IoT cloud service should be left to the third party providers

Xing Yan / VP of Gizwits / 2015-08-17

There are two types of founders of smart hardware products startups: traditional electronic hardware engineers with little experience in software development, and Internet software engineers with no knowledge in hardware. Smart hardware, on the other hand, is an industry combining both hardware and software. Entrepreneurs are likely to find it frustratingly inefficient if they decided to do everything on their own.

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It is fair to say that the smart hardware industry took off in China in year 2013, when wearables such as smartwatch and smart band inundated into the market. Previously, domestic smart hardware products are mostly made for export. Smart home appliances design could only be found in conglomerates such as Midea and Haier. Start-ups of smart hardware sprang up shortly afterwards, while appeared to be unprepared for the market. In contrast, smart hardware market in the US in 2013 has already entered its prime stage, with best-selling products like Nest.

China is a huge electronics manufacturing country with a vast amount of talents with ample knowledge in embedded technology. We can often see elite engineers with rich work experience in multi-national enterprises. However, an organic firm cannot make its living on only one type of smart hardware. It is commonly seen in the China market that when a new product released came into the market, imitation ensues. Entrepreneurs need to think hard of how long a company can survive with the support of only one signature product. It is requisite and almost inevitable for a start-up to take stock of the business environment, business model and product life cycle.

Take sporting equipment as an example. In an industry where a mature business model is consisted of hardware plus service, most of the companies are only selling a single product. Critical data, gathered from a great amount of fascinating health management products such as sporting band, health cup and electronic scale with brilliant design and function, have been largely undervalued as they are only used for social interaction. Selling a tangible product is not enough to bring robust growth. The business mode can be more persuasive if incorporate in the service of health management.

Manufacturers of sporting wearables can conduct analysis of user behaviors through a cloud health management platform. They can come up with more precise information of the physical condition of users with integrated data and upgraded algorithm. As there are more commercial value to the product, users are willing to pay for health services with higher added-value.

When the connectedness of smart device reached a certain degree, sub-sector apps and services are likely to emerge and raise the commercial value of hardware products through big data analysis on the cloud computing platform. Users can also enjoy services with higher added-value through connected infrastructure.

Specifically, smart hardware development goes through three stages. Stage I is for hardwares having access to the Internet, distant upgrade and management and third party social media accounts (WeChat, Weibo, etc.) Stage II is where hardwares of different brands getting connected through cloud computing technology. In Stage III, the entire Internet of Things will be connected as an organic eco-system after monetizing the value of products through data collecting and Big Data analysis.

Making good use of the product value is a critical premise to data analysis and providing sub-sector services to users. It is achievable with the participation of experts in different verticals. For instance, a smart golf club can collect data of the user’s angle, pace and dynamics when hitting the ball, and provide tips on the basis of results.

The industry is currently at the primary stage of smart hardware development, with the technology being largely underdeveloped and insufficient internet accessible device. It is not yet clear as to what and how to do with the data collected from smart hardwares through public cloud service. It is particularly true with start-ups who invested a lot of resources in cloud service, with only little time to push through due to huge market demand.

Industries empowered by specific expertise require the participation of professionals. In the United States where market industrial chain is rather well-developed and cloud computing starts as least two years earlier than China, it is a market normal for third-party cloud service platform providing professional services. Smart hardware companies rarely establish its own department in doing cloud computing. Gizwits is the service provider for global clients including AO Smith. There are about 5 third party Internet of Things cloud computing platform enterprises with stable growth finishing third round funding.

Gizwits is one of the largest professional Internet of Things cloud computing technology company with years of R&D efforts in software development. Based on what we’ve accomplished, we announced the smart hardware automatic development platform in providing tools and technological support to hardware startups for free. Thus, the product can be sold on the market with shorter development cycle, thanks to faster access to the Internet and cloud service. We will talk to the company management about its business model once the product has gained certain traction. Hardware startups can focus on working towards product differentiation by choosing development tools and cloud services readily provided.

There are roughly two types of founders of smart hardware products startups: traditional electronic hardware engineers with little experience in software development, and Internet software engineers with no knowledge in hardware. Smart hardware, on the other hand, is an industry combining both hardware and software. Entrepreneurs are likely to find it frustratingly inefficient if they decided to do everything on their own.

Not only so, smart hardware cloud is composed of technologies such as cloud structure, data analysis, cloud security that needs the support of expertise, something that most of startups are in short of. Startups should wholeheartedly commit themselves in better hardware design and functions, rather than building their own cloud computing platform. For independent third party cloud service platforms, they ought to work out an integrated ecosystem that offers more Internet access to startups and connects products from all dimensions.