Meet the guys behind the guys in the IoT

I have been down on IoT platforms lately, but there are a few that have found their niche. For example, there are hundreds of companies around the world that want to create a connected device but don’t have the engineering expertise or even the inclination to build their own cloud-based platform to handle device management, onboarding, data storage, and more.

While many people may think Amazon, Microsoft Azure, and others are providing these essential device and cloud services, their platforms still require various parts to be pieced together. That’s why companies such as Ayla, Tuya, and a few others are doing well. And roughly 18 months ago, a Kansas City-based company that used to build a smart home hub for Best Buy pivoted to join their ranks.

Pepper IoT is the name of the newly created platform, and Scott Ford, its CEO, says its goal is to win over customers by touting the ease of getting a device online and the ability to do so with a company that’s based in the U.S. Ford says his biggest competition is Tuya, a Chinese IoT platform provider that has been grabbing customers from among some of the second-tier brands in the consumer space. For example, Merkury, which makes smart outlets and related devices sold at Walmart, is a Tuya customer.

Ford says the big name brands tend to work with Ayla. But that’s not where he wants Pepper to focus. He’s hoping to attract the device sellers that want to pay a few dollars for their connectivity and cloud, but who also care about security. Current customers include Momentum and video camera maker Swann.

Pepper recently signed a partnership deal with security firm Kudelski Group to not only make sure its cloud is secure, but that the devices that get on the Pepper IoT platform are secure. Ford believes that retailers will push device makers to use demonstrably secure services like Pepper IoT in response to all of the bad news around hacking.

He’s also focused on concerns between the U.S. and China, and stressed that his company hosts data only in the U.S. I spoke with Alex Yang, COO of Tuya, who says that while his company is based in China, the data that its customers send to the cloud reside in locally owned data centers. So data created in the U.S. doesn’t leave the U.S. Both companies host their clouds on Amazon Web Services, as does Ayla.

And both Tuya and Pepper are able to host devices in other clouds, most specifically Microsoft’s Azure, since anyone selling at Walmart quickly learns that Walmart wants its vendors to avoid AWS. Ayla and Pepper work with chip companies to offer modules that integrate with their cloud platforms, while Tuya sells its own module for between $2 and $4.

Of the three platforms, Ayla offers the most flexibility and customization, but also added complexity. Both Pepper and Tuya want their platforms to be a bit easier to implement, and so offer preset services including generic applications their customers can use.

I’ll be curious to see if retailers help force IoT devices to become more secure, and in a way that can advantage certain security-focused IoT platforms. Currently, the market still feels very focused on low prices, which makes sense given that’s what consumers care about most.

Other businesses offering IoT platforms for consumer goods include Afero (an advertiser in this newsletter), Yonomi, and several others. Many of these companies are also branching out into the industrial and enterprise markets as well.

Updated: This post was corrected on Dec,. 26, 2018 to reflect that Tuya COO is Alex Yang, not Alex Wang.