In the 1980s IBM had a rock-solid market position in personal computers. Along came a small startup called Microsoft and disrupted the operating system space with DOS and Windows. By the 1990s Microsoft had a dominant position in operating systems. Along came a small startup called Android that offered an operating system for smartphones. Today, Android dominates that space with Microsoft grabbing a mere 3% market share. There are hundreds of similar examples that show how the IT and internet space have produced enormous business model disruptions in only few years.

The manufacturing industry, on the other hand, has been exactly the opposite: It has evolved over the course of the years and it has certainly not seen such major disruptions. The biggest changes in the factory environment since the 1980s have been

• A constantly increasing degree of automation
• The widespread adoption of Lean Manufacturing and Six Sigma principles
• The arrival and integration of enterprise IT systems (ERP, MES, PLM, etc.)

The industrial internet for the first time promises a complete convergence of IT systems and machine automation infrastructure.

Convergence of IT and industrial automation – click to enlarge

But what looks like just another evolution at first glance is actually the clash of two very different worlds – both aiming to shape the smart factory of the future.

Conservative manufacturing meets fast-paced IT

The slow-moving, conservative manufacturing industry is suddenly blending with the innovative and fast-paced IT industry. The German government calls it the fourth industrial revolution or “Industry 4.0”. Has the time of disruption finally arrived to the factories?

If you ask people working in these industries, the answer is clearly “No”. According to a recent survey undertaken by the World Economic Forum a whopping 88% of industrial decision-makers say that “they still do not fully understand the underlying business models and long-term implications of the industrial internet for their industries” (see report). One has to keep in mind that most of these executives have never witnessed any major disruption in their industry before.

So how much room is there really for disruption in smart factories?

Today’s factories are not efficient

If there is one decisive metric in the manufacturing environment, it is the OEE (Overall Equipment Effectiveness). The metric measures how effectively a manufacturing operation is utilized compared to how effective it could be. Average OEEs run at 60-70%. Today’s world class OEEs are around 85%. That means that even the most effective factories today lose 15% of time on non-value-adding tasks like machine changeovers, stoppages, maintenance, and production of faulty products. The monetary equivalent to a one percentage point increase in OEE is gigantic for every company. Subsequently, there is plenty of room for future smart factories to get closer to a 100% OEE.

But according to Clayton Christensen, Harvard professor and author of the best-selling book “The innovator’s dilemma”, the real enabler for disruption is not the improvement of existing metrics but rather “the emergence of technologies that promise a new set of attributes that some customers value.”

The question then becomes:  What new attributes can the Internet of Things bring to the smart factory?

15 stand-alone concepts for the smart factory

We have identified 15 concepts for the smart factory of the future. Not all of them are directly related to the industrial Internet of Things (IIoT). But all of them bring significant changes that make factories smarter:

15 components of the smart factory of the future – click to enlarge

A lot of early-stage projects are being undertaken right now to pilot these smart factory concepts:

• SAP’s predictive maintenance platform (link) and  augmented reality on the shopfloor (link)
• Siemens’ intelligent products in the Amberg plant (link)
• Microsoft’s intelligent setup of a Jeep Wrangler plant (link)

There are many more pilot projects. Some of them have the potential to do more than just slowly evolve towards the smart factory. They change the value proposition in the market and generate disruptive scenarios.

4 disruptive scenarios for the smart factory

The following scenarios have the potential to lead to smart factory disruption:

1. Cyber Physical Systems (CPS) change the existing automation hierarchy

Over the last ~30 years a well-defined 5-layer automation architecture has formed. Field devices (e.g., sensors) at the lowest level send data via analog signals to logical controllers. SCADA systems perform (remote) control tasks. Manufacturing Execution Systems allow users to perform complex tasks such as production scheduling. Top-level ERP systems allow for management reporting and share manufacturing data such as order status with other systems (e.g., CRM).

But there might not be a need for 5 layers in the future. The vision is that sensors send data directly to the cloud. Services (e.g., production scheduling) automatically subscribe to necessary data in real-time – this is the vision of cyber physical systems.

Cyber Physical System based automation – click to enlarge

Potential winners of this scenario:

• Top-level ERP providers driving the new architecture like SAP, Microsoft
• Bottom-level smart sensor manufacturers like ST Microelectronics, Bosch, or Texas Instruments
• Consumer IT technology providers bringing in similar architectures from the consumer-IT like Microsoft

Potential losers of this scenario:

• Automation players that offer hardware in the middle layers like Siemens, ABB, Schneider Electric
• Software companies offering middle-layer services like Continental Teves or T-Systems

2. Smart maintenance as enabler for Machines-as-a-Service

In the last 10 years, centralized computing and novel software architectures have given rise to a phenomenon called Software-as-a-Service (SaaS). The fact that software can be licensed on a subscription basis (e.g., MS Windows 365) has lead suppliers to generate higher profits and has given consumers more flexibility to subscribe only to the necessary services when needed. With the industrial Internet of Things this model could find its way into the smart factory. But the model doesn’t stop at industrial software packages, it could also be applied to machines themselves. Cloud-based operating data and real-time condition monitoring of machines enables machine manufacturers to be in full control of the operation at all times. This could lead to a smart factory where machine capacity is sold by the hour or even by utilization (much like the “car sharing” services you see in many cities these days).

Potential winners of this scenario:

• Condition monitoring companies like SKF or SPM
• Industrial IoT platforms like PTC or ARM mbed

Potential losers of this scenario:

• n/a

3. End-to-end automated decision-making

The big data analytics wave is in full swing in the consumer world. Take Google Maps as an example. The fact that Google stores people’s favorite destinations,  knows the current location, and combines the data with real-time traffic flows leads people to take faster routes to their destination than they used to. In a way Google is facilitating the decision-making for getting to your destination.

This kind of analytics is entering the smart factory. Whether it is finding the best production setup, optimizing the current schedule or improving quality defects: All of these tasks are going to be aided by analytics. Even more so, we will likely see processes become completely automated based on smart algorithms. The path is pretty clear. What remains somewhat unclear is the implementation. Will the computing happen in one central place in the cloud (like for Google) or will we see a rise in distributed edge computing (in which sensor nodes perform the analytics)?

Potential winners of this scenario:

• Analytics providers like IBM or Splunk
• Smart sensor manufacturers like ST Microelectronics, Bosch, or Texas Instruments

Potential losers of this scenario:

• Providers of legacy optimization modules to existing ERP/MES systems

4. “One-piece no-flow” production setup

For many years, the paradigm of manufacturing has been the “one-piece-flow”. One-piece flow allows for maximum transparency, minimum waste, and low inventories. But this may change in the smart factory of the future. The „one-piece“ aspect of manufacturing becomes even more a necessity now that customers demand tailor-made products. But the “flow” aspect, that has been state-of-the-art since Henry Ford invented the assembly line in 1913, may die out. The ability of future manufacturing systems to steer complex operations from the cloud, paired with the arrival of hyper flexible super robots may lead to production setups where each product takes a different but well-controlled route between different work-centers.

Potential winners of this scenario:

• Manufacturers of highly flexible robots and machines

Potential losers of this scenario:

• Specialized machine manufacturers

Conclusion

The pace of innovation in manufacturing is undoubtedly accelerating. While the impact for individual factory workers has not been discussed here (see for example: Will machines replace our white collar jobs?), the opportunities from a business model point of view are exciting. One could even say that the smart factory of the future is suddenly becoming “sexy” with all of this innovation and disruption in the air.

But who will shape the sex-appeal of the smart factory? Big IT-multis like SAP or Microsoft? Some visionary manufacturing automation leaders? Or small startups that aspire to become the Google of the smart factory of the future?

If the last ~40 years of disruption in the IT-space are an indicator of what will happen in the manufacturing world, it will be the latter.

It is an interesting phenomenon in every industry:  Companies cluster in specific cities or countries.

The big global clusters of:

• Financial firms: New York and London.
• Pharmaceutical firms: Switzerland and New Jersey.
• Automotive companies: Japan, Michigan, and Germany.
• Anything web-related: California

Which are the emerging company clusters of the Internet of Things?

The ranking of Internet of Things cities

According to the IoT Analytics database of 2000+ IoT companies, the top 15 emerging Internet of Things cities (based on company headquarter location) are the following:

1.      San Francisco / Bay Area (Silicon Valley)

The San Francisco bay area is the technology motor of the world. And it will continue to do so as the Internet of Things industry matures. Today, the area counts already more than 300 headquarters of companies that are active in the Internet of Things.

The dominance is fueled by both a large number of small new startups as well as some of the top 20 Internet of Things companies such as Google, Apple, or Cisco. The bay area has it all: Semiconductor companies such as Atmel, sensor manufacturers such as Invensense, or analytics providers such as Splunk.

Generally speaking, companies that are based in Silicon Valley tend to be more focused on consumer IoT applications and less focused on business-facing IoT applications than elsewhere.

2.      London, UK

Home to the popular IoT platform Evrythng or the minicomputer Raspberry Pi, London is becoming the IoT capital of Europe. What further boosts London’s position is its traditional strong footprint in Telco and M2M. It is home to the GSM Association and the international M2M council; Telco giants such as BT and Vodafone have its footprint in London.

3.      New York City, NY, USA

New York may not have any large multi-national Internet of Things companies but there are some rising stars that originate in the largest city of the United States. Among them are the Quirky/Wink smart home solution or the Canary security system.

4.      Boston, MA, USA

Due to its strong base of world-class universities such as Harvard or MIT, Boston is known to be a world leading city in innovation. Therefore, it is no surprise that some of the most innovative IoT companies have its headquarters in the area. Examples: Predictive analytics company RapidMiner or MC10 Inc., a pioneer in wearable electronics.

5.      Los Angeles, CA, USA

Los Angeles is a hub for wearable devices. More than 50% of the IoT companies that are based in LA make wearable devices for the end-user (the average for other cities is around 15% of companies). And most of these companies are small unknown startups such as Trakdot or Daqri . The most well-known may be the “Puls” by the singer “Will I am”.

6.      Paris, France

Like LA, Paris also stands out as a city with a high number of IoT device manufacturers (>50% of the companies). Moreover, companies in the French capital offer quite a few IoT platforms that promise to allow connectivity for your things (e.g., Beebotte, Sen.se, Weio).

7.      San Diego, CA, USA

San Diego is the third Californian city in the top 10 list. But in contrast to San Francisco and LA, a large number of the San Diego IoT companies focus on the business-facing side of the Internet of Things (rather than consumer-facing). San Diego heavy-weights include General Atomics, Qualcomm, Novatel Wireless, or Systech.

8.      Chicago, IL, USA

In 2014, Chicago hosted the Internet of Things World Forum.  Despite Chicago’s effort to “become the most digitally connected city in the world”, it is home to a number of connected health and smart grid companies. The most promising startup of the city might be TempoIQ, a real-time database built specifically for the Internet of Things.

9.      Seattle, WA, USA

Driven by Amazon and Microsoft, Seattle makes it into the list of top 10 cities. Other notable Internet of Things companies based in the Seattle area are the connected car platform Airbiquity and industrial IoT startup Seeq.

10.   Bangalore, India

Known as the “Silicon Valley of India”, Bangalore is producing a number of startups in the field of the Internet of Things. Many of these provide IoT platform capabilities such as Altiux or ConnectM. The most well-known company, perhaps, is Wipro – the large multi-billion IT solution integrator.

11.   Toronto, Canada

12.   Tokyo, Japan

13.   Hong Kong / Shenzhen, China (counted as one region)

14.   Berlin, Germany

15.   Denver, CO, USA

Why it matters?

Some estimates see the economic potential of the Internet of Things on a global scale surpassing the size of the total economic output of the USA in 10 to 15 years . That means: IoT will be a massive driver of global economic growth.

It would be wrong to assume that the leading cities will shift dramatically in the coming years. Both research as well as evidence from other industries show that clusters tend to become bigger over time because they underlie some unique self-enforcing effects:

• Sharing immediate inputs (e.g., It is much easier to have your hardware manufacturer around the corner if you develop an IoT solution so you can discuss challenges and provide feedback in person)
• Sharing a labor pool (e.g., if an IoT startup fails, the employees can move on to a more successful IoT company and immediately have impact with their skills and expertise)
• Knowledge spillovers (e.g., IoT firms that are physically close to each other share knowledge, discuss ideas, and develop partnerships)

This ranking can therefore be seen as a first indicator as to which regions might profit most from the Internet of Things in the coming years. (employment, tax revenues)

Methodology

IoT Analytics has developed a database of 2000+ IoT companies based on our own research and automated web queries.

