One of the key elements in the evolution of the Internet of Things over the last 10 years has been the ‘platformisation’ of the middleware elements of the stack. Functions that historically were built from scratch, either in-house or by a systems integrator, have been supplanted for off-the-shelf platforms that perform much the same role but at a fraction of the cost and typically with much greater simplicity. This covers areas such as device management, connectivity management, and application enablement. A recent survey conducted by Transforma Insights on behalf of Oracle showed that this trend is continuing.
The Oracle survey asked 800 IoT decision makers about which type of company the respondent would typically choose as lead supplier when deploying IoT. By a large margin, the favoured response is ‘IoT platform company’. Historically, the preferred provider had been systems integrators, particularly for the most sophisticated IoT deployments. However, amongst the respondents of our survey, IoT platform vendors have established themselves as the go-to organizations for IoT deployment. More than half (56%) of respondents chose IoT platform vendors among their top three and 25% chose this category as their first choice. Systems integrators were next with 42% of respondents ranking them in the top three (14% put them at the top). Business software vendors were in the top three of one-third of respondents (9%).
[Source: Oracle Communications IoT Survey, 2021]
The survey reveals that IoT platform vendors are establishing themselves as the go-to organizations for IoT. This is a reflection of the increasing productization and platformisation of the space. Progressively more and more adopters are demanding solutions that require minimal customization, and vendors are obliging by providing richer portfolios of productized offerings. This shift from customization to productization is causing some challenges for systems integrators making their money out of the customization (a topic examined in some depth in the recent Transforma Insights report ‘Systems Integrators should take on a new role to respond to increasingly productised competitors’).
This trend away from customization is further reflected in the responses to another question in the survey. When asked whether the enterprise adopters prefer procuring bespoke versus commercial off-the-shelf (COTS) solutions the respondents predominantly (64%) favoured COTS. Furthermore, when asked about the ways in which solutions providers can improve the user experience, the top two most quoted reasons were found to be through improving integration of off-the-shelf solutions and improving automation. Both of these indicate a desire for more productized solutions that do not require heavy lifting to integrate.
[Source: Oracle Communications IoT Survey, 2021]
This shift to off-the-shelf also reflects a recognition that IoT products organizations, particularly platform companies, tend to have a lot of highly valuable and often vertically-specific know-how over and above simply providing a platform.
It should be noted, of course, that this move towards more productisation and platformisation will not suit every IoT deployment scenario. There is still the need for customization of the product in many cases. IoT is still too diverse for a single off-the-shelf solution to realistically address every possible user and need. It may cover the most common use cases and sets of requirements, but some element of customization will always be required.
This blog post is based on a survey conducted by Oracle, of 800 leading IoT adopters in Australia, France, Germany, Mexico, Spain, Switzerland, UK and US. All of the results of the survey can be seen in the report ‘Five Best Practices of Leading IoT Adopters’.
