Industry 4.0 and IIoT move edge and boost the IoT edge platform market

Industrial markets in Western Europe and North America boost the IoT edge platform market, which is poised to grow at a staggering rate in 2018 as the movement towards the edge strongly impacts IoT platform evolutions, MachNation’s  IoT Edge ScoreCard for 2018 finds. What you should know.

Both the adding of intelligence to IoT devices and to IoT networks, sensors, actuators and everything at the edge, as well as the analysis and processing of IoT data, are moving closer to the edge.

The edge is a distributed technology and processing architecture that brings certain computational and analytics capabilities near the point of data generation (MachNation)

Edge computing and its Cisco variant fog computing make dealing with IoT workloads at that famous edge possible, supported by devices, infrastructure and tools such as IoT gateways and IoT platforms where there is also an increase of offerings that enable a faster processing of data, enhanced security, less IoT data storage and bandwidth needs and an overall reduction of pressure on the IT and network infrastructure which is further away from the edge.

By bringing more analytical and computational power closer  to the edge, where IoT data gets generated, using the mentioned transducers such as IoT sensors and actuators, processes can be distributed and that in turn can deliver significant benefits, depending on the process and scope.

The main reason why organizations start doing this is the impact of ever more IoT data with a clear leading role for the industries of Industry 4.0 and Industrial IoT.

Moving to the IoT edge across all IoT stack layers - a look at the IoT edge platform

All layers of the IoT stack move to the edge as industrial markets go edge

More data and more IoT devices, often geographically dispersed, indeed tend to be found in large-scale IoT projects and in IoT use cases in industries where a lot of data gets generated and leveraged, and certainly where there are a lot of remote IoT sensors, gateways and so forth (which form the first layer of the IoT technology stack).

So, we are indeed talking about industries such as energy, oil and gas and the industrial markets of Industry 4.0, along with smart cities and building management where there is also quite some movement to the edge as is the case in most industries and applications where IT and OT converge

As mentioned in an article on the pretty significant impact of ever more IoT data on IT infrastructure, for now most processing of IoT data still happens in the datacenter. Yet, at the same time as we are really at the verge of the explosion of IoT data, investments in network edge equipment are poised to grow significantly and are already on the second spot of changes to IT resources as a result of IoT projects in industry. Moreover, already little under half of companies process IoT data at or nearby the edge. This includes data aggregation, data filtering and data analysis, as you can read in the mentioned article, which contains September 2017 data from a 451 Research press release (PDF opens). Moreover, the 451 Research doesn’t specifically focus on those industrial markets alone.

IoT edge software is a true differentiator as the large majority of IoT edge complexity is related with software says MachNation CTO and co-founder Dima Tokar at the occasion of the launch of the MachNation IoT Edge ScoreCard for 2018 - picture source and courtesy MachNation
IoT edge software is a true differentiator as the large majority of IoT edge complexity is related with software says MachNation CTO and co-founder Dima Tokar at the occasion of the launch of the MachNation IoT Edge ScoreCard for 2018 – picture source and courtesy MachNation

IoT gateways and IoT platforms moving to the edge: the staggering growth of IoT edge platform revenue

Now, what does all this have to do with IoT platforms and, more specifically with IoT edge platorms?

The movement towards the edge is not just related with the thus far mentioned first layer of the IoT stack. Also other layers play a role and vendors of IoT gateways and of IoT platforms shift their focus to that edge. There are, for example, quite some (again, predominantly Industrial) IoT edge gateways in the market such as this Industrial IoT edge gateway beast from Robustel.

And also in the IoT platform market there are more IoT edge platforms. Previously we mentioned research from MachNation (known from its annual MachNation IoT platform scorecard) that shows some evolutions in the IoT platform industry for 2018 and beyond in the scope of the company’s launch of its IoT platform testing environment which offers independent IoT platform test data for potential buyers of such platforms and is called MIT-E (MachNation IoT Test Environment).

On December 6th, 2017, MachNation announced the availability of its IoT Edge ScoreCard for 2018. It doesn’t just rate and evaluate 16 IoT edge platform vendors but also shows the staggering growth of IoT edge platform usage and, thus IoT edge platform revenue.

Based upon data from the 16 IoT edge platform vendors which participated for the IoT Edge ScoreCard for 2018, MachNation found that IoT edge platform revenue is poised to grow at a whopping 81 percent in 2018 with the majority of revenue coming from Western Europe (35 percent) and North America (31 percent) as the graphic below illustrates.

Western Europe and North America lead the pack in the fast growing market of IoT edge platforms according to MachNation 2018 IoT edge ScoreCard.jpg
Western Europe and North America lead the pack in the fast growing market of IoT edge platforms according to MachNation’s 2018 IoT edge ScoreCard

The definition of the edge and case for IoT edge platforms

As could be expected the majority of sectors who are poised to spend most and show greatest interest in IoT edge platforms are typically Industrial IoT or Industry 4.0 industries here as well, with industrial, manufacturing, automotive, transportation and smart cities leading the pack.

IoT edge platform revenue will grow at a sharp 81% in 2018 with 35% of revenue generated from enterprises in Western Europe, 31% in North America and 34% in other regions. Some of the sectors of greatest interest to IoT edge platform vendors include industrial, manufacturing, automotive, transportation and smart cities (MachNation)

If you are looking for a definition of the edge everyone is talking about, here is MachNation’s edge definition: “The edge is a distributed technology and processing architecture that brings certain computational and analytics capabilities near the point of data generation. This technology enables certain processes to be decentralized and occur in a more optimal physical location”.

According to MachNation CTO and co-founder Dima Tokar, roundabout 90 percent (!) of edge complexity is software related. That is indeed a pretty strong case for IoT edge platform revenue growth.

As Dima Tokar puts it: “While many vendors already provide hardware that adequately supports many IoT solutions, the quality and sophistication of the related edge software is a true differentiator.”

Below is the list of participating IoT edge platform vendors for the 2018 IoT Edge ScoreCard (ADLINK, Amazon, CalAmp, Cisco, ClearBlade, Dell, FogHorn Systems, Huawei, Litmus Automation, Microsoft, MultiTech, Nebbiolo Technologies, SAP, Siemens, Software AG’s Cumulocity IoT and Telit).

The list of IoT edge platform vendors which participated at the MachNation IoT Edge ScoreCard 2018
The list of IoT edge platform vendors which participated at the MachNation IoT Edge ScoreCard 2018

You can get an executive summary of the first IoT Edge ScoreCard on this page where the availability of it is also announced and where MachNation customers find a link to the scorecard.

Top image: Shutterstock – Copyright: chombosan – All other images are the property of their respective mentioned owners.