What is an IoT Platform?

IoT platforms are a vital component of the IoT ecosystem and a fast-growing market, expected to exceed $22 billion by 2023. IoT platforms provide a huge amount of value to businesses - allowing them to lower development costs, accelerate launch and streamline processes. However, many people are still unclear on what an IoT platform is exactly, what they do, and when a business should use one.

In this piece, I’ll provide a simple, non-technical explanation of IoT platforms. What they are, why there are so many, when businesses should use them, and the important considerations when choosing between the many options.

So what is an IoT Platform exactly?

To understand what an IoT platform is, you first need to understand what goes into a complete IoT system. My previous post, How Does an IoT System Actually Work?, is a great way to learn, but I’ll summarize it for you quickly:

1. A complete IoT system needs hardware, such as sensors or devices. These sensors and devices collect data from the environment (e.g. a moisture sensor) or perform actions in the environment (e.g. watering crops).
2. A complete IoT system needs connectivity. The hardware needs a way to transmit all that data to the cloud (e.g. sending moisture data) or needs a way to receive commands from the cloud (e.g. water the crops now). This can be accomplished with mature forms of connectivity like cellular, satellite, or WiFi, or may necessitate more recent, IoT-focused connectivity options like LoRa.
3. A complete IoT system needs software. This software is hosted in the cloud (what’s the cloud?) and is responsible for analyzing the data it’s collecting from the sensors and making decisions (e.g knowing from moisture data that it just rained and then telling the irrigation system not to turn on today).
4. Finally, a complete IoT system needs a user interface. To make all of this useful, there needs to be a way for users to interact with the IoT system (e.g a web-based app with a dashboard that shows moisture trends and allows users to manually turn irrigation systems on or off).

In addition, the true value of IoT is unlocked when integrated with existing business systems and data streams. It's therefore critical that all of these disparate components get tied together effectively and in a manageable way.

At a high level, IoT platforms provide a head start in building IoT systems by providing built-in tools and capabilities to make IoT easier and cheaper for businesses, developers, and users. An IoT platform helps facilitate the communication, data flow, device management, and the functionality of applications.

IoT platforms exist in part 3 and, often, part 4 of what’s described above. With all the varying kinds of hardware and the different connectivity options, there needs to be a way of making everything work together. IoT platforms help solve that problem.

IoT platforms help:

• Connect hardware, such as sensors and devices
• Handle different hardware and software communication protocols
• Provide security and authentication for devices and users
• Collect, visualize, and analyze data the sensors and devices gather
• Integrate all of the above with existing business systems and other web services

Why are there so many IoT platforms?

Platforms are not unique to IoT, but if you look at other domains you'll notice that there are many fewer platform options. Android and iOS are two dominant mobile platforms, Windows and MacOS desktop platforms, and Xbox and Playstation gaming console platforms. If all of these markets have just a few dominant players, why don't we see the same in IoT?

Some may make the argument that we already have the dominant players in Amazon (AWS IoT Core), Microsoft (Azure IoT Hub), and Google (Google IoT Core). However, these platforms are more focused on the infrastructure level and therefore require greater expertise and customization to build specific IoT applications for businesses. IoT platforms are often built on top of these infrastructure providers, offering additional tools and services to quickly build IoT applications for businesses.

The question of why there are so many IoT platforms might be answered by 1) that the market is still so nascent that dominant players have yet to emerge, or 2) that because of the infinite IoT applications across industries, there will be different platforms focused on different breeds of applications. As always, it's probably a mix of the two, but I believe that the first explanation is more compelling. This makes it all the more important to consider which one you use because if you choose an IoT platform that doesn't become one of the dominant players, this could prove problematic in the future.

When should your business use an IoT platform?

Because IoT is a system of systems—a network of devices and software applications—rarely does an organization have expertise across all the relevant domains. Since IoT depends upon the correct synthesis of engineering fields as distinct as mechanical, electrical, software (to name a few), IoT platforms come to the rescue to help businesses overcome technical challenges without needing to salary and manage teams of engineers specializing in the various fields IoT requires, when only a single project or two needs to be developed.

For example, your business might be really good at building hardware and decide that you want to make your hardware “smart.” Instead of the expensive and time-intensive process of hiring software developers to build everything in-house, you can instead use an IoT platform to get up and running quickly and more cost-effectively.

However, there is a tradeoff. IoT platforms that save you time may cost more, in the long run, depending on how they’re priced. This is because they charge use-based and/or subscription fees that can add up over time. But you still get the benefit of significantly lower up-front costs (no CapEx).

IoT platforms that are inexpensive upfront will likely cost you more in time/effort. This comes back to the same point in bold above, the less you spend the more work you’ll have to do on your own, which takes time.

Now that you know whether or not you need one, need help choosing the best IoT platform?

Originally published on April 17th, 2017. Updated on January 29, 2020.