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SELECTING IoT SOLUTIONS AND PARTNERS: THE TOP ASSESSMENT CRITERIA

INTRODUCTION

Once companies have decided to invest in their IoT strategy, the process of designing and building an IoT solution begins. Having

evaluated their own internal capabilities and decided what solution components they will build themselves, the next decision is

selecting suppliers to help complete an end-to-end IoT solution. This is no easy task, and survey results show that supplier diversity

and offer complexity is one of the biggest challenges facing IoT solution deployments. There are literally hundreds of suppliers that can

assist in building an IoT solution, with some value chain elements already having over a hundred suppliers.

Overcoming this challenge and providing insight on choosing IoT solution partners is the focus of the third in a series of white papers

entitled Real IoT. This white paper will provide a review of the IoT value chain across hardware, networks and value-added services

for the important technologies and supplier categories. It will then review the top six assessment criteria that can be used to select

suppliers to create an IoT solution. It will conclude with four market segment examples identifying the critical IoT value chain elements

and important supplier requirements using the aforementioned assessment criteria.

2SELECTING IoT SOLUTIONS AND PARTNERS: THE TOP ASSESSMENT CRITERIAwww.abiresearch.com

ECOSYSTEM REVIEW

In the following section, the critical value chain components within an IoT solution will be described followed by a review of each across

six assessment criteria:

� Breadth of Offering – the OEM’s options for product or services across its current portfolio and via customization to meet the needs of a broad customer base

� Solution Performance – the ability of a product or service to handle greater load and still maintain the same level of performance as the number of connected endpoints increase

� Geographic Availability – product or service availability based on geographic location

� Support Services – additional pre-deployment services to customize a product or service to the needs of the client, or for post deployment support

� Vertical Market Experience – experience in vertical markets such as retail, manufacturing, transportation, etc. that can help design, build, or support an IoT solution

� Security – security features and services specific to the value chain component that support overall IoT solution security

IoT HARDWARE

IoT hardware refers to the sensor nodes and connectivity hardware. Sensor nodes can be everything from

a contact sensor or fire alarm in a smart home system to temperature, soil PH and moisture sensors

used in agricultural applications. Sensor nodes many times have built-in connectivity to a fixed line or

wireless network.

The two most common forms of connectivity hardware are gateways and modules. Modules are the communication component when

connectivity is embedded within the machine itself. Gateways are typically box devices that aggregate data coming from sensor nodes

and send to a data center using a wide area technology of cellular, satellite or fixed line connection. Many times gateways are used to

connect a single machine because the machine cannot connect to the available transport network.

Gateways come in all sizes both physically and electronically. As the name implies, gateways can do protocol translation to pass data from

one transport technology to another. Gateways also can store data and run applications such as security services and edge analytics.

There are multiple ways that sensors, modules and gateways transport data from an endpoint to a connected node and they fall into four

buckets. The first is fixed line backhaul connections, using predominantly Ethernet for networking and transporting data over TCP/IP. This

technology is used typically when endpoints such as vending machines or gateways are in and around buildings where there are local

cable, fiber or DSL connections. The second is cellular backhaul connections. These are 3GPP standard WAN technologies used for assets

distributed outside the availability of wired connections. Cellular offers multiple options for transmission rates and capacity ranging from

the low end 2G up to 4G based on LTE technologies. LTE has now expanded to offer low power, low throughput connections called LTE

Cat M and NB-IoT. Low power wide area technologies similar to NB-IoT are also available based on proprietary standards, with LoRa a

prominent option. The third connectivity type is satellite and, like cellular, is available through a network operator. Satellite provides lower

data rates compared to cellular – similar to low-end 3G connections – but provides global connectivity coverage.


The last transport technology category is short-range wireless technologies. These come in both proprietary and standardized options

and are typically used to connect a node to an aggregation point, such as a gateway, which backhauls the data using cellular, satellite or

fixed line technologies. The most prominent short-range technologies are Wi-Fi, Bluetooth and 802.15.4 technologies. Wi-Fi offers high

bandwidth but is a power hungry technology so typically not used with battery-powered devices. Bluetooth is far more battery friendly

but does not have the range of Wi-Fi. 802.15.4 technologies such as ZigBee have bandwidth and consumption similar to Bluetooth but

have an advantage of offering mesh-networking, which helps overcome range issues and provides more dependability.

