Nov 13, 2012

Vodafone and its M2M strategy

In Vodafone's H2-2012 financial results presentation, its CEO outlined Vodafone's 2015 strategy including a reference to its M2M goals. In particular, Vodafone's M2M business unit will be a part of its Group-wide Enterprise unit. This raises important questions about Vodafone's longer term goals especially in the light of a growing consumer M2M market and the reorganisation plans of several of its competitors.

According to Vodafone's strategy announcement, M2M will exist as a business unit within Vodafone Enterprise Services as illustrated below.
According to Vodafone, the intention is to consolidate its lead in M2M building on 8.8m connections and a strong contract pipeline. Vodafone intends to expand out of "traditional" M2M sectors and also to leverage its global service delivery platform.

This arrangement suggests that Vodafone is targeting a B2B type of  business model i.e. Vodafone as a supplier to enterprise customers who then deliver a connected device or service to their customers.

The M2M market, in its broadest sense, is expanding to encompass a wide variety of consumer applications - in-car information and entertainment, assisted living, wellness etc. These service concepts will drive M2M hardware volumes and the economies of scale that will enable even more affordable offerings.

In many cases, Vodafone will have a service relationship with consumers using these services; this relationship may exist via a voice 'subscription' or a Smartphone or tablet service offering. And, it may be the case that consumers use their data devices and subscriptions with Vodafone to interact with an M2M application supplied by one of Vodafone's M2M business customers. The strategic issue for Vodafone is how it will position itself in relation to B2C (go direct to the customer) and B2B2C (serve consumers through some form of partnering with enterprise customers) M2M opportunities. The latter approach is more likely because it carries a lower implementation risk and lower capital outlay if suitably structured.

In terms of its organizational model, Vodafone's strategy stands in stark contrast to the recent trend for mobile operators to establish 'Digital' businesses. These accommodate consumer M2M applications and other mobile-enabled services that address the emerging connected life-style of consumers.

2 comments:

  1. 10 Nov 2016 Update

    PTC’s ThingWorx Application Enablement Platform Chosen by Vodafone for Rapid IoT Application Development

    https://www.thingworx.com/about/news/ptcs-thingworx-application-enablement-platform-chosen-vodafone-rapid-iot-application-development/

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  2. 15 Nov 2016 Update

    Vodafone CEO promises consumer IoT play in 2017, UK TV service delayed again

    Vittorio Colao committed Vodafone to launching a consumer IoT product directly to its customer base next year, as the operator unveiled its latest financials.

    The Chief Executive said Vodafone was looking currently at potential plays and would “definitely” bring a product to market in 2017, but did not expand on what or where such a service would launch.

    The UK-based operator has 45.4 million “enterprise” IoT connections currently, up 39 percent year-on-year, which are largely centred around the automotive sector.

    Vodafone does not count that sector as directly consumer facing as it is the car companies themselves that offer the services to drivers, rather than Vodafone.
    http://eurocomms.com/industry-news/11953-vodafone-ceo-promises-consumer-iot-play-in-2017-uk-tv-service-delayed-again

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