AT&T (NYSE: T) is starting to see a trend in its machine-to-machine (M2M) and Internet of Things (IoT) business -- one where enterprises are looking not for a Wi-Fi first service but cellular first.
Of course, it depends on the application, but on the enterprise side in particular, "we've started to see an interesting trend" where customers started off with Wi-Fi-only devices and, for a variety of reasons, they're moving toward cellular-only, said Mike Troiano, vice president responsible for AT&T's Industrial IoT organization, in an interview with FierceWirelessTech.
AT&T announced a deal earlier this year with a company that builds medical carts for hospitals, with the idea being that a doctor or nurse can go to the cart to get medication and the cart automatically tracks inventory levels, security clearances and more. But this particular vendor was getting frustrated with the hospital Wi-Fi and the cabinets losing connectivity as they were wheeled around the hospital. The company made a decision to put cellular in so that it could control the experience, Troiano explained.
Offering another example, he said one of AT&T's customers builds industrial-sized microwave ovens for fast-food restaurants. In the old days, when they wanted to update the menus for the ovens, they did it via Wi-Fi or someone would visit each store with the latest software on a USB drive and they would upgrade the firmware that way. Now that company is putting cellular into the ovens so when they get shipped to the restaurants, nobody in the store has to touch them. The manufacturer can update it in a matter of minutes rather than days or weeks. "For a lot of companies that are looking at efficiency and trying to drive process re-engineering, they're becoming much more comfortable with a cellular-only" solution, he said.
Last month, Verizon (NYSE: VZ) laid out its IoT strategy, including the launch of ThingSpace, a web-based platform designed for developers to have an easy on-ramp to the IoT. The operator said it would be launching a new IoT network core in early 2016 that meets new IoT profiles at a much lower cost and it would be getting access to lower-cost modules. The new IoT core will be "super-efficient," allowing for new use cases, according to Verizon.
AT&T has put a lot of focus on IoT going back a number of years, with current AT&T Mobility CEO Glenn Lurie previously overseeing the company's emerging device unit. Last year, AT&T brought the enterprise M2M business together with the consumer business so it's under one umbrella. Many applications blur the line between consumer and enterprise, so it made sense to bring the two teams together, Troiano said.
Asked about Verizon's moves, including to lower-cost modules, Troiano said it's logical to assume that any of the major chipset or module makers that are building devices for IoT are going to get to similar price points, depending on the number of bands included. On the network side, it doesn't appear as though AT&T management thinks it needs a separate LTE core to handle IoT.
He said AT&T invests billions each year, and "the network is performing incredibly well relative to machine-to-machine technology, so from a customer experience, I think the moral of the story is the network as it's built and architected today for these machines is able to scale with the dramatic use cases that we'll see. And when I say dramatic, what I'm really alluding to is you have everything from sensors that are just transmitting small bits of data here and there," all the way up to machines that are doing things like video surveillance. "We've engineered that in mind, for both our traditional tablets and smartphones and of course IoT as well," he said.
He acknowledged that "we are absolutely thinking about 5G," but the standards for 5G have not been ratified so it's premature to outline the implementation. "We are active" in the standards work and working with the ecosystem for the right migration path, he said.
AT&T counted 25 million cellular-connected machines on its network as of the end of the third quarter. Connected cars represent one of the fastest growing segments for the operator, and it was the first major wireless carrier to launch a global SIM platform for cars. At the CTIA show in September, Lurie announced that AT&T had signed a new multi-year agreement with Jaguar Land Rover North America Jaguar to add AT&T connectivity to more of those vehicles.
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