� Breadth of Offering – For IoT hardware suppliers, breadth of offering primarily revolves around the options for connectivity. Sensor OEMs will typically have less choice simply because these vendors target particular vertical markets which have aligned around a few connectivity technologies. Gateway OEMs will typically have far more options both in connectivity to a machine and connectivity to a network.

� Solution Performance – Product performance is highly dependent on the IoT application segment and needs such as processing power, power consumption and ruggedness for operating in different environmental conditions

� Geographic Availability – Hardware OEMs range from small shops to multinational corporations like a Cisco. Global distribution is not an issue in this market but the real need is offering enough cellular connectivity options to connect on the radio frequencies and technologies of the local providers.

� Support Services – Support services are important for customization options either built into the product and tuned at the factory, or for custom design and build services to take advantage of existing network architecture.

� Vertical Market Experience – For sensor hardware, OEMs need to have products that work in the specific environment of the customer or with a particular machine type. For gateway device OEMs, vertical market experience is a nice to have, but more important is technology options that address the IoT segment need.

� Security – Security options in hardware extends from embedded TSM, TEE and data-at-rest encryption, to various software security services typically provided by gateway OEMs which can include SSL/TLS, VPN and certificates.

NETWORK PROVIDERS

Backhaul connections require network access through a provider of the technology. Enterprises tend to

want to want to use a fixed line connection to leverage the Ethernet access they already have. However if the

enterprise is an OEM whose machine or thing is distributed at various locations, working with the building IT

personnel to gain access can be a challenge even if the business will allow connecting into their network. If

the enterprise network cannot be used, the challenge with fixed line connections is setting up relationships

with local DSL or cable providers which then can be a logistics nightmare.

For OEMs that want to connect their equipment while avoiding the issues of fixed line connections, cellular is becoming not only a

satisfactory option but in many cases a better option due to the increasing availability of LTE. With LTE technologies there are no

bandwidth restrictions and regional coverage can be provided by a single operator. In Europe and Latin America, several operators

have networks that span across several countries. Many operators worldwide have also adopted the same IoT connectivity management

platforms, providing their customers an easy way to manage their IoT services globally across multiple operators.

Satellite connections through companies like Iridium and Orbcomm provide low earth orbit broadband connections that can cover the

entire globe across land and water.


There are also virtual network operators that offer cellular, private line connections or both, which can be preferable to gain the best rates

on connectivity across multiple network operators.

� Breadth of Offering – This applies primarily to coverage and bandwidth capabilities. If fixed line connections are not an optimal solution, cellular connection options based on bandwidth needs are on par with fixed line for high bandwidth IoT applications, and for low bandwidth applications, cellular options are becoming more plentiful with rollouts of LPWA technologies.

� Solution Performance – This pertains to dropped packets and disconnections. Only with private line connections can SLAs be written for network reliability. Generally for all other networks reliability will be dependent on the IoT application need for data delivery requirements and overall network use.

� Geographic Availability – Satellite is the only technology that offers global access from a single supplier. However, typically regional coverage is sufficient for addressing complexities of globally connected products for three reasons. First, cellular op-erators have arrangements with operators from other regions enabling global access from a single operator. Second, MVNOs are an option for connecting cross-regionally or globally. And third, some IoT connectivity management platforms have been adopted by many mobile operators, enabling easy global scalability of IoT services across multiple operators.

� Support Services – All network operators provide support with an important requirement responding to network outages and delays. The key question is the responsiveness of the support which is based on operator capabilities and network contractual requirements.

� Vertical Market Experience – While vertical market experience is always a benefit, national network operators serve all market segments so this criteria has less value for IoT Solution enablement. The more important consideration is if the network operator serves businesses and the share of their customers that are consumers.

� Security – Transport security technologies offer authentication and encryption functionalities suitable for securing transmissions over different types of networks, from fixed to wireless, and through licenses purchased from certification authorities. SIM cards provided in cellular connections offer additional security features including data-at-rest encryption and authentication/

authorization services.

