The IoT Marketplace
Updated: Aug 12, 2020
An e-commerce portal is only one way to sell IoT solutions but democratization of IoT data using a marketplace opens up countless possibilities.
The idea of an online marketplace is to enable multiple producers and consumers to trade and transact on an online channel. Organizations that have their own IoT platforms can potentially create solutions in one or more industry domains and offer them on their own marketplaces. For instance, a Smart City IoT platform can have an e-commerce store for municipalities to purchase solutions like Smart Parking, Smart Lighting, Stormwater management etc. While these services are offered online, the overall experience is still of an e-commerce channel as against that of a marketplace. For it to become a marketplace, multiple partners and vendors must be enabled to become suppliers to offer IoT solutions in competitive and complementary ways.
Marketplaces themselves are multifaceted. The likes of AWS and Azure offer marketplaces that empower other organizations to create innovative solutions using their infrastructure and platform services. Such solutions hosted on the cloud provider’s marketplace offer a plethora of components and services for interested parties to consume.
Further, there are industry focussed marketplaces like those of Airbnb and Magicbricks where sellers and buyers are focussed on a single category of commodities as opposed to the ones like Amazon and eBay which are more general purpose where all kind of commodities are traded with multiple sellers and buyers and with a wide geographical presence.
Marketplaces have the ability to create new opportunities that current business processes of an industry find difficult to invent. With more and more organizations seeking efficient and innovative solutions coupled with technology providers moving towards vertical specific IoT offerings, myriad IoT marketplaces are set to be born, where suppliers and consumers can fulfil demand and supply needs in a self service mode. Some advantages of adding an online marketplace to an existing IoT platform are:
Creating an ecosystem of producers and consumers around business' core offering, to enhance their market presence
Pushing internal technology standards to become industry standards with wider acceptance
A big data aggregation and deeper analytics over customer behaviour, their preferences and responses to campaigns
More comprehensive solution space with offerings from partners
Targeted promotions based on analytical inferences
A well designed IoT platform makes it easier to implement a marketplace by providing efficient data stores, an API gateway, an analytics engine and a visualization portal.
A typical IoT solution involves elements like Connectivity, Data Ingestion, Processing, Analytics and Visualization as shown in the data flow diagram in this article but offering an online marketplace is a different proposition. It requires integration with many core IoT functions and also multiple other enterprise and sometimes external systems. A key component to enable such integrations is an API gateway.
An indicative architecture for Marketplace is like the below:
Key components of a solution marketplace:
It is a front facing portal that displays all solutions that are up for sale. The user interface consumes backend APIs exposed on the API gateway of the IoT platform. If we consider an example of a Smart city marketplace, this is where potential customer purchase solutions like waste management, smart parking, smart kiosks etc.
Pricing and Promotions:
This Pricing and Promotions engine manages a dynamic pricing model to sell services. Promotions like bundled solutions or reduced pricing for priority customers are handled here in this component.
As the name suggests, it manages the lifecycle of an order placed on the marketplace. It talks to pricing, shipping, inventory and other systems to fulfil the order. It needs to trigger the hardware delivery and provisioning and also the account creation and set up on the IoT platform
Many of the IoT solutions sold are based on subscription rather than one off purchase. Also, the operations and support is generally a subscription based service, which is managed here.
This is a customer relationship management tool that managed the lifecycle of all IoT customers. This function can be delegated to an already existing CRM in the enterprise or it can be an independent function built as part of the IoT platform.
Billing and Payments:
It manages billing, taxes, integration with payment gateway, and other financial transactions. In case it's a subscription based service, it needs to persist the card and bank details in compliance with the regulations.
Technologically, an API gateway is the most crucial component that brings an IoT platform to the fore of a marketplace. Not only does it expose the device data collected, it also brings together partners and independent vendors to offer their solutions on the marketplace. This creates an API driven engagement capabilities between multiple sellers and consumers, culminating into an API economy.
To have an e-commerce channel evolve into a marketplace, the strategy must support enabling multiple third parties that transact on products and services. One option is to create a solution marketplace which involves having your IoT platform expose underlying infrastructure, platform and/or core IoT services for other sellers to consume and create new innovative offerings to sell them on the marketplace. The other option is to create a data marketplace which involves exposing the device data aggregated and processed using APIs for the independent app developers to consume and create complimentary services on the marketplace.
Marketplace is a natural evolution for many organizations maintaining an IoT platform. For technology companies moving towards offering vertical industry specific, pre-baked solutions, an IoT marketplace enables them in setting and increasing adoption of technology standards across the industry on one hand and promote independent software vendors to contribute towards a more comprehensive solution set for that industry, on the other.
For large enterprises to build IoT solutions from scratch and forge partnerships with multiple players like connectivity providers, cloud infrastructure providers and analytics companies, is rather cumbersome. Most of these organizations want to pick IoT solutions off the shelf and extract business value out of this investment, with the advantages of quick time to market and reduced cost. Marketplaces, therefore, can be instrumental in scaling up sales and operations in almost all kinds of industries.