IoT Technology Layers. How They Impact Routes To Market.

To understand how IoT is impacting routes to market for technology companies, we need some clarity on IoT itself, and on the layers of tech that we’re seeing.

IoT maturity is generally viewed in three layers, called the DEVICE LAYER, the MIDDLEWARE LAYER and the APPLICATION LAYER. Or sometimes the PERCEPTION LAYER, the MIDDLEWARE LAYER and the ANALYTICS LAYER or SERVICE LAYER.

These three layers are fairly well accepted as defining the technological landscape of IoT. This is sort of 101 IoT I realise, but it’s important to remind ourselves of the basics as we think about the impact on routes to market.

THE DEVICE LAYER

The device (or perception) layer is the 'connected things'. The cars, the pumps, the street lights, even the cows. Yes, that's real. There's a significant market for non-human wearables, sometimes called 'Connected Animals'.

The ‘Moo Monitor’ is used to report on a cow’s temperature. Data that’s used to monitor the animal’s health and fertility is sent to an app on the farmer’s phone. This device came onto the market in 2012.

Gartner tells us that there are about eight billion devices connected worldwide today, which is 30% more than last year, and it will be around twenty billion by 2020. So we have a lot of devices creating a lot of data.

That’s the device layer and in many ways this piece is history. Cows have had wearables for five years. That’s two years longer than we humans have had the Apple Watch.

Which gets us to the middleware layer.

THE MIDDLE LAYER

Again this piece is looking like a piece of history. We all know about big data and the need for analytics. There are around 1.5 billion cows on this planet. We all know they produce a lot of gas. Now they produce a lot of data too.

Looking at something else that produces noxious emissions, we’ve probably all heard that the average airplane engine produces 500 Gigabytes of data from every flight. There are around 40 million scheduled flights completed every year. And that’s just from plane engines in a single year.

You don’t analyse that amount of data on a spreadsheet, that’s for sure.

This data or middleware layer is a whole ecosystem in itself, with a whole host of technology vendors offering solutions. The middleware layer itself is typically seen in three layers: CONNECTIVITY MANAGEMENT which brings data from devices, DATA SERVICES and APPLICATION ENABLEMENT PLATFORMS.

This stuff is the glue that locks the applications to the devices and the data. The Application Enablement Platform is there to allow a developer to rapidly develop and deploy an IoT application.

You’ve got a wide range of vendors in this space. Well established vendors like CISCO and ORACLE. But also a range of specialists like MULESOFT and THINGWORX.

Many vendors in the middleware layer have partner programs. Of course Cisco and Oracle have existing partner programs, but the specialist vendors do also, like Mulesoft and Thingworkx. They’re wanting to build DEVELOPER ECOSYSTEMS and create APPLICATION MARKETPLACES.

THE APPLICATION LAYER

Finally we’ve got the application layer, or the analytics layer, or the services layer. In many ways this is where the IoT value sits. Up to now we’ve really been talking about devices and connectivity. Now we’re talking about customer value. This layer is where the data analytics, the AI vendors and the application developers sit.

There are a lot of very large companies in this layer, and lot of very small companies too. The smaller companies are the specialist integrators and developers, the start-ups, creating apps that use IoT data, and driving use cases in vertical markets, like retail, warehousing, healthcare, and so on.

The very large companies are in the middleware layer as enablers, and here in the application layer too as data analytics and AI vendors. You’d put IBM WATSON here, SAP HANA, and GOOGLE also.

Google (or Alphabet) has acquired around one company per week since 2010, and increasingly these acquisitions are to build out IoT middleware and analytics capabilities. The Google acquisition of NEST in 2014 is in this category, for home automation applications, and DEEP MIND the same year, for AI.

Deep Mind is the company that built AlphaGo, which is the first AI solution to beat the world number one ranked Go player in 2017.

In many ways the application layer of IoT is the one that holds the most interest for us as channel professionals, because it’s here, and to some extent in the middleware layer, that we’re seeing the drivers for change in routes to market.

The content in this opinion piece is an extract from ‘The Impact of IoT on Technology Routes to Market’, a keynote presentation by Matt Rowland-Jones of bChannels. To read more visit Matt’s webpage here.

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