CONNECTIVITY MANAGEMENT

Connectivity management platforms enable the provisioning, testing, management and troubleshooting

of the connections to IoT devices. They are provided by both network operators and by 3rd party

suppliers. Connectivity management provides the ability to change mobile or cellular networks based on

network coverage and quality, and pricing. Connectivity management is needed primarily for two transport

technologies: cellular and satellite. There are multiple reasons for these services. First is that cellular

and satellite access costs money, so connectivity management helps ensure high uptime connections. The second reason is, as new

devices are added to the network, there needs to be an easy way to add them as well as see billing impact. The third is that the

enterprise using these services do not own the networks and therefore need the ability to on-ramp and troubleshoot network issues

through a 3rd party.

� Breadth of Offering – Covers the types of connectivity technologies across cellular and satellite that can be managed from a single supplier. Also covers the granularity in billing options based on usage available to customers.

� Solution Performance – Primarily applies to both network OSS access for troubleshooting and BSS access for billing manage-ment. Higher performance is achieved with deeper network operator OSS and BSS system integration.

� Geographic Availability – Product OEMs typically prefer global management of connectivity. Suppliers with network operator partnerships that span the globe provide a one-stop-shop for connectivity management.


� Support Services – Support services are critical for quickly identifying and resolving network issues affecting an IoT solution. Non-operator connectivity management providers tout quick response support services as one of their differentiators over operator connectivity management.

� Vertical Market Experience – Vertical market experience is helpful for directly addressing the connectivity and IoT service needs of each individual market. For instance, auto OEMs often need a single connectivity management platform capable of managing IoT services across all of their vehicles globally, across multiple operator networks. They also need the ability to pro-vide split billing so that they can monetize IoT services across multiple partners, including usage-based insurance, infotainment, and other partners.

� Security – IoT connectivity management platform providers must provide multi-layered security across both devices and data – including prevention of unauthorized or illegal access, fraudulent device misuse, “break the glass” emergency protocols to prevent major breaches, two-factor authentication, and closed group monitoring.

DEVICE-TO-CLOUD SERVICES (APPLICATION ENABLEMENT)

Device to cloud services pertain to a set of technologies that extract data from the connected things,

then collect, manage and display the data. Services and technologies in this part of the value chain are called

application enablement services because they ease IoT application development and integration of IoT data

into enterprise systems. Suppliers that offer these services have know-how in cloud, data management, and

device connectivity/messaging, and many times bundle them together and label the bundle an application

enablement platform (AEP).

Cloud know-how is required because IoT data storage and transaction capacity must be able to scale to the needs of the application.

Device connectivity know-how is needed to address the common and sometimes proprietary messaging technologies and standards

such as MQTT, COAP, DSS, open source protocols, and gateway technologies. Device connectivity know-how is also required to manage

the device once deployed. Data management know-how is needed to deconstruct various data types such as time-series and log data,

display it, and apply business rules to act on it.

AEP supplier services become important in three situations. The first is if the enterprise does not have the staff and experience to select

the technologies and build it themselves. The second is if the infrastructure and technology are difficult to assemble even with internal

capabilities. The third is if the enterprise would simply prefer to outsource this part of the IoT solution and invest internal resources on

other parts of the IoT solution.

� Breadth of Offering – Focuses on several key areas important to IoT services:

• Devicemanagement – this includes standard device management protocols such as TR69 to specialized agents that can interact with the device based on the computing platform and operating system software

• Deviceconnectivity – includes messaging technology knowledge and capabilities in the most prominent types of MQTT and WebSockets. Also includes protocol translation services if the device platform and communication protocols are proprietary or non-IP.

• Devicevirtualization – Device virtualization is about creating a digital twin of the device based on its operating attributes. The benefit allows highly granular and scalable business rule development. Scalability comes about because operating attributes can be packaged to describe any device regardless of the OEM. This feature is expected to become more prominent in AEPs.


� Solution Performance – An important area of solution performance as the number of connections grows is messaging throughput. This is dependent on the architecture of the AEP, but successful AEPs report millions of messages delivered per second with no dropped packets.

