The commercial market for platforms that develop and support the connected management of IoT applications is rapidly growing, according to a new report by VDC Research. VDC forecasts revenue growth will exceed 40% in the IoT Application Development and Deployment Platform (ADDP) segment as more companies recognize the need for third-party platforms to help jumpstart their IoT application creation and monetization.

Companies are struggling to keep pace with the expected rate of IoT change. As engineering organizations and enterprises pursue lucrative IoT service revenue opportunities, they also face decreasing time-to-market windows and project requirements that extend far beyond their internal skill sets. These challenges are driving a rapid expansion of IoT ADDP adoption and revenues that is drawing attention from larger vendors.

“Amazon’s recent acquisition of 2lemetry shows interest in the IoT application platform segment is not limited to development tool providers,” said André Girard, Senior Analyst of IoT and Embedded Technology at VDC. “Independent providers should plan for new competitors and potential suitors from a number of domains.”

Large IT vendors with extensive portfolios that include functionality on the periphery of IoT ADDP solutions risk missing early-mover recognition by failing to provide a focused and integrated solution with a clear marketing message. Companies that view the rapidly expanding ADDP opportunity as an adjacent market could come from across a broad supply-chain including providers of operating systems, semiconductors, telecommunication networks, computing hardware/modules, enterprise back-end systems, and other software solutions. VDC projects that more companies with deep pockets and expansive sales distribution will likely follow the lead of Amazon and PTC by entering the segment via acquisition in the next few years.

“As with other emerging tech opportunities, first-mover status can play an outsized role in a company’s success and valuation,” says Girard. “Nevertheless, some highly-leveraged companies failing to meet initial growth expectations may struggle to survive…or struggle to survive alone.”

About VDC Research

Founded in 1971, VDC Research provides in-depth insights to technology vendors, end users, and investors across the globe. As a market research and consulting firm, VDC’s coverage of AutoID, enterprise mobility, industrial automation, and IoT and embedded technologies is among the most advanced in the industry, helping our clients make critical decisions with confidence. Offering syndicated reports and custom consultation, our methodologies consistently provide accurate forecasts and unmatched thought leadership for deeply technical markets. Located in Natick, Massachusetts, VDC prides itself on its close personal relationships with clients, delivering an attention to detail and a unique perspective that is second to none.