The IoT ecosystem includes all those technologies that enable consumers, businesses, and governments to connect, control and derive value from their connected objects in diverse environments, including manufacturing, agriculture, transportation, smart cities, construction, oil, and gas.
According to Forrester the total number of internet-connected devices will be 34 billion by 2020, up from 10 billion in 2015. IoT devices will account for 24 billion of these, while traditional computing devices such as tablets will comprise 10 billion. It is estimated that nearly $6 trillion will be spent on IoT solutions over the next five years.
It is clear then that the IoT market is a huge and expanding space which offers opportunities but threatens confusion, as the number of IoT products proliferates and it becomes less clear what distinguishes them.
This confusion is not helped by the fact that the IoT platform market remains fragmented: with over 600 different vendors, the market is split between IT players like Cisco, IBM, and SAP, IoT players such as startups, and OT players like Siemens, GE, and Bosch. Enterprise software and service companies and IoT startups account for the largest proportion (22% and 32%, respectively) with industrial technology providers following behind (18%), and internet companies and telecommunications companies making up the remainder.
Although some companies are emerging as leaders in this sector, understanding the difference between the different types of IoT product out there can be difficult with such a plethora of options available. Furthermore, the excitement around IoT platforms has led to a distorted picture of what is actually out there.
Most businesses do not know that the majority of IoT platform vendors do not offer general IoT platforms: instead, they tend to sell either IoT applications for specific use cases or “partial” IoT platforms, which technically only contain aspects of full IoT platforms.
In this article, we are going to explore the differences between the three main types of IoT product – platforms, applications, and solutions – in order to clarify what they do, and what they can offer businesses. We will start with a general overview of the IoT and the IoT value chain, and then move onto an examination of the different IoT products out there.
So, what exactly is the IoT?
Definitions of IoT tend to revolve around Mckinsey’s notion of it as “sensors and actuators embedded in physical objects and devices that are linked through wired or wireless networks, often using the same Internet Protocol (IP) that connects the internet.”
To make this simpler, IoT simultaneously refers to the ever-widening network of physical objects that use an IP address for internet connectivity, and the communication that happens between these objects and other internet-enabled devices and systems, allowing them to exchange data.
If that’s the IoT, what’s the IoT value chain?
From a technological perspective, the value chain of any IoT product includes connected assets, the network used to enable communication between devices, IoT platforms, IoT applications, and IoT solutions.
Connected Assets is the hardware layer – the sensors, actuators, chipsets, MEMS, etc. that are embedded into “smart” physical assets and devices.
The Network is the wired or wireless network involving network equipment, internet protocols, connectivity, network service providers, and device provisioning and configuring. The key standards for these wireless networks are LoRa, NB-IoT (Narrow Band- Internet of Things), restful APIs, (docker) containers, etc.
IoT Platforms vs. IoT Applications vs. IoT Solutions
We are now going to get into the details and take a close look at what the main differences are between the above IoT products, looking in detail at the components that make up the IoT value chain.
What is an IoT platform?
If the IoT is the wired or wireless networks of sensors and actuators, embedded in physical objects, and the communication and data-sharing activities that they carry out via the internet, then an IoT platform, or Enablement Platform, is widely understood as the underlying software that allows devices to share large quantities of data, and ensures that this data can be analyzed and put to use.
One example of an IoT platform is PTC’s Thingworx platform, which is an Industrial IoT platform that allows businesses to source, contextualize and synthesize data while orchestrating processes and delivering powerful web, mobile and AR experiences. This platform is flexible and can be deployed in a variety of ways; it is also supported by a vibrant partner ecosystem.
What is an IoT application?
An IoT application is a software programme that can be added “on top of” an IoT platform, and uses the latter, along with data it aggregates from the connected assets and network, to produce actionable insights for specific pain-point areas (for example, parking occupancy).
What is an IoT solution?
An IoT solution is an end-to-end service which integrates all of the above elements of the IoT value chain – from the connected assets to the communication network, the IoT platform and the specific business applications.
IoT solutions are therefore made up of a number of parts, which can often be separated and sold on their own (for example as applications), but that together comprise a comprehensive, outcome-based IoT service that is usually adapted to individual organizations’ needs.