10 Hot IoT startups to watch

With 20 billion internet of things devices online by 2020, the challenges and rewards are great for the top 10 startups hoping to capitalize on connected devices.

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The Internet of Things (IoT) promises to make machines smarter, industrial processes more efficient and consumer devices more responsive to our needs. According to research firm Gartner, there will be more than 20 billion connected things in use worldwide by 2020.

But these constrained devices often run on woefully out-of-date software that must be manually patched and upgraded; the market potential is enormous, but so are the risks.

Figuring out successful IoT business models is still a work in progress, and many are trying. We’ve looked at a large sampling of companies that have formed to work on these problems and pared the list down to 10 that warrant special attention. (See how we did it.)

Collectively, the startups featured in this roundup have raised nearly $150 million in venture funding to chase IoT opportunities and tackle the risks. FogHorn Systems ($47.5 million), Armis ($47 million), and AlertMedia ($17 million) have the deepest pockets. At the other end of the spectrum, the rest of the startups have locked down funding in the $3million to $11 million range, enough to provide plenty of runway to get a product to market.

These hot startups offer everything from enterprise emergency notification systems to smart manufacturing platforms to “virtual chips” that add security to any connected device.

AlertMedia

What they do: Mass-notification platform for the enterprise

Year founded: 2013

Funding: $17 million

Headquarters: Austin, Texas

CEO: Brian Cruver previously co-founded and CEO of Xenex, a company that develops germ-fighting robots that help hospitals prevent infections. Cruver also authored Anatomy of Greed, his firsthand account of Enron’s collapse.

Problem they solve: Large organizations face numerous threats to their people, assets and operations. When an incident occurs, the faster you can react, the more likely it is that you can minimize losses. Delayed awareness and slow response time can be costly in terms of production, profitability, reputation and the health and safety of employees.

Despite waves of automation elsewhere in the enterprise, emergency response is still a manual, reactive and often much-delayed process.

How they solve it: The AlertMedia platform connects enterprise sensor data, system data, location data and employee smart devices together to create a single multi-channel critical communication platform.

The AlertMedia platform collects signals from gauges, vehicles, GPS locators, etc., and converts those signals into meaningful 24/7 communications. AlertMedia minimizes disruption to the business while keeping employees safe and informed. 
AlertMedia helps its customers contend with a variety of emergency situations, such as severe weather, security threats, fires and power outages. But it also helps with more mundane emergencies too. For example, AlertMedia says that it is currently being used by a large restaurant chain to monitor temperatures in their refrigeration systems. When temperatures are outside a specified range, the system triggers notifications to the restaurant’s response team, preventing significant inventory losses. 

Competitors include: Everbridge and OnSolve
Customers include: AT&T, Volkswagen, DHL, Greyhound, Kawasaki, The Salvation Army, British Petroleum (BP), H-E-B Grocery Company, State of Texas and New York City

Why they’re a hot startup to watch: Unless you’re a global-warming denier, it’s clear that the market for emergency services will only rise in coming years. AltertMedia’s system, however, doesn’t just help during natural disasters. To return to the restaurant example, a power outage or a compressor failure that ruins enough inventory can be an equally crushing blow to a business’ bottom line.

AlertMedia says that it has 500+ enterprise customers located in 90+ countries around the world, including multinationals AT&T, BP and Volkswagen. With $17M in funding and a leadership team that features serial entrepreneurs who have founded other successful startups (Xenex), achieved successful IPOs (Demand Media), and guided a startup to a successful acquisition (Adometry, acquired by Google), AlertMedia is well-positioned to take advantage of this land-grab opportunity.

Altizon

What they do: IoT platform for smart manufacturing

Year founded: 2013

Funding: $5 million

Headquarters: Scotts Valley, Calif., and Pune, India

CEO: Vinay Nathan. Prior to founding Altizon, Nathan was Head of Sales, North America and APAC, for Persistent Systems.

