IoT platforms are a critical components of the IoT ecosystem, but many people don't know: what is an IoT platform?
Whether you’re new to IoT or a seasoned veteran, you’ve probably heard the term “IoT Platform” before. After all, there were over 300 IoT platforms as of last year and this number continues to quickly grow (I’ve heard there are now over 700). The IoT platform market is growing at a compound annual growth rate (CAGR) of 33% and is expected to reach a $1.6 billion market size in 2021.
IoT platforms are a critical component of the IoT ecosystem, but I’ve found that for many people, it’s not clear what an IoT platform is exactly or the differences between them.
In this post I’ll provide a simple, non-technical explanation of IoT platforms. What they are, when businesses should use them, and the important considerations when choosing between the multitude of options.
To understand what an IoT platform is, first you need to understand a little about the components of a complete IoT system. My previous post, How Does an IoT System Actually Work?, is a great way to learn, but I’ll quickly summarize here.
IoT platforms are the support software that connects everything in an IoT system. An IoT platform facilitates 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 and that’s what IoT platforms do.
Because IoT is a system of systems, rare is the organization that has expertise across all the relevant domains. IoT platforms exist to help businesses overcome technical challenges without the need to figure it all out in-house.
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 up front will likely cost you time. 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.
Want to know how to choose the best IoT platform?