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IoT Advisor and expert Sam Brown shares thoughts on the importance of hyperscalers, such as AWS, Google, Microsoft and Alibaba, and how they fit into the IoT landscape of the future.

‘IoT can’t be done without partners!’ This is often, no, pretty much always said at IoT events and it is very true. Simply put, the IoT ecosystem is made up of connectivity providers, module makers, SIM vendors, device makers, solution providers and platforms.

So where do cloud hyperscalers fit in? Firstly, a cloud hyperscaler is defined as a major cloud service provider that can appropriately scale to a customer’s increase in demand. The likes of Microsoft Azure, AWS, Google GCP and Alibaba AliCloud. They are ‘big tech’ and have the power to invest heavily – as Microsoft is, to the sum of US$5bn in IoT and intelligent edge innovation by 2022.

The IoT ecosystem and its solutions have a large and growing value.  By the end of the decade, the value will be huge.  Services can save companies save companies considerable amounts in terms of efficiency, down-time, as well as increasing yield and sustainability. To achieve this, we need to do more than simply connect devices. The true value is in the data collected by that device. For example, the data from measuring the level in a waste bin can be used to efficiently empty it, which saves resource, time and fuel. Similarly, a factory machine can be connected to ensure it is maintained depending on its working hours, avoiding downtime and allowing efficient maintenance planning. These are simple examples but it is easy to see the direct savings that can be made, and this is quickly being realised by companies everywhere.

Managing many thousands of devices and their data or even combining data from different devices and sources is not easy. This is where the cloud hyperscalers come in. They have the global infrastructure, experience and software expertise to work with large data sets and draw out the real value of the IoT device data.

To enable these solutions, the devices and the data they produce needs to be effectively utilised in a cloud-based platform so it can be manipulated and accessed anywhere. Berg insight predicts that yearly sales of device management and application enablement services are going to reach US$7.9bn in 2024, having been valued at US$2bn in 2019. Managing many thousands of devices and their data or even combining data from different devices and sources (think, adding in traffic flow data for the waste collection example) is not easy. This is where the cloud hyperscalers come in. They have the global infrastructure, experience and software expertise to work with large data sets and draw out the real value of the IoT device data.

New ‘IoT only’ connectivity providers have entered the ecosystem, with some utilising the hyperscalers capabilities to offer more services than core IoT connectivity. Allowing integration to the main cloud providers and their functions, along with the potential to translate lightweight IoT protocols to cloud protocols, increases their flexibility beyond the norm.

Many of these new connectivity providers are backed by investment and mobile operators. floLIVE recently raised US$15.5M led by Intel Capital and SORACOM has become a subsidiary of Japanese mobile operator KDDI.  With that and the insurance of the hyperscalers’ vast infrastructure, potential customers may see a reduced risk in buying connectivity from these relatively new companies. This is a shift in the market, where traditional mobile network operators were the first port of call for connectivity. However, it does not mean the mobile operators are relinquishing their position.

They too have IoT platforms, SIM offerings, on hand expertise and established global networks at their disposal, with some starting to enable hyperscaler integration to level out the playing field.

Some questions still remain unanswered. Are the new IoT customers that have never connected devices wirelessly before going to go to the traditional operators or the new disruptive connectivity providers? Will hyperscalers acquire more IoT companies or even their own connectivity and can mobile operators continue to adapt? There are some examples of this already, but the market is still in a rapid growth stage and who will dominate remains to be seen.

Either way, this increased interest and investment in the market is a good sign for the IoT ecosystem and as it grows into the billions of forecast connected devices, one thing is for sure, there is great value in the huge amounts of data they will collectively create.

Sam Brown

MEF Advisor, IoT

 

Available on Demand

IoT is scaling rapidly towards a forecast of 25bn connected devices by 2030. This fast- growing market enables the enterprise to transform digitally to achieve new ways of working, to reduce costs and increase productivity. For suppliers, there are abundant opportunities in driving these changes with efficient devices, effective global connectivity, robust security and sustainable solutions.

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