Problem they solve: Manufacturing CIOs are looking for ways to implement Industry 4.0 technologies, hoping to leverage things like deep learning and Big Data to improve operating efficiencies and to enable new business models.

In many factories, machines are already technically capable of communicating with one another, but the data they generate still requires plenty of human intervention before anything can be done with it. A lack of real-time visibility into machines, assets, and factory operations limits manufacturers’ ability to make informed, data-driven decisions and move beyond reactive fixes to predictive planning based on real-time machine performance trends.

How they solve it: Altizon’s goal is to help manufacturers revolutionize their shop floors using edge computing, sensors, Big Data, machine learning, and enterprise-ready integrations. Altizon’s IoT platform, called Datonis, consists of three main components: Edge connectors, the core Datonis IIoT backend platform, and a Manufacturing Intelligence component.

Datonis Edge provides connectors to common connectivity protocols, such as OPC-UA, Modbus, Bluetooth, and Wi-Fi, so devices can quickly connect to a manufacturer’s network. The Edge is built as a store-and-forward system and has a built-in cache for storing messages when offline. The Edge also uses data batching, compression, and various other techniques to ensure that it can deal with limited network data bandwidth. The Datonis Edge can also process and analyze sensor data on the edge, ensuring that only relevant data is transmitted back to the main platform.

Altizon’s Datonis IIoT software platform integrates connected devices within enterprise IT, connecting industrial assets and IoT software applications over a hybrid infrastructure. It uses Big Data and machine learning to help manufacturers get the real-time visibility they need to determine the effectiveness of their production system environments, predict their throughput, optimize their energy use, and make quality improvements. Features include device management capabilities, stream analytics, and customizable alerts and notifications.

The Datonis Manufacturing Intelligence (MI) component provides connectors to integrate plant data from a factory’s disparate plant-floor systems. Businesses are able to compile data from machines, existing SCADA and DCS systems, Enterprise Data Historians, and Manufacturing Execution Systems into a single repository that provides a unified view into all manufacturing operations data.

Datonis MI helps manufacturers define and track KPIs that are relevant to plant operations, while integrating those insights into business systems like ERP, CRM and Enterprise Planning and Scheduling systems.

Taken together, these tools help manufacturers build an intelligent connected ecosystem that spurs the flow of machine and enterprise-systems data for measurable business improvement in manufacturing.

Competitors include: C3IoT, Cisco Jasper, GE Digital Predix, PTC ThingWorx, Siemens Mindsphere, Xively, and Cumulocity.

Customers include: Varroc, CPG Company, and Prayas.

Why they’re a hot startup to watch: With $5M in VC funding, several named customers, and more than 150 implementations worldwide, Altizon has the resources to give the Datonis suite a fighting chance when going up against incumbents and major multinationals, such as PTC, Cisco, and GE. Moreover, the startup’s senior team has the right mix of backgrounds to bridge the IT-industrial divide, having gained relevant leadership experience at Persistent Systems, BMC, Storability, Sun Microsystems, Bladelogic, Rockwell, Siemens, and others.

Armis

What they do: IoT security

Year founded: 2015

Funding: $47 million

Headquarters: Palo Alto, Calif.

CEO: Yevgeny Dibrov. Prior to co-founding Armis, Dibrov was the first hire at Adallom, a cloud-security company. He began as a product manager and finished as the head of global business development when the company was acquired by Microsoft for $320M.

Problem they solve: Gartner estimates that there will be more than 20 billion connected things in circulation by 2020. With this many connected devices in circulation, any notion of a network/security perimeter becomes obsolete.

According to Armis, the new wave of connected devices comes with three distinct security challenges. First, many devices are now designed to automatically connect to the internet or other devices, meaning they’ll often bypass security by default.

Second, most of these devices are not designed to allow upgrades to their limited operating system or firmware, making vulnerabilities a major issue. Finally, most of these devices have no inherent security, nor, due to memory and processing constraints, can you put any anti-malware or security agents on them.

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