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The Elastic Edge

It's Where Everything IOT Is Headed

 

Joseph Bentzel, Edgelastic

The need to embed realtime IOT interaction capability in every "thing"--from smart homes and smart factories to delivery drones, autonomous vehicles, and a new generation of industrial wearables--has created an imperative to re-invent computing at the IOT edge.

And it's not just edge device functionality that is expanding or being re-invented.

What we're seeing is the emergence and growth of true edge-native software innovation side by side with experimentation and adoption of edge-as-a-service (sometimes referred to as "thing as a service") experiences.

 

I call this convergence of edge platform innovation and "as a service" business models the elastic edge.

So what's accelerating the emergence of a new elastic edge? I pay attention to three things.

1. Edge-Native Platform Ecosystems are Happening

Think of the elastic edge as more than just "edge+cloud" (although that's definitely a part of it). Instead start thinking in terms of a new wave of "edge-native" software innovation.

In terms of the marketing issues associated with new category emergence in tech, it always helps your cause when a world class open source community jumps in to evangelize the development of your emerging category.

Relative to edge-native innovation, the Linux Foundation folks have recently unveiled the EdgeX Foundry initiative aimed at building "a common open framework for Internet of Things (IoT) edge computing and an ecosystem of interoperable components that unifies the marketplace and accelerates enterprise and Industrial IoT". This is potentially huge, and while it's a brand spanking new initiative, it's backed by Dell, a company to watch in IOT.

And speaking of edge-native platform ecosystem emergence, it certainly doesn't hurt when one of the leading venture capital firms in Silicon Valley showcases new market opportunity at the edge of the IOT, literally counterposing it to the cloud landgrab to underscore their point. If you're not familiar with "edge" as a market VCs care about, you'll want to get into and fully digest this presentation from Peter Levine.

The take-away. Edge-native innovation is real and getting more real by the minute. Can market landgrab economics and a wave of new edge computing startups be far behind? At Edgelastic, we're banking on it.

2. Edge IOT Monetization is Evolving to "As a Service"

Unlike earlier machine economy innovation waves, edge IOT will be seamlessly integrated into the app economy and be monetized "as a service" i.e. XaaS. So what does that look like?

In B2C, think something as basic as a sharing economy bike startup that integrates edge hardware and software into an end-to-end app/service experience.

In B2B, take a look at what's happening in the "cold chain", i.e. the transportation of refrigerated food and medicine, as innovators like Orbcomm leverage edge sensors, software, and networks to track and manage business critical "things" in real time.

What the fusion of IOT and "as a service" means for growth and customer adoption is not lost on subscription economy platform vendors, e.g. innovators like Aria--a company already evangelizing the trend they call "limitless monetization models" for IOT.

The take-away. Never forget that venture capitalists are in love with "as a service" and recurring subscription monetization models. These models help VCs gain clear visibility into business performance. Creatively applying these models to edge-native IOT will pay off when it's time to raise money.

3. IOT Marketplaces Provide Exposure to Startups

In both cloud and SaaS, marketplace models have been used by industry leaders to attract 3rd party developer partners who add value to the platform. Salesforce pioneered this with AppExchange. AWS took the same approach with its marketplace and improved on it, making it easy to add complex functionality with "one click".

IOT innovators are also leveraging this marketplace model.

Check out the ThingWorx marketplace and you'll see that real IOT industry progress is being made as systems integrators, ISVs, and others have engaged to add value to a top platform player.

And in B2C in the smart home market, we're seeing interesting new approaches for marketplace add-ons, e.g. the new Amazon 3rd party add-on marketplace for Alexa "skills".

The take-away. There are many ways to leverage self-service online marketplaces to drive growth.

Not familiar with self-service marketplace growth models?

Here's a piece I did on Medium on the topic of how startups can capitalize on marketplace models for traction.

Conclusion

IOT landscape trends are driving the emergence of a new elastic edge with open hardware "makers", open source software ecosystems, "as-a-service" business models, and 3rd party partner marketplaces providing a launchpad for startup innovation.

We'll be here helping good ideas get baked and good startups get traction.

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