The Internet of Things companies on this list were double-checked and then clustered by technology offering and by end-user segment (if applicable). Using Geocoding, all company headquarters were plotted on a map and counted in the wider metropolitan area in which they are based. The list of 2000+ IoT companies can be purchased on our website. We do not claim completeness of all IoT companies but we believe it is the most complete and structured list on the market.

IBM is leading the Internet of Things companies ranking for Q2/2015 mainly due to its massive investment of $3bn it is starting to put into IoT.

Other major findings of the Q2 IoT companies ranking:

• Intel, that had previously been number 1, has fallen to the third position.
• The race between the five big companies (IBM, Google, Intel, Microsoft and Cisco) continues. Apple is starting to join the pack as a sixth company.
• What is striking about IBM is that the American software giant now employs more than 1,400 employees in the Internet of Things, almost 50% more as the second biggest IoT employer (Cisco).
• SAP remains the highest ranked non-US company in 7^th
• The list includes a number of new entries to the top 20 list, including Ericsson, Qualcomm, Orange, Facebook, and Dell.
• Gartner, ARM, Accenture, Arduino, IDC, PTC have fallen out of the top 20.

The IoT companies ranking is published by IoT Analytics on a quarterly basis.  The aim of the ranking is to quantify the popularity and activity of the biggest IoT companies as the technology evolves.

If you are interested in more charts and background on the ranking, click here: IoT companies ranking.

Q2/2015: The top 5 IoT companies

1. IBM (+4)

IBM’s announcement in late March 2015 that it would invest $3 billion over the next four years into a separate IoT division has wowed the IoT community. And it seems IBM has acted immediately: With more than 1,400 employees working in IoT, IBM has made a big step forward. Search traffic for IBM in relation with IoT has also increased largely.

In addition to the announcement of its own IoT division, IBM recently formed important industry partnerships, like a joint development of Continental’s connected mobile vehicle solution or the monitoring& predictive analytics of Pratt & Whitney’s 4,000+ commercial jet engines.

2. Google (+2)

Google has now officially introduced products for the Internet of Things. On May 28^th at the Google I/O conference, the company announced Brillo, the “underlying operating system for the Internet of Things,” with a developer preview coming in Q3 of this year.

Additionally there’s Weave, the (cross platform) common language that will let Brillo devices, phones, and the internet all talk to one another — that’s coming in Q4.

3. Intel (-2)

The Internet of Things drives Intel’s revenues. Intel made more than half a billion dollars from the “Internet of Things” in Q2/2015, the latest sign that IoT is starting to become a significant revenue driver for tech companies.

Breaking out sales for the first time from what Intel calls “embedded” systems in retail, transport, industrial and domestic products, the chipmaker said that the $533m from connected devices helped to offset “lower than expected demand” for business desktop PCs in the first quarter of 2015.

The big news for Intel in Q2/2015 has been its announcement to buy Altera in an all-cash transaction valued at about $16.7 billion, Intel’s largest acquisition ever.

Intel plans to offer Altera’s FPGA products with its Xeon processors as “highly customized, integrated products” and to improve Altera’s products by applying Intel’s design and manufacturing processes to them.

4. Microsoft (-2)

Microsoft’s big news of the quarter was the announcement that the company would make Windows 10 ready for IoT.

Windows 10 would then be used as a developer tool for example for Raspberry Pi 2. The software giant announced a number of other devices that are designed to run on the company’s upcoming operating system.

On top of that, Microsoft and Japanese electronics giant Toshiba announced a new Internet of things (IoT) alliance.

5. Cisco (-2)

Cisco is finally making its IoT ambitions a reality. Some people had been wondering what all that Internet of Everything buzz was about at Cisco. In Q2 (and now in Q3), Cisco is making some things happen.

On June 30, Cisco Systems announced a $635 million all-cash buyout of cloud security company OpenDNS, in a move designed to boost Cisco’s position in the upcoming Internet of Things security market.

Furthermore Cisco introduced more than 15 new IoT products mainly centered around connectivity and cyber security solutions but also a product suite around fog data analytics.

Q2/2015: Other notable IoT companies

11.       Ericsson (+10)

Ericsson has entered the top 20 IoT company ranking in Q2 because the Swedish company signed a couple of important partnerships in the IoT space in Q2 (SK Telecom, KT, LG, SaskTel)

14.       Qualcomm (+8)

Leading mobile chipmaker Qualcomm recently provided guidance on how big the Internet of Things (IoT) sector is for the company. The company said it made $1 billion in revenue last year on chips used in a variety of city infrastructure projects, home appliance, cars and wearables. There were 120 million smart home devices, 20 million cars, and at least 20 types of wearable devices shipped with Qualcomm chips in the last year.

These numbers lift Qualcomm into the top 20 IoT companies.

18.       Facebook (+32)

Everyone is waiting for Facebook to join the Internet of Things revolution. Facebook’s engagement in IoT remains a vague one but at least in Q2/2015, it has announced Parse for IoT , a Backend as a Service (BaaS) for microcontrollers and realtime operating systems (RTOS) . This little announcement has been enough to lift Facebook into the top 20 IoT company ranking.

In case you have missed previous IoT companies rankings

Q1/2015 – IoT company ranking

Q4/2014 – IoT company ranking

Subscribe to the IoT Analytics newsletter to stay on top of the latest IoT news and developments as well as future IoT companies rankings.

Wearables have climbed to the top of the IoT applications ranking for Q2/2015, riding the wave of Apple’s introduction of the Apple Watch.

Other major findings of the Q2 IoT applications ranking:

• Smart Home, that had previously occupied the #1 spot has fallen to the third position despite further product introductions by heavy-weights Google and Apple.
• Smart Cities have moved into second place, as Indian cities have started to embrace the concept.
• Smart Farming, a niche application of IoT, is picking up speed as TelCo operators make a move in this area.

The IoT application ranking is published by IoT Analytics on a quarterly basis. The aim of the ranking is to quantify the popularity of the biggest IoT applications as the technology evolves. The ranking is an indication of overall segment activity and public popularity – it does not reflect the actual size of the IoT market segment.

If you are interested in more charts and background on the ranking, click here: IoT application ranking.

Q2/2015: Most popular IoT applications (and biggest movers)

1. Wearables (+1)

Q2 has seen a hype around wearable devices. +33% Google searches and twice as many LinkedIn discussions have boosted the IoT application to first place in the ranking. Smart watches were the most important wearable application in Q2, led by Apple’s official release of the Apple watch on April 24. Further strengthening the position in the ranking was Fitbit’s successful IPO in June. It seems, however, that wearables have reached the top of the hype. Apple refused to release official sales figures for the Apple Watch as part of their quarterly earnings results (July 2015). While Apple claims that they haven’t done so for competitive reasons, many experts believe that the Apple Watch is not living up to its expectations. Feedback from users is also mixed.

2. Smart city (+1)

Many large cities have started initiatives related to “Smart Cities”. Boston, Barcelona, Copenhagen are making a strong push into that direction, to name a few. But the biggest push of all is currently coming from India. Last year, Indian PM Modi vowed to construct 100 so-called “smart cities” by 2022, an infrastructure project some estimate would cost $1 trillion. A year after the announcement, the plans are starting to be implemented and with it a lot of criticism and controversy. Many news articles in Q2/2015 shared a concern that this gigantic Smart City project would leave out the poor who have much greater needs than “smarter cities”, they need water and power. This controversy as well as the announcement of several US cities to start “Smart City”-initiatives (like Kansas City or Charlotte N.C.) increased the coverage for “Smart Cities. On top of that, Google launched Sidewalk Labs on June 11 with the aim to bring Smart Cities into the focus of other IT-companies.

3. Smart home (-2)

Smart home is still one of the most trending IoT applications, although it is losing two positions. Both Apple and Google continue to push the topic with new developments. The first HomeKit-certified products launched in June. Apple announced further HomeKit features for iOS 8 with the goal that every iPhone will soon be controlling a smart device by default. Google announced the first “Nest Security Cam”. Another prominent smart home company went public in June: Alarm.com.

8. Smart farming (+2)

Somewhat surprising but quite logically, Smart farming is rising in the IoT applications ranking as well. Many companies are realizing that there are synergies between the IoT technology used in Smart Cities and for Smart Farming applications. Both areas have an outdoor-component that will require some kind of cellular (M2M) connectivity. Verizon’s IoT efforts, for example, include both new partnerships with Smart Cities Councils as well as Smart farming accelerators and farming conferences. Vodafone announced the expansion of its Farmers Club initiative to empower farmers through technology, especially in emerging markets.

In case you have missed previous IoT rankings

Q1/2015 – IoT application ranking

Q2/2015 – IoT company ranking

Subscribe to the IoT Analytics newsletter to stay on top of the latest IoT news and developments as well as future IoT application rankings.

Learning from past industrial revolutions

When the steam engine was invented in 1781, some people believed that the world would soon see the end of manual labor. But the opposite happened. The steam engine created completely new sectors like railway systems or efficient factories, thereby eliminating some manual labor but also creating a number of new jobs, for example machine operators, engineers, or maintenance workers.

Nearly 250 years later, the debate is still the same. Will the next generation industrial technology, namely the industrial Internet of Things (or Industrie 4.0 as it is called in Germany), replace our jobs?

In their bestselling book “The Second Machine Age”, Erik Brynjolfsson and Adrew McAfee paint a very dark picture, suggesting that many white-collar jobs may be replaced by robots soon. Certainly, there is wide consensus that the Industrial Internet of Things (IIoT) or Industry 4.0 will lead to a replacement of simple and repetitive jobs in areas such as production assembly, administration, quality control, and planning. But will the overall number of jobs really decline?

In a recent report that we published together with the Boston Consulting Group, we looked at 10 individual Industry 4.0 use cases and found that the overall picture doesn’t look so bad. “Germany for example would see a net increase of 350k (+5%) Industrial IoT jobs over the next 10 years”In fact, it looks very bright for certain job profiles – mainly those in IT and R&D. It currently seems that the new technology provided by IIoT will lead to new product offers and business models (such as machines-as-a-service, or on-the-spot 3D printing). If that trend continues, Germany for example, would see a net increase of 350k (+5%) Industrial IoT jobs over the next 10 years. The interesting part is that we will see a dramatic shift of job roles.

Industrial job growth in Germany through Industry 4.0 by job type and by industry until 2025 – Source: BCG

Top new Industrial IoT jobs

These are the 5 most promising industrial IoT jobs that will see the biggest increase over the next years:

1. Industrial data scientists

The Harvard business review called data scientists the “sexiest job of the 21^st century”. Currently, data scientists are a strongly growing job profile in consumer and e-commerce companies. Now they are also entering the world of industrial IoT jobs. The role of a data scientist is to extract and prepare data, conduct advanced analytics, and apply the findings to improve products or production. Industrial data scientists must understand both manufacturing processes and IT systems and possess strong root cause analysis skills to identify correlations and draw conclusions. Programming skills will be required, including capabilities to use both statistical programming languages, such as “R,” and general-purpose programming languages, such as Python. Individuals in this role will need the flexibility to address topics continuously or respond to specific requests, as well as be able to work onsite or remotely.

2. Robot coordinator

Semi-autonomous, autonomous, and even humanoid robots are entering the shopfloors of factories. (See for example the Rethink Robotics Baxter line of collaborative robots). The role of robot coordinator will be a newly created industrial IoT job with the responsibility to oversee the robots on the shop floor and respond to malfunctions or error signals. The coordinator will carry out both routine and emergency maintenance tasks and involve other experts as needed. If a robot must be taken out of service, the coordinator will replace it with a substitute in order to reduce production downtime. In many cases, manufacturers will be able to retrain machine operators to take on this role, reducing the need for new hires.

3. IT/IoT solution architect

IT systems in manufacturing companies continue to become more complex and important. In order to manage the increasing amount of machines and products that are connected in real-time, IT solution architects take on the responsibility for the overall system design. They are involved in mapping the business needs to system requirements and technical requirements. Together with other technical architects they produce the technical specifications, integrating different technologies, platforms and people. The IT solution architect has end-to-end responsibility for applications such as remote operation centers, predictive maintenance, or assisted operations through augmented reality. As with the industrial data scientist, the IT solution architect possesses a broad range of skills, relating business know-how and IT experience with data management, application, and technology skills.

