What’s exciting about any new tech trend is that there is often a groundswell of start-ups out to create new products and services. Combine that with established companies also making investments and you have a dynamic new industry that is full of booms, busts and opportunity.
To help sort this out, we’re starting something new at IoT Central - the company spotlight. Up first is ThingWorx, a company that I keep coming across. The owners of ThingWorx is a PTC, a publicly listed company that employs nearly 6,000 people worldwide, serving more than 28,000 businesses and has approximately $1.3 billion in annual revenue. PTC has its roots in product lifecycle management and has recently taken on the IoT mantra.
Jim Heppelmann, CEO of PTC, said recently, "IoT gives us connectivity during the product's longest life cycle. First, things are products, which we could call the Internet of Products (IoP). Secondly, we want to serve these products better, and we can only do that by knowing what is going on. Lastly, we want to engineer products better. IoT really is PLM, putting the product at the centre of PLM. We are reinventing PLM."
Enter ThingWorx, which PTC acquired in December 2013. According to the company, ThingWorx is an IoT platform designed to build and run IoT applications, and enable customers to transform their products and services, innovate and unlock new business models. The idea behind the platform is to reduce the time, cost, and risk required to connect, manage, and develop applications for smart, connected products such as predictive maintenance, system monitoring, and usage-based product design requirements.
ThingWorx solutions include tools from Axeda, another PTC acquisition that allows developers to securely connect machines and sensors to the cloud.
So What Thing Works?
ThingWorx offers three products:
ThingWorx IoT Platform - provides a complete application design, runtime, and intelligence environment.
ThingWorx Machine Learning - brings advanced and predictive analytics capabilities for ThingWorx developers.
ThingWorx Marketplace - brings together hardware and software vendors with IoT app developers and solution providers within an online exchange.
ThingWorx IoT Platform is the flagship product and is composed of:
- ThingWorx Composer: An end-to-end application modeling environment for building applications. Allows you to model the things, business logic, visualization, data storage, collaboration, and security required for an IoT application.
- Codeless Mashup Builder: A “drag and drop” solution to rapidly create rich, interactive IoT applications, real-time dashboards, collaborative workspaces and mobile interfaces without the need for coding.
- Event-Driven Execution and 3D Storage Engine: To make business sense of the massive amounts of data from people, systems and connected “things.”
- Search-Based Intelligence: This so-called SQUEAL (Search, Query, and Analysis) brings search to the world of connected devices and distributed data.
- Dynamic Collaboration: This sounds like Slack for PLM and IoT. It’s a module that virtually brings together people, systems, and connected equipment and utilizes live collaboration sessions.
- Business Process Management: Enables automation and orchestration of events, processes and communication across physical things, business systems and people.
- Thing Management: A portfolio of standard and advanced capabilities to monitor, interact with and update connected things.
- Digital-Physical Integration Hub: Provides an integration framework for both physical and digital information.
- Administration: A console for role based access for business and system administrators and developers.
If you have any experience with ThingWorx, feel free to leave a comment. Also, if you have any suggestions for future spotlights, please comment and I’ll add it to my queue. We’d love to hear from you.
The Internet of Things encompasses a wide range of connected services, technologies, and hardware devices. Yet, for consumers, it is the growing number of portable and wearable devices that will be their main interface with IOT tech. The wearable device market is rapidly evolving, especially when it comes to smart watches and fitness monitoring devices.
As opportunities grow, the wearables dominating the market are also changing. What does this mean for those involved in the development, marketing, and sales of these IOT connected devices?
How Big is the Wearable Market in 2015?
International Data Corporation (IDC) has predicted that wearable device shipments in 2015 will rise to 173% of the total sales achieved in the previous financial year. This translates to over 72 million devices, including smartwatches and health trackers. This growth has been largely driven by high profile releases such as the Apple Watch in April of 2015, and also by widely publicized financial opportunities, Fitbit’s recent IPO being a prime example.
With the potential to move over 72 million units across the market, it is no surprise that leading technology companies like LG, Samsung, Sony, Microsoft, Apple, and Motorola are starting to increase their focus on wearable technology.
