Can Startups Drive Enough Scale to Impact the IIoT Platform Space? [MondayMusings]

The #MondayMusings, Industrial Transformation blog series provides insight and analysis for executives from the previous week’s briefings, events, and publications @LNSResearch.

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Today it seems like every company wants to have a digital platform for value-added services; from the BMW 5-Series (which unfortunately I don’t own) to the Withings Smart Scale (which unfortunately I do own - after the holidays dumb scales just weren’t going to cut it).

For anything to be considered a successful platform, minimum requirements must be met for technical capabilities, security, openness, and usability. But things start to become really interesting when a platform attains a critical mass of users, devices, third party content, and third party services.

In the Industrial Internet of Things (IIoT) Platform space, many of the world’s largest industrial and technology companies are aggressively pursuing the market opportunity. When compared to startups, these large and entrenched players have clear advantages regarding the ability to drive a critical mass of users, devices, and third party engagement. On the flip side, because of these company’s size and existing customer base, meeting the minimum requirements for security and openness could provide an advantage to startups.

Over the past few months, LNS Research has been briefed by the leaders of two IIoT Platform start-ups worthy of considerations because of their potential to focus in on and differentiate regarding security and openness (avoid vendor lock-in).

IoTium: Enabling Security at Scale

Today the top challenges to driving adoption of the IIoT is business case and funding. Security and scale still fall relatively far down the list. However, as more and more companies move from pilot projects to full production, scalability, and security are going to shoot to the top of the list.

IoTium is a Silicon Valley IIoT startup company that is focused on addressing these problems. The fundamental problem that IoTium is focused on addressing is the data from anywhere to anywhere architectural dilemma created by the IIoT.

When an industrial company has one (or a few) assets on the shop floor that want to share information with one (or a few) Cloud-based applications, the solution is relatively simple. Have IT punch a tunnel through the industrial firewall and provide secured access, simple. The challenge comes when there are 1000’s of assets per site and hundreds of applications, all of which want data to go from everywhere to everywhere. This is unmanageable for IT and can quickly overwhelm the industrial asset with data requests; not to mention the security vulnerabilities.

IoTium provides network infrastructure as a managed service using a bookended secure software defined network that runs nodes on plant-based gateways as well as on destination application Clouds, and an orchestrator in the Cloud to manage this virtual overlay network. This has the potential to allow industrial organizations to abstract away the physical plant networks and serves data from assets on the shop floor to Cloud-based applications with a data container based architecture that never requires a direct connection to physical devices, scales across communication platforms, and doesn’t overwhelm devices when multiple applications request data.

The potential for IoTium is considerable given the scope of the coming security and scaling challenges facing the IIoT and the need industrial companies have for a simple and elegant solution. There are also positive signs, with many IIoT gateways already running IoTium, including Dell and Intel.

Litmus Automation: A Horizontal Approach to the I&IoT

LNS Research was the first analyst firm back in 2014 to push the concept that the IIoT Platform had to be called out separately from the broader IoT Platform space because of the distinct differences in the industrial landscape vs. other markets like consumer and healthcare. Over time, this view was proven to be prescient, with many of the world’s largest industrial and technology companies launching industrial specific IoT platform solutions.

Litmus Automation is another Silicon Valley startup that is focused on the IIoT space. The company certainly subscribes to the fact the IIoT space is a unique market that has specific requirements but that once those requirements are met, there is no reason a single platform can’t span engineering, manufacturing, products, consumer, cities, and more.

Today Litmus Automation has focused its technology development on device connectivity, management, and application integration across connected factories and connected cars. The company focuses on Fortune 500 industrial and automotive companies (several customers already) and provides an IIoT platform called Loop, which is an Edge to Cloud solution. Loop connects industrial devices and systems from the factory floor and delivers timely data to Cloud and on-premises enterprise systems.

It is a highly competitive industry and broad scope but there is some early success for the company, with Nissan Motor Corp becoming an early adopter. It remains to be seen if Litmus Automation can parlay an early win like this into the scale and breadth needed to provide capabilities at full enterprise deployment for a company like Nissan Motor Corp.

Answering the Question: Can Startups Drive enough Scale to impact the IIoT Platform Space?

Silicon Valley is a unique place in the world, where everyone believes anything is possible. For us grizzly veterans of the industrial sector, we may doubt the fact that a startup can drive scale in our space. I can assure you, these two Silicon Valley startups, and many others, have no such doubt.

The more time I spend with the executives of these companies, the less I doubt that one of them will eventually disrupt our industry, and we may not be waiting for that much longer to see one of them do it.