By Manuel Nau, Editorial Director, IoT Business News.
For over a decade, many IoT vendors have attempted to win the market with “horizontal” platforms: generic device management, data acquisition, dashboards, and rules engines, designed to serve all industries from a single, universal core. This promise is incredibly enticing—build once, reuse everywhere.
However, most enterprises are not actually buying the “IoT” itself, but rather tangible results: less unplanned downtime, more secure operations, higher energy efficiency, compliance, lower logistics costs, or greater device uptime. These results are closely tied to specific industries. Therefore, the market is increasingly shifting towards vertically specific IoT technology stacks: carefully curated combinations of connectivity, device lifecycle management, data pipelines, analytics/AI, integration patterns, and domain workflows—packaged around specific industries or use cases.
This is not merely a packaging trend, but a structural shift in how IoT solutions are built, sold, and deployed—a shift that is reshaping the partnerships between connectivity providers, platform vendors, integrators, and vertical industry software companies.
Why Horizontal IoT Platforms Are Facing Bottlenecks
Horizontal platforms are not “dying.” However, in many deployments, these technologies become mere foundational layers rather than products that enterprises pay for. Several friction points explain this:
- Integration consumes significant time and budget. Connecting IoT data to ERP, EAM/CMMS, MES, SCADA, BMS, GIS, ticketing systems, and identity verification systems is a key reason for project stagnation.
- Data models are inherently vertical. Vibration sensors on turbines, cold chain loggers, and smart meters, while all “devices,” have vastly different data semantics, thresholds, and operational implications.
- Security and compliance vary significantly. Healthcare, critical infrastructure, automotive, and industrial environments face different certification paths, threat models, and audit requirements.
- Business ownership resides with the business units. Procurement centers are often operations, energy management, fleet, quality, or safety departments—teams that need domain-specific workflows, not generic tools.
This helps explain why the market is shifting from abstract platform messaging to a pragmatic, results-oriented approach—sometimes referred to as “mini PaaS” or “solution stacks.” (See also: Why IoT Platforms Are Evolving into Vertical Micro-PaaS Models.)
Why Horizontal IoT Platforms Are Facing Bottlenecks
A vertical industry IoT stack is more than just a pre-configured dashboard. A good vertical industry IoT stack typically combines the following:
Connectivity and Configuration Models: eSIM/iSIM policies, roaming logic, private networks, satellite fallback, device bootstrapping, and authentication.
Device Lifecycle Operations: Zero-contact configuration, firmware/OTA policies, configuration profiles, certificate rotation.
Domain Data Model: Assets, hierarchy, location, operational status, alarms, industry-standard KPIs.
Workflow Layer: Work orders, scheduling, SLA management, compliance reporting, anomaly handling.
Integration Templates: Connectors to systems already used in the industry.
Analytics and AI need to be tailored to the specific domain: Anomaly detection in rotating machinery is very different from energy demand forecasting.
The practical goal is clear: to shorten time to value realization by transforming “integration work” into reusable patterns and transforming “data mess” into a domain-consistent operational model.
Verticalization is happening across the entire technology stack—not just in software.
It’s easy to think of verticalization as a trend in software packaging. But the most significant shift is broader: connectivity providers, module manufacturers, original equipment manufacturers (OEMs), security vendors, and systems integrators are all building “vertical bundles” as buyers allocate budgets to these areas.
Connectivity is a prime example. IoT connectivity management platforms (CMPs) are increasingly distinguishing themselves by features that meet industry needs—policy control, security, multinational operations, and SIM card lifecycle orchestration across large networks.
Similarly, architectures are becoming more “use case-native.” Hybrid connectivity is a good example: industries like utilities, logistics, and environmental monitoring often require overlays that combine terrestrial and non-terrestrial networks.
Conclusion: The End of the One-Size-Fits-All Era, the Beginning of Composable Vertical Technology Stacks
The rise of industry-specific IoT technology stacks does not mean the ecosystem is abandoning platforms. It means platforms are being restructured into composable building blocks that can be assembled into industry-native solutions.
For businesses, this shift offers an opportunity to move beyond viewing IoT as an endless integration project and instead purchase reusable deliverables. For vendors, this means differentiation is no longer about generic functionality, but about understanding and applying specific industry realities.