What does the Google IoT core shutdown tell us about IoT platforms?

The Google IoT core shutdown may be a tactical move for Google, but it is symbolic regarding what it says about IoT platforms at large.

Google’s IoT core, a service allowing users to connect IoT devices and manage them, was a boon for amateur developers and business folks alike. While AWS and Azure still maintain a headstart on market share, Google’s IoT core was a part of its cloud solutions and thus the UX is both layman-friendly and intuitive, in comparison.

Alas, it wasn’t meant to be. Google is closing the shutters on its Cloud IoT core service by August 2023. This makes Google IoT core the latest in a long list of products that Google has shut down over the years. There is even a whole website dedicated to documenting the Google graveyard.

While the Google spokesperson mentioned that this move intended to downsize and focus on the core offerings of Google Cloud, Google’s cloud losses were recorded at USD 858 million in Q2 of 2022. Given that both AWS and Azure are profitable, Google clearly had to take some bold decisions to rectify this situation.

The untimely death of a promising service

The Google spokesperson explained, “Since launching IoT Core, it has become clear that our customers’ needs could be better served by our network of partners that specialize in IoT applications and services.”

We can draw a clear interpretation from this. Google is the third largest IoT vendor in the market today, right behind AWS and Azure. However, Google’s users did not leverage the IoT core for its platform capabilities, but only the cloud infrastructure for data storage.

If we are to dive deeper into why this was the case, we come across IoT core’s user base. According to a recent report by Enlyft, over half of Google IoT Core’s customers are small businesses, with large businesses taking up nearly 40%.

Google’s own strategy was to bring in more customers for Google Cloud through IoT core, and their primary focus was enterprise customers and smart cities.

To simplify this, Google IoT core wanted large companies only. But they entered the market in 2017, by which time both AWS and Azure had gained some momentum. The only advantage Google had at this point was its superior UX, which allowed them to gain a larger share of small businesses and individual developers. But over time, people were only interested in using Google for its cloud capabilities.

What does this mean for IoT platforms?

Constellation Research analyst Holger Mueller, in a discussion with TechCrunch, agrees that the giant trio of cloud  —Amazon, Microsoft, and Google— haven’t really updated their IoT services. He further explained,

“All three have been kind of standing still on their offerings, which has allowed the best-of-breed and specialised vendors to catch up.”

This is further evidenced by the growing numbers of smaller IoT platforms that offer a lot more in terms of features, customization, support, security, and feasibility. Another important factor to consider is that integrating multiple solutions on any of these 3 platforms is a hassle, and according to the 2021 IoT Signals report, complexity or technical challenges are the biggest challenges that IoT projects face.

Many new IoT companies are opting for smaller platforms for these reasons and using the larger solutions for data management.

Security, especially, is turning out to be a major factor in the adoption of new and independent IoT platforms. While Google, AWS, and Azure only offer Encryption and Authentication, smaller platforms are offering anomaly detection, threat intelligence usage, alerting, and incident logging for stronger security.

IoT spending and overall trends

Several experts have wondered whether this is a smart move by Google as IoT spending are only increasing year on year and the sector is projected to grow into a behemoth. Statista shows us the recent and projected trends in IoT spending here.

The truth is that this is the kind of thing that will only be apparent in retrospect. While IoT is growing at colossal speeds, it wouldn’t matter for Google if it is a cash sink in the long term. On the other hand, Google has revived projects with a new spin in the past, and they may very well choose to do so again.

In any case, one thing is clear, the size of the company is no longer a guarantee of success in the IoT space. Innovation and constant improvement is the only way to survive.

Have you been affected by the shutdown in any way? Let us know in the comments.