MachNation: Will carriers become irrelevant in the Internet of Things?

Steve Hilton - MachNation

I am worried.

Across the world MachNation has been continuing our dialog with carriers about their strategies and tactics in the Internet of Things (IoT) ecosystem. We have heard about their growing machine to machine (M2M) business units, their burgeoning number of M2M employees, their focus on increasing their share of the M2M wallet beyond connectivity.

See if you can name which M2M carrier follows this strategy. "We help businesses realize the full value of connecting their mobile assets. We sell a managed connectivity solution to eight to 10 targeted industry verticals. On top of that service, we also offer a series of value-added platforms and consulting services."

Do you think this strategy matches the strategy any one of dozens of M2M carriers? If so, you are correct. Many carriers' M2M plans seem to be taken from the same playbook.

It's time for the most progressive carriers to get serious about the IoT--a world where information technology (IT) and operations technology (OT) merge. Enterprise awareness of, and interest in, IoT has blossomed.

As Wim Elfrink, Cisco's executive vice president of Industry Solutions, said at the 2014 IoT World Forum, "The world has changed dramatically in the last year." According to MachNation's and CSG's 2014 Global Business Services Survey, a survey of 800 businesses in eight countries/regions, IoT will be as important a technology to large enterprises in one to two years as unified communications (UC) and more important than social networking, mobile payments and mobile couponing.

Interestingly, some carriers are taking differentiated approaches to IoT. They are engaging in acquisitions to develop rich industry sector offerings that span devices, connectivity, platforms, applications and customer support services. Some carriers are beginning to target different types of enterprises with innovative offerings. Other carriers are merging together M2M and other business units to create more holistic offers.

But some of the greatest excitement in IoT is coming from the IT vendor community. The IT world has been investing huge amounts of time and money to re-craft IoT to fit more squarely with common IT technology and security architectures. This emphasis creates a great opportunity for all involved in the IT world, but also comes with some risk to carriers.

MachNation is pleased to sit on Cisco's IoT Steering Committee, a group comprised primarily of large enterprises like Airbus, Bosch, Chevron, Ford Motor Co., Shell and Starbucks. MachNation has been spending a lot of time with some of these world's largest multi-national corporations in working group sessions to understand what is important to them on standards, technology architectures, security paradigms and implementations.

We recently attended the 2014 IoT World Forum in Chicago. This event attracted 1,500 attendees, 60 per cent of whom were large enterprises. We were an invited panellist in a session featuring the utility/energy sector alongside two large utilities. The most interesting discussion involved a disagreement over some of the implementation challenges and organisational change characteristics inherent in smart grid deployments.

MachNation is finding that some of the fastest growth and innovation is coming from enterprises deploying IoT solutions to change business processes. Often these enterprises disagree with one another about very specific implementation-related issues associated with their IoT solutions. Disagreements about technology, business plans and staffing requirements provide rich information about what works and what does not work in the real world.

It is vitally important that the global carrier community's voice be part of the evolving IoT ecosystem. It is an ecosystem that often approaches IoT as an operations technology redesign or an IT integration, rather than a managed connectivity solution with some bells-and-whistles added on.

Carriers often learn about IoT opportunities late in the procurement process. Why? Because connectivity and connectivity management is relatively low on the list of important technology and business considerations when an enterprise is considering an IoT deployment. Carriers needs to find a place in enterprise operational discussions--talks that involve enterprise departments like logistics, planning, warehousing, shipping and maintenance--in order to better advance their solutions to enterprise buyers.

MachNation anticipates that vendors and solution providers will continue to develop and refine their IoT solutions. These solutions enable enterprises to more readily launch IoT solutions, speed up the introduction of new devices on networks and increase the overall value of the IoT solution with rich data.

The best carriers will embrace the rapidly changing IoT ecosystem, technology architectures and security paradigms. We will see continued acquisitions in the market as vendors supplement their existing portfolios and develop new integrations between IoT platforms and core enterprise applications. MachNation will continue to follow changes in this rapidly developing part of the IoT ecosystem.

Steve Hilton is managing director of MachNation, the only dedicated insight services firm for the IoT and IoE industries. MachNation specializes in understanding and predicting the IoT and IoE industries including developments in hardware, platforms, communication services, applications and deployment services. Steve has over 20 years experience providing guidance in the technology and communications sector. For more information, visit: www.machnation.com

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