Zinnov released on Wednesday its global ratings of Internet of Things (IoT) Platforms. The study estimates that global enterprise investments in buying IoT platforms will reach US$1.9 billion in 2019, and is expected to grow at a staggering 35 percent CAGR to cross $9 billion by 2024.
The study titled, ‘Zinnov Zones for IoT Platforms – 2019,’ is aimed at helping enterprise customers build a deep understanding of the IoT Platform landscape and enable them to make informed decisions on selecting the right platform partners for their IoT initiatives.
The industrial, public sector, automotive, retail & CPG, and energy and utilities are the top five verticals focused on IoT and account for about 65 percent of the total enterprise IoT spend in 2019. Other industries such as healthcare, life sciences, telecom, and travel and hospitality are also demonstrating rising adoption of IoT with an uptick in proofs of concept.
The study also revealed that the top 200 global enterprises spent 35 percent of all digital program outlays on IoT-centric applications, marking the growing importance of IoT as a core business enabler. The study also found that 45 percent of these enterprises have set up dedicated IoT Centers of Excellence (IoT COE) to support existing use cases and build reusable IPs.
Zinnov defines the IoT platform spend as the enterprise spend on COTS (commercial off-the-shelf) IoT platforms, excluding any spend made on the development of proprietary IoT platforms. This comprehensive study covered 30 Global IoT Platform Companies across three categories – Application Enablement Platform (AEP), Device Management Platform (DMP), and Connectivity Management Platform (CMP). Within AEP, Zinnov further assessed use cases including Industry 4.0, connected products, connected assets, connected logistics, and connected workers.
The 30 global IoT platforms that Zinnov evaluated as part of this study were found to have cumulatively invested over USD 3.5 Billion in 2019 to scale their IoT businesses. Two-thirds of these platforms launched IoT applications marketplaces to expand their market reach, while 80 percent of them focused on building native AI/ML capabilities on the back of acquisitions in the last 24 months.
Based on the data, Zinnov believes that the next frontier of growth is likely to be catalyzed by 5G, with more than 65 percent of the analyzed IoT platform companies having already started experimenting with 5G-led IoT use cases, with over 45 percent of participants having 5G talent pool of more than 50 employees and almost 60 percent forging partnerships specifically for innovation around 5G.
Zinnov also estimates that while IoT platform companies have found initial traction in the US and European markets, it is the markets in the APAC region that are likely to drive the next wave of growth, providing about 50 percent market contribution in the next five years. Rising APAC-centric investments in IoT engineering by top platform providers, increased focus by governments on smart cities and smart manufacturing, along with rapidly growing start-up ecosystems are the major enablers for this evolution.
‘Zinnov Zones for IoT Platforms’ rating analyzed 30 Global IoT Platform companies on their ‘IoT Prowess’ and ‘Scalability,’ to position them in 4 Zinnov Zones (‘Nurture Zone,’ ‘Breakout Zone,’ ‘Execution Zone,’ and ‘Leadership Zone’).
Apart from the rating across the three layers – AEP, DMP, CMP, the analysis also provides a leadership graph of AEP companies across 5 categories – Industry 4.0, Connected Products, Connected Assets, Connected Logistics, and Connected Workers. Microsoft, PTC/Rockwell Automation, AWS, and IBM have been identified as leaders for AEP. AWS, Bosch, PTC/Rockwell Automation, and Microsoft are placed in the leadership zone for DMP, while Vodafone, Huawei, Telit, and AT&T are positioned as leaders for CMP.
“Globally, over 750 companies including tech giants, services companies, application vendors, OT players, hardware OEMs, and start-ups are offering IoT platforms to their customers,” said Praveen Bhadada, Partner & Global Head – Digital Transformation, Zinnov. “While the supply market is becoming increasingly competitive, the demand market is yet to see the rapid scaling of IoT deployments at an enterprise level. Our analysis suggests that 75 percent of all IoT platform revenue comes from first-time buyer enterprises. Moreover, 50 percent of the top 200 companies are also building their own IoT platforms instead of buying an off-the-shelf solution which is emerging as a big concern for IoT platform players. We strongly believe that IoT platform companies will need to re-align their sales strategy to partner with customers’ Digital and IoT-centric programs early on and co-create the roadmap to scale enterprise IoT investments.”