As companies continue to embrace a software-centered world, what are the top trends for the year, and what can we expect for connected device management in 2023? The company behind Mender, Northern.tech CEO Thomas Ryd shares his insights from conversations with the world’s leading organizations.
From top energy service providers in the United States to automotive OEMs in Europe, Thomas spends the year engaging with and guiding customers, key industry opinion leaders, and ecosystem partners. The IoT device management industry is quickly maturing from an embryonic stage to the maturity seen in the well-established data center world; and Thomas sees this clearly from the questions being asked and topics raised. Here are the top five trends based on Thomas’ observations from these conversations.
Trend #1: Integrating all into one
Organizations are taking the strategic direction of integrating everything into a single manageable product, as you can read about in this case study . This approach is a natural evolution as it reduces the number of parts and processes that they need to source and manage. Everything becomes simpler by integrating this type of service into one product.
Case in Point: Across industries, companies still rely on some traditional products not natively ‘smart’ or connected. But they want to make them smart by adding software capabilities as a means to extract the data that their machines are producing. Once that data is accessible, companies can transfer it to the cloud, make mobile applications based on it, and deliver dashboards and analytics to other business stakeholders and support functions. Armed with this data, additional services and insights can also be offered to customers or partners.
To first extract the data from traditional systems, organizations typically develop a gateway box and connect it to the main product, creating a bridge between the device and the cloud backend. Once up and running, companies often realize a more efficient solution is to actually integrate the gateway inside the product.
Realizing the promise of IoT through data insights, companies are making the strategic decision to fully integrate the gateway box seamlessly into the product instead of an external peripheral. It is a journey from having nothing in terms of connectivity, to a gateway-product connector, to a gateway fully integrated into the product. Once the embedded integration occurs, the desire to update the smaller connected devices, such as MCUs and ECUs, inside the product often emerges. The end result is a fully integrated, software-driven solution with the ability to update, configure, and troubleshoot everything on the device.
At this point, the organization has become much more mature on the journey of product digitalization. And from this point onwards, creativity and innovation can kick into full throttle. A shift from ‘how’ to ‘what’ means the software is now free to be used to dramatically improve the utility of the product. The software becomes a truly integrated part and the key driver of future product value. This is the first trend happening across industries.
Trend #2: Security remains in the spotlight
In the early days of digitalization, the focus was on successfully transferring data from the edge to the cloud and creating dashboards for analysis. Once these promises were fulfilled, security came into play, often as an afterthought. With the continued rise in cyber attacks, this year saw more questions asked about security than ever before. As with other technological evolutions, the initial focus is on getting the core objective, IoT infrastructure, simply to work. Then, the larger considerations came into view.
Customers at the more mature end of the spectrum start to ask about establishing a source of truth and creating a chain of trust between devices and the cloud. Having advanced in their IoT journey, these companies are starting to think much more about system management and security.
First of all, they have to get everything working at a base level from device hardware and software backend. Then, when everything is functional, having reviewed the next-generation situation, the realization is made that security and the device lifecycle have to be looked after. In today’s digital world, security cannot be an afterthought. As such, mature organizations are embracing security-by-design, where security is embedded throughout the process, at every stage and scale. It is just not enough to encrypt everything; a source of truth is required and best practices in security need to be adopted, such as software-based key management and rotation or hardware-based keys (HSM and TPMs). While unfortunately still popular, the worst-case scenario is manual acceptance of devices or shared keys among devices. Security remains a top concern for business executives, and rightly so.
Trend #3: Managing volatility in supply chains & resources
Many project delays occurred due to the lack of components. In recent years, the world has experienced the fragility of the supply chain; in some manner, it is broken. Organizations large and small are feeling the delays with some finally receiving their shipments of embedded components after a 12 up to 16-month delay.
At the same time, with the current recession risks, many new IoT projects are at risk of being put on hold. In an expected recession, organizations often want to tighten their belts and save money. With this, the aspiration for greenfield projects may take a hit when enterprises scale down.
IoT can help businesses save money in the long term, such as through process improvements and optimization during a scale-down, but it takes great courage to invest and divest at the same time. The onus will be on the industry to continue to measure and articulate the business value of investments in IoT infrastructure so that executive management can comprehend the upside and tolerate the risks involved.
