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Consolidation shrinks IoT platform players

Market news |
By Nick Flaherty

The number of IoT platform companies has declined over the last two years.

Since 2019, many IoT platform companies have pivoted their business models: a number of companies no longer focus on IoT or have moved toward selling IoT solutions. Some have ceased to exist.

The trend of increasing IoT platform companies on the market seems to have stopped and is now reversing, at least in the Americas, Europe, and the Middle East and Africa (MEA). For the first time, more IoT platform companies discontinued their operations than new ones were created.

The overall number of IoT platforms based in Asia-Pacific (APAC), especially China, increased strongly from 2019 to 2021, while the number of platforms in all other major global regions decreased.

Two years ago, IoT Analytics identified 620 IoT platform companies globally on the open market up from 450 companies identified in 2017. As a result, the number of IoT platforms is consolidating, and there are 613 IoT platform providers based on IoT Analytics’ latest research.

An IoT platform is a specialized software tool used to build and manage IoT solutions. IoT Analytics classifies five different types of platforms: application enablement/management, device management, data management, telco connectivity/management, and IoT-based Infrastructure-as-a-Service (IaaS).

This latest research publication details the IoT platform company competitive landscape, classifies the technological capabilities of each IoT platform, identifies the main segments each platform targets, and ranks the leading platforms based on revenue and market share.

For the first time since 2015, the IoT platforms market is not growing. From 2015 to 2019, the number of publicly known IoT platforms more than doubled from 260 to 620.

The number of IoT platforms might have stopped growing, but the size of the market has still increased substantially. In 2020, $5bn were spent on IoT platforms but the market is expected to grow to $28bn in 2026. That constitutes a 33 percent compound annual growth rate (CAGR) for 2020 to 2026. The growth is fuelled by the rapid adoption of cloud-based IoT platforms and the increasing number of customers choosing to buy (not make) IoT platforms.

Most IoT platforms offer application management/enablement capabilities (58 percent of the 613 IoT platforms). Data management is offered by 43 percent of all IoT platforms, and 35 percent offer device management. Fewer IoT platforms offer IoT telco management capabilities (7 percent) or infrastructure services/IaaS (3 percent).

Next: IoT platform pivots


Of the 620 IoT platform companies identified in 2019, the majority (426) are still alive and active in 2021, but 188 of those companies are not considered IoT platform companies anymore:

Some companies have ceased to exist and no longer offer their services such as DevicHub.net, iota Computing, and Yoics.

Some companies (24 percent) no longer focus on IoT but still offer a platform. One example is Accenture, which rebranded its Insights Platform as AIP+ and now offers a collection of modular, pre-integrated AI services and capabilities not focused on IoT.

Some companies (21 percent) have pivoted toward selling an IoT application or vertical solution or now have a security focus. Examples include Tellu and Centerity.
Tellu used to offer an IoT platform (TellluCloud) for all verticals but has pivoted to eHealth solutions. While the company still markets an eHealth platform, the main focus is on two healthcare solutions: digital supervision and remote patient monitoring.

Centerity in 2018 offered a broad data management solution, including a specific offering for original equipment manufacturers of connected products. The company has pivoted toward security and now offers one platform for advanced monitoring and security, in which IoT plays a minor role.

Seven IoT platform companies have been acquired since 2019, adding to a growing list of 84 IoT platforms acquired since we started tracking the market in 2015. Most of the acquired IoT platforms still operate today. Examples of IoT platforms acquired after 2019 include Brightwolf, which was acquired by Cognizant in November 2020 and is still active and operating, and Sprint’s Curiosity IoT platform, which was acquired by T-Mobile in April 2020 and is now fully consolidated into its parent company.

In addition, 182 new IoT Platform companies have emerged since 2019. The fact that 30% of all market players discontinued and almost the same percentage joined the market demonstrates that the market environment remains highly dynamic.

In the last two years, 30 platform companies have pivoted to an application or now offer a vertical solution instead of a horizontal IoT platform, and 10 now offer a security platform. Rather than choosing to compete with 620 other companies and invest millions of dollars into maintaining a highly modular and scalable software platform, those providers followed the demand for specific—sometimes niche—applications that allow them to build out competitive advantages in vertical-specific solutions.

The market for IoT platforms continues to concentrate, with the top 10 companies now controlling almost two-thirds (65 percent) of the entire market, compared to 58 percent in 2019 and 44 percent in 2016. The hyperscalers (Microsoft, AWS, and, to a lesser degree, Google Cloud, Alibaba, and some others) have become market leaders, and they continue to outgrow the overall market with growth rates of 50%+ per year.

Both AWS and Microsoft continue to add new capabilities to their growing portfolios of IoT platform services. Earlier this year, AWS introduced AWS SiteWise Edge to a wider audience, which allows customers to keep their industrial data on-premises, e.g., for lower latency or security reasons. Microsoft recently presented new capabilities of its IoT solutions for retailers utilizing cameras and sensors to enable smart spaces. Additionally, the company showcased its own use of Azure Digital Twins for building management. Microsoft aims to standardize a shared data model for Digital Twins (e.g., in the building space) as part of its cloud services.

In June 2021, the Chinese government announced its goal of 3–5 industrial IoT (IIoT) platforms with international influence “made in China” by 2023. This agenda is being reflected in our research: the number of vendors from APAC (and especially China) has increased from 16 percent in 2019 to 22 percent in 2021. Shenzhen and Beijing are now among the top five cities for IoT platform company headquarters.

While most IoT platform companies are still headquartered in North America (44%), their share has decreased by six percentage points in the last two years. Examples of the 66 Chinese IoT platform companies identified include tuyaAlibaba CloudBaidu IoT Core, and the Huawei Connection Management Platform.

https://iot-analytics.com/iot-platform-companies-landscape/

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