Evolving Dynamics and Key Trends in the Enterprise IoT Market

Eseye in Discussion with TecFutures

TecFutures recently had the pleasure of speaking to Nick Earle and David Langton of Eseye. We had a wide-ranging discussion around the evolving enterprise IoT market, focusing on the challenges and trends in enterprise IoT connectivity.

The discussion highlighted a number of key drivers that are changing the enterprise IoT market:

• Emergence of new standards like SGP 32, which are disrupting the market by enabling significant changes to interoperability

• The growing importance of device expertise

• Enterprise Needs: the strong need for businesses to understand the business case behind IoT projects, rising requirements for global connectivity solutions, their growing demand for high data use cases and the requirements around managed services

• The opportunity for MNOs and MVNOs in the market and the challenges of being in the middle of the market.

  
  

Enterprise IoT Market Overview

The enterprise IoT market is in a state of flux, with new standards, customer demands, and competitive dynamics reshaping the landscape. As IoT providers seek to capitalize on the growth opportunities, a clear understanding of the critical success factors is essential.

Disruption Driven by Interoperability

The emergence of standards like eSIM (GSMA's SGP32) is proving to be a significant disruptive force in the IoT market. These new specifications are enabling greater interoperability between devices and connectivity providers, breaking down the historical proprietary walls erected by mobile network operators (MNOs).

This shift is driving demand from large enterprises for single, global IoT solutions that can seamlessly connect across multiple countries and operators. MNOs, realizing the threat to their traditional business models in the enterprise IoT space, are now scrambling to adapt and offer more interoperable, cloud-based platforms.

The Device: The Elephant in the Room for Global Enterprise IoT

The path to achieving true global enterprise IoT connectivity is fraught with challenges, and the device itself has emerged as the "elephant in the room." IoT providers must grapple with the reality that roaming agreements and SIM-based connectivity are not enough – the firmware and operational settings of the devices are critical to enabling reliable, resilient, and location-agnostic performance.

From Eseye’s recent State of IoT Adoption research, it identifies that enterprises are increasingly recognizing this device-level complexity - with 60% of companies admitting they underestimated the challenges. IoT suppliers that can provide device expertise, firmware optimization, and managed services with guaranteed performance will be well-positioned to succeed in the enterprise IoT market.

Enterprise Evolution in a World of Changing Competitive Dynamics

The cumulative effect of changing competitive dynamics is leading to a bifurcation of the enterprise IoT market into two distinct segments.

Low/End/SMB Segment: At one end, there is a growing demand for low-friction, self-service connectivity solutions targeted at small-to-medium businesses and experimenters. These customers prioritize ease of use and rapid time-to-market over advanced features.

High-End/Large Enterprise Segment: On the other end of the spectrum, large enterprises are seeking comprehensive, managed IoT services that can deliver global coverage, high-bandwidth applications, and device-level optimization. These customers are willing to invest upfront to ensure long-term reliability and scalability.

Navigating the Challenging Middle Ground of Enterprise IoT

The middle ground between these two extremes is proving to be a challenging space to occupy. IoT providers that lack the scale and resources of the "low-end" disruptors, as well as the specialized device expertise of the "high-end" specialists, risk being squeezed by commoditization and customer churn.

Successful IoT suppliers in this evolving market will need to carefully evaluate their positioning and capabilities. Developing deep vertical expertise, offering managed services with guaranteed performance, and prioritizing device-level optimization will be critical differentiators.

Additionally, a  network agnostic platform-based approach that can aggregate connectivity from multiple MNOs and provide enterprises with choice and flexibility may be a viable strategy for navigating the complex enterprise IoT landscape.

Conclusion

As the enterprise IoT market continues to evolve, IoT providers that can anticipate and adapt to the changing dynamics will be best positioned to capitalize on the growth opportunities. By addressing the device-level challenges, offering managed services, and aligning with the diverse needs of customers, IoT suppliers can establish a sustainable competitive advantage in this rapidly transforming industry.