Perhaps you saw this in the news: Telstra recently signed a $100 million deal to provide connectivity for Intellihub’s smart meters that will add 4.1 million SIMs to Telstra’s IoT network, and it was all built on Cisco IoT Control Center. Just like Telstra, service providers around the globe are seeing big business opportunities in the massive explosion of low complexity, cellular-enabled devices such as utility meters, asset tracking tags, medical devices, and agricultural sensors.
With low bandwidth consumption, low levels of complexity, and deterministically predictable usage patterns, these devices are often connected over wide areas with 3GPP LPWA (NB-IoT, LTE-M) networks. LPWAN delivers reliable, cost-effective IoT connectivity for low-cost devices supporting a broad range of low-power use cases and business models, from a water meter that sends a burst of data once a week to a city parking meter that handles transactions at all hours of the day and night.
And the business opportunity is massive. Investment in digitalization is just starting and has the potential for continued growth over many years as more countries, industries, and enterprises automate human-focused activities and leverage wireless technology at scale to power this digital transformation. Just consider recent Gartner Research findings that show 3GPP LPWAN will reach 1.2 billion worldwide connections by 2025. Energy and utilities, agriculture, government, smart cities, and healthcare will account for 90 percent of NB-IoT and LTE-M connections over that time.
But adding this extremely low-cost mass IoT segment to your service offerings puts downward pressure on profitability and requires rethinking how you deliver connectivity across all segments. Will your current value chain and economic model be able to support the next wave of IoT growth? Increasing your relevance in the value chain and reconsidering the economics of managing multiple Connectivity Management Platforms (CMPs) are keys to thriving in this growing market.
Zero Touch Deployment adds relevance to increase value
Let’s talk about relevance in the value chain. Today the machine builder/smart meter manufacturer understands their connected products must be factory tested, shipped to the destination, installed, configured, and managed both from a connectivity and an ongoing monitoring and analytics/operational perspective. Each step in this multi-stage process adds cost and time, and the IoT connectivity provider is often last in line when it comes to getting their share of the wallet. Without being relevant by delivering more value, IoT providers are limited to competing for revenue per device, per month. One way to achieve relevance that leads to more wallet share is to play a bigger role in the end-to-end enablement of the devices and services. Part of the vision of the digitization dream is to reduce human involvement and the resulting cost. Zero Touch Deployment (ZTD), which leverages multiple, well-defined technologies, is an excellent option for driving that relevance for service providers.
Let’s revisit the workflow using ZTD. The device is manufactured, tested, shipped with the standard factory configuration, installed in a desired location with peripherals connected, and powered on. The device powers up and pulls down its pre-defined set of parameters from the cloud, and now is automatically configured, security policies are enabled, it’s visible to the enterprise, and data is being collected by the cloud-based analytics. This is done leveraging capabilities that align with the IoT connectivity provider skillsets. Will you get an enterprise’s attention based on this new workflow? Absolutely! By enabling end-to-end process automation that delivers cost savings and faster time to deployment, while eliminating manual errors that lead to operational costs and service downtime, ZTD increases the value you provide and improves your relevance, leading to greater wallet share.
Low-complexity deployments don’t mean low risk
There are other ways to increase relevance. It’s a mistake to think that low-complexity deployment at scale means simplified operations or reduced security risk. For example, let’s assume a stationary smart meter starts roaming across a wider geographic region. Clearly the device has been compromised. But as perhaps just one out of thousands or millions of devices, determining that a single device is exhibiting an anomalous behavior is humanly impossible to do manually. However, machine learning can determine and detect out-of-ordinary patterns and help you proactively identify problem devices.
So low-cost deployment at scale must go hand in hand with the necessary guard rails to quickly mitigate risk. If the IoT connectivity provider can utilize machine learning capabilities that offer real-time monitoring, rapid detection, alerting, and automated remediation of such issues, this presents another opportunity to increase value and relevance with the enterprise.
What about costs?
Now that we’ve discussed how increased relevance leads to increased revenue, I’ll take a closer look at the other side of the profitability equation – Operational Expenditures (OpEx). Let’s start by considering how different types of IoT devices are handled by the connectivity provider. The CMP usually determines the experience that’s delivered to the enterprise. Multiple CMP platforms used within an IoT connectivity provider is very common and the CMP the device is placed on is based on a price negotiated for the device and the complexity of the required management capabilities. High-value devices usually end up on platforms with rich feature sets including security, while low complexity devices may be targeted for lower feature-set platforms.
With this ecosystem of multiple CMPs, visibility, which is key to successful and cost-effective operations, is split across the platforms. Multiple CMPs increase complexity and can require significant additional resources in development and operations. In a cost-constrained business, consolidation of platforms should be considered a serious part of any strategy to successfully capture the low-cost mass IoT market and be profitable moving forward. Ultimately a one-to-one relationship, ‘One Enterprise’ to ‘One Platform’, delivers the most comprehensive and cost-effective business outcomes.
To effectively harness the power that IoT offers – to become both relevant and profitable as a service provider – it’s important to consider new ways of thinking about your deployments. We’ve talked about a few ideas here like ZTD and consolidating your CMPs, but we’ve got plenty of other ideas that will benefit you on your digitalization journey. Come visit the IoT Control Center team at Mobile World Congress to learn more about where we see this exciting new technology advancing and learn how your organization can add relevance and obtain more wallet share. We look forward to seeing you there!