� Geographic Availability – With changes in national data repository laws, device clouds will increasingly need to be local to the country or region.

� Support Services – Support services are a very important aspect to ensure all components of an AEP are performing properly to deliver data to the device cloud.

� Vertical Market Experience – Because machines are very specific to a vertical market, experience is important for device connectivity, although this is not a deal breaker for choosing a supplier.

� Security – Security features for AEPs are highly supplier dependent and extend from the device to the device cloud. They can include device encryption, SSL/TSL, VPN, authentication, logging and limited IP addresses. For low compute footprint devices, TLS and outbound-only connections are options. The management portal can offer various authorization privileges including integration with LDAP and user identity security tokens.

DATA ANALYTICS

Analytics on machine data comes in three forms, each progressively more difficult to do. The first is descrip-

tive analytics which is effectively data reporting showing machine data in pie charts and Pareto diagrams. The

second is predictive analytics which maps the data to best-fit algorithms thereby allowing pattern monitoring

to determine when future events will occur. Lastly is prescriptive analytics that apply a software layer to the

predictive algorithms to run simulations and determine potential outcomes.

Advanced analytics on streaming and collected machine data is often an afterthought but should be a key consideration early in the

IoT supplier discussion. The reason is that many of the hardware and network considerations will need to understand the computing

footprint and data throughputs for near term and future analytics computations.

In recent years, analytics suppliers have been focused on differentiation in two areas. One is edge analytics whereby a smaller footprint

analytics algorithm is placed on the machine or in a gateway and does more advanced analysis such as pattern matching on streaming

data. The second area of development has been in analytics automation offering software tools to reduce the iterative process of

building, testing and rebuilding analytics models as well as expanding access to a broader user base within a company.

� Breadth of Offering – Descriptive analytics is common and not differentiated. Analytics value is greatly enhanced through a broader set of offerings:

• Edgeanalytics – Software that resides on the machine or gateway connected to the machine and can run advanced analytics

• PredictiveAnalytics – Command and implementation of current and new machine learning algorithms

• PrescriptiveAnalytics – Offers a modeling capability to run predictive simulations

� Solution Performance – Important questions to judge solution performance are:

• Howquicklycantheanalyticssolutionprovideinsights?

• Whatautomationcapabilitiesdotheyoffer?

• Howmanyvariablescantheanalyticssolutionhandle?

� Geographic Availability – There is only an issue for geographically dispersed assets if country data storage regulations require local clouds by region or country.


� Support Services – Support services can include inquiry time for results interpretation. Data cleansing services is a plus to improve modeling operations.

� Vertical Market Experience – Vertical market experience is becoming increasingly important as IoT analytics offer the best insights when the engineering, process and environmental factors are understood and considered in the modeling. In addition, under-standing the vertical market will help to identify relevant contextual data to add to the analytics models for sharpened insights.

� Security – Cloud-based analytics will leverage the same security services as provided by data centers extending from data-at-rest encryption to access-rights management. Edge analytics can leverage hardware-based security using TSM and TEE, as well as transport security functions of SSL/TLS and VPNs.

PROFESSIONAL SERVICES

Professional services for IoT projects can include skills and resources for device and embedded engineering

services, application enablement, application development, analytics, system integration, security, strategic

consultations and project management. On one end of the IoT solution is the building of customized em-

bedded connectivity. This typically happens when gateway connectivity is not appropriate, the application

requires wireless connectivity, and the volume of connected products is large enough to justify the develop-

ment and integration effort.

SIs and VARs can also help companies with application enablement services particularly when machine data is sent directly to the

enterprise data center precluding the need for a device cloud. Here professional services will assist in software agent development, mes-

saging solutions and business rule logic. Part of this effort can include development of both server and mobile applications but many

times enterprises wish to do this development in house using their own IT teams.

System integration is a common activity for SIs and VARs. IoT does not change this activity for them and in fact adds new business to their

portfolio as IoT data as well as any analytic insights augment different enterprise systems such as the product catalog, service ticketing

system and maintenance logs.

Strategic consulting services are an important area of opportunity for IoT professional services given the complexity of the supplier envi-

ronment and technology choices. Enterprises dedicated to IoT seeking long-term scalable solutions hire SIs to understand new business

models and competitive impacts, as well as development of a reference architecture which attempts to maximize use of existing enter-

prise assets and supplement with new assets and services.