When we look closer at the marketplace, we see a strong mix of upstart companies and traditional players, with Fitbit, Garmin, and Xiaomi all new entrants. This blend of "old" technology giants and very new companies is promising - the marketplace is growing rapidly, and opportunity actually exists.
Future growth will be an incentive for further investment. IDC figures suggest that by 2019, global sales of wearables could exceed 150 million units. The market is open completely, with any company able to take a device to market open to growth.
Do these figures mean success for all involved in the wearable market? Not entirely.
Challenges for Businesses to Adapt
Although the overall market has grown, recent trends show that wearable fitness devices are losing out to increased smartwatch sales. Gartner’s latest research suggests that the dip could largely be associated with the increasing crossover in functionality between fitness devices and the latest smartwatches. 50 percent of those seeking a fitness wearable will end up choosing a smartwatch instead, and brands do not necessarily know why this shift is happening.
I think that one feature overlap is contributing to this. Fitness devices chiefly collect information relating to distance covered, physical location, and heath, including heart rate. Nearly every smartwatch on the market today can do all of this, and more. For a savvy consumer, combining a Samsung Galaxy Gear smartwatch with a high-end Galaxy Note 4 or Galaxy S6 would provide GPS tracking, information on calories burnt, heart rate monitoring, and even blood oxygen levels. The technology is advancing year on year, and it is clear that the innovation gap is already closing.
There are two consequences I see with this lack of clear differentiation. The first is that fitness-focused products need to innovate or die. With the market contracting by supporting multi-feature devices over purpose-built tools, the new goal should be for innovation to differentiate. Put simply, the fitness trackers of the world need to do something that smartwatches cannot.
The second consequence is that companies like Fitbit and Nike, which are focused on fitness tracking, will need to lower prices to compete with integrated smartwatches. When a consumer is faced with a $120 fitness tracker and a $200 smartwatch with phone connectivity, alerts, and apps, the choice becomes very one-sided. Yet, the bottom of the market, and the sector more likely to actually increase sales of purpose-built trackers, is relatively unsaturated.
Fitbit, Jawbone, and Nike make up 97% of the wearable fitness device market. In smartwatch territory, it is Samsung and Apple that lead the market. Looking at one of the least expensive fitness trackers, Fitbit's Zip, we see a $60 base price point. Even at this level, the casual user has to pause and think - their phone already does much or all of what the Zip does, and a waterproof fitness case is cheaper. Fitbit, in this case, needs either to more fundamentally differentiate or drop its pricepoint.
Where is the Money in Wearables?
Even with staggering sales numbers, wearables are not in themselves a key revenue stream. Instead, it is the associated value that provides the biggest benefit to manufacturers.
Smartwatches, in particular, are seen as accessories. They are paired to smartphones and in turn can help to drive sales. They are also showpiece items. Even if Samsung, Apple, Sony etc. only manage to sell wearable technology to 10% of their smartphone customers (a speculative number), they will generate brand marketability, and logically would experience knock-on sales.
When it comes to companies like Nike, Fitbit, and Jawbone, the profit can come from connected services. Examples include subscription based exercise plans, analytics software, and in the case of Nike, a wearable can lead to increased apparel sales.
Still, there is an incredible gap for new entrants to the market. Apple and Samsung can rely on a massive pool of existing customers, and directly integrate their offerings into that group. Fitbit cannot, with no "hub" devices on the market. Even subscription-based models cannot make up for the gap. This makes the marketplace incredibly hard to predict going forward - nothing prevents a company like Samsung from releasing another mid-range watch and completely dividing the market.
As with all IOT technology, the wearable device is only one part of the experience, and therefore only one part of the business model. It is the way in which data is collected, analyzed, and presented that provides the true value of any smart device. Smartwatches already have an advantage because they are highly integrated into their respective smartphone operating systems. Wearable fitness device companies have the opportunity to provide fitness tracking as a service, and must find new ways to monetize the service to generate direct revenue on top of initial hardware sales.
