IoT Enablement Application Platforms: Market and Business Models

Nov 20 2017

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Introduction to CHOReVOLUTION, an IoT-Oriented Open Source IDRE - Part 3/3

Links to part 1/3, part 2/3.

The creative integration of smart connected things with existing information systems will be a driving force behind the much talked about digital transformation of the business world. CHOReVOLUTION is a solution for developing innovative IoT-enabled applications capable of managing complex interactions between users, services and things, in contexts such as intelligent transportation systems and smart city applications. Now available as an integrated development and runtime environment (IDRE), CHOReVOLUTION leverages a software engineering innovation known as choreography of services that heralds a new generation of applications integrating services and things in a manner that is dynamic, secure and distributed.

The first part of this article introduces the CHOReVOLUTION solution for developing distributed IoT-enabled applications, the second analyses how the Internet of Thing is moving toward a layered model and where CHOReVOLUTION fits in the model while the third assesses the market and business models for application enablement platforms and the CHOReVOLUTION IDRE.

Part III - IoT Enablement Application Platforms: Market and Business Models

Positioned as an Application Enablement Platform, CHOReVOLUTION is a new breed of application development software which market has not yet been clearly analysed. This third and final part analyses the business potential for application enablement platforms, and more specifically, the CHOReVOLUTION IDRE.

Service Intensive Business Models

Integrated development and runtime environments (IDRE) are software products that demand a significant level of support services, such as training, expertise and systems integration. CHOReVOLUTION is an IDRE for the development and deployment of innovative large-scale, IoT-enabled, service-oriented, distributed applications. Today's IDREs can be purchased or rented and used on site or online as a service. Since the CHOReVOLUTION IDRE is available as open source software, service-based business scenarios are the lost relevant. While end-users can use CHOReVOLUTION to implement their own IoT-enabled applications, cloud service providers and systems integrators will leverage the platform to develop IoT-oriented offerings. CHOReVOLUTION supports the following business models:

- User support services: in this scenario, vendors provide services and maintenance subscription packages to customers who have deployed the CHOReVOLUTION open source software, whether for internal or commercial use.
- Platform as a Service (PaaS): CHOReVOLUTION is delivered as a service rented by cloud service providers; users purchase access rights to the IDRE and application deployment resources.
- Cloud-enabled IDRE: the CHOReVOLUTION is the engine that powers cloud services; here, the technology is monetized within the services created, thanks to the IDRE.
- Facility integrated in large complex systems: i.e. network of heterogeneous components interacting in a given context; here, the CHOReVOLUTION IDRE makes possible large systems integration projects.

It is highly unlikely that software and support services will be the only deliverables in a CHOReVOLUTION project. Because IoT-enabled applications developed using CHOReVOLUTION will have the power to disrupt whole industries, the platform offers new business opportunities for a whole host of services, spanning from training, systems integration, hosting and maintenance, etc. to sophisticated technical and strategic business consulting.

High Potential Vertical Markets

From a technical perspective, CHOReVOLUTION is a solution to integrate heterogeneous services and things and it can be used to deploy IoT-enabled applications in any vertical sector. It may be sector-agnostic but its market sweet spot, as marketers would call it, are segments where IoT will contribute to redefining business models and industry boundaries. A number of studies comparing the market potential for IoT in different sectors have been published. McKinsey for one developed a top-down approach in which they identify a number of “settings” where IoT-enabled applications would offer the greatest economic impact. Drawing from this analysis of where new IoT-enabled applications can create most value, the market potential for the CHOReVOLUTION IDRE appears to be greatest in segments such as Manufacturing, Smart Cities, Retail and Mobility, HealthCare and Wellness. These segments will probably account for 80% of the potential market for application enablement platforms during the next three to five years. Manufacturing and Smart Cities are CHOReVOLUTION's principal markets.

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Market Sizing by Triangulation

It is always risky to lay down market figures for a ground-breaking technology; for the most part, market estimates have no scientific corroboration and at best are “guestimates”. The only acceptable approach is by some form of triangulation, using indicators that converge to provide a rough estimate of market size and growth. Independent market research firms regularly publish estimates of reference IoT markets, such as Industry, Smart Cities, mHealth, etc. Needless to say, these estimates have their limitations, but all put together, they reflect the generally accepted current perception of how much the IoT market is worth, where it is going and how fast. Weighing the rough sizing of each vertical by the potential for disruptive IoT-enabled application in each sector provides the best estimate of the market outlook for the CHOReVOLUTION IDRE.

Conclusion

The versatility of the CHOReVOLUTION IDRE makes it an effective solution for new application development in a number of growing market segments. The greatest market opportunities will be in the Smart Retail, Smart Cities and Smart Mobility segments. As a new technology, the success of CHOReVOLUTION will depend on systems architects, developers and systems integrators investing time and skills in making CHOReVOLUTION the application development and runtime platform of choice for the development of innovative IoT-enabled applications.

Acknowledgements for Market Sources

This brief analysis is based on desk research—web-based, of course—and dozens of face-to-face conversations with vendors. Independent industry analysts and market research firms (see links here below) regularly produce all sorts of reports and market studies. For the IoT market, principal sources include ABI Research, Gartner, IoT Analytics, Markets and Markets, McKinsey, and Mordor Intelligence. For the CHOReVOLUTION analysis, desk research was completed by face-to-face interviews conducted in Barcelona, Brussels, London and Paris at events such as IOTSWC, Net Futures, Cloud Expo Europe, Smart IoT London, Cloud Computing World Expo and IoT world. It's the collecting and cross-referencing of multiple data and opinions that led to envision the layered structure of the IoT technology stack and position the CHOReVOLUTION IDRE as an application enablement environment and, more precisely, with its studio and service composition abilities, on the developer's end of this segment as defined by ABI Research.

IoT Market Analysis Sources

    ABI Research https://www.abiresearch.com/
    Gartner http://www.gartner.com/technology/home.jsp
    IoT Analytics https://iot-analytics.com/
    McKinsey http://www.mckinsey.com/
    Marketsandmarkets http://www.marketsandmarkets.com/
    Mordor Intelligence https://mordorintelligence.com/

- https://directory.apphub.eu.com/organization/chorevolution
- https://l.ow2.org/cpvm

Business white paper

http://www.chorevolution.eu/bin/view/Discover/Whitepaper

CHOReVOLUTION is a research project funded by the European Commission.

This article was originally posted on Linkedin: https://www.linkedin.com/pulse/iot-enablement-application-platforms-market-business-models-thomas/


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