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The IoT market has begun sorting itself out in 2019 — a vast improvement from its disorganized past

It has been a wild and chaotic ride for Internet of Things (IoT) vendors, with many placing big bets on IoT in the past and entering 2018 largely disappointed by the results. While IoT will likely never meet the expectations placed on it in 2015 and 2016 — the peak of hype — IoT’s contribution to IT vendor revenue will increase, with IoT ultimately becoming a core revenue driver. IoT, as a technique to solve business challenges through the assembly of technology to drive results, such as predictive maintenance, resource efficiency, value-added services or generally, increase insight, is not going anywhere.

The good news for vendors is IoT is getting a lot easier as the ecosystem sorts itself out. The increase in portfolio focus and partnering is making the market easier to navigate for vendors and customers. Offerings are becoming easier to implement and integrate as vendors begin to converge on architectures and standards, as well as orient go-to-market strategies toward coopetition rather than “winner takes all.” Customers are coming to market with a greater understanding of what they are looking for thanks to efforts by vendors and early adopters educating the market and cutting through the hype pays off. TBR believes 2019 marks the emergence of “go-to-market 2.0” as an evolved strategy for both IT and OT vendors seeking to better profit from IoT.

 

The 1Q19 Commercial IoT Market Landscape looks at technologies and trends of the commercial IoT market. Additionally, TBR catalogs and analyzes by vertical more than 450 customer deals, uncovering use trends, identifying opportunities, examining maturity, and discussing drivers and inhibitors.

The exaggerated expectations created by IoT hype play a big role in how vendors approach IoT in 2018, for better or worse

HAMPTON, N.H. — Internet of Things (IoT) vendors are succeeding by focusing on business problems, not transformation, according to Technology Business Research, Inc.’s (TBR) 3Q18 Commercial IoT Market Landscape. Shane O’Callaghan of TSM Control Systems, a PTC customer, explained it at LiveWorx2018 in the most straightforward manner: “IoT is not a technology project; it’s a business project.” TBR believes leading vendors are gaining market traction because they are molding their IoT go-to-market strategies around solving tactical business problems with solutions proved by case studies.

Vendors that focus on technical aspects are unlikely to gain breakthrough success and will be relegated to being component suppliers to vendors more engaged with customers at a business-problem-solving level. At LiveWorx 2018, PTC CEO Jim Heppelmann told analysts PTC may have been looking too far forward, focusing on cutting-edge technology, and had trouble explaining IoT to customers and how its platform, ThingWorx, would improve outcomes.

Like PTC, some vendors appear to be caught between trying to evolve from a component-positioned, technical-messaging vendor and a vendor trying to solve business problems. And many vendors are struggling to rise above the messaging of more successful peers or put a unique twist on their solutions to differentiate them amid an increasingly saturated and hypercompetitive market.

In its 3Q18 Commercial IoT Market Landscape, TBR deeply examined paths vendors are taking to evolve.

  • Emphasizing partnering is one approach most vendors use. Partners are critical because most IoT projects include components from several vendors, and very few of those vendors have a relationship with the customer.
  • Increasingly, IoT is embedded in both hardware and software products from independent hardware vendors (IHVs) and independent software vendors (ISVs), respectively. IT vendors are leveraging large- and small-scale ISVs and IHVs to bring their technologies to a broader market beyond providing custom solutions.
  • Some vendors are narrowing their focus and messaging to verticals in which their expertise matches the challenges experienced in the vertical.
  • Some vendors are beginning to sell off underperforming business units or looking for attractive acquisitions in their areas of focus. TBR expects 2018 to be a year of consolidation and acquisition activity.

The 3Q18 Commercial IoT Market Landscape looks at technologies and trends of the commercial IoT market. Additionally, TBR catalogs and analyzes by vertical more than 350 customer deals, uncovering use trends, identifying opportunities, 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].

 

ABOUT TBR

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.