From where IT professionals sit, these are early days for industrial IoT. Still, the software, hardware, and network ecosystem required for delivering on the promise of IoT will eventually transform the way enterprises think about running everything. Here are four cloud-based industrial IoT startups worth knowing.

Charles Babcock, Editor at Large, Cloud

August 16, 2016

13 Min Read
<p align="left">(Image: mangpor_2004/iStockphoto)</p>

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Who are the most promising internet of things (IoT) startups? Venture capitalists, sensing the opportunity, are looking for companies to invest in. Millions of dollars are available for technologies with a track record and a good idea. One particular area of interest for us here at InformationWeek is the activity around cloud-based industrial IoT platforms.

From where IT professionals sit, these are early days for industrial IoT. Still, the software, hardware, and network ecosystem required for delivering on the promise of IoT will eventually transform the way enterprises think about running everything.

Industrial operations, supply chain, commerce, and customer service are some of the enterprise environments expected to be dramatically transformed by IoT.

Ultimately, the ability of IT to effectively use industrial IoT technologies in the enterprise will depend to a great extent on the platform used to develop the software used to manage operations -- and whether that platform lives on-premises or in the cloud.

Various analyst groups have produced estimates about future revenues tied to IoT -- each one larger than the last. Machina Research upped the ante last week, predicting IoT would be a $3 trillion market by 2025.

[Want to see how the Internet of Things is being put to work? Read GE Uses Machine Learning to Restore Italian Power Plant.]

Another development helping to drive market speculation was SoftBank's purchase of ARM, a major supplier of low-power chips used in the iPhone and other smartphones, for $32 billion.

In a prepared statement announcing the deal, SoftBank's CEO Mashayoshi Son said ARM was "an excellent strategic fit as we invest to capture the very significant opportunity provided by the Internet of Things."

Here, we examine some of the emerging IoT companies aiming to create the cloud-based platforms they hope will serve as the basis for industrial and enterprise IoT deployments. We'll make comparisons to C3 IoT, a Redwood City, Calif.-based startup, whose early traction with utilities provides an important indicator of where industrial IoT platform startups might focus their energies.

C3 IoT

C3 IoT, a small firm of 105 employees, generated revenues of $38 million in its last quarter -- its first of the 2017 fiscal year. The company is analyzing the grids of 20 public utilities, helping them match generation to customer demand, and realizing other diverse benefits from that instrumentation.

In an interview with InformationWeek, Tom Siebel, the former Siebel Systems founder who is chairman and CEO of C3 IoT, said a utility armed with the new data can tell who on its distribution network is bypassing the meter and stealing electricity, a bit of intelligence that every utility wished it had.

Figure 1: (Image: mangpor_2004/iStockphoto)

(Image: mangpor_2004/iStockphoto)

Energy thefts occur more frequently than the average customer might think -- an average of $10 per meter per utility -- and that's a loss that utilities would like to recover, Siebel said in an interview.

Siebel funded C3 Energy, its predecessor, by sending out an email on a Friday in December 2008. By the following Monday, he said, he had commitments for $20 million, and C3 was off and running.

He has added money from his own $1.9 billion software fortune to fund the company to this point, and told us the firm is now a "cash positive" business able to fund its own expansion. He said he expects it to be profitable within three years.

There are several other IoT startups working on cloud-based industrial IoT platforms to compete with Siebel's firm, which is considered by most research firms to be a current leader in the industrial IoT market. Each of the companies featured here is producing a platform for developing software to collect

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data and manage the many "things" that make up the internet of things. With the different approaches taken, one or more of these startups could become a challenger for C3 IoT, or a serious market contender in its own right.

Uptake.io

Uptake, based in Chicago, employs more than 300 software engineers, designers, and data scientists to provide custom IoT applications for its customers. Like C3 IoT, Uptake is focused on building a cross-industry platform with an emphasis on predictive analytics, and it has found an early customer in Caterpillar.

Harbor Research, in a July report, called Uptake "a threat down the road from a product development standpoint" to C3 IoT, and declared it "a key competitor to watch."

Founded in 2014, Uptake got traction in the marketplace when Caterpillar became an investor, as well as a customer, in March 2015. Uptake has raised $45 million in less than two years. According to Harbor Research, Caterpillar "relies on the Uptake platform to provide its smart services offerings."

