INSIGHT: Jostling for position in the Internet of Things

INSIGHT: Jostling for position in the Internet of Things

Expect to see plenty more of these strategic moves and partnership announcements in the coming months as the major players define their roles.

As the Internet of Things gathers momentum, becoming a catalyst for digital transformation, the major players, including IT vendors, telecoms companies, and systems integrators, are making strategic moves to position themselves at the forefront of this next wave.

For enterprises, this signals a move into the IoT mainstream, and the prospect of connecting a broader range of business process to the digital world.

Google’s move this week to establish its new holding company Alphabet is the latest in a series of longer-term strategic bets by technology leaders.

Alphabet will allow the search giant to grow its IoT-related investments, including smart home technology, driverless cars, and drones, outside the formal constraints of its mainstream search business.

In parallel, Microsoft’s ambitions for Windows 10 are less about recapturing the important mobile operating systems market, and more about gaining a strong foothold in the next multibillion-dollar market of IoT.

In their own ways, SAP, IBM, HP, and Oracle are all making related moves.

SIs too will have a huge role to play in this market. For many the need to evolve is even more urgent as their existing business models become disrupted by enterprises moving to the cloud.

All of the large firms have established IoT practices, often closely linked to their initiatives around digital transformation, and have a clear opportunity to provide enterprises with the required combination of business, technology, and industry expertise.

For telecoms companies, the machine-to-machine (M2M) communications that form the connectivity backbone of IoT have been keenly anticipated as a new source of revenue, but it is becoming apparent that they cannot rely on M2M traffic alone and must add value in the IoT space to generate profit.

In the telecoms sector too, there are strategic moves to build IoT platforms and offer a range of IoT services, often in partnership with other parts of the ecosystem.

A good example here is Vodafone’s recent announcement of a €2m investment with EMC to build a platform (known as Infinite) to help companies develop and test industrial IoT services.

The IoT is now moving beyond a cluster of specialised industry applications and into the business mainstream.

Alongside analytics and artificial intelligence, with which it is interdependent, IoT will be the major driver of ICT industry growth over the next decade, so expect to see plenty more of these strategic moves and partnership announcements in the coming months as the major players define their roles.

By Tim Jennings - Research Analyst, Ovum

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