4. Industrial computer engineer / programmer

The IT solution that is designed by the IT solution architect gets brought to life by the industrial computer engineer. Three kind of programming skills are necessary for these kind of industrial IoT jobs. Firstly, the programmer should be experienced in some of the major general purpose languages such as Java, C++, or Python. Secondly, he/she should be able to work with specific applications: e.g., Matlab and Simulink for industrial simulations or R for general data analytics programming. Finally, there is an important hardware component in the industrial programming environment. Robots and intelligent devices need to be programmed. Today, it requires a combination of languages such as C, VHDL, and proprietary languages such as Kuka’s KRL. Computer engineers also need to be aware that the increasing shift to cloud architectures brings in new programming paradigms such as components as services, an increasing focus on lightweight objects and layered services, as well as new protocols and lightweight programming languages such as node.js.

5. Industrial UI/UX designer

Another job family that is slowly migrating from the consumer world to the industrial world are user interface (UI) and user experience (UX) designers. From intuitive manufacturing dashboards on tablets and mobile phones, to machine interfaces and robot interaction, augmented reality applications in operations and maintenance and finally the service and product design for the users of industrial equipment – the industrial environment will see a dramatic increase of user interfaces that need to be optimized for usability. The broad responsibility of a UX designer is to ensure that the product logically flows from one step to the next. UI designers on the other hand are in charge of designing each screen or page with which a user interacts and ensuring that the UI visually communicates the path that a UX designer has laid out. Both job functions are increasingly becoming more important in the industrial environment. Basic knowledge of industrial software architecture design and state-of-the-art programming paradigms are a must for any industrial UI/UX designer.

What it means to you and looking ahead

The industrial internet is bringing the “internet mindset” to the manufacturing sectorAll of the top 5 Industrial IoT jobs are IT-related and some have already found wider adoption in various consumer-facing industries (such as the UI/UX designer). The industrial internet is now bringing this “internet mindset” to the manufacturing sector. In addition to the drastic increase of the above-mentioned IIoT job profiles, most other jobs that had previously few or no elements of “IT” will see increasing elements of IT integration as well. A machine operator’s job that had previously a lot to do with pushing buttons and pulling levers will see increasing elements of operating interactive touch-screens and training machines through digital interfaces.

What it could mean to you:

• If you are deciding on your career path in the industrial or manufacturing sector, you should consider a career in one of these top 5 industrial IoT jobs.
• If you are past that stage and are looking to strengthen your profile you might want to retrain in any of the above areas (for example through one of the many online courses offered nowadays).
• If you are an executive in an industrial company, you should develop strategies to retrain your workforce or acquire these skills externally.

We will not only witness a shift from classical engineering to IT-related work; It is also important to note that the new jobs created will require significantly higher qualification levels than the existing jobs on the shopfloor today.

The often cited “war for talent” will be related to exactly these 5 industrial IoT job profiles described above – we will most likely see a shortage of qualified people, leading to very high wages in these areas.

For additional information on the future of the industrial workforce, you can download the full report “Man and machine in Industry 4.0” here .

07 Dec 2015. The latest IoT company ranking by market insights firm IoT Analytics shows that four companies are emerging as IoT leaders:

• Intel in the semiconductor space
• IBM and Microsoft in the platform/analytics space and
• Cisco in the connectivity space.

Intel is reclaiming the top spot in the top-20-ranking of IoT companies. Intel’s Q3 IoT revenue came in at $581M.

Notable movers: Asian companies moving up

A new trend is that Asian companies are starting to rise in the ranks with LG, NEC, and Huawei joining Samsung in the top 20 ranking in Q3/Q4 2015.  LG announced a number
of new IoT-enabled appliances, a smart sensor, a smartwatch and at the same time the company is working on the next generation 5G telecommunication network for IoT. Japanese IT company NEC made headlines in Q3 with an announcement that it is increasing the employee count in its IoT division by a factor of five until 2020. The company is developing encryption technology as well as solutions.

Self-reported IoT revenue: GE leading the way

General Electric is the clear leader in terms of self-reported IoT revenue as the company is forecasting $5B in IoT-related revenue in 2015. However, the IoT company ranking which measures employee activity, news appearances and online searches, does not mirror this clear leadership position that GE is claiming. The report points out the difficulty in comparing IoT revenue of different companies: Very few companies break out IoT revenue separately and of those that do some companies announce numbers that are not part of their official reporting, leaving questions about the value of the announced IoT revenue.

Further insights

• The big tech names Google, Apple, and also Facebook are losing ground in the ranking as these companies continue to focus more on their core business, rather than on IoT. Hewlett-Packard and Dell, on the other hand, are on the rise.
• IoT revenues are growing on average at around 20-25% for these companies suggesting that IoT markets may be experiencing lower growth than some market forecasts predict.

If you are interested in the complete report, including more detailed analyses and a list of the runner-ups you may download your free copy here by signing up to our IoT newsletter.

Download the complete report

In case you have missed the previous IoT company ranking

Q2/2015 – IoT company ranking

With IoT related M&A deals surpassing $20B in 2015 and startup funding reaching the $1B mark, the Internet of Things reached new records of financial activity and convinced yet the biggest critic that it has become a tech sector on its own.

The 10 most relevant news in IoT 2015

These are the announcements, deals, and stories that shaped the IoT 2015 year.

1.    Biggest overall announcement: Google

At the Google developer conference in May, the Mountain View based company presented the Weave and Brillo initiatives to create both a common language and a common operating system for the Internet of Things.

2.    Largest investment: IBM

IBM stunned the world in March with the announcement of a whopping $3B budget for a new Internet of Things business unit. Since then IBM has opened a new IoT Watson headquarters in Munich, announced several important partnerships and acquired a number of smaller companies.

3.    Largest startup funding: Jawbone

In April, the wearable company Jawbone, known for its stylish wristband UP, received $300M in funding from Blackrock. This funding round marks the largest of all IoT 2015 startup funding rounds.

4.    Most stunning startup funding: Sigfox

In February, French startup Sigfox, raised $115M and emerged as the frontrunner to build the next generation telecommunication network specifically for the Internet of Things (known as LPWAN). The company has since deployed their network in several European countries including France, Spain, and the UK and is building up networks in several US cities including San Francisco.

5.    Wall street’s favorite: Fitbit

In June, wearables company Fitbit made its debut at the New York stock exchange. On the second day, shares of the company climbed 20%. Since then the share price has come back down to approximately the levels of the IPO.

6.    Largest M&A deal: NXP

In March, Dutch chipmaker NXP, announced that it would take over its US rival Freescale in a deal worth $12B. The acquisition was finally closed in December and strengthens NXP’s position as #1 chipmaker for the connected car space.

7.    Second largest M&A deal: Qualcomm

In a similar move as the NXP and Freescale takeover, chipmaker Qualcomm acquired CSR in August to boost its Bluetooth chip offering in segments such as wearables and smart home.

8.    Biggest IoT value proof: GE

How much money can one make in IoT 2015? According to GE’s announcement in October, the company is already making $6B with industrial IoT products. An impressive growth of more than 300% compared to the previous year.

9.    Most important public sector initiative: US Government

In September, the Obama administration announced the Smart Cities Initiative, which includes $160M in federal grants to create IoT applications that can help collect data and information in order to deliver better services to citizens.

10.   Most convincing strategic move: Amazon

In March, Amazon acquired IoT platform startup 2lemetry and bought domains such as www.amazoniotplatform.com . The 2lemetry acquisition marks a shift in Amazon’s strategy to become serious about IoT. Together with the IaaS platform Amazon AWS and the language-processing product Amazon Echo, Amazon seems to have serious IoT ambitions and is in a great position.

Other notable IoT 2015 insights

IoT becoming a top priority for big corporates

Two fantastic HBR articles published in 2015, highlight how IoT may change the world (you can download them here via PTC). The topic is now on top of many CIO and CEO agendas. 2015 marks the year in which IoT investments neared the 50% hurdle for surveyed companies (link). Whether in manufacturing, retail, or in our cities: All sectors invested heavily in IoT 2015.

Explosion of IoT titles

In 2015, we saw an explosion of new Internet of Things related job titles: VP IoT, Chief IoT architect, IoT value creator, IoT technical sales engineer to name just some. This trend shows that IoT 2015 saw a number of companies creating new IoT departments. Expect this trend to continue in 2016.

Emergence of new market spaces

IoT 2015 saw new market segments emerging (like IoT platforms or LPWAN). By the looks of it, these market segments are still rather immature and just starting to grow up. Very few companies can claim more than $10m of revenue in these areas. In 2016, we can expect the emergence of other areas like IoT security or IoT analytics which are still rather undefined at the moment.

PRESS RELEASE. Hamburg, Germany – 19 Jan 2016 //  IoT Analytics, a leading provider of market insights for the Internet of Things (IoT), today published a comprehensive Market Report, focusing on sizing the opportunity of the IoT Platform market for the period 2015 to 2021.

The emerging IoT Platform market continues to exhibit strong momentum as businesses accelerate their transformation into IoT data-driven companies. This momentum is driving strong growth in IoT Platform-related hardware, software and integration services for connected business solutions.

A new forecast from IoT Analytics sees the IoT Platforms market growing at a compound annual growth rate (CAGR) of 33% over the 2015-2021 forecast period, with annual revenue reaching $1.6 billion in 2021.

The new IoT Platform Report examines (expected) revenue of the IoT Platform market in greater detail across 10 vertical-industry segments and 7 regions with deep dives into North America, Europe and Asia.

To better understand the market players IoT Analytics profiles 12 of the top IoT platform providers, estimates corresponding market share and outlines 90 other notable contenders. The new study also describes the top 5 trends affecting IoT platforms as the fast growing market is being transformed by increasing M&A and funding activity (see Report Structure below).

Commenting on the findings, IoT Analytics Managing Director Knud Lasse Lueth said: “We are currently witnessing an explosion in IoT deployments and solutions around the world. IoT platforms are emerging as the central backbone of these IoT deployments and are the key for the development of scalable IoT applications and services. IoT Platforms represent a truly new market segment that was almost non-existent a few years ago. Despite its tremendous diversity, the $300M market is currently dominated by US vendors with PTC emerging as the market leader at 18% market share. The US is also currently the biggest market for IoT deployments using IoT platforms. However, we are seeing that Asian markets are starting to pick up and do expect Asia to emerge as the biggest continental market by 2021”.

The IoT Platform Report is available to download HERE.

About IoT Analytics

IoT Analytics is the leading provider of market insights & competitive intelligence for the Internet of Things (IoT), M2M, and Industry 4.0. The specialised research firm helps more than 20,000 Internet of Things decision-makers understand IoT markets every month. IoT Analytics tracks important data around the IoT ecosystem such as M&A activity, Startup funding, company projects and latest developments. Product offerings include in-depth market reports, technical whitepapers, sponsored research, regular newsletter, as well as Go2Market and consulting services. As a research pioneer, IoT Analytics combines traditional methods of market research such as interviews and surveys with state-of-the art web-mining tools to generate high-calibre insights. IoT Analytics is headquartered in Hamburg, Germany. For more information, visit www.iot-analytics.com

Report Structure – IoT Platforms Market 2015-2021:

Executive Summary

1. Industry Overview
   • The role of IoT platforms within the Internet of Things.
   • IoT platforms: A new market segment – not just a natural evolution.
   • The role of IoT platforms in overall IoT solutions.
   • Technology: The 8 major building blocks of an IoT platform.
   • Market segmentation: 3 lenses to look at IoT platforms.
   • Seven leading IoT platform use cases demonstrate the value of IoT platforms.
2. IoT Platform Market Analysis
   • Market characteristics overview.
   • Market size & growth: A $1.6B market by 2021
   • Market size by segment: Manufacturing leading the way
   • Market share of platform provider companies: PTC emerging as overall leader
   • Market size by geography: USA biggest single-country market
3. IoT Platform Companies: Strategies & Profiles
   • Market entry: 4 major strategies to enter the IoT platforms market
   • Company profiles and SWOT analysis of 12 leading IoT platforms.
   • M&A: Activity is picking up
   • Funding: IoT Platform startup funding exceeding $450M
   • Main billing/pricing structures: Building on the freemium model
   • IoT platform provider’s internal structure and partner relationships.
4. Innovation & Trends
   • IoT platform innovation.
   • The top 5 trends in the IoT platforms market.
   • Major obstacles for further market expansion.
5. Methodology & Definitions
6. Appendix

Companies Mentioned (selected):

2lemetry, Accenture, Amazon, Analog Devices, Alcatel-Lucent, Apple, Arrayent, Artik, AT&T, Ayla Networks, Autodesk, Axeda, BlackBerry, Blacksumac, Bosch, Carriots, Cisco, CloudPlugs, Davra Networks, Ericsson, Evrythng, GE, Good Technologies, Google, Greenwave Systems, Huawei, IBM, iControl Networks, Jasper, LogMeIn, Microsoft, Mnubo, Motorola, Murata, myDevices, Nokia, Oracle, Qualcomm, Predix, ProSyst, PTC, PubNub, Relayr, Salesforce.com, Samsung, SAP, SeeControl, Siemens, SmartThings, ThingWorx, Verizon, Vuforia, Wipro, wot.io, Xively, Zebra Technologies.