� Breadth of Offering – Firms providing professional services can offer services up and down the entire IoT solution stack, however most SIs targeting IoT simply try to extend their current offerings to maximize opportunities in IoT. Regardless of their core competencies, SIs can fill a gap for IoT solutions by offering the following services.

• Consultative – Advise on reference architecture and how far up and down the stack to build versus buy. This is highly dependent on enterprise capabilities and the IoT application.

• Ecosystemknowledge – Advise on specialist and one-stop shops to consider.

� Solution Performance – Highly dependent on the types of professional services offered, but some general areas for assessment include:

• ProductsandServices – Can the SI/VAR-supplied product components meet performance requirements and exceed capabilities of a COTS product?


• ProjectStaffing – Do SIs or VARs have the skilled personnel to build or support an IoT solution?

• SystemsIntegration – On what internal systems are services available?

� Geographic Availability

• LocalStaff – local SIs are a critical supplier for IoT solution enablement primarily because they have an existing relationship with an enterprise who is now expanding into IoT.

� Support Services

• N/A

� Vertical Market Experience – This is important for IoT professional services because enterprises need consultants that are familiar with their business model, the competitive environment, and core technologies that drive their business.

� Security – Highly dependent on the SI or VAR, but professional services can include end-to-end security consulting and services design from device to the data center.

MARKET SEGMENTS – SUPPLIER ASSESSMENT CHOICES

Based on the important features of supplier services in each IoT value chain element, four broad application market categories are

reviewed, identifying the specific criteria by value chain component for assessing supplier capabilities. Added to the review is the assess-

ment of one-stop-shop suppliers. Companies in this category bundle together services across several value chain elements with the goal

of reducing technology and supplier selection complexity for the enterprise.

BROWNFIELD – OEMS

Brownfield OEM environments skew heavily to industrial markets with lots of IoT interest and adoption

by heavy equipment OEMs, manufacturing equipment providers, and oil and gas suppliers. These are

well established markets where asset costs and uninterrupted operations drive tremendous need for use of

IoT services.

Retrofitting equipment with new sensors and communications capabilities is not a typical activity for security and operational integrity

reasons, so gateways are common devices for connecting to brownfield OEM equipment. Network requirements can vary from use of

local Ethernet connections if connecting to the factory floor to cellular and satellite connections for truck OEMs and distributed field

equipment in oil and gas installations. When cellular communications are required, it is important that connectivity management provid-

ers have a global footprint as OEMs typically are selling globally.

Application enablement services are important for two reasons. First, the machine software, operating systems and communication pro-

tocols may be proprietary and not capable of communicating using standard IP. Second, the data sets coming from industrial equipment

is specific to its operation, the sensors on the machine, and how it was delivered. As a result, translating that data for consumption by

mobile or server side applications requires platform providers have some insight on the machine or vertical market.


Analytics is a critical area for OEMs with brownfield assets because they are trying to maximize asset value by extending its lifetime opera-

tion and reducing maintenance service costs. Brownfield assets are often operating in real-time where detection of failure conditions as

soon as possible can be the difference between costly unplanned downtime versus a planned, low-cost maintenance event.

All of these conditions require analytics suppliers with a broad offering including both cloud and edge analytics, and predictive and pre-

scriptive modeling tools. The highly specialized and proprietary machines are also best analyzed by suppliers with vertical experience of

both the machine and the business processes.

IOT VALUE CHAIN CORE SUPPLIER CAPABILITIES

IoT Hardware

Gateways serve brownfield markets well because they can quickly connect machines. However, it requires suppliers with a product

portfolio that can connect to a customer’s machines and assets. Therefore, vertical market experience is important which then translates

into gateway technologies that meet vertical market needs. Ruggedization and solution performance under a range of environmental

and computing conditions are important capabilities of hardware suppliers serving this market. Sensor supplier vertical knowledge is

important because their products typically need to be designed for the machine it is attached to.

