If I look back at the last 18 months in IoT, I see a period where big IT has gotten serious about IoT. GE has put the industrial internet at the center of its future, most recently exemplified with its $1 billion new energy business dubbed Current. In September IBM officially launched its new IoT unit after it made a $3 billion IoT commitment in March. And Salesforce recently unveiled its IoT Cloud that will leverage Thunder, its realtime event processing engine.
But one company that is particularly interesting on the enterprise end of IoT is Amazon, most notably because it is going after IoT from both an ecommerce consumer facing angle and from an enterprise cloud strategy. The fact that Amazon is so unique in being both a cloud provider and a consumer e-retailer gives it a unique understanding of the design demands in an IoT software platform as well as the types of cloud services businesses need.
October opened with Amazon announcing the expansion of its Dash service. Amazon initially rolled out Dash earlier this year, a simple button consumers can attach to products like coffee makers or the garbage. Synced with their smart phone, when pressed, the button automatically orders coffee or garbage bags. It’s one more play from Amazon’s effort to take market share from grocery retailers.
But what was interesting about the newly announced expansion is that the goal is to leverage sensors in order to eliminate the need for the consumer to press anything. Sensors in a washing machine or a printer will automatically measure supply levels and communicate reorders to Amazon when needed. The strategy is a fairly elegant implementation of using sensor technology in consumer IoT so that purchasing behavior essentially is governed more by machines and less by humans.
Will there be human pushback from say, folks who dislike machines buying products for them? Sure, there will be. But trust will likely grow and with less price sensitive customers or those who are very busy and are growing accustomed to not having to physically go to the grocery store, this program is just an extension of a behavioral trend. In a nutshell, more and more people don’t want to shop anymore. We’ve seen that occur in the physical retail context but with the expansion of Amazon Dash, the company is arguing that the trend may now apply to ecommerce as well.
Amazon has also been working the IoT angle on the enterprise side. At AWS re:Invent in early October it announced the launch of AWS IoT. AWS IoT will provide SDKs to allow product developers to easily connect to the cloud, offer network capabilities to connect to cloud applications, certification for device identification and encryption, and interoperability with AWS analytics tools. It includes a rules engine that, in coordination with content and context aware data, opens up the possibility of automated responses across the AWS application platform. This is critical because in successful IoT, applications need to automatically respond to sensor data.
In March Amazon acquired 2lemetry, a Colorado startup that had an enterprise focused platform for tracking and managing IP-enabled devices. So it’s not entirely shocking that AWS has quickly rolled out a dedicated IoT platform service.
There’s a lot of hype right now in the world of IoT, though I believe that long term these investments will pay off. For enterprise customers currently moving to the cloud, a consideration over the next 3-5 years will always be whether to add connectivity to their physical product lines. For example, if Whirlpool is moving its IT operations to the cloud, they may well consider also using a service like AWS IoT for a connected washing machine provided the tool is mature enough. The other major consideration is whether there’s added value in keeping the IoT platform in the same ecosystem as other cloud services.
The IoT platform market is getting competitive, where every big IT player from IBM to GE is rolling out their own IoT offering in addition to the startups like Arrayent and Electric Imp. I’m expecting a consolidation over the next 18-24 months, and the critical question will be whether the big IT giants can leverage their customer relationships to sell add-on IoT services or whether the specialized focus of startups will pay off. Many of the IoT platform providers that are smaller have been laser focused on connecting point devices, managing back end cloud services, making data available for third party analytics, and even dealing with hardware module design.
In reality, many of the early platform providers are consumer focused and the GE and AWS’s of the world will be going after the enterprise. Still, there’s inevitable overlap and many of the early consumer facing IoT platform providers chose consumer IoT as an easy and near term revenue strategy while setting their sites on longer term revenue available from big enterprise customers.
Device proliferation continues and whether we’re talking about AWS IoT or Google’s recently announced Brillo operating system for IoT, the core realization in big IoT is that they want to control the software that both end consumers and large enterprises use to interact with all of their devices. That was always a seemingly easier proposition when we were talking about one smart phone or tablet.
But now we’re talking about multiple devices that are sensor enabled. It’s a big, complicated undertaking. But given how much people’s lives and behavior are being driven by the devices in their lives as well as the fact that in many respects the software spans from the consumer to the enterprise, it’s a market big IT feels is worth fighting for.