Introduction
For over 30 years Cambashi has been analyzing the engineering and manufacturing software market. In 2010 it began to study embedded software which is fundamental to the IoT.
As interest in IoT grew, Cambashi decided to analyse this market in full. An initial review of available information and statistics led us to the conclusion that there was no reliable and authoritative source for segmentation, size or growth estimates in this market, so in 2017 we undertook a self-financed research project into the landscape for IoT and Digital Transformation. This involved interviewing key people in major providers for a report; ‘The Industrial Internet of Things and Digital Transformation; Market Landscape and Trends’, completed in January 2018. This provided a perspective onto the market from both technical and commercial viewpoints. This report was only made available to the participants at the time, but can now be requested here.
The next step is to design an industry-accepted market segmentation that can form the basis for accurately measuring the global market size and composition, and to forecast growth in the Digital Transformation and industrial IoT space. Cambashi’s established ‘Market Observatory’ datasets provide the environment into which we can launch and maintain the Cambashi Digital Transformation and Industrial IoT Market Observatory.
We are promoting an industry-led initiative to guide scope and segmentation to achieve best fit for future business and marketing planning. Selected providers will be invited to become Founder Members in the Industrial IoT and Digital Transformation Charter Program.
Approach
As a result of the market landscape research initiative, we found that providers focused on three areas:
- IoT Technology – ‘IoT platforms’, cloud technology, edge computing, sensors, communications technology, etc.
- IoT Applications – tailored for particular use cases or industries.
- Digital Transformation as an over-arching concept.
While there has been much publicity around IoT technology and Digital Transformation, the feedback we have received from industry stakeholders is that they urgently need qualified insight into Applications in their Market Areas. Their customers are looking for solutions that they can implement easily, at a known cost, with identifiable benefits.
We have derived a draft market segmentation model which comprises nine important ‘Connected’ Market Areas into which most existing industry Applications can be placed. Along with the IoT technology and Digital Transformation services, this provides an overall measure of what we identify as the ‘IoT-related market’.
The draft segmentation is shown in the following diagram:
Prior to the quantitative analysis, these Market Areas are being validated by leading solution providers to ensure that they are the most important and relevant areas, and that the groupings make technical and commercial sense for their current and planned Applications.
What is the Charter Program and why is it important?
The idea behind the Charter Program was to invite a small group of key providers (Founders) to join the program as Members to prioritize and steer Cambashi’s research. These Founder Members receive financial and other benefits and they have the opportunity to prioritize the most relevant Market Areas, to drive the qualitative segmentation and to have early access to the qualitative and quantitative analysis.
The Charter Program delivers both quantitative and qualitative information about this market, which participants can use to plan their global Go-to-Market actions and campaigns.
Many of the providers we talked to said they did not have useful numbers with which to structure their global sales and marketing plans. One deliverable of this research will be reliable figures for market sizing and growth projections in the target Market Areas, by Application. The quantitative outcome of this research will be reliable figures for market sizing and growth projections in the target Market Areas, by Application which can be used for planning in 2019 and beyond.
The Charter Program will deliver both quantitative and qualitative information about this market, which participants can use to plan their global Go-to-Market actions and campaigns.
We have also heard that many customers – and often the providers’ Industry Marketing Executives that work with these customers – are not clear about what IoT or Digital Transformation can do for them, what is involved in implementing it, how it can be purchased and what it costs. This lack of clarity slows down take-up, because hard-nosed industrial companies demand proven solutions in their Market Area that provide a benefit over cost; ‘Proof of concept IoT projects’ or ‘Digital Transformation initiatives’ are simply not enough.
The qualitative outcome will be a series of messages, seminars, Thought Leaderships etc. that will help convey the message of how the solutions on offer can help users understand the technology, address problems and take advantage of opportunities.
A deeper understanding of user issues, ‘Connected Applications’ and the Market Areas in which they can be applied will allow Charter members to better structure and focus their solutions, thus increasing their market penetration and profitability.
Some of the issues we have heard, the implications and reasons are summarized here.
Founder Membership Benefits and Obligations
The Founder Members have the opportunity to prioritize the most relevant Market Areas, input to the segmentation and early access to the qualitative and quantitative analysis. This provides an important early market advantage.
Founder Member benefits (deliverables):
- Participation in / steering of Cambashi-led work with one-to-one sessions to:
- Refine segmentation model
- Share IoT industry issues
- Prioritize Cambashi IoT/DT research agenda.
- Early access to Preliminary Global IoT Observatory (spreadsheet) to include market sizing and forecast with three years’ projections.
- Early visibility of, and input to, the IoT Observatory model and development plan.
- Visibility of the Use Case and Case Study analysis results.
- Analyst-on-call to support IoT Observatory questions.
- Two IoT webinars from Cambashi IoT industry experts;
- one to Member-invited industry participants (prospects)
- one internal to Member organisation on an agreed topic.
- Quarterly briefing on selected topics.
- Assistance with appropriate messaging in corporate collateral.
- Preferential rates on IoT-related custom work by the Cambashi team.
Founder Member Obligations:
- Provide access to key personnel to discuss and advise on strategy.
- Share and review information on Use Cases/Connected Applications, Case Studies, market estimates and trends. (Cambashi will respect and not share private data with other companies).
- Participate in timely reviews of Cambashi deliverables.
Provisional IoT Observatory development timeline
| Phase | Cambashi | Timeline | Status |
| Market Segmentation | Discuss and then present segmentation | Aug/Sept 2018 | Complete |
| Initial Observatory design | Present design and logic | Nov/Dec 2018 | Complete |
| Webinars and Thought Leadership | Develop webinars and Thought Leadership; present to Founder Members and/or prospect groups | Sept 2018 Onwards | Ongoing |
| Prototype of Observatory | Research and produce prototype; present one-to-one | Q1 2019 | In progress |
| Version 1 of Observatory | Research and produce version 1; present to group | Q2 2019 | In progress |