MNOs’ IoT Platform Predicament

IoT Analytics, the German market research firm, recently published a customer satisfaction assessment of IoT platforms [1]. It covers 50 vendors and applies a broad definition for IoT platforms. At one end of the spectrum, there are multi-purpose cloud infrastructure and platforms, such as those offered by Amazon and Microsoft. At the other end are platforms for niche users, with machine builders as one example.

IoT Analytics used feedback from senior executives in organizations that procured and are deploying IoT solutions to rate the top-25 platforms. There is a slight bias to North America, which accounted for 40% of the mix. Europe (25%), APAC (25%) and MEA (10%) make up the rest of the survey.

For this post, I propose to focus on a summary chart. This maps leaders, challengers and follower IoT platforms across technology and customer-centricity dimensions. The chart highlights a predicament for mobile network operators and especially the large European operators.

Customer feedback for the large, European mobile network operators (MNOs) places DT, Orange, Telefonica and Vodafone in and around the ‘Follower’ category. Ericsson’s DC Platform, which has an operator legacy from its Telenor origins, also falls in the ‘Follower’ category.

North American operators, AT&T and Verizon, fared better. These two appear close to the ‘Leaders’ category. For reference, the Amazon AWS and Microsoft Azure IoT offerings placed best in the rating.

Here are a few impressions from this comparative chart:

• The Technology axis looks like a proxy for the IoT value stack that emphasizes network connectivity at the lowest level and application-enabling capabilities at the upper layers.

• The User Centricity axis appears to reflect the range of capabilities and tools that providers offer to users. Amazon and Microsoft can draw on an ecosystem of developers and solution partners and make it straightforward for users to gain access to these solution elements. This contrasts with the Follower MNOs. They position IoT as one of their Business or Enterprise Services offerings. Often, potential customers don’t have direct access to component offerings and must pass through a sales organization. This might result in a consultative sales process and be a necessity driven by the level of technical expertise in the user community.

• AT&T and Verizon fare much better in the rating. Both have a longer track record in the current phase of the M2M/IoT market, marked by the launch of Verizon’s Open Development Initiative in late-2007 and AT&T’s subsequent launch of its Emerging Devices organization. Verizon’s Thingspace offering has an appealing straightforwardness. Perhaps this is because it is not trying to solve all problems and limiting its focus to LTE-M and NB-IoT network capabilities. By contrast, it is more difficult to navigate AT&T’s offering with multiple web sites for its platform offering, a marketplace for IoT solution elements, design tools, solutions for time-series data and automotive sector specializations.

• North American providers monopolize the Leader category. Some caution is warranted due to the weighting of customers in IoT Analytics’ survey.

• Caution is also warranted in relation to the numbers of customers commenting on individual IoT platform providers. There is scope for skewed views if there are small numbers of users or respondents with narrow application requirements. 

The predicament for MNOs is how to capitalize on IoT opportunities in a growing market, now that there is greater market acceptance about the value of IoT. Connectivity-only solutions will continue to succeed in line with the projected growth in numbers of connected devices, subject to competitive pricing pressures. However, there is greater value in moving up the IoT stack by adding more capabilities to the IoT solutions toolbox, as implied by the Leaders in IoT Analytics’ rating. There is also greater value in becoming user centric. This can involve better sales and customer care channels.

Customers are also interested in better integration strategies. That means looking beyond the boundary of standalone and silo IoT applications. In other words, how will IoT platform capabilities evolve over time and how might different platforms interwork as organizations tackle cross-silo applications? This line of reasoning calls for a strategic roadmap for homegrown IoT platforms.

Apart from platform-to-platform integration opportunities, a different integration challenge is to combine technologies. A case in point is IoT (connectivity-oriented) and AI (data and data-science oriented) capabilities. Should they be tightly coupled, or should AI be a bolt-on (over-the-top) technology?

Platform users depend on the innovation capacity of their platform provider’s technical teams and any third-party partner affiliates. These arrangements can build around a proprietary standard or follow a walled garden strategy. That may be effective for niche strategies. However, it is not on a par with open standard or open ecosystem approaches where there is a larger pool of experts to draw upon. This is another issue for ‘Follower’ and ‘Challenger’ platform providers who face a choice between niche strategies and the world of billions of connected devices that the mobile industry has been promoting for the last decade.

[1] IoT Analytics, 25 Best IoT Platforms 2019 - https://iot-analytics.com/the-25-best-iot-platforms-2019/