The Internet of Things (IoT) is particularly interesting for industry because it can achieve what is hardly possible in a high-tech infrastructure: the optimization of processes. The frequently cited example of predictive maintenance makes this clear: the optimum maintenance time window in terms of cost and necessity is calculated based on data supplied by a machine. Interval-controlled maintenance often replaces parts before they are actually worn out, while reactive maintenance results in temporary production downtime in the worst case. Thanks to the machine data and its evaluation, the most economical time can be determined and nominal costs saved.

But this is just the beginning. "IoT technologies can be used to implement completely new business and revenue models," says Jan Rodig, CEO of independent IoT service provider Tresmo. "Products can be upgraded with digital services - either to stand out from the competition or to meet the expectations of customers, who have long been specific in this regard. This is because more and more people, particularly in the industrial environment, are questioning whether it is absolutely necessary to purchase infrastructures such as machines or whether what they do cannot be rented as a service." In other words: time, usage and performance-based payment models are easy to implement with the help of IoT data. "In the medium term, IoT initiatives will therefore become strategic projects that should be approached with the appropriate awareness," advises Jan Rodig.

A confusing market is consolidating

Above all, this includes choosing the right tools - from edge technology to IoT platforms. The market is diverse, as providers come from different areas of expertise. The IoT edge sector is dominated by IoT device manufacturers, some of which supply their products with high-performance controllers and specially developed IoT software. Some have now broadened their solutions considerably and offer their own IoT cloud or cooperate with platform providers and cloud providers. For example, hardware manufacturer Advantech has transformed itself into a comprehensive IoT solution provider and, in addition to IoT development tools, offers preconfigured cloud services and access to the cross-provider PaaS solution Wise. Electrical engineering giant Schneider Electric has also developed a dedicated IoT portfolio and can be booked as a complete solution with Microsoft Azure as the backend.

Jan Rodig has already worked on more than 40 IoT projects.

© Tresmo

It is no longer possible to draw a clear line between the offerings. Many cloud providers, including global market players such as Amazon, Microsoft and Google, have invested heavily in the development of IoT solutions via their cloud infrastructure in recent months. "Entire IoT ecosystems have developed as a result. Companies can put together their own individual toolset," says expert Jan Rodig from Tresmo. "At the same time, the provider market is currently very confusing and very much in flux. As choosing the right technologies can be crucial for the success of the IoT project and the corresponding adjustment of the medium-term business strategy, companies should weigh up the options carefully."

Although the IoT market is still relatively young, it is already going through its first consolidation phase, according to Jan Rodig. On the one hand, this is due to the commitment of large companies that are supporting their own developments through acquisitions. Software AG, for example, added an IoT application and device management platform to its portfolio with the purchase of Cumulocity. Salesforce took over the software manufacturer Mulesoft along with its
integration platform and SAP AG expanded its device management with the help of Plat.one.

On the other hand, this was due to the need to implement IoT functionality across the board. From the recording of data by a sensor to possible pre-evaluations in the gateway and data analysis in the cloud: it's all about data standardization, expandability through new devices and updating applications. A single, industry-specific application, for example, is of little use if it cannot interpret the data format of the IoT devices or return control instructions from monitoring to the device.

For companies looking for a suitable solution for their IoT initiative, market consolidation will usually prove to be an advantage. When large market players invest so heavily, this is a sign of sustainable market development. The risk that the chosen service provider will no longer be on the market in two years' time is reduced. And companies can use the growing ecosystems for themselves and do not have to worry about the compatibility of the systems themselves.

Which tools are suitable for your own IoT project should be carefully evaluated in the initial phase.

Choosing the right platform

"Hardly any company can or wants to switch its entire strategy to IoT business overnight. It is therefore advisable to start with a specific use case and develop a concept for it first," says Jan Rodig. "In addition to the business objectives, this primarily includes the technical specifications - regardless of the future platform." These technical specifications can be quite extensive. They include the aforementioned data standardization as well as connectivity, data visualization options, device and service management requirements, desired external interfaces and security features.

In practical terms, for example, it is important to plan for the expandability of the solution from the outset: additional or new IoT devices are likely to be integrated in the near future, the operating systems of the devices require constant updates or additional service tools - for example for billing new revenue models - and the devices must be able to do something with the data. It is then important that the IoT platform can take on the role of an intermediate layer. This should be able to accept data from the devices independently of the manufacturer and also pass it on to the applications in such a way that they can evaluate the data accordingly. Cloud connectivity - i.e. how certificates or firmware of the devices can be updated in the field - as well as scaling and the degree of automation play a role here.

Avoid vendor lock-in

In order to avoid a vendor lock-in, i.e. being too closely tied to one service provider, the platforms in question should be checked to see what changes are necessary when changing providers and how much effort would be involved. This becomes all the more difficult the larger a provider's ecosystem is and the more of it you use yourself. This includes interface specifications, supported device and gateway implementations, the type of data storage and, last but not least, the associated support contracts. Especially when it comes to hosting the entire IoT solution in a cloud infrastructure of any kind, long-term contracts are quickly concluded because they are cheaper.

Several developments are currently coming together in the IoT environment. IoT initiatives are becoming increasingly business-critical, as they offer potential for optimization, meet customers' growing expectations for additional digital services or even enable new business models. At the same time, an IoT solution provider market has developed that is highly diversified and is currently developing attractive ecosystems - an advantage for companies that can put together their own individual toolset from numerous ready-made solutions - from edge functions to sourcing options. This increases the risk of vendor lock-in and the crowding out of small, specialized providers.

Author:
Kerstin Janke is a freelance journalist.