Network Providers

Cellular and satellite are common network technologies used for distributed assets such as in oil/gas and construction markets. Solution

breadth is important to address various capacity requirements with LPWA becoming an important technology for serving industrial

markets for asset tracking and simple monitoring.

Connectivity ManagementGeographic availability is favored for serving global clients. Support services are important in areas of troubleshooting asset connectivity

issues.

Device-to-Cloud Services

Industrial markets are characterized by use of industrial communications protocols and proprietary software. As a result, breadth of

offering and vertical market experience is important to enable communications with assets through software agents on the machine or

gateway.

Analytics Solution breadth is important for analytics suppliers serving brownfield OEMs via advanced modeling tools and use of edge analytics.

Professional Services

Professional services supplier capabilities to serve brownfield OEM markets cannot be neatly defined as brownfield OEM capabilities can

vary. However, in general brownfield OEMs will have more engineering talent so professional services needs will reside higher up the

stack with device-to-cloud services and analytics. A plus for any professional services is assistance in building reference architectures

specific to the IT and OT assets of the firm along with supplier recommendations.

One-Stop-Shop Providers

One-stop-shop suppliers can play an important role but it is highly dependent on the needs of the OEM. Oil and gas companies like one-

stop-shops that extend from the IoT hardware to the device cloud but they will do their own analytics. Factory equipment OEMs tend to

like one-stop-shops that start from the device cloud and offer the full suite of analytics and professional services.

BROWNFIELD – SERVICE PROVIDERS

Brownfield service providers include utilities for delivery of electricity, water and gas; insurance providers;

package delivery services; and telecommunication services. Nearly all brownfield service providers have

leveraged some IoT services either in the equipment that facilitates the service or in use of sensors to

enhance their services. All of these verticals vary in maturity of use of connectivity, sensors and various IoT

value-added services. Insurance providers could be considered the most immature brownfield service

provider having only recently offered usage-based insurance possible using OBDII dongles which can

transmit driving behavior to the insurance company which is used to determine insurance rates. Package delivery companies such as

FedEx or DHL are the most mature as tracking delivery vehicles has been a core operational capability ensuring on-time delivery and

customer satisfaction.


But all existing service providers regardless of their current use of IoT services are looking to improve their services using IoT

technologies. Starting with IoT hardware, the addition of sensors to elements of the process can enhance existing service capabilities.

One potential opportunity is in package delivery services. Using LPWA technology, low cost tracker devices can be used to track in

real-time the exact location of a package. Another is in retail where beacons can be placed throughout the store to drive shopper

engagement and understand customer traffic patterns. Depending on the service, off-the-shelf sensors may not be available requiring

development of specialized sensors based on size, radio technology and software functions.

Another key area of investment for brownfield service providers with IoT is in analytics for improved operations or new service

development. Analytics on new sensor data combined with existing process and operations data can assist retailers allowing

better placement of marketing end caps or development of new promotions. For utilities, analytics on usage data is helping to build

demand-response programs tailored to individual customer’s electricity, water and gas usage.


IoT Hardware

Vertical market experience and breadth of offering are critical as sensors and connectivity are important for meeting individual market

needs. Support services are also important as suppliers and customers in these markets may need sensor customization to meet a

particular application segment need such as ruggedization or special antenna design.

Network Providers

For applications needing wide area networks such as asset tracking, geographic availability and solution breadth are critical components.

For indoor environments, connectivity technologies will be driven by the hardware selections many times including gateways and the

associated sensors.

Connectivity ManagementService providers can be small with only local operations or global. Support services particularly with pricing management will be a key

differentiator for smaller service providers.

Device-to-Cloud ServicesSolution performance is critical as existing service operations can rapidly drive up sensor deployments and resulting messaging through-

put. Vertical market experience is a plus as service providers will not want process sensorization to impact existing operations.

Analytics

Analytics solutions should have a breadth of capabilities for incorporating disparate data types into a model for insight generation. Run-

ning simulations through prescriptive analytics based on usage data to create new service opportunities is another important analytics

component for existing service providers.


Embedded engineering services for customized sensor development depending on the product or environment. The other area is

mobile application development for augmenting existing mobile applications with new IoT-driven services. Systems integration services

are of value for integrating IoT data into back-end systems.

