Navigant Research Blog

Industrial IoT Gets Needed Technology Boost from Vendors

— June 14, 2018

For many businesses, the industrial Internet of Things (IIoT) has yet to take hold. Most are well aware of the concept, but have little practical experience with the intricacies of IoT deployments, or else lack a strategy for taking advantage of IoT. Lately, though, new tools and better approaches have become available to help move firms still on the sidelines to the playing field.

OSIsoft Cornering Collaboration

For example, OSIsoft has developed several ways of collaborating so clients can get the most from their operational data. The company is working with Amazon Web Services to simplify the analytics process that kicks in when a firm uses OSIsoft’s PI System. Also, the company has a new deal with Nokia whereby the two firms will jointly develop new business models based on integrating IoT with private LTE networks. The aim is to help customers more easily deploy predictive maintenance and communication infrastructure. Lastly, in the utility sector, OSIsoft is helping Japan’s Kansai Electric Power Company (KEPCO) use the PI System in a newer way, providing remote monitoring and real-time alerts to reduce grid downtime.

Sprint Looks to Capture the Small and Medium Business Market

US wireless carrier Sprint is another firm supplying a new IoT tool, in this case aimed not only at larger firms but also the often overlooked small and medium business market. Sprint has created its IoT Factory, an online marketplace offering pre-packaged IoT solutions. The marketplace is a collaborative effort that includes strategic partners myDevices, a creator of drag-and-drop IoT devices, and the Goldie Group, a firm that provides lifecycle services in the electronics and wireless industries.

Let’s Talk about Progress

Progress, a provider of application development and deployment technologies, has come out with a new self-service anomaly detection and prediction tool for the IIoT market. The firm’s DataRPM is said to be a first-of-its-kind offering that enables R&D and innovation groups to enhance their decision-making capabilities during IIoT proof-of-concept or piloting projects. The new tool is hosted on AWS, which is offering free trials of Progress’ DataRPM to qualified manufacturers.

And Then There’s Microsoft

Finally, Microsoft is forging ahead with efforts to promote its Azure IoT Edge capabilities. At its annual Build conference, the software giant announced that it is open-sourcing Azure IoT Edge Runtime, launching Project Kinect for Azure, and further embracing Kubernetes. What this means is Microsoft is all in on IoT. This was underscored by the announcement earlier in the year that it is tripling its previous spending on IoT.

Small Steps Add Up

Individually, these might appear to be mere small steps in the evolution of the IIoT market. Taken together, however, these efforts illustrate the type of technology development momentum necessary to drive adoption. These strategic moves should help reduce the complexities involved in IoT projects.

This is just the type of market development anticipated in Navigant Research’s most recent report on the subject, Industrial Internet of Things. The report notes how, unlike consumer markets for IoT, the industrial or enterprise adoption pace will be more measured in the near term, with a surge coming later. That pace is likely given how many companies take a more restrained approach to new technology. Established companies will be hesitant to fully adopt until the evidence shows that they will get the necessary ROI.


Amazon Continues to Expand Its Services, but Where Will It Go Next?

— May 29, 2018

In 2017, we saw how far Amazon was willing to push the boundaries of technology to make its customers’ lives more convenient with its Key service, which granted access for in-home deliveries through a compatible smart lock and the Amazon Cloud Cam. Then earlier this year, we saw Amazon push this service further with its acquisition of Ring, which allows the company to own the entire delivery experience, instead of having to rely on partnerships to enable the Key service. And now, we are seeing the company expand this service even further by bringing deliveries to the car.

The Dawn of in-Car Deliveries

On April 28, 2018, Amazon announced that it was partnering with General Motors and Volvo to grant couriers access to a person’s vehicle to deliver packages. Amazon has been testing the service in California and Washington for the past 6 months, and is now rolling it out in 37 US cities. The service is currently only available to Amazon Prime subscribers and those who own a model year 2015 or newer GM or Volvo vehicle. There have already been a series of automakers experimenting with in-car deliveries, including Audi, Volvo, and Volkswagen. The technology equipped in GM and Volvo vehicles, primarily OnStar and Volvo On Call, which are used for features like roadside assistance, make these manufacturers a good fit for Amazon’s service expansion.

More Companies Are Offering Security Services

Amazon’s tentacles seem to be extending in any direction touching direct to consumer services, which begs the question where Amazon might be expanding next. A move reported by many news publications at the end of April 2018 may provide a clue. Amazon is now selling home security services, including professional installations, with no monthly fee. The security package is available at five price tiers ranging from $240 to $840 and includes devices like an Echo Dot, lighting, Ring, a camera, and sensors, depending on the tier. Security is a value proposition in which many companies are increasingly engaging. Comcast is using security to generate new revenue as its existing cable TV business model is under threat from companies like Netflix. Nest, which started with its Learning Thermostat, recently expanded its product portfolio with six new security products. Amazon wants in.

Amazon Is Only Adding to Current Offerings so Far

However, this move isn’t quite as profound as it sounds. The package deal is largely just a collection of things that Amazon already sells or services it is already implementing. If Amazon were to actually move into home security through the acquisition of a security company like Vivint, it would place the company as a home management and service provider. The company would not only provide e-commerce services and a handy digital assistant, it would own nearly all pieces of the smart home value chain and become the only real smart home platform provider. This could have serious implications for the market’s development, especially in a space that is fragmented and is expected to see further consolidation.


