IoT taking the smartphone’s lead

But while the 3310 may have been known for durability, battery life and of course, Snake, it ultimately was a very limited piece of hardware and one that did not develop much after it left the factory assembly line.

What has stood the iPhone and other smartphones apart since then, and allowed them to grow as enduring devices, is the option for users to make the phone their own, adding customisations and new functionality from the the associated app store. Last year there were 178.1bn mobile app downloads alone, showing the absolute vastness of this market, and how it is integral to the lifespan of the smartphone.

There’s a striking parallel between the app store economy that has built up around the smartphone and a similar emerging dynamic in the Internet of Things market. This market is none other than the billions of internet-connected sensors and other devices that transform massive volumes of data into actionable intelligence based on new insights. Advisory firm Bain predicts IoT will generate $450bn in revenue worldwide by 2020. 

As in the early days of mobile phones, the traditional approach to embedded devices has been hardware-centric and fixed function. Once that device was deployed to the field, for example to help monitor performance and boost efficiency on an oil drilling platform, there were little or zero mechanisms to quickly deploy any feature updates or address any newly discovered security vulnerabilities. The device was fixed and brittle.

That’s changing with the emergence of a new smart view that makes updating and extending the functionality of IoT devices as simple as what we’ve become accustomed to with our smartphones. In this approach, companies can create and publish new apps and services via their own branded IoT app stores and extend device lifecycle as well as increase customer retention and revenues.

This means the functionality of deployed devices can be extended without replacing the physical hardware. A device can safely run multiple applications, which allows it to extend beyond its original purpose without requiring the end user or manufacturer to go through a new procurement, installation process or physical on-site visit. 

In a typical scenario for multi-app devices, a device manufacturer or service provider establishes an app store that includes applications from the company and possibly trusted third parties as well, partners, developer ecosystem and customers. The development of an app ecosystem is key to driving customer solutions and solving their problems by leveraging devices running domain-specific applications. Also of consideration is the combination of device analytics and AI/ML capabilities that might also be considered to assist in distributing and optimising the application workload.

An example of a company following this strategy is Rigado, which powers edge connectivity for more than 300 global IoT customers and five million connected devices. Rigado has developed a multi-app device that allows them to customise their gateways for each customer from a curated list of IoT applications. By providing domain-specific solutions to individual customer requirements, Rigado is able to service different industries, some of which include retail and hospitality. Rigado also plans to extend this capability to allow trusted business partners to offer customised app stores for their customers, hence creating an open and valuable ecosystem rich with domain-specific applications.

An IoT app store allows a company to offer many useful capabilities to their IoT developer ecosystem:

• New app and feature promotion.
• Early access for testing and feedback.
• Special incentives and pricing models.
• Ecosystem awareness through usage and distribution KPI’s.
• Extension of build capabilities via third-party developers.
• The ability to authorise and govern which devices run what software.
• The ability to govern update mechanisms based on the criticality of device updates.

Further analysing the benefits of such an approach:

Future-proofed offering: For a device manufacturer that may be used to generating a one-off initial sale, an IoT app store opens up the opportunity to create ongoing revenue either through new features, additional services or extended support. In a world of declining hardware margins, such monetisation provides a huge opportunity for device manufacturers as they look to build a sustainable and future-proof commercial offering.

Releasing software on your terms: The option of creating a public or private app store enables a manufacturer to select which software they want to release to their customers versus that which is still in internal testing. Once ready to release a new feature, the manufacturer can simply push it to their public store, thus offering customers new functionality on their own pre-defined terms and use case requirements.

Controlled authentication: Manufacturers can enhance the security around who is accessing their store by authenticating only approved devices. If desired, authentication can also restrict certain developers accessing certain stores, both internal and external, depending on their requirements so that policies can be established and an overall governance model established.

Hardware flexibility: Being able to re-use the same hardware device for different workflows, and hence appear to be different in use and function, represents a huge gain in flexibility and cost-efficiency. For example, a single-function industrial robot could be updated to take on additional jobs or a drone could add new algorithms and hardware support for detecting structural deficiencies in bridges, simply from an additional downloaded app without any changes to the physical device.

The app store economy that is growing up around IoT is helping nurture a concurrent shift to a a subscription or pay-per-use model for IoT devices. For large industrial equipment, this will often allow the purchase decision to become an OPEX expense versus a CAPEX expense, reducing the up-front equipment expense. A pay-per-use system also encourages the vendor to be more responsive to preventive maintenance to ensure the deployed device continues to operate in the field and delivers end user value.

The app store approach also encourages the creation of license models and revenue streams based on specific feature enablement. For instance, Tesla is able to remotely configure their cars to enable self-driving capabilities in different models. Likewise, IoT devices can allow for mass customisation of devices based on specific customers needs, licensing and market demands.

The mobile phone industry has conditioned us to expect a choice of multiple apps and frequent feature updates to maintain an optimal user experience. The day is coming fast when this will become second nature in IoT as well.