What is the internet of things?
IoT technology is a collection of connected things able to communicate with one another.
What is an IoT platform?
Part of our Internet of Things briefing
Global | Publication | June 2019
IoT platforms provide services that have, as their primary focus, the exploitation of data existing at the higher layers of an IoT ecosystem. They:
- are typically cloud-based;
- may include some or all other layers and components of an IoT ecosystem, but are characterised by having an additional layer of software upon which other businesses can
- develop their own IoT offerings; and
- operate by using such software to capture, analyse and present sensor and device data. In that way, they provide for IoT application enablement.[1]
IoT platform
- Enablers for applications
- Managed access to information
- Brokering for capability interaction
- Support
- Integration of different systems, devices, and networks
- Abstraction - hiding details of underlying technologies
What is the significance of IoT platforms?
The answer turns on data economics. It used to be the case that technology vendors could obtain and maintain market share by large capital investment in hardware. Over time, the ability to develop proprietary software became an additional barrier to entry. With the advent of open source software and the development of advanced data analytics, the new “digital oil” is now data. The possession of large proprietary data sets by a business is a significant (and increasingly the most important) barrier to entry for its competitors.
In an IoT context this means that those who control the higher (data) layers in an IoT ecosystem (rather than the lower raw data, hardware, transmission and storage layers) may have an intrinsic advantage, because that is where insights lie.[2] Where are such data and insights to be found within an IoT ecosystem? At their most potent, in IoT platforms.
Whoever controls the platforms will rule the future. Attributed to Henning Kagermann by the European Commission, Cross-Cutting Business Models for IoT, 2017, page 42
The importance of data in the IoT value chain means capital investment in the underlying IoT devices and infrastructure may not be nearly as important as had been the case in other contexts. It also means that those involved in the infrastructure layers may be more beholden to demands at the higher data layers.[3]
The logic of economic imperatives
The logic of such economic imperatives suggests that, in order to control access to (and use of) the resulting data, many hardware and communications technology vendors will seek to:
- End-to-end: occupy the IoT ecosystem increasingly on an end-to-end basis;
- Transform business model: “servitise” their product offerings;
- Standards: use their own proprietary standards (see Interoperability, interfaces and Standards);
- Multiple points of presence: deploy multiple IoT points of presence in networks in order to be able to generate a synoptic view (or overview) of data trends, and more valuable insights; and
- Scale: achieve economies of scale and get access to the most valuable data, by promoting their own IoT platform as the default platform to be used by other businesses (who wish to build their own solutions).
It is hardly surprising, therefore, that businesses are adopting an increasingly diversified approach to their IoT offerings by strategies such as:[4]
- Bottom up: start with connectivity layer and build platform from the bottom up;
- Top-down: start with the analytics layer and build platform from top down;
- Collaborations: form strategic JVs and collaborations to offer a full IoT platform;
- M&A: acquire full IoT platform functionality by acquisition; and
- Investment: investment in IoT technology throughout the IoT ecosystem
Footnotes
1
Padraig Scully, 5 Things to Know about the IoT Platform Ecosystem, IoT Analytics, https://iot-analytics.com/5-things-know-about-iot-platform/, 26 January 2016, page 1.
2
European Commission, Cross-Cutting Business Models for IoT, 2017, page 61.
3
European Commission, Cross-Cutting Business Models for IoT, 2017, page 61.
4
Padraig Scully, 5 Things to Know about the IoT Platform Ecosystem, IoT Analytics, https://iot-analytics.com/5-things-know-about-iot-platform/, 26 January 2016, page 3.
What is an IoT platform?
IoT platforms provide services that have, as their primary focus, the exploitation of data existing at the higher layers of an IoT ecosystem.
What are the impacts of IoT technology?
Addressing the economic, sectoral and geographical impacts of IoT.
Are there vulnerabilities in the technology?
Like all information technology, IoT technology is not immune from technology-related vulnerabilities.
What are the key operational issues?
The IoT device manufacturing industry is characterised by a relative lack of product lifecycle plan.
What are the key legal considerations?
Considerations include privacy and cybersecurity, IP rights, liability and autonomous decision making issues, regulatory and competition, tax and litigation.
What are the issues to consider in acquiring IoT technology?
Businesses wishing to utilize IoT will need to consider a number of issues.
What should IoT stakeholders be doing now?
IoT stakeholders should be reviewing their privacy policies and terms and conditions.