Contact

For further comments or more information on this press release, please contact: Padraig Scully, VP Market Research, IoT Analytics padraig.scully@iot-analytics.com

Insights from ongoing research on IoT Platforms.

We are currently witnessing an explosion in IoT deployments and solutions around the world. IoT platforms are emerging as the central backbone of these IoT deployments – By 2019, the IoT Platform market will reach $1 billion.

These IoT Platforms are the key for the development of scalable IoT applications and services that connect the real and virtual worlds between objects, systems and people. However, as the IoT Platform market represents a truly new segment that was almost non-existent a few years ago, the landscape is complex and changing very quickly.

In this article we highlight 5 IoT Platform insights:

1. Not every IoT Platform is an IoT Platform

_{Figure 1:  Apples vs Oranges – Not all IoT Platforms are the same}

These days many companies offer an “IoT Platform” but a closer comparison reveals vast differences. For a newcomer it can be difficult to understand whether this term refers to a complete and mature IoT cloud platform or whether the term has been stretched to describe just an element of a platform – or even something completely different.

When we talk about an IoT Platform we generally refer to an IoT Application Enablement Platform (see #2 below for the eight technological elements of these platforms).

There are 4 other types of platforms that are often referred to as “IoT Platform”:

• Connectivity / M2M platforms. These platforms focus mainly on the connectivity of connected IoT devices via telecommunication networks (e.g., SIM-cards) but rarely on the processing and enrichment of different sets of sensor data. (An example of a connectivity platform is Sierra Wireless’ AirVantage)
• IaaS backends. Infrastructure-as-a-service backends provide hosting space and processing power for applications and services. These backends used to be optimized for desktop and mobile applications but IoT is now also in focus. (An example is IBM Bluemix – not to be confused with IBM IoT Foundation)
• Hardware-specific software platforms. Some companies that sell connected devices have built their own proprietary software backend. They like to refer to the backend as an IoT Platform. Since the platform is not open to anyone else on the market it is debatable whether one should call it an IoT Platform. (An example is Google Nest)
• Consumer/Enterprise software extensions. Existing enterprise software packages and operating systems such as Microsoft Windows 10 are increasingly allowing the integration of IoT devices. Currently these extensions are often not advanced enough to classify as a full IoT Platform – but they may get there soon.

The different types of IoT Platforms and the complex IoT Platform offerings create confusionA confusing aspect of IoT Platforms is that companies are starting to combine different services. IBM for example is combining its IoT Foundation application enablement platform with its Bluemix IaaS backend. Jasper and Telit, two companies that have traditionally focused in the Connectivity / M2M space have now added IoT application enablement capabilities to their offering.

2. A modern IoT Platform architecture comprises of 8 components

In its simplest form, an IoT platform is just about enabling connectivity between “things” or devices. The architecture may also consist of a software platform, an application development platform or an analytics platform. In a more sophisticated form, a true end-to-end IoT platform consists of eight important architectural building blocks:

_{Figure 2:  The 8 components of an IoT Application Enablement Platform (Source: IoT Analytics)}

1. Connectivity & normalization: brings different protocols and different data formats into one “software” interface ensuring accurate data streaming and interaction with all devices.
2. Device management: ensures the connected “things” are working properly, seamlessly running patches and updates for software and applications running on the device or edge gateways.
3. Database: scalable storage of device data brings the requirements for hybrid cloud-based databases to a new level in terms of data volume, variety, velocity and veracity.
4. Processing & action management: brings data to life with rule-based event-action-triggers enabling execution of “smart” actions based on specific sensor data.
5. Analytics: performs a range of complex analysis from basic data clustering and deep machine learning to predictive analytics extracting the most value out of the IoT data-stream.
6. Visualization: enables humans to see patterns and observe trends from visualization dashboards where data is vividly portrayed through line-, stacked-, or pie charts, 2D- or even 3D-models.
7. Additional tools: allow IoT developers prototype, test and market the IoT use case creating platform ecosystem apps for visualizing, managing and controlling connected devices.
8. External interfaces: integrate with 3rd-party systems and the rest of the wider IT-ecosystem via built-in application programming interfaces (API), software development kits (SDK), and gateways.

Note: Built-in security by design is a must-have element for all of these building blocks; the platform architecture has to be holistically designed so the threat of cyber attacks is minimised at every level.
 

3. Different entry strategies into the IoT Platform market

_{Figure 3:  12 of the 300 IoT platforms (Source: IoT Analytics)}

There are more than 300 IoT platforms in the market today and the number is continuing to grow. However, as discussed not every platform is the same – IoT platforms are being shaped by varying entry strategies of different companies trying to capitalise on the IoT potential. Innovative Startups, hardware and networking equipment manufacturers, enterprise software and mobility management companies are all competing to become the best IoT platform on the market. Various strategies are visible with companies:

• Organic bottom-up approach: Starting with the connectivity part and building out platform features from the bottom-up (e.g., Ayla Networks)
• Organic top-down approach: Starting with the analytics part and building out platform features from the top-down (e.g., IBM IoT Foundation)
• Partnership approach: Striking alliances to offer the full package (e.g., GE Predix & PTC Thingworx)
• M&A approach: Targeted acquisitions (e.g., Amazon – 2lemetry) or contenders performing strategic mergers (e.g., Nokia & Alcatel-Lucent)
• Investment approach: Tactical investments throughout the IoT ecosystem (e.g., Cisco).

4. Open source is driving IoT Platform interoperability

_{Figure 4:  Open-source Vorto links the IoT Platform ecosystem (Source: www.eclipse.org/vorto/)}

To create a true IoT ecosystem, where systems of systems interact and generate value from diverse streams of data, interoperability is essential. No one IoT platform will be able to cover the wide spectrum of existing and potential use cases yet to be envisaged.

New open source approaches where IoT platforms work together for the “greater good” are enjoying increasing success. Open source tools such as Vorto – backed by the open Eclipse community – are providing the missing link, implementing a common framework for information modelling that eases integration and promotes interoperability between platforms and the entire IoT ecosystem.

For example, PTC and Bosch Software Innovations collaboration is a prime example of a major technology alliance using Vorto to facilitate the integration and technical interplay between their two platforms.
 

5. Data and connected services are the real value of IoT Platforms

_{Figure 5:  Data drives the value of IoT Platforms}

Gathering and connecting data points from billions of physical objects is fundamental to letting new IoT business cases come to life. As Robert Metcalfe postulated in the 1980s: “The value of a telecommunications network is proportional to the square of the number of connected users of the system”. Generating insightful data is the key to unlocking this value.

This trend will be seen in many industries: selling the main product becomes a by-product, while the business model around the data becomes the main product.

Companies are shifting their business models from selling products to handling data On top of that, we will see the creation of entirely new industries that build business models solely on IoT data and use hardware partners to get access to the necessary data sources (e.g., the insurance industry of the future). The IoT Platform itself becomes an essential enabler, a means of gathering and making sense of the data, while the real value will come applying the resulting insights to create great IoT services (e.g., predictive maintenance) for connected businesses.
 

Further Information

For more in-depth information on IoT Platforms, check out:

• IoT Platform White Paper: Central backbone for all IoT solutions (FREE)
• IoT Platform Market Report 2015-2021: The $1.6Bn market opportunity – including detailed forecasts per segment and region focusing on sizing the opportunity of the IoT Platform market for the period 2015 to 2021
• IoT World Event, May 10-12 in Santa Clara, CA: IoT Analytics will be present and participate in a discussion panel on IoT Platforms. (Get in touch with us for a 15% participation discount)

IoT stock valuations appear attractive

With more than $20B worth of M&A deals in the year 2015, the hype term “Internet of Things” (IoT) has started to establish itself as a tech sector on its own.

Investors are asking:

• Is it worth investing a significant portion of my portfolio into IoT stocks?
• When is the right time to invest?
• Which companies will be shaping the IoT world in the coming years and will therefore overperform the market?

The bad news

• You have missed out on a couple of 30%+ performances in 2015. Some early IoT stocks have started to take off.

The good news

• The January/February 2016 tech sell-off has cut technology company valuations (and also those of IoT companies) by up to 50% – Some valuations appear very attractive.
• If you believe IoT stocks have the potential to beat the market, it is not too late to invest. IoT stocks have actually been underperforming the market in the observation period.

IoT stocks underperform the market

In the timeframe from 13 February 2015 to 10 February 2016, the NASDAQ fell by 12% while our equally-weighted watchlist of 32 IoT Companies fell by 16% (see below for a description). You may also want to check out our corresponding blog post from late 2014, labelled 15 Internet of Things stocks you should own right now.

Large cap beats small cap IoT

An interesting observation is that large cap IoT stocks have outperformed small cap IoT stocks in 2015.

Small cap IoT stocks underperformed the NASDAQ index by roughly 6 percentage points while large cap IoT Companies outperformed the NASDAQ by 3 percentage points.

It is important to note that there is basically no “pure-play” large cap IoT company but certainly a number of “pure play” smaller ones. In that sense Internet of Things stocks may have underperformed the market in the observation period even more than the watchlist suggests.

Individual winners: 2015 saw some 30%+ performances in a declining market

A couple of Internet of Things stocks really stand out. Among the “non-pure play” large companies Amazon Inc. rose 30%. The company made a significant step into IoT in 2015 with its AWS IoT announcement.

Google which announced Brillo, Weave, and Thread IoT initatives during the 2015 period also rose 30%.

Luxoft, a multinational software company and a system integrator for IoT, is currently 25% above its share price at the start of the observation period.

Individual losers: Lifelogger, Novatel, Sierra Wireless

The IoT stocks of Lifelogger Technologies Corp., which produces a wearable camera and corresponding software tools as well as Novatel Wireless Inc., which provides wireless broadband access solutions for the Internet of Things both fell more than 80%.

Sierra Wireless, a company offering connectivity solutions for the IoT, is currently -68% below the value it had a year ago.

Software beating hardware and connectivity-focused IoT stocks

Software-focused IoT stocks did surprisingly well. This segment of the Internet of Things portfolio outperformed the NASDAQ by 8 percentage points and other IoT stocks by 11 percentage points.

Besides the already mentioned companies (Amazon, Google, Luxoft), the software-focused IoT winners were Microsoft (+15%) and Software AG (+25%). Microsoft is growing its Azure IoT cloud offering and recently announced the new “IoT hub”, Software AG focuses on streaming analytics for IoT.

IoT Hardware firms and specifically semiconductor companies underperformed the NASDAQ in the timeframe.

The decline was driven by companies like Echelon and Invensense which both fell by more than 50%. Echelon markets an open-standard control networking platform, mainly for industrial applications. Invensense is best known for its sensors.

Connectivity-focused IoT Companies also underperformed the NASDAQ by more than 10 percentage points.

Most of the IoT Connectivity Stocks that we monitored underperformed and lost in value. Sierra Wireless lost more than 70% of its value during 2015.

Gemalto, Gemtek Technology and CalAmp Corp. all lost more at least 10% of their value as well.

Looking ahead: Has the time to invest finally come?

Companies that are focusing their efforts on the Internet of Things are not beating the market on average. But with Internet of Things product revenues expected to reach billions of dollars and outgrowing most other technology segments in the coming years, the stocks would have to follow as well eventually.

As can be seen in the analysis above, the market is seeing quite some volatility with individual IoT stocks rising or falling by up to 80% in one year. Software is generally outperforming the rest of the technology stack.

We believe that IoT is here to stay and change products, people and society. A balanced portfolio of Internet of Things stocks might be a great alternative to the investment in individual stocks. One such portfolio is the “MEGATRENDS: IoT & Industry 4.0” which can be traded via the Stuttgart Stock exchange ISIN: DE000LS9GAC8. On a USD-basis the portfolio outperformed the NASDAQ by 1 percentage point in the observation period.

