Steve Hilton - MachNation
Over the last 4 to 5 years operators have hired high-quality dedicated machine to machine (M2M) teams, stood-up platforms, built critical partnerships, segmented the market for opportunities and refined their branding and advertising to incorporate their new digital services offerings.
We are now seeing a new group of operator entrants launching in these markets. These operators have learned from the mistakes of the earlier entrants and are doing things differently to be successful.
In this article we take a look at these "challenger" operators, and we profile one of these recent entrants into the internet of things (IoT)/M2M ecosystem, Tele2 M2M Global Solutions.
Four weapons of choice for challengers
According to the Merriam-Webster online dictionary, the verb challenge has several definitions, my favorite being, "to call out to duel or combat." It could be hyperbole that operators approach the IoT/M2M market with such bravado, however, the actions they take can accelerate or decelerate their growth in the industry.
In our technology world, what are the top four tactical armaments that operators can wield to challenge earlier-to-market operators?
1. Segmentation--Challengers can choose to segment the market differently than existing players. Segmentation can be based on industry sectors, customer size, buyer profiles or any number of other schemas.
2. Solution partnerships--IoT/M2M solutions necessitate partnerships, because no communications supplier can bring to market the full panoply of technology required for an enterprise IoT/M2M buyer. The partners chosen for devices, platforms, applications and integration services can create pre-integrated solutions to better appeal to customers.
3. Sales and support channels--Operators can differentiate themselves by changing the channels they use to sell and support specific types of IoT/M2M buyers. Operators can use direct and indirect channels to market. Having a channel with experience selling to operations technology (OT) decision-makers rather than IT decision-makers is important, as MachNation has written about earlier this year.
4. Branding and marketing--Approaching potential customers with novel, differentiated branding and marketing support tools for IoT/M2M services can set the stage for an operator's complete offering. The branding and tools that often accompany a challenger's offering set it apart from more traditional players in the market. In a market where differentiation can be difficult, this type of marketing is very important.
Case study: Tele2 enters the IoT/M2M market
Tele2--with a history of being a challenger operator in the Nordic and Baltic markets--has recently entered the IoT/M2M market to change the way services are offered to customers in the region.
The Nordics have some of the most developed M2M solutions in the world. And operators and vendors working in this region have put together some strong technology offerings, partnerships, services and sales channels to support their dedicated M2M business units.
I had the opportunity to speak at a recent Tele2 partner event in Stockholm. At this event Tele2 CEO Mats Granryd, and Rami Avidan, head of M2M Global Solutions spoke about the company's focus in the market, M2M's long-term viability in its regions and its recent entry into the M2M market.
Tele2, as an M2M challenger, is pursuing different tactics than some of the incumbent M2M operators. While Tele2 addresses all four of the tactical issues discussed above, it is especially focused on sales channels and solution partnerships to fuel its entry into regional and inter-regional M2M services while leveraging its existing brand as a market challenger.
To create a unique M2M channel approach, Tele2 partnered with Wipro, which provides Tele2 a sales channel to access larger enterprise customers. Wipro has: existing relationships with private and public sector entities across virtually all segments; rich, services-based businesses; industry- and application-knowledgeable teams; and contacts within IT and OT (operations technology) teams at potential customers.
We anticipate Tele2 will announce more system integrator partners shortly.
Tele2 is also forming a series of solution-centric partnerships with various M2M hardware, platform, and application vendors. These predefined solutions allow for more rapid M2M deployment in Tele2's core verticals of healthcare, security, utility/energy, industrial automation, automotive/transport, and finance/retail. In addition, these predefined solutions help system integrators like Wipro better position their services at competitive prices. Many of these solution partners are based in the Nordic and Baltic region, making them helpful both as technology and selling partners.
Newer entrants into the IoT/M2M market are continuing to fuel awareness and growth in the industry. While new entrants in slow growing or stagnant technology sectors create financial difficulties for all participants, the M2M market is growing at such a strong rate that we anticipate Tele2's entry into the Nordic and Baltic markets will simply increase awareness of IoT/M2M solutions. Most industry sectors are showing 20 per cent to 40 per cent global, year-over-year growth. At that rate, additional entrants to the market will simply increase awareness of the viability of IoT/M2M solutions, rather than stealing share from incumbent operators.
As IoT/M2M opportunities grow, we anticipate more challengers in Europe, Middle East, Asia and Latin America over the next 12 months. Operators in these markets are finding new opportunities with their existing enterprise customers. We anticipate many of these operators are going to establish dedicated IoT/M2M teams, create new partnerships, refine their branding, and redefine their sales channels to capture these new IoT/M2M opportunities.
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