Despite the continuing volatility, organizations are getting the hardware they need for their IoT projects in the end. Hardware vendors are working in more agile and smarter ways to deliver for their customers and are changing hardware configurations depending on component availability as Variscite CEO Ohad Yaniv explains in this article . IoT vendors will also have to help their customers find benchmarks on how IoT investments can deliver business value, so they are better equipped with the business cases needed to secure corporate funding for their projects.
Trend #4: Increased awareness of vendor and supplier lock-in
System management requires resilient partners that will not sunset critical products or offer an open source code continuity path. Recent situations, such as the planned sunsetting of Google IoT Core , have made organizations wary of vendor and supplier lock-in. The ease of use of a large IoT platform may have made it look attractive to companies, but the trend is moving towards organizations designing their own IoT platform infrastructure. They will be inclined to do this with open source-based software and open core business models where they need hosting or managed services with the reassurance to move back to the open source code and avoid vendor lock-in if their relationship with the vendor changes or their technology roadmap changes direction. Open source software adoption is growing rapidly as more organizations seek flexibility, security, and transparency. A survey of 2660 open-source software (OSS) professionals by OpenLogic and the nonprofit Open Source Initiative (OSI) found that 77% of organizations were more reliant on open source software than they were 12 months ago, with 36% reporting they had increased their use of open source “significantly”.
This trend seems to continue as the industry matures and organizations learn more about vendor lock-in, opting to become more digitally native.
Trend 5: A hybrid infrastructure world like the data center
Enterprises today live in a hybrid world of public cloud and on-premise servers. Edge device infrastructure will be the same. There will be a mix of platforms and technologies, albeit much more commoditized and standardized than what is the case today. A large-scale Enterprise should not design all its systems around only one platform because it will lock the enterprise and inhibit its freedom to operate, innovate and achieve favorable commercial terms.
Fewer enterprises will make strategic decisions to go all-in with one provider. Multiple ways of onboarding devices, performing authentication, and authorization will be used going forward. Each will require adaptation into a heterogeneous system design. A strong attachment to one particular tech stack, one provider, or one platform will be counter-intuitive to this growing need for flexibility.
Thanks to Moore’s law, technology is commoditized. This means, with time, there are fewer and fewer esoteric technology stacks. In the data center world, there used to be Solaris, HP-UX, Aix, Windows, and Linux. Today, there is only Linux and Windows (and the never-dying main frame). There used to be a myriad of proprietary storage solutions, but today commodity storage is mostly used. There used to be proprietary network solutions, but commodity networks are about to take over. Software-defined networks and software-defined storage are enabling commodity hardware aided and abetted with powerful software applications to perform on par with the legacy higher-priced proprietary products. Albeit now at a much lower price.
In the world of IoT, there is currently a plethora of hardware and shoehorned software solutions. This will further change, and we will see more standardized stacks, as has happened in the data center. Large vendors cannot continue to push cumbersome and rigid software solutions without offering any APIs or integration points. It is a question of time, not because it is IoT, but because it is technology, and technology commoditizes over time.
Public cloud platforms can lock customers in through strategic agreements offering suite-related benefits at scale and complete product offerings. However, due to mergers and acquisitions, companies end up buying companies on another public cloud platform. Most Fortune 2000 enterprises suffer from an inability to move 100% of their workloads to the cloud, and they must retain certain on-prem instances. The reality is that Fortune 2000 companies operate in a hybrid, commoditized world. The same will hold true for IoT.
Considerations for 2023
The industry continues to mature. As enterprises transition from legacy and traditional views towards a digitally native, software-focused perspective, their underlying operations, processes, and infrastructure will follow suit. And within this evolution, the industry will start to see greater standardization and commoditization as well as emerging best practices.
Next year will be another important step forward in the world’s digitalization journey.
Learn more about IoT and device management across industries
Feature: Check out the ebook on IoT device management in the medical industry. Learn more about how connected devices and OTA software updates enable innovation and improved patient care in clinical and hospital settings.
Lead illustration: Freepik