Disclosure

The intent in publishing this article is to inform investors about developments related to specific Internet of Things stocks. The author did not and does not intend to suggest any specific action by any investor or shareholder and strongly suggest that any decision made to buy or sell shares of these stocks be made after consultation with an investment advisor as to the suitability of such an investment. The author currently does not own shares of any of the above-mentioned stocks but may buy or sell shares at any time based on market conditions and the trading prices. The author is involved in activities with the managers of the “Megatrends: IoT & Industry 4.0 portfolio” but does not own any shares of the same.

Methodology

This analysis is based on a portfolio comprising of 32 companies focusing fully or partially on the Internet of Things. The stocks were segmented by level of market capitalization and compared to the NASDAQ index.

Key insights

• Industry 4.0 related patents have grown by a factor of 12x in 5 years
• 3D printing as the up and coming technology showing rapid growth
• Cloud computing currently with largest patent activity
• Cyber physical systems with unexpectedly low patent innovation

Introduction to Industry 4.0

Industry 4.0 or in other words the fourth industrial revolution is not only an up and coming trend in the German industry but with Industry 4.0 as the main theme at this years’ World Economic Forum it can be seen as a worldwide movement towards the future of manufacturing and industry. However, it remains unclear which industrial technology will lead the way to the future of manufacturing. By analysing patent numbers of the past six years for the core Industry 4.0 technologies, we can give an indication.

7 core industrial technology fields making up Industry 4.0

Unfortunately there is no widely accepted overall definition for the fourth industrial revolution and which technologies it includes.

We believe that the following 7 core technologies can be seen as the backbone of Industry 4.0:

_{Figure 1: Core Industrial Technology Fields make up Industry 4.0}

1.     Cyber physical systems

CPS form networks through (wireless) sensing and actuation and are able to respond to changing conditions or even anticipate changes in physical processes.

2.     Cloud computing

Cloud computing makes it possible to move applications or services from local storage units into the internet.

3.     Big data and analytics

Big data refers to Datasets, which are larger than what typical database software tools can capture, store, manage and analyse. Big data analytics are ways of making them usable for industrial intelligence, for example enabling machine learning.

4.     (IT) System security

Data and communication channels, as well as all other industrial systems, machines and components need to be adequately secured against cyber attacks.

5.     Additive manufacturing / 3D Printing

“The process of joining materials to make objects from 3D model data, usually layer upon layer, as opposed to subtractive manufacturing technologies”

6.     Augmented reality (HMI)

Using augmented reality glasses workers can receive instructions for the correct assembly of parts or assistance for commissioning.

7.     Robotics / Humanoid robots (HMI)

New technologies enable safer interaction for tasks such as pick and place or procedures in places humans can’t reach. Robot design is often inspired by human looks.

3 Innovation drivers: 3D printing, augmented reality, and big data

With the current hype around Digital Transformation, Internet of Things, and Industry 4.0 it can be very difficult to understand where the hotbeds of innovation currently lie.

IoT Analytics analysed the worldwide numbers of relevant patents that were issued in the past years from 2010-2015. Patent count can be seen as an indicator for innovation activity.

Main takeaway: The total annual count for the registration of Industry 4.0 related patents has exploded by a factor of 12x in just 5 years.

_{Figure 2:  Total Patent Numbers for Industry 4.0 Related Topics (2010 – 2015)}

_{Figure 2:  Detailed Patent Number Development for Industry 4.0 Related Topics (2010 – 2015)}

_{Figure 3: Detailed Patent Numbers for Industry 4.0 Related Topics (2010 – 2015)}

These are the other top three findings:

1. 3D printing is the up and coming technology

With a growth factor of 10x, 3D Printing, or additive manufacturing (AM), seems to be the next trending industrial technology. Having not yet reached its peak (over 1200 patents in 2015), 3D printing has now taken over augmented reality and is closely on the heels of cloud computing in order to become the shooting star of Industry 4.0 related patents in the next year or two. This is particularly interesting, because 3D Printing isn’t a specific internet technology, but rather qualifies as a new way of manufacturing and is therefore hardware based.

A good example for the use of additive manufacturing is Airbus. Only recently has it become known, that the enterprise has installed a 3D Printer for the prototyping of helicopter parts.

2. Cloud computing makes a clear number one (for now)

With over 1600 patents issued in both 2013 and 2014, it is biggest of the industrial technology fields that were analysed. Starting off with only 150 patents in 2010, numbers increased by a factor of ten by 2012. However the fall in patent numbers in 2015, coming short of “only” 1400 patents, might suggest that this technology has reached its peak. The 2016 numbers are definitely to be watched.

IBM is the leading company for cloud computing patents. The company has registered patents concerning security services, hybrid data backups or mobile device workload management, just to name a few examples.

3. Cyber physical systems make an unexpected last position

Cyber physical systems, or CPS, are supposed to be the heart of Industry 4.0 according to the German Federal Ministry of Education and Research. They are seen as the central industrial technology, integrating the cyber world and physical world in an industrial context. Patent numbers however are low. Adding to only 48 patents over the past five years, CPS fall in last place. They are way behind the leading technologies. This might be due to the fact that it isn’t easy to define the topic in a quick and easy manner and make it palpable. It entails many different sub technologies and seemingly no patents are dedicated to the overall topic. This is disappointing, regarding the huge role it is supposed to play in the next industrial revolution.

Further insights

• Augmented reality is on a fast-track it has seen a constant growth in the past years and has made the top three of industrial technologies. For example the German company Ubimax is specialised in augmented reality and wearables for industrial solutions. One of its devices for augmented reality is the pick-by-vision solution “xPick”. These smart glasses help optimise picking procedures and were successfully tested by DHL in the Netherlands. They can now be integrated with SAP EWM.
• Big data has made a remarkable surge in the past two years, that might me comparable to additive manufacturing.
• The patent count of both IT system security and humanoid robots is rather low, but nevertheless stable. In the case of system security the low number may prove to be a problem for the future development of the fourth industrial revolution, as it is a basic requirement for its realisation.

Looking ahead

Assuming that patent developments are an early indicator for the future of industrial technology, we now know which technologies to expect. An explosion of 3D Printing technologies seems likely and augmented reality use cases are soon to pop up in various scenarios. Cloud computing may have reached it’s peak in patent development, with an implementation throughout the industrial world still on the go. A lot has yet to be expected of big data & analytics that could yet surge as high as the 3D Printing patents. As an industrial company the best way forward is to embrace these four technologies as a core part of the fourth industrial revolution.

However, a possible obstacle can be seen in the low attention patent research for cyber physical systems and (IT) system security are getting. With both technology fields being key for Industry 4.0, it is essential to keep up with the rapid development of other technologies.

PRESS RELEASE. Hamburg, Germany – 08 Mar 2016 //  IoT Analytics, a leading provider of market insights for the Internet of Things (IoT), and Priori Data, the app store intelligence company, have teamed up and today published the results of the first-ever app-usage based market model for Smart Thermostats. The model is based on downloads of more than 120 thermostat apps and reveals insights never-seen before for the Smart Thermostat market. The model is accompanied by a Market Report that is focusing on sizing the opportunity of the Smart Thermostat market for the period 2015 to 2021.

The analysis reveals that the $879M (4.9M devices) Smart Thermostat market is currently seeing its strongest ever momentum as Smart Home adoption and assisted-living solutions are quickly becoming more prevalent in the consumer market. The uptake has been especially strong in North America in 2015 and was driven by very strong Q4/2015 sales.

The study examines the Smart Thermostat market of 14 countries in detail (USA, Canada, Mexica, Great Britain, Germany, France, Spain, Italy, China, India, Japan, Russia, Brazil, Korea) on a monthly basis for the past 18 months, both by number of devices sold as well as realized revenue. The study also gives an outlook by key country until 2021 with the total market size reaching $4.7 billion by 2021.

To better understand the different market players IoT Analytics profiles 10 of the top Smart Thermostat providers, estimates corresponding market share and sales split by country (see Report Structure below).

Demand for Smart Thermostats is currently strongest in North America with 70% global market share. The overall market is currently dominated by US vendors with Honeywell and Nest emerging as the market leaders. European markets are also starting to pick up but interestingly with a more diverse landscape of vendors such as Hive, Netatmo, and eQ-3.

Commenting on the findings, IoT Analytics Managing Director Knud Lasse Lueth said: “Leveraging the app download data of Priori Data and combining that with our primary market research enables us to generate extremely granular insights. Smart Home markets have thus far disappointed most growth expectations, however the new model highlights a market explosion in November and December. This could indicate that we are at the beginning of a new growth wave in consumer IoT. Looking at the data, it is also very interesting to see how Canadian startup Ecobee has beaten all other players in the marketplace month-by-month in the second half of 2015. Going forward, we believe growth for Smart Home and specifically Smart Thermostat markets remains strong with approximately 60% global growth in the short term and 35% annual growth foreseen for the next 6 years.”

The Smart Thermostat Market Report is available to download HERE. You may also subscribe to the quarterly market model updates.

About IoT Analytics

IoT Analytics is the leading provider of market insights for the Internet of Things (IoT), M2M, and Industry 4.0. The specialised research firm helps more than 30,000 Internet of Things decision-makers understand IoT markets every month. IoT Analytics tracks important data around the IoT ecosystem such as M&A activity, Startup funding, company projects and latest developments. Product offerings include in-depth market reports, technical whitepapers, sponsored research, regular newsletter, as well as Go2Market and consulting services. As a research pioneer, IoT Analytics combines traditional methods of market research such as interviews and surveys with state-of-the art web-mining tools to generate high-calibre insights. IoT Analytics is headquartered in Hamburg, Germany. For more information, visit http://www.iot-analytics.com .

About Priori Data

Priori Data is an App Store Intelligence company that provides comprehensive market data and competitive benchmarking information on the global app economy. Leading mobile app and gaming developers, investors, and advertisers rely on Priori Data for key metrics such as app revenue, downloads, and ranks on more than 3 million apps across more than 55 international markets. Priori Data is trusted by over 1K top global publishers including AllState Insurance, Buzzfeed, National Geographic, Rosetta Store, and Soundcloud. The company was founded in 2013 and is headquartered in Berlin

Report Structure – Smart Thermostats Market Report 2015-2021:

Companies Mentioned (selected):

ALARM.COM, ASKEY QBEE, BELKIN, CARRIER, CLIMOTE, COMCAST, CONTROL4, DAIKIN, DANFOSS, DEISSON, EATON, ECOBEE, EMERSON, ENERGATE, ENGIE, EQ-3, FILTRETE, FIRST ALERT, GEO, GREEN MOMIT, HEAT GENIUS, HEATMISER, HIVE, HONEYWELL, INSTEON, IRIS, JUNKERS, LENNOX, LEVITON, LOCKSTATE, LUTRON, NEST, NETATMO, OWL, PLUGWISE, PRO1, QIVIVO, ROGERS, SALUS, SAVANT, SCHNEIDER ELECTRIC, SOMFY, TADO, TRANE, VIMAR, VIVINT, WATTIO.

Contact

For further comments or more information on this press release, please contact: Stephanie Baumann, Press team, IoT Analytics GmbH press@iot-analytics.com

May 17, 2016 // One of the largest IoT conferences took place last week in Santa Clara, California: IoT World 2016. The 3-day event which is in its 3^rd annual edition, attracted a crowd of ~15,000 people with most of the major IoT vendors either exhibiting or speaking on stage.

IoT Analytics had 2 analysts on the floor at IoT World, we moderated 3 of the panel sessions and talked to many of the exhibitors and visitors. These are our 7 key takeaways of the conference:

1.   We are starting to enter the second wave of IoT

Several panel discussions at IoT World introduced the notion of a second wave of IoT. The second wave of IoT describes a development we have heard a number of companies talk about lately: The IoT industry is moving on from just connecting things and trying out what works (wave 1) to actually developing new IoT-based business models (wave 2). The underlying theme of these new business models can be largely summarized as “Everything-as-a-service”. SAP highlighted projects with sporting goods manufacturers to deliver “fitness-as-a-service” while others talked about energy savings as a service or transportation as a service, all enabled by IoT. ADT delivers Smart Home Security as a service that lets you secure your house during vacation time only. Microsoft showcased how they support Rolls Royce’s jet engine as a service. In some respects, this development is analogous to the transformation of enterprise software from perpetual licenses to Software as a Service.

