State of the IoT Core Analytics Market in 2020

The initial forecast for the big data analytics market in 2020 expected it to experience a significant shift in dynamics due to the emergence of a new marketplace within the Internet of Things (IoT)— IoT data analytics, which would stimulate uplift in IoT core analytics revenues. The reality of the year is, in fact, different, amid the COVID-19 pandemic that caused the health crisis and global economic decline. ABI Research estimated that the IoT core analytics market would surpass US$7.8 billion in 2020; however, the newly updated forecast has been downgraded by 3% for 2020 to 2022.

In practice, the IoT analytics market slowed down, due to uncertainty and lack of industries' rapid response and business resilience, despite the growing value of the data and commoditization of data as a result of the COVID-19 response. Hence, many companies experienced a "freeze of the contract" or temporary postponement of deals (for companies under US$10 Million revenue, it is still the case). While it is essential to highlight that there is a global industrial slow down, again, as a result of COVID-19, ABI Research expects to see a dip in the analytics market. However, it would not be proportionate to the industries' slow down. Within a few years, and especially over the recovery years, IoT core analytics service solutions are expected to enter the acceleration stage in terms of market growth.

The data-enabled technology vendors are utilizing this crisis to their advantage and coming up with new business models and products to innovate and support the turbulent market—while monetizing it. Companies like Amazon Web Services (AWS), C3, and Google are successful in promoting their products and analytics capabilities (toolsets and environment) by creating centralized data repositories for COVID-19. I.e., COVID-19 Data Lakes. Currently, those lakes are public and not monetized. However, it is expected that those companies will attempt to penetrate more of a healthcare market in the future. The public cloud industry has healthcare industry "ambitions," but more needs to be done before the realization of such a vision. From the technology perspective, those data lakes could be the first steps for creating/testing data visibility, data exchange products, and services. For more details, see the ABI Insight AWS and C3.ai Are Leading the Efforts for Public COVID-19 Data Lakes to Analyze, Predict, and Enable Data Exchange (IN-5832)

Despite everyone's hope to see more Artificial Intelligence (AI)/Machine Learning (ML) utilization, ABI Research did not detect a rapid uplift in technology utilization. The early stage of AI/ML in the IoT prevented those technologies from being quickly democratized and adopted on an ad hoc basis. However, vendors like Falkonry, Nokia, and FogHorn have been actively presenting new out-of-the-box solutions with integrated AI functionalities to tackle challenges of remote everything. Falkonry presented Falkonry Clue, with plug and play capabilities enabling users to navigate their operational data environment for themselves and have very rapid deployments—fFor more details, see the ABI Insight From Strategizing to Adopting Information: Falkonry’s New Out-of-the-Box Solution Democratizing AI for Manufacturing (IN-5848). While companies like Nokia are pushing their Video ML products (crowd monitoring, airports monitoring, etc.), SpaceTime Scene Analytics, which has a deep learning capability, has model training taking place in the cloud and can be deployed at the edge. Finally, in June 2020, FogHorn announced Health and Safety monitoring solutions, which are presented as out-of-the-box Software-as-a-Service (SaaS). Such software kits enable enterprises to prevent employee exposure to cold, virus, and flu, using ML combined with video analytics, as discussed further in IoT, AI, and ML Services: Deploy, Learn, and Monetize (AN-2420). At the same time, such developments led to a further prediction that the video ML IoT market would go up, with substantial impact on fleet management, commercial and residential building management, Business-to-Business-to-Consumer (B2B2C) and Business-to-Consumer (B2C) markets.

Finally, transportation and asset tracking markets are experiencing bigger hits than initially expected. The core analytics in those industries are expected to experience a 25-35% revenue hit (European market). The E.U. Markets with transport/automotive/logistics verticals are not expected to recover until the recovery of the U.S. market—the core analytics industry follows the trend.

Considering the downgraded forecast, does it mean that IoT core analytics is in decline? No. Many newly emerging cloud-native data-enabled analytics vendors have benefited from COVID-19, with "more business than usual." Since industries are transitioning to "remote everything," out-of-the-box solutions, such as remote monitoring, asset management, asset visibility, and predictive maintenance, are in high demand and exemplify market acceleration. Vendors are now easing access to ML and AI toolsets by expanding availability through deployment options that include the edge, on-premises, cloud, Platform-as-a-Service (PaaS), and SaaS. COVID-19 showcased that rapid deployment is critical. For example, the edge-cloud companies (SaaS with hardware agnostic capabilities) are also on the rise, due to quick and easy deployment, as well as a satisfactory pricing strategy.

All in all, the IoT core analytics has proven its potential and practical application for tackling the pandemic and, despite a downgraded forecast, which aligns with an economic slowdown (reduction of the tech-investments and cash preservation by many) IoT analytics would swiftly bounce back and enable monetizing opportunities in various verticals.