There are rich pickings in security and data management for IoT platform service providers according to industry watchers at Beecham Research.
"Due to the growing complexity of IoT applications and trend to consumer-driven, multi-service environments such as smart cities, cars and homes, there is a growing need to manage edge devices - such as sensors, switches, smartphones and tablets - connected using a variety of short range wireless and fixed line technologies," said Saverio Romeo, principal analyst at Beecham Research.
"With this pace of change, companies will increasingly rely on outsourcing and we expect that revenues from device authentication, device management, data management, billing and security will exceed $3bn by 2020. And out of these, we see security and data management services generating some $1.8bn alone."
Data management for IoT is currently a small market, but Beecham Research believes that it has the most potential for high gross margins.
"While many market players still see security as a cost rather than a business opportunity, this is changing and we see IoT security providers offering high value, end-to-end security to service and application providers," added Romeo.
He also pointed to authentication, device management and billing/charging as leading indicators of the growth potential for enabling services in an IoT environment.
Robin Duke-Woolley, CEO at Beecham Research, added: "We see many changes in requirements for these enabling services in the IoT market now compared with just a few years ago. Our current research is assessing the impact of this on the connectivity services layer, the application enablement layer, and on other services that span both these."