2.   The Internet of Things is overhyped

Even though there is a move towards the second wave of IoT there seems to be widespread acknowledgement that the Internet of Things is overhyped. Not only did some of the speakers at IoT World mention this explicitly, it was also apparent on the exhibition floor. Despite a packed exhibition floor, several of the exhibitors noted that the number of customers or prospective customers visiting the stands was below expectations. One might argue that most customers will show up at vertical-focused conferences – nevertheless it can be interpreted as an indication that IoT is not picking up as quickly as some expect it to do. This is also in line with some of our IoT market models (see for example our analysis of the IoT Platform market indicating that we are presently talking about a million-dollar not a billion-dollar market)

3.   Everyone has an IoT Platform

It seems like you are only an IoT vendor these days if you have an “IoT Platform”. At the event, Hitachi, Hewlett Packard Enterprise, and Schneider Electric unveiled their new IoT Platforms. Hitachi says it is planning to invest $2.8B in IoT-related activities over the next three years.

IoT Platform was probably the most commonly mentioned word in the exhibition area of IoT World. Not only did most vendors highlight their IoT Platforms but they were generally all marketed as being secure, device-agnostic and end-to-end. Cloud vendors like Microsoft were marketing their IoT Platform at IoT World, electronics distributors like Avnet, M2M communication module vendors like Gemalto, design firms, and even semiconductor companies like Dialog Semiconductor. Even though the marketing messages align, vendors on each of these levels take a slightly different approach, adding to the confusion.

Last year we counted 260 IoT Platforms worldwide – we are currently in the process of updating that list and by the looks of it we are now approaching 400 IoT Platforms. The updated list will be published at the end of this month on our website.

4.   IoT Security is being recognized as part of the stack

A very positive development is the fact that IoT Security appears is getting more attention and depth. It is not anymore seen as an inconvenient afterthought but rather as a core element of every IoT Solution. Several startups like Electric imp, Mocana, or Zingbox were highlighting specific IoT Security solutions at IoT World. Some of them are taking a holistic approach and some are looking at individual aspects of the security chain. While the security landscape remains extremely fragmented, it is becoming apparent that IoT requires a new trust model–one that does away with the assumption of a secure perimeter and assumes operating in untrusted environments as the default. If you are interested to learn more on this topic, look out for an IoT Security report coming out in Q3 or join us at the Security of Things Conference coming up on June 27, and 28 in Berlin, Germany (20% Discount code: IOTANALYTICS2016).

5.   Mesh networks are emerging as an alternative to LPWAN

On the communications side of things, Mesh networks made a few unexpected headlines at IoT World. Mesh networks are communication networks that rely on device-to-device communication rather than connecting individual devices to the network. SilverSpring Networks introduced their new Starfish connectivity solution (based on the Wi-Sun Mesh standard) for smart meters and similar Smart City Solutions. The talk was also about connected car mesh clouds. From a communications technology point of view, mesh networks represent an alternative to the heavily marketed low-power wide area networks (such as Sigfox or Lora) for low-powered devices that do not require large amounts of bandwidth – both technologies have their pros and cons.

6.   Building algorithms as an asset

A lot of discussion at IoT World were still around the topic of where the value or profit pools lie and who will benefit the most. Rather than talking about data as an asset or services as the ultimate value-enabler, Tanya Rueckert of SAP introduced the notion of treating “algorithms as an asset”.

In line with that concept, several of the larger IoT Platforms showed how they are moving towards pre-defined templates for specific use cases. These templates let the user build specific IoT solutions like predictive maintenance or asset monitoring quicker and easier by working with pre-defined algorithms and configurations. It still remains to be seen whether different IoT vendors can really differentiate each other by having more efficient or better algorithms than others. However, the fact that some vendors offer pre-defined templates for specific use cases while other vendors don’t seems to be a differentiating factor at this point.

7.   Kickstarting IoT through value-based outcomes

Due to the IoT hype and its limited adoption in some industries, several sessions at IoT World discussed how vendors can help kickstart IoT. One possible answer to this question is “value-based IoT outcomes”. It appears as though more and more vendors are building IoT solutions in which the vendors have their own skin in the game. Therefore, some IoT vendors are now charging for building the IoT Solution based on the value to their customer, not based on the effort that went into it. If for example, a manufacturer of a smart product achieves new revenue through the sale of products-as-a-service, the IoT vendor gets a fair share of that increase in revenue. With this setup, OEMs and other companies developing IoT Solutions have a lower risk and a guaranteed ROI that helps accelerate their IoT deployments.

Last week, we released the updated 2016 List of 360+ IoT Platforms. The list is an update of the popular 2015 list of 260+ IoT Platforms. In the meantime more than 100 new IoT Platforms have emerged, either new startups or large corporations now offering an IoT Platform (Hitachi, Siemens…).

The updated company list is structured along 54 columns and enables a comparison of the different companies by aspects such as location or focus area. For some companies it also provides platform announcement dates and funding.

These are some of the high-level findings when looking at the data:

Segment focus

Of the 360+ platforms we identified 251 with one or several focus areas. The others market themselves as general IoT Platforms. Most of the focused IoT Platforms are operating around the Smart Home (81) while a lot also target manufacturing environments (68).

Market entry

New Platforms continue to enter the market. In the first 5 months of 2016, we counted 16 new platforms (9% of the 147 platforms whose launch date we could identify)

Other technologies offered

Most of the IoT Platform companies focus on their platform only as their IoT product offering. 16% also market their own IoT Device and 15% offer specific Analytics packages as well.

Further information

The list is now available for download . Feel free to reach out to us at insights (at) iot-analytics.com in case of questions.

The 2016 database of enterprise IoT use cases contains extensive information on 640 real IoT projects, including details on project location, industry, end-user as well as key vendors involved in each project.

PRESS RELEASE. Hamburg, Germany – 11 Aug 2016 //

IoT Analytics, the leading provider of market insights for the Internet of Things (IoT), today published a comprehensive IoT use case database, focusing on non-consumer IoT use cases.

The new project database itemizes more than 640 publicly announced IoT use cases in greater detail across 10 major segments covering applications in 60+ countries worldwide. More than 300 IoT vendors are identified as either hardware, software, or connectivity providers for these projects.

IoT use cases implemented in Industrial settings make up the largest part of identified projects (22%), followed by projects which are part of Smart City initiatives (20%) and projects evolving around Smart Energy generation and distribution (13%).

Most identified projects are set in North America (44%), however, Europe (34%) and Asia Pacific (16%) also play an important role.

The database entails only Internet of Things use cases which have in fact been realized or are currently being completed. In the majority of projects, the end-user can be identified by name and a link to an online project description is available. All information is presented in a structured form, allowing for a wide range of further analyses and deep-dives.

Commenting on the findings, IoT Analytics Managing Director Knud Lasse Lueth said: “In the last months, a number of firms have approached us to understand which IoT use cases are being implemented in their industries and by whom. We are now in the position to answer this question holistically. The database allows for a deep understanding of the current IoT ecosystem and serves as an important basis for anyone who wants to look beyond the hype of the Internet of Things and get real about actual IoT use cases.”

The List of 640+ IoT Projects is available to download HERE.

About IoT Analytics

IoT Analytics is the leading provider of market insights & competitive intelligence for the Internet of Things (IoT), M2M, and Industry 4.0. The specialized data-driven research firm helps more than 30,000 Internet of Things decision-makers understand IoT markets every month. IoT Analytics tracks important data around the IoT ecosystem such as M&A activity, Startup funding, company projects, use cases and latest developments. Product offerings include in-depth market reports, technical whitepapers, sponsored research, regular newsletter, as well as Go2Market and consulting services. As a research pioneer, IoT Analytics combines traditional methods of market research such as interviews and surveys with state-of-the art web-mining tools to generate high-caliber insights.

IoT Analytics is headquartered in Hamburg, Germany.

For more information, visit www.iot-analytics.com

Database Structure – IoT use case list 2016

The IoT use case database is structured along the following 5 dimensions

• Use Case Detail – General information about the IoT use case (description, industry, location and link to more information)
• End user of the IoT solution – Information about the company employing IoT (description, industry, homepage and location)
• Value proposition of IoT deployment – classified as revenue, cost, safety, other and description of results
• IoT infrastructure – Name of IoT Solution vendors classified by hardware, software, connectivity and other solution provider for respective use case
• Use case classification – e.g. Predictive maintenance; Precision Farming, etc.

IoT vendors mentioned (selected vendors only):

ABB, Accenture, Aeris, Amazon, Arrayent, AT&T, Ayla Networks, Autodesk, Axeda, BlackBerry, Bosch, Carriots, Cisco, Dell, Ericsson, Evrythng, GE, Gemalto, Huawei, IBM, Intel, Jasper, Kore Telematics, Libelium, LoRA, Microsoft, Nokia, ntels, Oracle, Qualcomm, PTC, Relayr, Rockwell Automation, Salesforce.com, Samsung, SAP, Semtech, Siemens, Sierra Wireless, SIGFOX, Solair, Telefonica, Telit, ThingWorx, Verizon, Xively, Zebra Technologies.

Contact

For further comments or more information on this press release, please contact: Thomas Meier, Market Analyst, IoT Analytics thomas.meier@iot-analytics.com

It’s time to look beyond the hype and get real about the Internet of Things!

As part of a larger effort to track the IoT ecosystem, we set out, mining hundreds of homepages, and managed to assemble and verify 640 actual enterprise IoT projects (Note: We did not include any consumer IoT projects such as wearable devices or hobby projects).

In a second step we took the time to collect all published information about these IoT projects and put them into a structured list. There is a vast number of insights hidden in the data, some of which we would like to share with you today.

Most IoT projects in connected industry

Most of the IoT projects we identified are in industrial settings (141 projects), followed by Smart City (128) and Smart Energy IoT projects. The Americas make up most of those projects (44%), followed by Europe (34%). There are large differences when looking at individual IoT segments and regions. The Americas and particularly Northern America is strong in Connected Health (61%) and Smart Retail (52%), while the majority of Smart City projects are located in Europe (47%). The Asia / Pacific region is particularly strong in the area of Smart Energy projects (25%).

1.   Connected Industry: Strong IoT project footprint in oil & gas and in factory environments

Connected industry is the largest IoT segment in terms of number of IoT projects. This segment covers a wide range of connected “things” such as printing equipment, shop floor machinery, cranes or entire mines. One of the largest sub-industries is Oil & Gas. The ability to remotely monitor and optimize heavy assets has resulted in a number of projects. An example is RasGas´ LNG equipment monitoring in Ras Laffan, Qatar, allowing the LNG producer to perform predictive maintenance on its assets. Manufacturing shop floors are another area of major importance for IoT. For example, German food producer Seeberger knows exactly where specific goods are at any stage of the production process allowing for complete food traceability.

2.   Smart City: Traffic management and utilities driving Smart City IoT use cases

20% of all identified IoT projects are Smart City related. On top of that, the IoT Employment Statistics Tracker shows a strong upward trend on the back of hundreds of recent Smart City initiatives started by governments around the world. Prominent examples include the City of Barcelona and the City of London. The most popular Smart City application is Smart Traffic (e.g. Intel and Siemens´ Smart Parking solution in the City of Berlin) followed by Smart Utilities (e.g. Dublin´s smart bins). Other Smart City initiatives evolve around city safety. A notable (European) safety monitoring IoT project is the CityPulse IoT project in Eindhoven where the information on noise levels is matched with social media messages in order to detect and manage incidents and adjust the street lighting accordingly.

3.     Smart Energy: Strong push in the US and other parts of the Americas

Both North and South America appear to be strong adopters of Smart Energy projects with nearly half of all identified Smart Energy IoT projects taking place there. The majority of Smart Energy projects can be classified as Smart Grid initiatives, an example being the American City of Fort Collins Utilities´ Smart Grid initiative. Another extensive Smart Energy project is the smart grid demonstration project on Jeju Island, South Korea, which incorporates both distributed renewable generation and advanced metering infrastructure. While typically these projects focus on increasing the efficiency and reliability of the grid, IoT technology can also be used to avoid energy theft as showcased in a project in Tucumán, Argentina.

4.   Connected Cars: Largest segment making use of M2M technology

Connected cars is one of the more mature IoT segments in which M2M/Cellular type of IoT connectivity has been employed for quite some time. Most Connected Car IoT Projects focus on vehicle diagnostics and monitoring. Two out of three projects can be classified as Fleet Management initiatives, an example being Telefonica´s fleet management solution for ISS. On top of that, there are a number of usage-based car insurance projects, e.g. Unipol Sai´s black box solution. Other types of projects include real time decision support for Honda´s racing team or Daimler´s Car2Go car sharing service.

