Cool Vendors in the Internet of Things, 2015

Innovative approaches for the Internet of Things focus on core building-block technologies in communications, IoT platforms and security. We profile five Cool Vendors that can help CIOs, IT leaders and decision makers build IoT solutions.

Key Findings

• The level of interest and hype for the Internet of things is translating into proof-of-concept Internet of Things (IoT) projects for many enterprises. They want to understand key requirements for building block technologies as well as business models.
• Many companies are developing IoT platforms for leveraging gateway-based architectures to connect IoT endpoints to enterprise IT and OT systems via the cloud. Axiros, Ayla Networks and Concirrus are three companies in this crowded space that have interesting business models and technology approaches.
• A core requirement for IoT projects is securely connecting to IoT endpoints. Two IoT vendors focused on these core building-block technologies are Sansa Security with its embedded security code for chipsets and Sigfox with its efforts to build a UNB-based dedicated cellular network.

Recommendations

• Build a matrix of requirements based on an assessment of your IoT pilot projects to understand the general set of requirements you need to meet. Map this matrix against the capabilities from vendors, including these Cool Vendors, to build a scenario analysis for your enterprise on adoption trends and general issues related to the IoT.
• Work with your business unit colleagues to build, by 3Q15, a shortlist of IoT platform vendors that your enterprise can leverage for upcoming IoT projects. Generate the list based on vendors' flexibility, vertical market expertise, partners, price and so on.

Analysis

This research does not constitute an exhaustive list of vendors in any given technology area, but rather is designed to highlight interesting, new and innovative vendors, products and services. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

What You Need to Know

The IoT continues to gain interest and momentum as enterprises experiment with business projects that incorporate IoT endpoints and technologies. This interest by enterprises is mirrored via strong activity by startup companies and established vendors that are building solutions and proof-of-concept projects. The following vendors form our second annual cohort of companies that have developed representative cool technologies and solutions to support the evolving IoT markets:

• Axiros
• Ayla Networks
• Concirrus
• Sansa Security
• Sigfox

The first three of the cool vendor listed are IoT platform vendors. For the purpose of this document we will provide a high-level IoT platform definition so we can focus on the unique coolness factors for each of the vendors.

An IoT platform is a software suite that monitors and manages various types of IoT endpoints, gathers and analyzes data from those endpoints, and calls back-end systems to achieve a business objective. Capabilities include endpoint management, communications, data integration and storage, security, orchestration, analytics and so forth. IoT platforms are a critical building block for the IoT and for digital businesses because they are the way that we extract data from our things

Axiros

Munich, Germany (www.axiros.com)

Analysis by Benoit Lheureux

Why Cool: Axiros is a software provider of a horizontal, cloud-delivered IoT platform and agent stack for embedded systems that initially proved its scalability by provisioning and managing large numbers (in third-party performance tests they demonstrated 100 remote procedure calls per CPU/Core) of industrial OT and other IoT projects in the telecommunications market. Founded in 2002, it has since developed key vertical market expertise for the utility and consumer smart home industries. Thus, the company is not just a provider of a vanilla IoT platform, but rather is an experienced IoT platform vendor that has proven its vertical market capabilities in the complex European marketplace.

Besides its vertical market capabilities, the company has proven its technology as it relates to high IoT endpoint concurrency and provisioning (it claims rates of 100 remote procedure calls per CPU/Core). Its solution has been proven on unreliable grids where it can automatically switch, for example, from IP to cellular to radio communications, as required, for fault-tolerant remote connectivity.

Challenges: As the company looks to expand, it will need to assess and prioritize its system integration partners to focus on those that will help it grow in the future, while not alienating key partners. Very "techie" marketing can work well with partners, but doesn't clearly articulate the commercial value-proposition of its solution to direct customers. Sustained differentiation will be a challenge as "mega" vendors (e.g., Cisco, IBM and Microsoft) roll out similar horizontal IoT platforms targeted at their indirect channels.

Who Should Care: Product and marketing managers at system integrators, independent software vendors and midsize-to-large enterprises — in Europe as well as in Latin America and Asia/Pacific — seeking a scalable and proven horizontal IoT platform with proven scalability and flexibility upon which to implement their own end-to-end industry solutions.

Ayla Networks

Sunnyvale, CA (www.aylanetworks.com)

Analysis by Alfonso Velosa

Why Cool: Ayla's founders rethought how to develop and support connected products or things. The company needed to design its IoT platform so that they could help manufacturers create secure, connected products, quickly and cost-effectively, while minimizing the need for nonrecurring engineering expenses for custom development.

The company has built a cloud-centric IoT platform that is optimized for greenfield projects or relatively simple retrofit environments. This enables Ayla to quickly bring manufactures' connected products online and for manufacturers to gain valuable insight from the data generated from the connected devices. Thus, Ayla Networks solution helps its customers connect things such as appliances, consumer electronics, HVAC systems and other home and building devices with minimal effort, while at the same time providing an extremely cost-effective solution.

