Cloud hyperscalers & AI integration reshape IoT market outlook
New research from IoT Analytics indicates that the Internet of Things (IoT) platform market is now dominated by cloud hyperscalers as the industry focus moves toward integrating artificial intelligence.
IoT Analytics' latest analysis, compiled in the IoT Platforms Market Report 2025–2030, reviews the evolution of a market once expected to reach a potential of USD $11 trillion. Despite rising adoption during the past decade, this potential has not been fully realised, and the IoT platform sector has undergone significant consolidation.
Industry consolidation
The report details the transition from a market with over 600 vendors to one today led primarily by large cloud providers. IoT deployments have proven to be complex, limiting the scale of implementation and reducing the number of players capable of maintaining market relevance. According to the research, the market for agnostic IoT platforms in 2025 is concentrated among a small group of hyperscalers, with companies such as AWS and Microsoft holding significant positions.
The analysis suggests that horizontal IoT platforms have struggled to provide clear tangible value to many end users. This challenge has led to what IoT Analytics calls a shift from a potential "blue ocean" market opportunity to a "red lake," characterised by intense competition and limited growth avenues.
IoT Analytics highlights that the anticipated USD $11 trillion opportunity for 2025 has not materialised as forecast, with several market players exiting the space. One example noted in the analysis is Google, which ended its IoT platform efforts in 2023, illustrating the difficulties faced by technology giants in this sector.
Focus on AI integration
Knud Lasse Lueth, CEO at IoT Analytics, comments that "The IoT platform market never lived up to its early promise of becoming the 'Google for connected devices,' and the much-cited $11 trillion opportunity was never fully unlocked. Between 2015 and 2025, adoption advanced but complexity and unclear ROI turned a once blue ocean into a red lake, prompting high-profile exits such as Google in 2023. What remains is not a dead market but a reshaped one, with AWS and Microsoft dominating and real value shifting toward device management, data harmonization, OEM-specific workflows, and the convergence of IoT with AI."
The report identifies AI integration as a significant area of value within today's IoT platform market. Ongoing trends suggest a growing emphasis on the convergence of IoT data with artificial intelligence to deliver new business capabilities, such as advanced device management and data harmonisation.
As a result, companies operating within this reshaped market landscape are placing increased focus on services that go beyond general-purpose IoT platforms, developing OEM-specific workflows and tailored integration between devices and business processes.
Market outlook
IoT Analytics' findings suggest that while the broad addressable market for horizontal IoT platforms has reduced, specialised segments remain. The analysis points toward sustained investment in areas associated with device management and workflow automation, driven by hyperscalers and select vendors able to pair IoT capabilities with AI applications.
The ongoing transformation of the IoT platform market mirrors wider shifts within the technology sector, where the integration of cloud, edge computing, and artificial intelligence is expected to shape the competitive landscape for the next five years.