Challenges of Partnerships and Acquisitions in the IoT Lighting Market

— April 10, 2018

The commercial lighting market has new and expanded technology solution offerings that are helping to address customer pain points through new use cases. Lighting manufacturers and technology companies providing Internet of Things (IoT) solutions are focusing on optimizing space utilization, enhancing retail customers’ shopping experience, asset tracking to improve operational efficiencies, and providing energy management and visualization features to analyze building system data. Vendors have expanded their offerings through internal growth and acquisitions. As the industry is undergoing continual change and advancement, it is expected there will be challenges to overcome for vendors competing in this shifting landscape.

Interoperability and Partnership and Acquisition Integration

Interoperability is a leading challenge faced by the lighting industry. Many systems are proprietary or are a modified version of standards, which creates the same issues as a proprietary system. There are groups working to address this issue, which can provide customers with more options and eliminate the need to select all components from the same vendor.

The IoT lighting market has seen an increased number of acquisitions and partnerships as companies look to expand their solution portfolios and provide a customized solution to the customer. Partnerships and acquisitions require integrating different systems and components, which can be complicated when devices aren’t interoperable. And while the growing number of partnerships within this market have helped alleviate issues surrounding interoperability, problems remain when some components of a system use open communication standards but some devices are not interoperable at the communication level.

Partnerships and Acquisitions That Provide Value

With the growing number of partnerships and acquisitions, it can seem like companies make these moves for the sake of publicity. Partnerships must be strategic to expand the capabilities of a company’s offering. For a company to provide a complete IoT lighting solution portfolio without partnerships is difficult—likely impossible. It is best to allow each company to focus on its own area of expertise, not only to provide an improved offering to its clients, but also to increase business for the companies involved in the partnership. The IoT lighting market is in its infancy, and partnerships are still forming  as companies realize areas within their offerings may need complementing and expanding. There is even more potential to provide customers with customized solutions to address their pain points when partnerships form between multiple companies, as opposed to a siloed system where a company has multiple individual partnerships.

In some cases, a vendor may choose to expand its offerings through an acquisition rather than a partnership or internal growth. Again, there can be challenges with interoperability of new products and solutions. Caution is needed in acquisition integration, and acquiring a company and not integrating them fully can also prove a challenge. If an acquired company remains segregated from the new parent company, it begs the question of why that company was acquired instead of partnered with. Is there a benefit in one method of expansion over another? Currently, companies are showing success in both forms of go-to-market strategies, and it isn’t clear which provides greater success. As the market matures, one avenue of increased solution offerings may become preferred. In the current state of the market, it is apparent that both partnerships and acquisitions provide substantial value—but must be entered upon with caution.


Telcos Aggressively Expanding Smart City Services

— December 7, 2017

Among the essential building blocks for the smart cities market are communication networks that connect the sensors, controllers, cameras, and other hardware infrastructure capturing valuable data from the city environment. The need for urban connectivity is creating new opportunities for the telcos responsible for providing public wired or wireless communication services to government, consumers, and businesses. Telcos are increasingly making strategic acquisitions and extending their footprint into solutions and services for smart cities and Internet of Thing (IoT) application areas. Whether through established technology such as 3G/4G or potential disruptors like 5G and narrowband-IoT (NB-IoT), cellular providers are aiming to become the leading suppliers of connectivity for smart cities.

Significant Acquisitions and Service Offerings in North America

In recent years, a number of telcos have made bold expansions into the smart cities market. Verizon, for example, has been working to expand its presence in that industry. It made a major move to extend its footprint with the acquisition of smart street lighting and sensor network provider Sensity Systems in late 2016. Verizon is supporting a wide range of smart city applications, including transportation, public safety, city management, and smart buildings.

AT&T has also significantly increased its visibility in the market since its initial smart cities launch in 2015—notably through its role in the Atlanta and San Diego IoT platform deployment projects. It is supplying Bluetooth and Wi-Fi for short-range connectivity, plus fiber and LTE for backhaul to the cloud.

In early 2017, AT&T obtained exclusive rights to distribute the sensor nodes from Current powered by GE through a reseller agreement in the US and Mexico. AT&T will be the commercial lead on future smart cities projects, with Current as its technology provider.

Significant Global Acquisitions and Offerings

Telefónica, the Spanish-based global telecom provider, has also been targeting smart city opportunities. It was lead commercial partner in the SmartSantander project, which involved deployment of over 20,000 devices in Santander and the surrounding area (including sensors, repeaters, gateways, etc.).

French carrier and service provider Orange is leveraging its expertise in 4G, fiber, LoRa, Wi-Fi, and Bluetooth to install a network of connected sensors for Romania’s Alba Lulia Smart City 2018 project. Telefónica and Orange Group are key players in the development of FIWARE standards—an open source initiative that aims to establish a standard for smart cities based on the FIWARE platform.

Most recently, Telestra, an Australian telecom company, acquired fleet management systems provider MTData and created a partnership with Melbourne-based Smart Parking. The company has already won contracts to install Smart Parking’s sensors in five Australian council regions.

Telco Expansion Challenges Non-Cellular Connectivity Providers

The aggressive telco expansion into the smart cities market should serve as a warning shot to other providers of urban connectivity such as RF mesh and Wi-Fi players. These providers should quickly move to protect market share by emphasizing their relative advantages over cellular (e.g., private networks, lower operating costs) and developing more vertical solution partnerships and connectivity capabilities.

While most cities are likely to have multiple providers and types of connectivity for different use cases, cellular providers are making a clear push to capture the high bandwidth segment of the smart city communication networks value chain. There is evidence that resistance to public cellular is declining in the utility sector. With the deployment of new cellular technologies such as NB-IoT and 5G on the horizon, the same is likely true for cities.


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