A key starting point for the company was a careful look at the overall ecosystem. This led them to work with semiconductor companies focused on the IoT. Ayla Networks embedded its networking and security software on their chips, while leveraging the semiconductor vendors' key capabilities, including their existing drivers and their security capabilities. The Team at Ayla also thought about how the OEMs create and configure virtual representations of the devices to enable new functionality as well as collect data on the device. This resulted in a menu-based portal approach for a user interface designed for nonprogrammers. Ayla's data analytics capability provides reporting on device health and consumer usage, while their professional services team helps customers ramp up as quickly as possible.

The company has set up a full operation in China to provide local support for Chinese manufacturers looking to provide connected products for domestic and international markets.

Challenges: Ayla Networks, as with any other small company in the IoT, faces a broad range of traditional challenges. It must differentiate itself amid a large number of competitors in terms of small nimble companies as well as large established mega vendors. Its customers often need to be educated on fundamental aspects of the IoT, including core architectural differences, business models and data policies.

However, Ayla's specific challenges center on two things. First it needs to focus on the right markets as it makes its investment decisions. Second, as it is quickly growing, it needs to protect its culture and hire the right people in its U.S. and Chinese operations.

Who Should Care: Product managers at manufacturers looking to get better data on the things they create and sell, in order to develop better products, manage warranty costs and create product differentiation. CIOs who are thinking about smart IoT architectural design to better partner with their business stakeholders looking to bring connected products to market.

Concirrus

London, England (www.concirrus.com)

Analysis by Eric Goodness

Why Cool: Concirrus is a company that offers a platform (Concirrus Connect) to organize the IoT. Concirrus wraps its platform with approved hardware, applications and value-added services to make it easy to buy.

Too often, users are left to conduct due diligence, source, procure, integrate and manage the parts that make up an IoT connected solution while learning on the job. What makes Concirrus cool is that the company focuses on delivering measurable value for its customers and it has a raft of reference deployments. Working with customers to extract value from IoT in their business and getting a measurable positive outcome for customers is the company's core business model.

Concirrus' mission is to bring order and discipline to IoT technology and deliver it as a simple service for a monthly fee (including access to 24/7 monitoring operations center and related services). Concirrus handles the entire configuration, data management, platform application programming interface (API), device management and setup of its Connect platform — and provides services to help customers apply the solution to their business. For example, Concirrus works with customers from business planning to solution implementation to choose and implement the most appropriate hardware and also develops and integrates custom software.

Concirrus Connect is a cloud-based platform designed for IoT scalability. Core concepts of raw check-in data, data driven events, rich APIs, machine learning, and industry applications are at the heart of the solution. Concirrus Connect conforms to security compliance standards such as ISO/IEC 27001:2005 Audit and Certification and Payment Card Industry Data Security Standards Level 1.

Challenges: Concirrus is a small company with limited market visibility. In these early days of connected solutions, transitioning from the connect-and-control of machine-to-machine (M2M) to a more data-driven IoT, it is as important to engage in significant partnerships and other indirect channels to market that generate sustained revenue streams as well as conveying expertise and stability. In other words, these partnerships must provide growing revenue opportunities and there must be value transfer from the partner brand. Such partnerships include Google, Intel, GE, SAP, Oracle, Microsoft, AT&T and Vodafone.

Who Should Care: Concirrus presents M2M, IoT software and value-added services to increase the time-to-solution. Enterprise architects looking to steward and support IoT solutions within the business should review Concirrus' platform capabilities and professional services to align wants and needs.

Given the level of IT and support services that Concirrus layers on its cloud-based services, there are strong partnering opportunities in the market. Regional system integrators, or startup companies involved in IoT projects, will find Concirrus' approach advantageous in ramping up its IoT capabilities and speed its time-to-market and time-to-revenue. Gartner believes that many manufacturers of consumer and operational technology (OT) business assets present a strong OEM opportunity to ensure that their platform is bundled and extended to enterprises looking to bring B2B and business-to-consumer services to market.

Sansa Security

Tel Aviv, Israel (www.sansasecurity.com)

Analysis by Earl Perkins

Why Cool: Sansa Security is a security software company that provides embedded security code for chipsets for mobile and IoT hardware, middleware for content protection, command and control, and client/server software for secure software provisioning.

Sansa Security is one of the few vendors in the IoT market that can legitimately lay claim to being an IoT cybersecurity vendor and having a history with device manufacturers and software developers. With an existing software heritage in the mobile industry and in securing physical chipsets, the company is moving up the stack to offer a four-function software portfolio with:

• Presence in silicon and gateways
• Provisioning of IoT software assets as a value-added service
• Trust services for IoT service providers
• Applications to manage trusted IoT devices as part of a trust ecosystem

Sansa seeks to use its device expertise within software design and management services to deliver end-to-end IoT protection.

What makes Sansa Security cool is its focus on the concept of trust as the centerpiece of its design. By emphasizing the need for creating trust layers at key points across the IoT (and mobile device) business moment, the company is able to focus relevant services as required, whether it is content protection, command and control, cryptography, provisioning or delegation. Additional levels of trust are possible via additional capabilities applied at key points of the silicon, the network and the application. Sansa already has important relationships with hardware makers, service providers and enterprises that many vendors that wish to be in IoT cybersecurity do not have.

