The industrial IoT gateways market accelerated significantly from 2021 to 2022, growing 14.7% to reach $860 million, 38% of the overall IoT gateways market.
According to IoT Analytics' new IoT Gateway Market Report 2023-2027, which includes detailed definitions of IoT gateways, market projections, adoption drivers, competitive landscape, notable trends, and case studies.
Knud Lasse Lueth, CEO at IoT Analytics, says industrial IoT gateways are critical for connecting legacy systems with modern technology.
"They also play an important role to support the migration of manufacturing applications to the cloud," he says.
"In the future I also expect a number of smaller applications to sit directly on IIoT gateways, leveraging containerisation technology, more powerful storage and computation and in some cases even AI chips for ML inference."
Kalpesh Baviskar, Analyst at IoT Analytics, says that IoT gateways have emerged as a highly cost-effective solution for deploying IoT systems with multiple sensors.
"They play a crucial role in connecting legacy equipment and devices that were previously unconnected. In recent years, we have seen the integration of high-performance processors and AI chipsets into IoT gateways, transforming them into edge IoT gateways," Baviskar says.
"These edge gateways can perform local data processing and analytics, significantly reducing the amount of data that needs to be sent to the cloud. This can lead to significant cost savings and performance improvements for IoT applications."
According to the IoT Gateway Market Report 20232027, the $0.9B industrial IoT (IIoT) gateway market experienced accelerated growth between 2021 and 2022, which is set to continue on the back of several favourable tailwinds.
IIoT gateways are enabling IT and OT convergence by securely and efficiently sharing data between floor-level OT equipment and IT equipment or the cloud, with implementation typically as part of one of four broader IoT architectures.
The factors driving this growth include the following:
Connecting the unconnected
Many companies are retrofitting their legacy equipment with sensors and controllers, using IIoT gateways to perform necessary protocol and data transformation and transfer the data to an IT endpoint.
Software applications are migrating
Companies with connected equipment are moving some key applications to the cloud, with IIoT gateways emerging as the main nexus point for information flow in and out of industrial premises. Some applications are also now run locally on the gateway itself.
More powerful hardware
New, enhanced gateways with embedded multi-core processors, AI chipsets, and secure elements are enabling faster and more secure data processing and transmission (to an IT endpoint or cloud).
How IIoT gateways connect the IT and OT worlds
Many companies maintain legacy equipment that does not have sensors or control devices. Even if the legacy equipment has sensors or controllers that connect locally, such as to a human-machine interface or panel PC on the factory floor, it may not offer connectivity options or use messaging protocols that end equipment (like an IT server or cloud) uses.
Meanwhile, companies that possess IoT-enabled equipment may desire to move data off-premises (e.g., to remote IT equipment or the cloud) or enhance local data computation for automated responses before transmitting the data.
In cases like these, IIoT gateways can connect with standalone or integrated sensors, either wirelessly or wired through I/O module masters to transmit data to IT or cloud servers. As described below, they fit within many architectures found in industrial IoT solutions.
IIoT gateways within IoT architectures
Whether a company builds or buys an IoT solution, the solution will align with an IoT architecture to collect and transmit data to the endpoint. While a direct sensor-to-cloud architecture does not require the use of an IIoT gateway, IIoT gateways are commonly found in 4 general types of IoT architectures.
1. Sensors/devices to PLC/IPC to IIoT gateway to cloud
In industrial environments with existing automation hardware, the sensors/devices to PLC/IPC to IIoT gateway to cloud architecture is very common. Field sensors or actuators are connected to I/O module masters. These I/O module masters transmit data to the on-premises PLC or IPC. The PLC/IPC is then connected to the IIoT gateway, which serves as a bridge between the PLC/IPC and the cloud.
This architecture can be very powerful but also potentially dangerous. The IIoT gateway can technically be configured to remotely access the entire architecture that sits below the PLC/IPC. While this setup enables any data to flow between IT and OT and thus any imaginable use case, it also has the biggest potential attack surface (potentially the entire facility), e.g., in case of a misconfigured security architecture.
2. Sensor to I/O modules to IoT gateways to cloud
In the sensor to I/O module master to IoT gateways to cloud architecture, simple sensors connect to I/O module masters. The I/O module master then uses wired or wireless connectivity standards to transfer data to IIoT gateways, bypassing any PLC or IPC. This architecture proves to be highly effective in scenarios where multiple sensors are arranged into clustersthe I/O module master acts as the central node for each cluster of sensors, efficiently gathering and transmitting data to the cloud via an IIoT gateway.
3. Sensors in devices to IoT gateway to cloud
In the sensors in devices to IoT gateway to cloud architecture, devices equipped with single or multiple onboard sensors are connected directly to the IIoT gateway. This architecture is often deployed where non-standalone IoT devices are used (i.e. devices that cannot connect to the internet by themselves).
4. Sensors to IoT gateway to cloud
In the sensors to IoT gateway to cloud architecture, IIoT gateways enable connections between sensors and cloud servers directly. This architecture can for example be found when retrofitting specific sensors on an asset (e.g., for condition monitoring) with the desire to bypass all other existing networks (to not interfere with them and create a new security risk).
Advancements in the capabilities of IIoT gateways
As IIoT gateways have become more common in IIoT solutions, they have become capable of offering more for their users. In general, IIoT gateways typically offer 8 key functions:
Protocol translation Data management Device management Computation Communication Resource management Security management Managing quality of service
As the IIoT gateway market has grown, these functions have advanced. The following are just some examples of advancements.
A growing number of customers are requiring proof of security level from manufacturers for their industrial IoT equipment.
Security management
As the number of connected devices continues to increase, the risk of cyberattacks and unauthorised access becomes more significant. This is especially true for companies looking to connect factory equipment to external IT or cloud servers. Fortunately, to address these risks, IIoT gateway vendors are proactively incorporating security features into their products and adhering to industry-specific regulations and standards, allowing OT monitoring and control to reside securely behind layers of policies and access controls.
Computation
IoT gateways in general have trended toward more processing power. In industrial solutions, this has helped companies move data processing and computation toward the solutions edge, nearer to the data collection point, saving them bandwidth and communications power and freeing their IT and cloud servers to manage other tasks. Additionally, there has been a trend of integrating AI chipsets into some IoT gateways to facilitate edge computing.
Data and resource management
Local data storage helps enable data processing at the edge. Further, some industrial use cases may call for data sorting and analysis before being transmitted to an IT or cloud server, either due to limited network connectivity or the desire for more efficient use of IT equipment.
Device management
With integrated storage comes the ability to containerise applications for deployment on IoT gateways, including device management software. Traditionally, deploying applications on IoT gateways involved installing them directly on the equipments operating system, which had limitations in terms of scalability, flexibility, and ease of management.
However, companies are increasingly using containerisation as a deployment strategy for applications on IIoT gateways, offering platforms like Kubernetes and runtimes like Docker. These technologies provide a way to create lightweight and isolated runtime environments, known as containers, where applications can run consistently across various platforms and environments.