Other notable findings

• LPWAN still plays a minor role in announced IoT projects

Despite the current LPWAN hype, less than 10% of all identified IoT projects employ this type of connectivity. 59% of all identified LPWAN projects are currently implemented as part of Smart City initiatives, for example Gorizont-Telecom´s Smart Parking solution in the City of Minsk.

• Large cost saving potential in Smart Energy and Smart Supply Chain

The main value driver for most IoT enterprise projects is cost savings. This number is particularly high in the Smart Energy segment in which 84% of IoT projects target cost reductions. The number is also relatively high for Smart Supply Chain projects (61%). An example is Kore Telematic´s cold chain monitoring solution.

• The number of IoT enterprise employments is still limited – yet shows strong upward momentum

While the list of 640 IoT Projects is certainly not complete, our analysis leads us to conclude that the total number of globally announced and published IoT projects is limited. Triangulating the list with a number of other data points, we believe the total number of IoT enterprise projects (including all unannounced projects) is in the range 7,000 – 10,000 projects. This number is well in line with our overall market model and our observation that expectations for the Internet of Things are overhyped. Our IoT Employment Statistics Tracker confirms strong momentum for IoT initiatives but the starting point is probably lower than most people expect.

Fun stuff

Finally, for the fun of it, here are some of the more unusual IoT projects that we identified during our research:

• We are huge fans of the Rhino ankle collar, protecting this endangered species.
• Just because… we would love to satisfy our curiosity and have a look of the sensor data from the International Space Station
• And then, being based in Germany, we also really appreciate Estrella Damm´s beer temperature monitoring solution

Looking ahead

If you want to find out more about our research or the List of 640+ Enterprise IoT Projects feel free to reach out! You can download a sample of the project list here. We believe the list is a highly valuable reference point for anyone working in IoT and we are planning to update the list and analysis in 2017.

The “Guide to IoT solution development” white paper aims to steer Internet of Things (IoT) Business and Technical decision makers through the challenging process of developing solutions for the IoT.

PRESS RELEASE. Hamburg, Germany – 20 September 2016 //

IoT Analytics, the leading provider of market insights for the Internet of Things, announced today the publication of a white paper that serves as a guide to streamline IoT solution development. The paper helps companies steer through the challenging solution development process to accelerate their IoT endeavors. Sixteen specific learnings are cited from recent projects across the five major phases of IoT Solution Development.

The paper breaks down IoT solutions into five distinct layers and 15 components in order to further simplify the complexity of end-to-end IoT solutions.

To assist companies in better understanding the offerings of IoT solution providers, IoT Analytics showcases a high-level comparison of eight major IoT solution providers, including Microsoft, Amazon, IBM, Intel, GE, Google, PTC and SAP.

The paper reveals that IoT projects are increasingly relying on existing out-of-the-box solutions and that 29 percent of companies look to IoT cloud platforms to lead their solution development projects.

Additionally, the white paper discusses three areas that demand special attention when developing IoT solutions in detail: Security, Interoperability and Manageability.

“Our research shows just how challenging IoT Solution Development still is in 2016,” reveals IoT Analytics’ Managing Director, Knud Lasse Lueth. “We estimate approximately 3,000 new enterprise IoT projects will be launched in 2016. I recommend that these project teams read our guide to avoid making mistakes others have made and instead follow a structured solution development framework.”

The white paper is available to download HERE.

About the white paper

Microsoft Corp. sponsored this whitepaper and IoT Analytics’ research and analysis were conducted independently.

White Paper – Guide to IoT Solution Development

Table of Contents

1    Introduction
1.1    The Internet of Things is transforming businesses and industries
1.2    Demystifying the complexity in IoT Solution Development
1.3    IoT Solution development – Status Quo
1.4    Developing an IoT Solution in 5 Phases
2    PHASE 1: Developing a sound Business Case
2.1    Learning 1: IoT Projects take much longer than anticipated
2.2    Learning 2: Organizational & cultural change is often underestimated
2.3    Learning 3: The necessary skills are often not available in-house
3    PHASE 2: Build vs. Buy and Vendor Evaluations
3.1    Requirements Engineering – Understanding what is needed for your IoT Solution
3.2    The Build vs. Buy decision
3.3    The vendor selection
3.4    Comparing key IoT Solution vendors
4    PHASES 3-5: Proof of Concept, Piloting and Commercial Deployment
4.1    Security
4.2    Interconnectivity
4.3    Manageability
5    IOT SOLUTION BLUEPRINT: IoT Enabled ADR
6    Conclusion
Appendix

IoT Companies Mentioned

Amazon, Arrow, AT&T, Blue Pillar, Cisco, Dell, Ericsson, GE/Predix, Google, IBM, Intel, Kärcher, Microsoft, Oracle, PTC/ThingWorx, Salesforce, SAP, Vodafone, Wipro.

Target Audience

The focus of this white paper is on industrial and manufacturing scenarios but the lessons learned can be leveraged by any organization looking to implement IoT. The paper may be most beneficial to IoT Business and Technical Decision Makers (i.e., Original Equipment Manufacturers, Original Design Manufacturers, System Integrators, Independent Software Vendors, Solution Providers, End-customers).

Methodology

The findings presented in the paper are based on a number of executive discussions, customer interviews, an industry survey, internal sample data and desktop research of ongoing and completed IoT projects. The paper also includes several best practices from Microsoft, a leading provider of IoT technology and this paper‘s sponsor.

About IoT Analytics

IoT Analytics is the leading provider of market insights & competitive intelligence for the Internet of Things (IoT), M2M, and Industry 4.0. The specialized data-driven research firm helps more than 40,000 Internet of Things decision-makers understand IoT markets every month. IoT Analytics tracks important data around the IoT ecosystem such as M&A activity, Startup funding, company projects, use cases and latest developments. Product offerings include in-depth market reports, technical whitepapers, sponsored research, regular newsletter, as well as Go2Market and consulting services. As a research pioneer, IoT Analytics combines traditional methods of market research such as interviews and surveys with state-of-the art web-mining tools to generate high-caliber insights.

IoT Analytics is headquartered in Hamburg, Germany.

For more information, visit www.iot-analytics.com

Contact

For further comments or more information on this press release, please contact: Stephanie Baumann, PR Manager, IoT Analytics press@iot-analytics.com

As we close out 2016 implementing IoT technology still remains a challenge for most manufacturers looking to digitize their products or services.

Our research suggests that by the end of 2016 we will surpass 10,000 global enterprise IoT projects. While most of them are still in the PoC (Proof-of-concept) stage, some of them end-up in frustration – As one (unnamed) project manager recently put it: “Our implementation had serious flaws. In hindsight, I wish we had asked the right people and more questions beforehand”.

In recent months, the IoT Analytics team performed extensive research on IoT technology implementations, interviewing dozens of decision-makers both on the end-user and the IoT technology vendor side. We also compiled a list of 640+ real enterprise IoT projects in September.  We teamed up with Microsoft to highlight some of these learnings in a comprehensive 31-page paper called “Guide to IoT Solution Development” (download it for free here).  Companies implementing IoT Solutions in 2017 should read these helpful insights to avoid the mistakes others have made.

Key IoT technology components

Whether companies are working on a predictive maintenance solution for wind energy, vehicle tracking in the supply chain, or precision farming in agriculture: The basic IoT technology is the same. We summarized the technology in 15 components (see below)


For a detailed description of the individual components, please refer to the aforementioned white paper.

Not only is the technology similar, we also found that some common problems emerge when talking to those who have implemented IoT technology.

Here are 6 learnings:

1.    Organizational & cultural change is often underestimated

This is the number one challenge we hear about when we talk to end-users who have implemented IoT projects and ask them about their biggest learning.

Take the German cleaning machine manufacturer Kärcher, for example. Their director of digital product, Friedrich Völker, mentioned when they started rolling-out their connected fleet management solution “our salesforce had no experience in pitching software and virtual offerings to the customers. Rather than making a one-off sale they are now in continued talks with the customer regarding the ongoing performance of the machine. This change in mindset as well as the education of the salesforce takes time and it is just one of many organizational challenges we are faced with”.

IoT initiatives are usually part of a larger digital company transformation that requires the product development organization to adopt agile approaches and the billing process to support subscription-based customer billing or even pay-per-use based billing.

Takeaway: Take the organizational change management efforts seriously, start early and use agile methods!

2.    IoT projects take much longer than anticipated

To some this might be a “no-brainer” but implementing IoT really takes a long time.  Our research found that the fastest IoT technology implementations went from business case development to commercial roll-out in 9 months. But these are exceptions, the current average of time-to-market is around 18-24 months. Reasons for prolonged project timeline are manifold including both business-related issues (e.g., not having the buy-in from the right stakeholders), as well as technical issues (e.g., not working with an infrastructure that supports scaling the solution in a commercial deployment scenario).

What’s more: Profitability is usually not achieved for another few years as most firms are focused on achieving a critical mass on their IoT solution at first.

Takeaway: Teach all stakeholders to be patient and build in little success stories that help satisfy shareholders and senior management on the way.

3.    Necessary skills are not available in-house

End-to-end IoT solution development requires a broad range of skills including embedded system design, cloud architecture, application enablement, data analytics, security design and back-end system integration (e.g., into ERP/CRM).

Unfortunately manufacturers have limited experience in working with the technology elements that are unique to the Internet of Things such as MQTT or AMQP protocols, LPWAN communication and edge analytics.

Our research suggests that the skills gap in data science is particularly worrying (Look for a report on industrial data analytics skills, coming out later this month).

Takeaway: Map the IoT skill gaps, cross-train and upskill the workforce with a focus on new technologies unique to IoT. Work with true IoT technology experts from different fields with deep domain knowledge.

4.    Security is often an afterthought

Security is  too often an afterthought when teams start to develop IoT technologies. The security features are commonly cut from initial designs to accommodate additional device functionality.  However, global data and device security needs to play a central role in IoT technology development, for companies and customers to broadly adopt the ‘Internet of Things’.

One example is a manufacturer of Connected Medical Devices who employs a so-called “ethical hacker” whose sole role is to detect security vulnerabilities in the network. This security-breaking expert applies typical hacking techniques to root a device, penetrate, lift and de-obfuscate code.

Takeaway: Follow security best-practices such as employing a secure boot process or using unique identity keys and map the attack surface (e.g., using the STRIDE model).

5.    Interconnectivity issues are a major complexity driver

When you download an app on your phone, you take for granted that it is ready to be used within seconds. People who are not too familiar with IoT often have the misconception that it must be similar with IoT technology.

However, today’s reality is far from that. Protocol translation still takes up a majority of today’s IoT development efforts. During the IoT technology implementation of an industrial OEM it took nearly 4 months to develop all necessary protocol translations and make equipment and applications work seamlessly.

Takeaway: Build on a standardized ecosystem that is relevant for your use case and industry.

6.    Scalability becomes an issue when going to thousands of devices

There are not many people, who report this issue. But when they do, they are in deep trouble because in most cases the products are already in the market.

A large manufacturer of construction equipment initially created neat dashboards to monitor their machines remotely. A year later, the project was amended to start performing predictive maintenance and fault analysis of the hydraulic systems. That is when the team realized that the data model did not support the necessary backend processing capacity.

In another example the processing power of the hardware wasn’t powerful enough when a manufacturer wanted to add functionality to the connected device.

Takeway: Even though you should start small, you must think big from the beginning. Build your IoT technology in a modular fashion and challenge your hardware design and data model.

More on this topic

To learn more about 2016 IoT technology implementations download the complete “Guide to IoT Solution Development” here.   Or sign up for our newsletter to stay up-to-date with our ongoing IoT market coverage.

Twitter: @AnalyticsIoT

As we go into 2017 our IoT Analytics team is again evaluating the main IoT developments of the past year in the global “Internet of Things” arena. This article highlights some general IoT 2016 observations as well as our top 8 news stories, with a preview for the new year of opportunities and challenges for global IoT businesses. (For your reference, here is our 2015 IoT year in review article.)

In 2016 the main theme for IoT was the shift from hype to reality. While in 2015, most people only heard about IoT in the media or consumed some marketing blogs, 2016 was different. Many consumers and enterprises went out and started their own IoT endeavors or bought their own IoT devices. Both consumer IoT and enterprise IoT enjoyed record uptake, but also saw some major setbacks.

A. General IoT 2016 observations

A1. Consumer IoT

Millions of consumers bought their first IoT Device in 2016. For many of them this was Amazon Echo (see below for more details).