One-Stop-Shop Providers

One-stop-shops are common in brownfield service markets because IoT technologies and services is typically not a competency such

as with fleet delivery services or automobile insurance. One-stop-shops can package all components of an IoT solution from hardware

through data collection including any hardware installation, network access and system integration work allowing service providers to

focus on serving customers.

GREENFIELD – OEMS

Greenfield OEM environments are products where their lifetimes are not as long, product turnover is high,

or where the market is at the cusp of a natural replacement cycle. Auto and truck OEMs are the original

greenfield OEMs designing in connectivity and IoT services in new models year over year. Equipment in

industrial markets that experiences lots of wear such as pumps, motors, actuators and generators have been

the recent early candidates for adding connectivity and software for monitoring their operation and usage.

Lighting has also been an area of intense new product development extending from consumer products to

industrial markets including smart lighting in cities.


As greenfield OEM IoT solutions are built from the ground up, OEMs will typically not use gateways, and will instead source connectivity

hardware as part of the normal product design and development process. Cellular network access applies if the products are distributed

or mobile. Network provider decisions have more to do with throughput and coverage needs than with other MNO differentiators. Con-

nectivity management favors suppliers with a global footprint as most OEMs will seek to expand their distribution globally.

Greenfield OEM markets have a more strategic vision for IoT services relative to brownfield OEM markets. Brownfield OEM markets are

typically focused on one or two objectives such as machine tracking or improving asset utilization. Greenfield OEM IoT solutions seek

to use IoT for multiple opportunities extending from the near-term tactical like brownfield markets but also for product and services

development up to implementing new business models. As a result, greenfield OEM IoT solutions will seek to build customized solutions

in many of the value-added services of the IoT solution stack mostly focused on application enablement, application development and

analytics.

In application enablement, software agents will be optimized for data delivery from the new machine and deliver data directly to an en-

terprise cloud. Applications on both the mobile and server side are specifically designed to the needs of the business and users of the

data. Greenfield OEM projects will also see OEMs hiring their own data scientists to provide long term support for IoT solutions intending

to change the OEM business. All of the specialized requirements as well as a desire to own as much of the IP as possible drives greenfield

OEM markets to heavily leverage professional services for accomplishing these goals.


IoT Hardware

While gateways are an option for early deployments, built-in connectivity is the goal since it can be incorporated into the product design.

As a result, breadth of offering for selecting the appropriate modules, and support services to advise and assist in product development

are important supplier capabilities.

Network ProvidersFor OEMs, global network access is important as they seek to sell products worldwide. Multinational network operators can fulfill global

network access as well as certain MVNOs.

Connectivity ManagementGeographic availability is favored for serving global clients. Support services are important in areas of troubleshooting asset connectivity

issues.

Device-to-Cloud ServicesSolution performance for messaging throughput is important to demonstrate scalability particularly if data collection frequency increases

for analytics insights. Device virtualization can have benefits for offering products as a service where business rules can control usage.

AnalyticsAnalytics needs are dependent on the product but suppliers with a broad offering from edge to cloud are desired to fully leverage all

opportunities that IoT offers from new business models to developing new products.


Breadth of offering in embedded engineering services and application enablement are important for designing a greenfield OEM IoT

solution. Vertical market experience can play an important role in guiding the OEM in making the right technology and supplier partner

decisions.

One-Stop-Shop ProvidersSince customization is a central tenant of the IoT exercise, OEMs building IoT products from scratch will selectively choose suppliers that

meet their needs versus procuring multiple services from a one-stop-shop.


GREENFIELD – SERVICE PROVIDERS

Greenfield IoT services are a very nascent area compared to brownfield opportunities and OEM greenfield

opportunities. However, there are a few examples of IoT helping to create a service where one did not really

exist before. For example, smart parking solutions that alert drivers to an available parking space. And wide

area asset tracking services for new product categories such as luggage is an up and coming opportunity

facilitated by LPWA technologies. Aging-in-place solutions are now possible through sensors applied through-

out a home and wearables worn by seniors.