Challenges: Sansa's architecture and services message isn't always easy to understand for customers. The solution set strives to be broad, which can dilute Sansa's ability to concentrate on key markets and customers. Although Sansa's experience in silicon and with engineering firms can be strategic for succeeding in the IoT market, many IT-centric customers may not appreciate that advantage. Potential partners may also be concerned about overlapping functionality between their product and Sansa's portfolio.

Though the use of the trust services model is strategic, Sansa faces significant competition with the certificate authority approach found in use across many enterprises. The trust model is heuristic (in essence, dynamic and self-learning) and potentially more amenable for IoT use, but is not pervasive at this stage.

Who Should Care: Industrial environments such as oil and gas, utilities, manufacturing and transportation are some of the verticals that could use Sansa's cybersecurity portfolio as they update, upgrade or otherwise extend their existing legacy OT infrastructure. Chief digital officers, chief security officers and CIOs will be interested in Sansa for its ability to view the cybersecurity requirements of IoT from a physical device perspective, coupled with a key protection and control functions perspective. This is critical when introducing end-to-end software protection, security management and data integrity for business applications routinely using IoT devices.

IoT system integrators, solution providers for IoT network services and enterprises with significant IoT presence will be interested in Sansa's portfolio offering. This includes not only enterprises and providers for traditional IT solutions, but also for OT focused companies that have industrial automation and control security requirements.

Sigfox

France (www.sigfox.com)

Analysis by Anshul Gupta

Why Cool: Sigfox is one of the companies setting up global cellular connectivity of IoT designed for low throughput communication. This dedicated cellular network based on ultra-narrow band (UNB) technology is suitable for billions of connected nodes such as sensors or actuators that require low bandwidth to transfer small amount of data. Also, traditional Global System for Mobile Communications (GSM) cellular networks are too complex and costly to allow low power operations to connect with a large number of nodes. Sigfox's cost of connecting a node as low as $1 per year — for large volume of subscriptions — makes it an affordable alternative to connect things.

Sigfox's technology uses unlicensed Industrial Scientific and Medical (ISM) radio bands reserved internationally for the use in industrial, scientific and medical purposes with frequencies differing from region to region. For example, in Europe 868 MHz is used and in the U.S. 915 MHz band is used. Sigfox networks have been deployed in France, the Netherlands, the U.K., Spain, Portugal and 15 cities around the world. It recently got funding of $115 million to complete the European coverage and continue fast network expansions globally including the U.S., Asia and Latin America. Sigfox's UNB technology allows high capacity and very low transmitter power to be used, while still maintaining robust data connectivity between the nodes with speeds up to 100 bits per second in Europe and 600 bits per second in the U.S. This speed is good enough for many applications to operate and many devices would find this cellular network good enough. Sigfox has also updated technology to support bidirectional communication, addressing drawback of its earlier unidirectional UNB communication to support scenario of clock adjustment, resetting of things and so forth.

Sigfox permits a very small amount of data (12 bytes) transmission per message at a very slow speed. This technology for using very small data and very slow speed makes it a good fit for IoT applications which need to send small data, infrequently. Some examples are alarm systems, location monitoring, parking monitors, electricity meters and preventive maintenance.

Challenges: Although Sigfox is first in the market to set up an exclusive cellular network for IoT, there are other large wireless companies working to launch similar exclusive networks. Also, availability of this network in only a few regions would not support its future growth. This puts pressure on Sigfox to speed up network deployment to take significant lead and increase the usefulness of this technology for much larger audiences.

Use of ISM band would also mean there will be other applications running on same band, leading to interferences, thereby putting a limit on the numbers of objects that can be connected. Also number of messages per device need to be tightly controlled to avoid jamming/interference in ISM band.

Who Should Care: Sigfox will add immense possibilities for new connected products in the IoT or provide enhanced capabilities to existing products. Product managers working on IoT concepts building smart objects that connect to smartphones through Bluetooth, short range radio (Z-Wave, ZigBee), or local-area networks (Wi-Fi) could think of adding a Sigfox chip to smart object. This could be very useful in scenarios of sending/receiving alerts or controlling objects from anywhere because it would require only a small amount of data to be communicated to make Sigfox a perfect alternative.

Where Are They Now?

Because this is only the second version of the Cool Vendors in IoT report, we do not have any significant changes in the alumni to review.

Evidence

The analysis and advice provided in this document is built from constant scanning of the market, as well as from the aggregation of analyst experience and ongoing interactions with end-user organizations, and technology and service providers. We have used a range of sources to feed our perspective on the topics discussed in this document, including:

• Gartner customer inquiries and conversations with enterprise and government end users, and technology and service providers.
• Discussions between Gartner analysts with expertise in key architectures and technologies for the IoT, particularly horizontal technologies such as middleware, security and semiconductors.
• Attendance at industry conferences and briefings from key software, semiconductor, electronics and services companies.

Gartner analysts also leverage secondary sources of information, including government and media reports on software, electronics, the IoT and related developments.

Source: Gartner Research Note G00273597, Alfonso Velosa, Benoit J. Lheureux, Eric Goodness, Earl Perkins, Anshul Gupta, 30 April 2015