HAMPTON, N.H. (Jan. 31, 2018) — Technology Business Research, Inc.’s (TBR) 1Q18 Commercial IoT Market Landscape finds that customers and vendors are overwhelmingly abandoning expectations for big Internet of Things (IoT) transformation projects to refocus on incremental adoption of smaller, tactical IoT tools. Customers are evolving to understand IoT as two interconnected techniques: connected operations for their industry-specific operational needs and connected business tools for their horizontal business functions. In addition to serving both IoT techniques, vendors will focus on delivering user-friendly components and prepackaged IoT applications and services that help customers eliminate IoT sprawl and get their work done.
IoT is creating a sea change in how technology can drive business. Although IoT will ultimately drive large percentages of IT vendor revenue, IoT-driven revenue will increase only at a moderate rate for many years. This challenges vendors to refine their IoT go-to-market strategies to be as efficient as possible. Vendors must master a huge and diverse partner ecosystem, demonstrate the value of their products and services in multi-vendor solutions, and become customer-standard vendors for IoT components. Some examples of this shift in 2017 include:
- SAP’s Leonardo Live in November 2017 featured very little about the technology, instead focusing more on the business outcomes that can be achieved with various implementations of innovative technologies such as IoT and machine learning. Customer stories and general discussions on business disruption and transformation replaced the traditional product announcements and demonstrations. This fundamental change from SAP’s other events shows that SAP is evolving to guide customers through their own transformations.
- GE Digital, to leverage Predix to pave the way to positive changes for end customers, refocused around the prepackaging of industrial IoT (IIoT) applications to enable customers to build their own system of systems in 2H17. This makes the company’s ecosystem — built around its experience developing software for operating vertical-specific machinery along with its partnerships with fellow industrials and IT-oriented vendors such as Microsoft — its differentiator. GE’s new ecosystem is vital as very few customers will commit to transformation in one sweeping change. Instead, customers are likely to follow a series of steps toward their specific goals.
- IBM evolved its IoT message during 2017. Instead of emphasizing IoT-based business transformation, operational efficiency gets top billing. The company now encourages customers to “start small” and is partitioning all of its offerings; with SaaS, it is easy for customers to choose the modules they need. Pricing is designed to allow customers to “pay as they benefit.”
TBR’s key findings include:
- IoT hype will give way to a focus on providing businesses the tools to get work done in 2018.
- IT will act as the helmsman as businesses navigate the new waters of IoT.
- The success of artificial intelligence (AI) is governed by the degree to which it is democratized.
- IoT is maturing as a technique, but its underlying technological foundation is still solidifying.
- The emerging divergence of connected operations and horizontal business functions delivers continued opportunity to specialized vendors.
- 5G will be an evolution, not a revolution.
- The “distributed core” is emerging.
The 1Q18 Commercial IoT Market Landscape looks at technologies and trends of the commercial IoT market. In addition, TBR catalogs 336 customer deals and analyzes them by vertical and use case, uncovering use trends, identifying opportunity, examining maturity, and discussing drivers and inhibitors.
For additional information about this research or to arrange a one-on-one analyst briefing, please contact Dan Demers at +1 603.929.1166 or [email protected].
Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, and telecom vendors and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in a format that is uniquely tailored to clients’ needs. Our analysts are available to address client-specific issues further or information needs on an inquiry or proprietary consulting basis.
TBR has been empowering corporate decision makers since 1996. For more information please visit www.tbri.com.