforms need security components to authenticate the devices, control identity-and-access management, protect connections, update software, and protect against data loss.

Manage: IoT systems often consist of thousands of connected devices that measure and control operating states such as pressure, temperature, vibration, and more. IoT platforms consequently contain features for remotely monitoring and testing device parts, updating the software, and rectifying errors.

Analyze: IoT analysis functions are currently at the development stage. They involve data filtering or streaming analytics so data can be monitored in real time and advanced analyses can be conducted to discover hidden patterns and other insights in the available information and to initiate actions.

Build: Because IoT application scenarios differ greatly, software integration and APIs are required to support conventional business processes and applications. After all, it must be possible to invoice a smart home or smart energy service through a traditional enterprise resource planning (ERP) system. Platforms simplify business logic and program development, providing developers with functions for data management, connectivity, and security. Furthermore, many platforms offer development and scripting tools, API links, and API management tools for connecting IoT applications with enterprise software from companies like IBM, Microsoft, Oracle, and SAP.

No platform can do it all

IoT platform providers often focus on different areas. Many platforms lack a complete range of functions as described by Forrester or other market researchers. They usually concentrate on specific aspects of their platform. Mobile providers frequently focus on M2M communications and other components are provided through a partner network and integration services.

In its latest market report Forrester Research identifies PTC, IBM, GE, Microsoft, and Amazon Web Services as leading providers of IoT platforms. Source: The Forrester Wave: IoT Software Platforms, Q4 2016.

Of 360 IoT platforms identified by the American IoT specialist XMPro, 75% deal exclusively with device connectivity. In Forrester’s IoT platform report, the researchers studied 11 providers and classified them as either leaders, challengers, contenders, or strong performers (see diagram above).

According to Forrester, the five best offerings come from PTC, IBM, GE, Microsoft, and Amazon Web Services. Two platforms frequently referenced in Germany are Siemens Mindsphere and Bosch IoT Suite but they do not appear in this evaluation. The reason for this is that the report was compiled last September and the Forrester team specified that platforms in the study had to have been available for six months prior to that.

The installed base of IoT devices and applications is increasing dramatically (left) and the IoT platform market will show unprecedented growth by 2021 (right) Source: IoT Analytics.

Mindsphere only launched as a beta release in March 2016 and the Bosch cloud was only available for in-house services and will only be opened up to others this year.

Market researchers predict a bright future for the IoT platforms market. According to Forrester, 60% of large global enterprises already use IoT-enabled applications, or plan to implement them within two years. The rate of use across companies of all sizes and fields is 52%. the future looks bright Market researchers at IoT analytics estimate the worldwide platform market in 2016 will be worth $417m rising to $1.64bn by 2021. In other words, an average annual increase of 33% (see chart below). The number of platform providers will consolidate in the coming years, according to market intelligence frm IDC. While there is currently a constant influx of IoT platforms, only five or six will dominate in the long term, predicts Mark Alexander Schulte, an IDC senior consultant.

IoT Platforms: Questions to ask when making a choice

How can users find the best IoT platform for their companies? There is no single answer to this question because different companies have differing requirements. But there are several questions that can help them choose when answered honestly.

What market is the company active in? What IoT goals are being pursued?
An industrial company that wants to analyze the machines in its production facilities and connect them needs a different IoT platform to one that manufactures products for consumers and wants to add digital services. The answers to these questions determine which of the five characteristics of an IoT platform are especially important.

How open should the IoT platform be?
Many providers offer platforms that work exclusively or primarily with their own IoT services. When considering such propositions, prospective customers should carefully consider whether they can prosper in such a closed world or with such a dependency.

How strong is the partner network?
Providers do not support the basic functions of IoT platforms equally well. Companies should look carefully to see how well certain functions are supported, and should take a close look at the range and quality of the integration and software partners offered by the manufacturer.

Which delivery models and cloud partners can be used?
Is the IoT platform offered as a service in the cloud, on-premises, or in both worlds? With which major cloud providers does the IoT provider work?

How easy is it to integrate the IoT platform with enterprise IT?
For companies undergoing a digital transformation in which IoT platforms make a major contribution, an important role is played not only by the connection between the physical and the virtual world, but also that between IoT and IT. In a case where the latter becomes too complex, the company will lose speed and flexibility.

To what degree is the platform scalable and expandable?
At the start of a project, companies rarely know how important the IoT platform might become and how many devices will have to be integrated, managed, and analyzed. Furthermore, in the beginning they seldom know which functions and applications will be needed in the future. It is important to place a major emphasis on both scalability and expandability.

Are the provider’s security efforts good enough?
No other market environment is currently faced with as many threats on a daily basis as the IoT market. Robust security mechanisms should be part of every IoT platform.

Is the platform easy to use and maintain?
Just as with IT platforms, the amount of effort required by an IoT platform is determined by how complex it is and how easy the tools are to use. To paraphrase Einstein: An IoT platform should be as complex as, but never more complex than, the tasks it must perform.

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