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About the Authors:
Howard Smith
Managing Director
Howard Smith is a managing director (office of the president) specializing in research and investment in software-as-a-service (SaaS) businesses and other business models based on information technology, particularly internet of things, cybersecurity, and internet infrastructure. He also built the firm’s historical research franchises in call centers and computer telephony. He is a thought leader in his sectors, having authored numerous widely read white papers. He uses his industry knowledge and expansive network to uncover promising investment opportunities and help companies navigate their strategic paths and accelerate growth. His work has been cited for excellence by the Wall Street Journal and other publications. Prior to joining First Analysis in 1994, he was a senior tax consultant with Arthur Andersen & Co. He earned an MBA from the University of Chicago and a bachelor’s degree in accounting from the University of Illinois at Urbana-Champaign. He is a certified public accountant.
David Gearhart
Vice President
David Gearhart is a vice president specializing in research in software-as-a-service (SaaS) and the Internet of Things sector and has played a key role in establishing First Analysis’s Internet of Things franchise. He is a thought leader in his sectors, having authored several widely read white papers. He uses his industry knowledge and expansive network to uncover promising investment opportunities and help companies navigate their strategic paths and accelerate growth. Prior to joining First Analysis in 2011, he was an accountant with The Northern Trust Co. and an options broker with American Option Services. He earned a bachelor’s degree from Purdue University with a concentration in economics and finance and his MBA at DePaul University with a focus on finance and entrepreneurship. He is a CFA charterholder.
First Analysis Internet of Things Team
Howard Smith
Managing Director
David Gearhart
Vice President
Matthew Nicklin
Managing Director
IoT/M2M Platform Software
Overview of an essential and increasingly appreciated ecosystem layer
September 3, 2015
  • The ability to help manage the inherently complex IoT/M2M networking environment as well as automate related tasks at scale has pushed platform software to the fore, sparking significant investor and M&A interest and making an in-depth look at this market a timely undertaking.
  • We estimate the wide-area wireless infrastructure software market, consisting of device and network (subscriber) management as well as application enablement/development platforms, will reach $49B by 2024, up from $8.5B in 2014, and representing 19% CAGR; however, the vast majority of this market is either in-house or bundled as a captive part of a broader offering, leaving only about 15% of the market as standalone third-party software.
  • Despite the relatively small percentage of the market that is standalone, there are hundreds of generally very small private players; in addition, hardware, network, and full-solutions vendors are increasingly bundling platform software into their core offerings, making this a dynamic and often confusing ecosystem.
  • Because few entities deploying IoT/M2M solutions begin their journey with the selection of a platform supplier, we believe partnering for distribution will be a key success driver for standalone platform companies along with more traditional success drivers such as breadth of offering, customer support capabilities, and vertical market expertise.

TABLE OF CONTENTS

Includes profiles of 30 public and private companies

IoT/M2M Platforms: A basic description

The IoT/M2M ecosystem and where platforms reside

Platform types

Benefits - primarily around cost, time savings

Segmenting the market

Pricing

Sizing the platform software market opportunity

Adoption drivers

Competition - highly fragmented market, players still emerging

Success drivers

Trends and observations

Conclusions

Public and private infrastructure software company profiles

IoT/M2M Platforms: A basic description

This report offers a high-level overview of the infrastructure software market beginning with a basic description of a platform and the three general platform types. We then describe the benefits of using a platform, discuss ways to segment the market, size the global opportunity, highlight adoption drivers and trends, and offer some high-level conclusions. After our overview, we profile 30 public and private players.

At a high level, a platform represents the support software IoT/M2M solutions use to help connect (integrate) core ecosystem components (i.e., hardware, network, application software, other infrastructure software, systems), ensuring data can be passed between monitored/controlled assets and end-user applications; this software also handles ongoing management tasks and facilitates data visualization. Platforms essentially play the role of intermediary: Assets and solution components can send data in a broad range of formats using different communication protocols, but an abstraction mechanism, which the platform provides, is required to translate it into common formats so it is usable elsewhere in the value chain. This software has been typically created internally by companies needing to support a proprietary application, often at great cost and requiring much time/effort. However, third-party or outsourced platforms are starting to become more popular. They are able to provide much of the underlying support functions, which tend to be common across verticals, leveraging infrastructure built to be agnostic to devices, networks, and other components.

It’s not uncommon for IoT/M2M platforms to be referred to as middleware solutions, infrastructure software, frameworks, plumbing, and even glue – terms basically describing similar concepts that we use interchangeably in this report.

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