Three steps to choosing the right IoT vendor
September 21, 2016
A strong push from hardware companies, communication providers, independent software vendors, system integrators, startups, and IoT cloud platforms (o...
A strong push from hardware companies, communication providers, independent software vendors, system integrators, startups, and IoT cloud platforms (of which there are 360+ competing providers in this market alone) has resulted in a complex and confusing market. As a result, it can be difficult for an OEM to evaluate which IoT vendor is the best fit for their connected solutions. But this is an important decision that will shape an OEM’s IoT journey, as they will likely be reliant on that vendor for years to come.
IoT Analytics analyzed the process of identifying the right IoT vendor in an industry white paper entitled, Guide to IoT solution development. According to the paper, there are three important aspects to finding the right IoT vendor.
1. Map the engineering requirements
Assuming you have nailed the business case (i.e., you have a clear vision for your IoT solution) and have double-checked the basic assumptions (i.e., expected ROI), you will need to formalize your engineering requirements. This is necessary (at least on a high level) so that you can craft the right IoT initiative for your organization, perform the build vs. buy decision, and consult the right vendors or partners.
a) Ask the right questions
First, come up with answers to operational questions such as,
- What end points will provide the data?
- What data points should be collected?
- Which analyses will generate strategic insights?
- Which enterprise systems need to be connected?
- What services do I need to offer?
IoT needs to be thought through from end-to-end or device-to-cloud. Keep in mind that the true value of IoT solutions resides in the data generated by your connected products from which you derive actionable intelligence and feed timely insights back into products, processes, and operations to transform the entire business.
b) Map the requirements by area
As a second step, you should make a rough draft of your end-to-end solution according to five distinct layers:
- Cloud services
- Cross-layer security
For each component, ask questions such as, do we have the technology expertise in-house? Can we keep pace with the technology evolution and future customer requirements?
For example, it is important to know how much data will be generated, in which form, and how fast it will be retrieved. This will determine which kind of database and storage solution is required and whether you will be able to build this on top of your existing data infrastructure or not.
2. Decide whether to build or buy
After assessing the engineering requirements, you need to decide which components of the solution you want to build from scratch. In many cases, it is beneficial to work with existing solutions by third-party vendors i.e., out-of-the-box solutions (Table 1).
[Table 1 | Why companies go with out-of-the-box solutions]
Before deciding to go with an out-of-the-box solution, companies should evaluate the related costs as well as the threat of becoming locked-in. Being locked-in with the wrong vendor may strip away certain degrees of freedom in the overall solution or lead to uncontrollable support, maintenance, and customization costs in the long run.
Most vendors offer the ability to perform an initial pilot trial. While companies may initially test some features for free, it should be noted that a certain budget needs to be planned in for the pilot phase, as some integration effort and data modeling is always necessary to get the pilot project up and running.
3. Select the vendor
There are numerous reasons to choose one IoT solution vendor over another. In an industry survey, IoT Analytics asked 144 companies currently building IoT solutions, “Which vendor is primarily in the lead to co-ordinate your IoT solution development?”
[Figure 1 | Most companies look to IoT cloud platforms for solution development]
The analysis shows that the majority (29 percent) of companies developing IoT solutions see IoT cloud platform companies in the lead. Meanwhile, 21 percent of respondents see no vendor in the lead and are building in-house instead (Figure 1). However, finding the most suitable IoT cloud platform vendor is difficult with hundreds of competing providers in the market today.
One should also note that at this point (Q3/2016) there is no single IoT vendor that can provide the complete end-to-end out-of-the-box solution. However, as IoT Analytics’ 2016 IoT platforms market report verifies, some companies offer more than others and together with their partner ecosystem, some can provide complete end-to-end IoT solution support.
Comparing key IoT solution vendors
Correctly assessing the capabilities of each possible vendor against your requirements definition is crucial for your selection. While there are hundreds of existing eEnterprise IoT projects, the use case at hand determines your solution requirements and the vendor selection process largely depends on the components the vendors offer and how they fit into your solution.
A high-level comparison of eight major IoT solution providers including Microsoft, Amazon, IBM, Intel, GE, Google, PTC and SAP, as well as other best practices for OEMs, ODMs, and device manufacturers, can be found in the Guide to IoT solution development. Download it for free here.