Like brownfield service provider solutions, connected sensors added to the environment or products providing the service are the impor-

tant hardware enablers for IoT data collection. Battery efficient, wireless technologies are also important enablers to simplify deployment

and support of sensors. At this end of the value chain, service providers will need the help of suppliers for the hardware and network

solutions to collect the data.

Greenfield service providers will tend to do-it-themselves by building applications that use IoT data and integrating the data into cloud

infrastructure. Professional services will find some opportunity to fill gaps in application development and integration, particularly when

needing to develop a mobile application.


IoT Hardware

Vertical market experience and breadth of offering are critical as sensors and connectivity are important for meeting individual market

needs. Support services are also important as suppliers and customers in these markets may need sensor customization to meet a

particular application segment need such as ruggedization or special antenna design.

Network Providers

For applications needing wide area networks such as asset tracking, geographic availability and solution breadth are critical components.

For indoor environments, connectivity technologies will be driven by the hardware selections, many times including gateways and the

associated sensors.

Connectivity Management Geographic availability is always a plus to ensure connectivity is provided regardless of location.

Device-to-Cloud ServicesBecause greenfield service provider markets will likely employ sensors to provide data acquisition which can grow to large numbers of

install base, solution performance in messaging throughput is a critical element in choosing a supplier.

Analytics

Analytics services will mostly focus on showing trends in alerts from sensorized environments, but advanced analytics will quickly play a

role for recommendations based on predictive simulations. An example in smart parking could be notifications on traffic congestion and

lead times to parking spot availability.

Professional ServicesThis market can use professional services in embedded engineering services for customized sensor development depending on the

product or environment. The other area is mobile application development for customer engagement.

One-Stop-Shop ProvidersHealthcare institutions are already using third party patient monitoring services, so it is not a stretch to see nursing homes and assisted

living facilities using aging-in-place IoT suppliers as an extension of their senior care services.


CONCLUSIONS

As daunting as the IoT supplier environment is, assessing suppliers through the lens of six capabilities can help narrow down supplier

options for building enterprise IoT solutions. This list includes:

� Breadth of Offering

� Solution Performance

� Geographic Availability

� Support Services

� Vertical Market Experience

� Security

Application of these criteria to the four IoT application market scenarios shows that breadth of offering is a common requirement

particularly for IoT hardware selection, analytics services, and to some extent for AEP services. However, an important caveat is that

vertical market experience manifested in hardware or in services can be equally – if not more – compelling to the selection of suppliers

in IoT hardware and AEP services. Vertical market experience reduces supplier selection risk and total supplier assessment time. For

data analytics, vertical market experience can decrease not only time-to-insight but also improve analytics precision by understanding

machine design and operational metrics and associated business processes.

Geographic availability is a key requirement for cellular network providers but even more so for connectivity management suppliers. The

reason is that connectivity management suppliers, which include both network operators and 3rd party suppliers, can reduce relationship

management tasks in selecting network operators for transport services. OEMs that typically seek distribution beyond their local footprint

are far more likely to select suppliers with geographic availability.

Solution performance is most important in AEP services particularly around messaging capacity. Early AEP platforms disappointed

early adopters due to poor message throughput performance. While this is becoming less of an issue today, the growth of sensorized

environments will drive up total connections and again challenge AEP supplier messaging capacity.

Rounding out the assessment is a review of requirements for professional services suppliers and relevance of one-stop-shop

suppliers. For professional services, strategic consulting services and supplier ecosystem knowledge is valued regardless of value chain

need. Vertical market experience is also important which drives opportunities for large and small SIs and VARs. One-stop-shop suppliers

have a role to play, not least of which is to address the supplier diversity and offer complexity challenge. Brownfield OEMs and most types

of service providers find the most value in one-stop-shops.

Published January 2017©2017 ABI Research

249 South StreetOyster Bay, New York 11771 USA

Tel: +1 516-624-2500www.abiresearch.com

© 2017 ABI Research. Used by permission. ABI Research is an independent producer of market analysis and insight and this ABI Research product is the result of

objective research by ABI Research staff at the time of data collection. The opinions of ABI Research or its analysts on any subject are continually revised based on the most

current data available. The information contained herein has been obtained from sources believed to be reliable. ABI Research disclaims all warranties, express or implied,

with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

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