the role of software in hardware, equipment and machine OEM businesses
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Software will play the leading role in machine-equipment, device-focused systems, and OEM businesses. How players can participate in this rapidly evolving trillion-dollar opportunity?
What Are Smart Systems?
“Smart Systems” is Harbor Research’s term for the software-led future of machine-equipment, device-focused systems, and OEM businesses. It represents a new generation of computing systems and information architecture which—when combined with artificial intelligence, machine learning and Internet of Things technologies—is breaking away from today’s information, computing, and telecom (ICT) paradigms.
This break will enable intelligent real-world physical systems to be integrated onto networks, allowing the data from machines, sensors, video streams, maps, people, newsfeeds and more to become an integral part of all information systems. It represents a new paradigm that will drive the interactions of all those “information-objects” toward real-time, state-based, context-sensitive capabilities. Ultimately, it will integrate processes and knowledge to enable collective awareness and better decision making.
Software Tools Fall Short of Needs and Expectations
Multiple parallel technologies are increasingly reinforcing and accelerating one another. Cloud infrastructure, mobile and edge computing, machine learning, and IoT technologies are combining to enable previously unimagined capabilities for both the B2C and B2B worlds. And yet this new reality could be much farther along than it actually is. The reason? The world is still trapped in its own legacy systems.
The software tools we are using to make products “smart” were not designed to handle the diversity of devices, the scope of interactions, and the massive volume of data-points generated from contemporary systems. Each new device requires far too much customization and maintenance to perform the basic required tasks, and this dilutes an organization’s ability to manage its own processes intelligently. Today, software tools, frameworks, and platforms for Smart Systems and the Internet of Things are still a collection of yesterday’s technologies and architectures that fail to address the most basic development challenges.
The term “convergence” implies unification, but you wouldn’t know it from today’s rapidly evolving “Internet of Things” market—a fragmented landscape full of incomplete platforms, narrow point-solutions, and software incompatibility. Many companies are telling fantastic IoT marketing stories about what their solutions can do, but reality-on-the-ground is markedly different.
Many people take it on faith that the best possible designs for the future of software and computing systems will emerge from large IT, telco, or automation players. The truth is that these sectors have failed to keep pace with advancing technology and its potential impact on their constituents. During the last two decades, the world has become so dependent upon existing systems that most people cannot envision the future evolution of these technologies with a fresh set of eyes. Even in sophisticated discussions, the key enabling technologies of yesteryear are still viewed as inevitable and unquestionable.
The net effect of all this is that we’re building a huge collection of information-islands. Even if they remain in existence reliably, they are still fundamentally incapable of truly interoperating with other information-islands. This is the issue with all the so-called IoT platforms that have flooded the market. They are really “data traps.” We can create bridges between them, but islands they remain, because that’s how they were designed.
Harbor’s Smart Systems and IoT Software Research
When we use the term “Smart Systems” we’re referring to the future of all hardware, machines, equipment, computing and information. This future will require a remarkably agile global network that can comfortably scale to trillions of nodes—some of them hardware, some software, some purely data, many of them coming into and out of existence and changing location constantly. Obviously, such network systems cannot be “designed” in any ordinary sense. Certainly, they cannot be designed “top-down.”
And yet the Internet of Things must be designed in some sense. What will it look like, and how will it come about?
Our research on Smart Systems and IoT Software presents an important new perspective on software development tools and platforms that play a critical role in enabling these new solutions. Here’s a sampling of what we address in this report:
- The ongoing convergence and blending of mainstream software development tools and so-called IoT platforms;
- The required architecture and software technologies to inform a radically new view of data-driven application services;
- The corresponding business and revenue models these technologies will inform;
- The potential scale, scope and forecasted market opportunity;
- The rapidly evolving player landscape and what tech and market roles and relationships participants will need to address; and,
- Continuing market development needs and requirements for this opportunity to be fully realized.
How Should You Be Thinking About the Smart Systems and IoT Software Opportunity?
Software is undergoing a dramatic evolution. Today we have rampant containerization, the waning importance of specific coding languages, microservices that are available everywhere, and workflow-automation and low-code/no code development tools that are leveraging a new generation of lower-skill “citizen developers.” This enables very powerful self-built software solutions for end-users.
But it also creates great complexity for both traditional “old economy” OEMs and “new economy” software start-ups. Both groups are challenged for different reasons. For OEMs, it’s because software in general—beyond the code embedded in their equipment—is so foreign to their business models. For startups, it’s largely due to their lack of industry and domain experience.
Smart Systems and IoT software technologies have now evolved to the point that the scale, scope, and sophistication of the opportunity for both OEMs and new software startups is finally coming into view. But it will be achieved only by those willing to make the leap to the future.
Harbor’s new study of this phenomenon delivers a fresh view of the rapidly evolving landscape that executives in all the affected businesses will want to see.
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