Nevertheless, Harbor analysts Alex Gaser and Glen Allmendinger concluded: "At present, Uptake is significantly behind C3 IoT in terms of customers and scale of deployments."

Forbes wasn't as pessimistic when it named the "nearly unknown" Uptake as its hottest startup of 2015 in December, noting it was already valued at $1.1 billion.

As C3 IoT has done, Uptake is working directly with a customer-partner to improve its platform. In a March 5 press release announcing its minority stake in the startup, Caterpillar noted it "will collaborate with Uptake and the Cat dealer network in the coming months to roll out the latest predictive analytics and insights through web-based and mobile tools... "

According to an article in ConstructionDive.com, a construction industry newsletter, Uptake could become the supplier of IoT software to "equipment manufacturers in the construction, aviation, mining and rail industries to create software as a service products that stream sensor-based performance and maintenance data to users."

Blue Pillar

Indianapolis, Ind.-based Blue Pillar takes all the data on energy delivered to a large, complex facility -- such as a modern hospital, an Army base, or telecommunications supplier -- and loads it into its Aurora Platform for analysis.

Where C3 IoT is concentrating on the big picture of utility operations, Blue Pillar wants to focus on the smaller picture of "microgrid" operations within a company. It collects data at the utility supplier meter and puts sensors on all other sources of electricity generation, such as the emergency backup generators and their batteries, or a solar panel array on a building.

Figure 2: (Image: aydinmutlu/iStockphoto)

(Image: aydinmutlu/iStockphoto)

In an interview with InformationWeek, CEO Tom Willie said microgrids don't really exist, because companies have only rudimentary means of collecting data on their primary energy usage equipment, such as heating, air conditioning, lighting, and emergency backup systems. The main source of such data today is "somebody walking around with a clipboard recording a few meter readings," he said.

Blue Pillar collects data on power entering a facility from the utility grid and combines it with data from sensors placed on all sources of internal power generation. It then builds a local wireless network to collect the data and feeds it into a gateway.

[Learn about these 10 tips for successful IoT projects.]

The gateway switch relays the data to the Blue Pillar Aurora platform running on Microsoft's Azure cloud, where it can be analyzed. The data can also be held on-site, as some large customers prefer, where it can be routed to an on-premises server with Aurora and its applications running locally.

Originally, Blue Pillar started as an automated system for tracking and checking on emergency backup diesels and their batteries and fuel supply in locations where such systems are mission critical-components, such as a telecommunications data center, an armed services facility, or a hospital.

"A backup diesel or natural gas generator is mostly idle. Utility outages are not that common," Willie said. Consequently, facilities managers are rarely confident they can count on their backup equipment within the split second it will be needed in the case of a major power failure.

According to an article in Engineering.com, Blue Pillar automates the testing of such systems, monitors their fuel supply and battery power, and combines their output with any other sources of generation available on site, such as wind or solar.

For such sites to have energy resiliency, they also need to test their energy transfer switching, which substitutes one source of power for another. Blue Pillar's application can provide such testing as well.

Blue Pillar's customer base includes 200 hospitals and the US Army. It can expand its scope in the future to similar power management for a facility's consumption -- specifically identifying how much power each piece of equipment is using helping to spot where can savings be realized, Willie said in our interview.

However, the company does not have a timetable for doing so right now.

Blue Pillar has raised $27 million in venture funding from investors such as Claremont Creek Ventures, Arsenal Venture Partners, Allos Ventures, and OnPoint Technologies -- the venture fund of the US Army.

Douglas Davis, senior VP and general manager of the Intel Internet of Things Group, recently joined the Blue Pillar board of directors.

Carriots

Carriots, founded in 2011 in Madrid, is a spinoff of the machine-to-machine division of Wairbut, a Spanish engineering consulting firm. While not much is known about Carriots in the US, it's working with Cisco as a partner in Europe to build out a platform and network of connected devices with some similar goals to those of C3 IoT.

It also lists Microsoft Azure and the IBM Intelligent Operations Center for SmartCities as partners. Carriots has produced an IoT platform-as-a-service for developing IoT applications, and it's hosted a platform for running them.

