James Comfort, Manager of Service Delivery
According to networking vendor Cisco, global IP networks will support up to 10 billion new devices and connections by 2020, increasing from 16.3 billion in 2015 to 26.3 billion by 2020. Connections means connectivity and that means communications service providers (CSPs) should be in the drivers seat when it comes to the Internet of Things (IoT). So why are so many still struggling to find their place in the IoT ecosystem?
There are three overarching challenges keeping providers from maximizing their IoT opportunities:
- Operational Challenges: The IoT is not as easy as it looks to integrate into a service providers existing offerings; while its just data, many service providers back-office systems arent set up to handle billing for billions of micro-transactions or managing another product suite like in home-security offerings.
- Business Challenges: Leadership of the IoT ecosystem is fragmented; even with everyone using the same jargon to describe and market their products. With so many innovations occurring regularly in such a variety of IoT channels it can be difficult to identify the strategy for capturing market, and without a lot of time to mature, these markets may be risky.
- Technology Challenges: Standards are anything but clear across the industry and service providers are making early technology bets. They hold the trump card because they own the connectivity networks and a product step towards the consumer is easier for them. CSPs are already making large innovations to networks and infrastructures but identifying how to develop a technology strategy for IoT may be challenging. The first is understanding what product types to offer and close the gap between offering Internet and selling IoT technologies that are essentially plug and go.
Connectivity is the least-common denominator and most providers are already involved at this level, even if they dont have a formal IoT strategy in place. However, as weve seen happen in the past, the network can become a commodity and providers will need to find new ways to participate in the IoT ecosystem or else risk being marginalized. Monetization is still elusive to many providers because theyre relying on tactical, ad-hoc activities; too many of these one-off projects leads to a de facto strategy based on tactical movements, not one based on business goals.
So, while building an IoT strategy based on business goals sounds good, how can providers get this done? There are two key areas providers can focus on to deliver real results:
1) Building Strategic Partnerships – The IoT market is bigtoo big for service providers to go it alone, especially while there is still so much uncertainty and challenges around so many areas of the business. Partnerships can help service providers spread the risk and test solutions and strategies without making full-scale investments. By creating partnerships on two frontsconnectivity and devicesservice providers will be able to respond more quickly to opportunities.
- Partnerships with other providers such as MNOs, MVNOs, companies building low-power wide area (LPWA) networks, satellite providers and others, will allow them to present more robust, seamless connectivity options to their customers. These types of coverage partnerships can help providers offer an end-to-end strategy, supporting, for example, the IoT requirements of multinational organizations.
- Partnerships with module and device makers will help service providers present end-to-end solutions to their customers and stabilize profitability. By recognizing customers needs, they will be able to grow their base and see a quicker return on their IoT investments.
2) IoT Analytics – The end goal of IoT for some is the data it provides to help make better business decisions and grow their business. Service providers can also use IoT technologies, gathering, analyzing and distributing the vast amount of data collected by their solutions and using it to develop marketing and sales strategies. These strategies can leverage analytics, monitoring and real-time reporting to help them differentiate their product and solutions offerings.
Early Success Stories
There are some early success stories from the IoT. One example where providers have been successfully creating end-to-end solutions is the Smart Home, with service providers offering home security systems and services with varying degrees of success. Comcast, Verizon and others have been able to overcome many of the business, operational and technology challenges associated with the IoT and are actually working to create demand instead of just reacting to it.
For example, Comcast partnered with Boomtown, a start-up accelerator, to open an IoT Development lab in Colorado in early 2015. The lab is accessible to IoT technology enterpreneurs looking to create products and applications. Verizons ThingSpace program provides developers looking into IoT with API documentation, developer kits, community support and tools for building IoT applications. Verizons Solutions Lab provides IoT solutions and publications for businesses that span across industries in the private and public sector.
These are just two examples of many around the world where service providers are stepping outside their role of connectivity providers and taking leadership roles. Beneath all of this, however, is the need for flexible platforms and optimized infrastructures that can help service providers meet the rigorous demands of todays data and analytics driven world. The IoT delivers millionsand growingof real-time micro-transactions every day and legacy billing and OSS systems may not be equipped to handle the volume for selling and managing IoT devices.
Many innovations are taking place in the home. This is an area where technology is meeting challenges, and it doesnt just impact the consumer. More often than before, consumers are calling into their service provider to complain of connectivity issues, when sometimes it is actually an issue of their in-home network having too many devices for the modem or router to handle. With increasing home IoT technologies, theres a big need for innovations in home wi-fi networks that can support many devices and leverage a wavelength that can reach all the parts of a home. This recent development has brought rise to some new companies pushing market in this realm. A logical next step for service providers may be offering enhanced in-home networking devices and systems to connect their IoT devices.
The IoT holds enormous potential and service providers who create a strategic plan that includes the right partners with device manufacturers and other connectivity partnersare poised to capture significant reward. They need to take a long, hard look at their business, technology and operational challenges, overcome those issues and implement an IoT-centric business strategy. With a well-thought out IoT strategy in place, providers have a real opportunity to own and monetize some of the ecosystem.
James Comfort is the Manager of Service Delivery at Excelacom. James has seven years of experience in the IT Consulting and Telecommunications industries and is PMP certified. He has held various roles during his tenure at Excelacom, including project management, deployment, and strategic planning of delivery systems.
Jamess responsibilities include working with onshore and offshore resources to identify and implement quality solutions, as well as maintaining effective relationships with clients and supporting their business and operational needs. James recently led a team in a Planning and Assessment and Implementation for customer-facing systems.He has also worked on Telecommunications Provisioning systems that support the infrastructure used to connect many IoT devices.
For more information please visit www.excelacom.com