What does the Future Hold For Wearable Technology?
Over a billion smartphones were sold around the world in 2014. Global wearable sales make up less than 10% of that number. The challenge for manufacturers is to develop wearables that easily integrate with daily life that also are something that consumers want to use on a daily basis.
While wearables are high in consumer mindshare, they are relatively low in actual penetration. Smartwatches are now able to integrate a fitness device with a smart device in a way that is both compelling and practical, but is it enough? Those in the industry will need the best ideas, the best strategies, and the best talent to ensure that in-demand products are developed in line with business goals, and that they result in strong financial growth.
When considering how to hire leadership for the emerging Internet of Things market, keeping these consideration in mind is critical.I can help guide your choices, find the best candidates, and bring IoT experience to your company. Contact me today for a consultation.
I’m guilty of hype.
As a communications consultant toiling away at public relations, media relations and corporate communications, I’ve had my fair share of businesses and products that I’ve helped get more attention than it probably deserved. Indeed, when it comes to over-hyping anything, it’s guys like me and my friends in the media who often take it too far.
Recently though, I came across an unlikely source of hype - the McKinsey Global Institute.
In a June 2015 report that I’m now reading, McKinsey states, “The Internet of Things—digitizing the physical world—has received enormous attention. In this research, the McKinsey Global Institute set to look beyond the hype to understand exactly how IoT technology can create real economic value. Our central finding is that the hype may actually understate the full potential of the Internet of Things…” (emphasis is mine).
If McKinsey is hyping something, should we believe it?
Their report, “The Internet of Things: Mapping the Value Beyond the Hype”, does point out that “capturing the maximum benefits will require an understanding of where real value can be created and successfully addressing a set of systems issues, including interoperability.”
I think this is where the race is today - finding the platforms for interoperability, compiling data sources, building security into the system and developing the apps that deliver true value. We have a long way to go, but investment and innovation is only growing.
If done right the hype just may be understated. McKinsey finds that IoT has a total potential economic impact of $3.9 trillion to $11.1 trillion a year by 2025. They state with consumer surplus, this would be equivalent to about 11 percent of the world economy!
Do you believe the hype?
IoT platforms make the developer’s life easier by offering some independent functionality which can be used by the applications they write to achieve their objective. Saving them from the task of reinventing the wheel. Given here is a list of useful IoT platforms.
Kaa is a flexible open source platform licenced under Apache 2.0 for building, managing, and integrating connected software in IoT. Kaa’s “data schema” definition language provides a universal level of abstraction to achieve cross-vendor product interoperability. Kaa supports multiple client platforms by offering endpoint SDKs in various programming languages. In addition, Kaa’s powerful back-end functionality greatly speeds up product development, allowing vendors to concentrate on maximizing their product’s unique value to the consumer.
The Axeda Platform is a complete M2M and IoT data integration and application development platform with infrastructure delivered as a cloud-based service.
The Arrayent Connect Platform is an IoT platform that helps to connect products to smartphones and web applications. It comes with an an agent which helps the embedded devices to connect to cloud, A cloud based IoT operating system, A mobile framework and a business intelligence reporting system
Carriots is a Platform as a Service (PaaS) designed for Internet of Things (IoT) and Machine to Machine (M2M) projects. It provides tools to Collect & store data from devices, SDK to build powerful applications, deploy and scale from tiny prototypes to thousands of devices
Xively offers an enterprise IoT platform which helps in connecting products and users, manage the information and an interface to for product deployment and health check
ThingSpeak is an open source Internet of Things application and API to store and retrieve data from things using the HTTP protocol over the Internet or via a Local Area Network. ThingSpeak enables the creation of sensor logging applications, location tracking applications, and a social network of things with status updates
The Intel® IoT Platform is an end-to-end reference model and family of products from Intel, that works with third party solutions to provide a foundation for seamlessly and securely connecting devices, delivering trusted data to the cloud, and delivering value through analytics.
A votable & rankable list of these platform can be found at Vozag
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