Image 1: The Amazon Echo Dot was a consumer IoT 2016 success (left hand side) while other devices didn’t always convince (e.g., Nest thermostat – right hand side)

Unfortunately many consumers also realized that marketing promises and reality are often still disparate. Cases of disappointed users are increasing (For example a smart thermostat user who discovered that his thermostat was disconnected for a day).

Some companies were dissolved in 2016 (like the Smart Home Hub Revolv in April – causing many angry customers), others went bankrupt (like the smart watch maker Pebble in December) or didn’t even come to life at all (such as the augmented reality helmet startup Skully that enjoyed a lot of publicity, but filed for bankruptcy in August without having sold a single product).

A2. Enterprise IoT

On the enterprise/industrial side of things, IoT 2016 will go down as the year many firms got real about their first IoT pilot projects.

A general wake-up call came in September when a massive cybersecurity attack that involved IoT devices (mainly CCTV cameras) shut down DNS provided Dyn and with it their customer’s websites (e.g., AirBnB, Netflix and Twitter). While this kind of attack didn’t directly affect most IoT companies, its implications scared many IT and IoT decision-makers. As a result, many IoT discussions have now shifted towards cybersecurity solutions.

B. Top 8 IoT 2016 Stories

For us at IoT Analytics, the IoT Security Attack on Dyn servers qualifies as the #1 story of the year. Here are our top takeaways from IoT 2016:

1.    Biggest overall story: IoT Security attack on Dyn servers

The Dyn DDoS attack was the first large-scale cybersecurity attack that involved IoT devices – Dyn estimates that 100,000 infected IoT devices were involved. As a first-of-a-kind, it sent shockwaves through corporate IT and IoT.

Chinese CCTV system manufacturer, Hangzhou Xiongmai Technology Company, was at the core of the attack.  Its cameras (among others) were infected with the so-called Mirai malware. This allowed the hackers to connect to the infected IoT devices and launch a flood of well-timed massive requests on Dyn servers – which led to the shutdown of their services.

2.    Biggest Consumer IoT Success: Amazon Echo

Launched in June 2015, the Amazon Echo Smart Home Voice Control was undoubtedly the consumer IoT success story of the year. Recent data provided by Amazon reveals that device sales exploded by 9x (year-on-year vs. last Christmas).

Amazon sold more than 1 million Echo devices in December 2016

Our app-based Smart Home models confirm this trend suggesting that Amazon sold more than 1 million Echo devices in December 2016 and close to 4 million devices throughout the whole of 2016.

With these gains, Amazon has suddenly become the #1 Smart Home Hub and is leading the paradigm shift towards a voice-controlled automated home. Google jumped on the same train in October by releasing Google Home; Microsoft Home Hub is expected to follow in 2017.

3.    Most overcrowded space: IoT Platforms

When we launched our coverage of IoT Platforms in early 2015, little did we know that the topic would soon become the hottest IoT area. Our count of platform providers in May 2016 showed 360 platforms. Our internal research is now well over 400. IoT Platforms is also well placed in the Gartner Hype Cycle 2016.

Companies have realized that the value of IoT lies in the data and that those that manage this data will be the ones capturing a large chunk of this value. Hence, everyone is building an IoT platform.

The frightening part is not necessarily the number but rather the fact that the sales pitches of the platform providers all sound like this: “We are the only true end-2-end platform which is device-agnostic and completely secure”.

4.    Largest M&A Deal: Qualcomm/NXP

While we can see a massive expansion of global IoT software/analytics and platform offerings, we are also witnessing a consolidation among larger IoT hardware providers – notably in the chip sector. In October 2016, US-based chipmaker Qualcomm announced it would buy the leader in connected car chips NXP for $39B, making it the biggest-ever deal in the semiconductor industry.

Other large hardware/semiconductor acquisitions and mergers during IoT 2016 include Softbank/ARM ($32B) and TDK/Invensense ($1.3B)

5.    Most discussed M&A Deal: Cisco/Jasper

In February, Cisco announced that it would buy IoT Platform provider Jasper Technologies for $1.4B. Journalists celebrated the acquisition as a logical next step for Cisco’s “Internet of Everything” story – combining Cisco’s enterprise routers with Jasper’s backend software for network operators and hopefully helping Cisco put an end to declining hardware sales.

6.    Largest startup funding: Sigfox

Sigfox already made it into our 2015 IoT news list with their $100M Series D round. Their momentum and the promise of a global Low Power Wide Area Network led to an even larger funding round in 2016. In November, the French-based company received a record $160M in a Series E that involved Intel Capital and Air Liquide among others.

Another notable startup funding during IoT 2016 involved the IoT Platform C3IoT. The Redwood City based company received $70M in their Series D funding.

7.    Investment story of the year: IoT Stocks

For the first time IoT stocks outperformed the Nasdaq significantly. The IoT & Industry 4.0 stock fund (Traded in Germany under ISIN: DE000LS9GAC8) is up 17.5% year-on-year, beating the Nasdaq which is up 9.6% in the same time frame. Cloud service providers Amazon and Microsoft are up 14% for the year, IoT Platform provider PTC is up 35%. Even communication hardware firm Sierra Wireless started rebounding in Q4/2016.

Some of the IoT 2016 outperformance is due to an increasing number of IoT acquisitions (e.g., TDK/Invensense). At the beginning of 2016 we asked if the underperformance of IoT stocks in 2015 was an opportunity in 2016. In hindsight, the answer to that question is “Yes”. Will the trend continue in 2017?

8.    Most important government initiative: EU Data Protection policy

In May, the European Union passed the General Data Protection Regulation (“GDPR”) which will come into effect on 25 May 2018. The new law has a wide range of implications for IoT technology vendors and users. Among other aspects:

• Security breaches must be reported
• Each IoT user must provide explicit consent that their data may be processed
• Each user must be given the right to object to automated decision making
• Data coming from IoT Devices used by children may not be processed

From a security and privacy policy point of view the law is a major step forward. IoT technology providers working in Europe and around the world now need to revisit their data governance, data privacy and data security practices and policies.

C. What to expect in 2017:

• War for IoT platform leadership. The large IoT platform providers are gearing up for the war for IoT (platform) leadership. After years of organic development, several larger vendors started buying smaller platform providers in 2016, mainly to close existing technology gaps (e.g., GE-Bitstew, SAP-Plat.one, Microsoft-Solair)
• War for IoT connectivity leadership. NB-IoT will finally be introduced in 2017. The new low-power standard that is heavily backed by major telco technology providers will go head-to-head with existing LPWAN technology such as Sigfox or LoRa.
• AR/VR becoming mainstream. IoT Platform providers PTC (Vuforia) and Microsoft (Hololens) have already showcased a vast range of Augmented Reality / Virtual Reality use cases. We should expect the first real-life use cases emerging in 2017.
• Even more reality and less hype. The attention is shifting from vendor/infrastructure topics such as what the next generation of platforms or connectivity standards will look like and towards actual implementations and use cases. While there are still major developments the general IoT audience will start taking some of these technology advancements for granted and focus on where the value lies. We continue to follow that story and will update our list of IoT projects

Our IoT coverage in 2017: Subscribe to our newsletter for continued coverage and updates. In 2017, we will keep our focus on important IoT topics such as IoT Platforms, Security and Industry 4.0 with plenty of new reports due in Q1/2017. If you are interested in a comprehensive IoT coverage you may contact us for an enterprise subscription to our complete IoT research content.

Much success for 2017 from our IoT Analytics Team to yours!

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_{Disclosure: While our opinions are well researched these predictions are not guarantees.  The author did not and does not intend to suggest any specific action by any investor or shareholder and strongly suggests that any decision made to buy or sell shares of IoT stocks be made after consultation with an investment advisor as to the suitability of such an investment}

PRESS RELEASE: Hamburg, Germany – 21 March 2017 //

IoT Analytics, a leading provider of market insights for the Internet of Things (IoT), today published a comprehensive Market Report, focusing on sizing the opportunity of the Predictive Maintenance market for the period 2017 to 2022.

The emerging market for Predictive Maintenance shows increasing growth as maintenance strategies move from what has been known as Condition-based Maintenance to Analytics- and IoT-enabled Predictive Maintenance. New IoT platforms, low-cost secure cloud storage as well as analytics vendors that offer dynamic data models play an increasing role in the technology transition.

The Predictive Maintenance report forecasts a compound annual growth rate (CAGR) for Predictive Maintenance of 39% over the time frame of 2016-2022, with annual technology spending reaching US$10.96 Billion by 2022. These numbers are based on the Predictive Maintenance related revenue of leading technology companies in the field, across 13 industries and 7 technology areas.

In developing the 132-page report, the analyst team at IoT Analytics studied over 110  companies that offer Predictive Maintenance technology elements and reviewed 47 implemented Predictive Maintenance projects. Ten of the leading companies and eleven of the use cases are presented in depth, alongside an analysis of current business models and M&A activities. The Predictive Maintenance report also calls out 6 major industry trends as well as various challenges, both for technology providers as well as technology users.

Commenting on the findings, IoT Analytics Managing Director Knud Lasse Lueth said: “Predictive Maintenance is one of the few real ‘killer’ use cases for the industrial Internet of Things. It is easy to understand how it works and the benefits are real. Inside factories, predictive maintenance is increasingly used to optimize internal operations typically resulting in 20-30% efficiency gains. But the real revolution is happening outside the factory. Several equipment OEMs have started to introduce new Predictive Maintenance services that are so compelling that they will likely change the industry dynamics forever. During our analysis, we found the elevator industry to be one of the segments at the forefront of this development. However, when we looked deeper into individual projects, we found that even advanced implementations in this industry are still to unlock the majority of its value.”

The Predictive Maintenance report is available to download HERE.

Predictive Maintenance Report Structure

Executive Summary
PREFACE
1. Introduction to Predictive Maintenance (PdM)

1.1 Definition & Disambiguation
1.2 Role in IoT & I4.0
1.3 Benefits of employing PdM
1.4 PdM application areas
1.5 PdM process
1.6 Technology stack

2. Market Size & Outlook

2.1 Total Market
2.2 General Market
2.3 Market by Technology
2.4 Market by Industry

3. Competitive Landscape

3.1 Overview
3.2 List of Vendors
3.3 Company Profiles
3.4 M&A Patterns
3.5 M&A Activity Log
3.6 M&A Examples

4. Business Models & Use Cases

4.1 Business model observations
4.2 Selected market strategies
4.3 Use Case deep-dive
4.4 Further use cases

5. Trends

5.1 Trending Topics
5.2 The Future of Service
5.3 Challenges & Barriers
5.4 PdM Research

6. Methodology
About IoT Analytics
Appendix

Companies Mentioned (selection from the Predictive maintenance report)

Accenture, Alexander Thamm, Bosch, Brüel&Kjaer, C3 IoT, Cassantec, Caterpillar, Cisco, DataRPM, Dell, General Electric, Helium, Huawei, Hitachi, IBM, Keysight Technologies, Konux, Meggitt, Microsoft, National Instruments, OSIsoft, PTC, Rockwell Automation, Samsara, SAP, SAS, Schneider Electric, Senseye, Siemens, Sight Machine, SKF, Software AG, Spectris plc, Splunk, Tachyus, thyssenkrupp, Uptake + 65 more.

Target Audience

The focus of this Predictive Maintenance report is on industrial equipment and machinery but the lessons learned can be leveraged by any organization looking to implement PdM. The Predictive Maintenance report may be most beneficial to OEMs looking into PdM as a new business model, technology vendors in the IoT & PdM space. Also relevant for companies looking into M&A targets in the PdM area, as many Startups mentioned.

About IoT Analytics

IoT Analytics is the leading provider of market insights & competitive intelligence for the Internet of Things (IoT), M2M, and Industry 4.0. The specialized data-driven research firm helps more than 40,000 Internet of Things decision-makers understand IoT markets every month. IoT Analytics tracks important data around the IoT ecosystem such as M&A activity, Startup funding, company projects, use cases and latest developments. Product offerings include in-depth market reports, technical whitepapers, sponsored research, regular newsletter, as well as Go2Market and consulting services. As a research pioneer, IoT Analytics combines traditional methods of market research such as interviews and surveys with state-of-the art web-mining tools to generate high-caliber insights.

IoT Analytics is headquartered in Hamburg, Germany.

For more information, visit www.iot-analytics.com

Contact

For further comments or more information on this press release or the Predictive Maintenance report, please contact Stephanie Baumann, Public Relations Manager at IoT Analytics by emailing: press@iot-analytics.com