Market research firm Lux Research lists Carriots as a competitor to C3 IoT. It is privately held and has

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been funded by the Suez Environment Group venture capital firm, as well as the Centre for the Development of Industrial Technology -- the venture capital arm of the Spanish government.

In addition to Cisco Systems, Carriots's customer base includes Fortune 500 companies ArcelorMittal, and Enel. Its website doesn't say exactly what it is doing with Enel -- a large public utility based in Rome that manages distribution networks in Italy and Spain. Its name stands for National Entity for Electricity, and it's a customer associated with C3 IoT as well.

Carriots has built a cloud-based IoT development platform with a central device control panel. Developers can use Groovy to connect devices to the platform and build simple data capture and analysis applications.

In C3 IoT, by contrast, developers start out with JavaScript to tie devices to the network, and can work with various languages to build applications. Both platforms provide rules engines, and both offer open APIs for third parties to connect applications as well.

Carriots has spent four years building its platform. It received a Series B round of funding in June 2015. In a prepared statement announcing the funding round, CEO Miguel Castillo said:

Carriots has passed many different tests as our clients demanded more services and more capacity. We now have a powerful tool that dramatically reduces times of development and costs for companies building connected products for the IOT.

Figure 3: (Image: Maxiphoto/iStockphoto)

(Image: Maxiphoto/iStockphoto)

Carriots was one of two IoT startups mentioned by Lux Research analyst Isaac Brown in a May 2016 report on GE Predix:

Carriots and Particle are both small IoT Platform startups with minimal market penetration ... Carriots and Particle have 200,000 and 130,000 devices connect to their respective platforms.

GE Predix is aiming for 500,000 connected devices by the end of 2016; C3 IoT, in contrast, claims 70 million devices connected to its platform.

[Want to see what GE is up to with Predix? Read GE Supplies IoT Developer Kit for Predix.]

Lightpad

If Carriots is little known in the US, even less is known about the potential platform that could come with Lightpad, a Chicago-based startup still in stealth mode.

"We'll be sharing our vision in the Summer of 2016," is the message that greets visitors to the Lightpad website. However, enough is known about the company to consider it a potential industrial IoT application platform provider, albeit with a different angle from the likes of C3 IoT, Blue Pillar, Uptake, or Carriots.

Lightpad was founded Mike Lombardi, a former top Motorola engineer. It boasts a team of Motorola engineers working on its platform, Lightpad aims to bring a consumer-like experience to industrial IoT, according to Chicago startup newsletter ChicagoInno.

Lombardi oversaw the development of the Moto X smartphone at Motorola, and now he's working with the Lightpad team to bring "incredible attention to detail in design and user experience," according to the Lightpad website.

Lightpad keeps appearing on lists of top IoT startups in the Chicago area, though no one seems quite able to explain what it's doing. It appears Lightpad plans to connect devices in the home to provide applications that can manage them. If consumers can make it work in the home, businesses may find that it's useful for connecting devices behind the firewall as well.

The company announced it will come out of stealth mode this summer, but Labor Day is fast approaching. Will Lightpad keep to its schedule or delay?

What's Ahead?

In our view, the growth of industrial IoT will depend on the ability to settle upon standardization of development platforms, APIs, and networks in order to create an ecosystem that extends beyond corporate walls or national borders.

We're in the build-out stages of what will prove to be a transformative era of technology in the years ahead, one in which we'll see major strides taken in software development, automation, analysis, cloud-based ventures, and network advancement. The startups featured here make up one part of the overall potential we see for industrial IoT.

IT professionals are facing a steep learning curve as they look to incorporate industrial IoT into their operations, and there's no time like the present to begin the education process.

If you're currently working on industrial IoT developments, we want to hear from you. If your organization hasn't yet begun exploring the potential of IoT, tell us why. We can all learn from each other, so let's meet up and talk about it all in the comments section below.

About the Author(s)

Charles Babcock

Editor at Large, Cloud

Charles Babcock is an editor-at-large for InformationWeek and author of Management Strategies for the Cloud Revolution, a McGraw-Hill book. He is the former editor-in-chief of Digital News, former software editor of Computerworld and former technology editor of Interactive Week. He is a graduate of Syracuse University where he obtained a bachelor's degree in journalism. He joined the publication in 2003.

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