Co-opetition in Digital and IoT markets

Several news stories have circulated over the past few weeks in connection with the potential acquisition of Nokia’s mapping business, HERE. The most recent stories have a group of German auto-manufacturers winning out over Uber although there has been no formal announcement to this effect.

HERE is an important enabler for mobile value-added services. One element of its technology captures location content such as road networks, buildings and traffic patterns. Other businesses then purchase or license this mapping data along with navigation services from HERE. Smartphone Apps, to make use of mapping data, form a part of its technology portfolio.

The potential acquisition of HERE by three German car makers – BMW, Daimler and Audi – is relevant to the telecoms industry for several reasons.

IoT alliances and interoperability

I have recently been consulting on the topic of IoT Platform strategy with a particular focus on the recently issued oneM2M standard. As part of this work, I researched the activities of different IoT alliances and industry groups because there is a lot of industry discussion about competing standards.

In discussions with company executives, a recurring theme is that nobody wants to take a bet on any single ‘standards’ approach. As a result, many companies choose to hedge their bets and participate in multiple initiatives. Having examined several of the leading initiatives from different dimensions, it’s debatable whether companies are getting a strategic, product-development return on their participation (setting aside brand-building and corporate networking benefits).

There are many different ways to look at each of initiatives. For this post, let’s begin by concentrating on their mission and primary objectives.

Roadmap for IoT strategy

Over the past few weeks, there have been several industry conferences, magazine articles and webinars dealing with the IoT market opportunity and the role of different companies across the eco-system. The topics addressed in these events have generally highlighted M2M use cases (vertical-specific applications) and the promising role for telecoms operators.

In many respects, the subjects under discussion have been disappointing. They indicate that many parts of the industry are still coming up the M2M learning curve and some way off dealing with the commercial implications of the IoT market. In terms of the competitive landscape that is forming around the IoT, company executives who are coming to terms with M2M are not yet in a position to plan sustainable IoT strategies.

So, how do you tell if your organization is working with an M2M mind-set and whether it has embarked on the transition from M2M to IoT?

What do we know about IoT developers?

A couple reports published in recent weeks have touched on the topic of the IoT developer community. The first one, from Vision Mobile [1], is entitled IoT Megatrends 2015. Based on research involving over 4,000 IoT developers, Vision Mobile identifies four seismic changes that will shake up the IoT market; one of these changes is that 'everyone can become a developer'.

According to Vision Mobile, this development is quite likely to occur in the consumer portion of the IoT market. This is because IoT platforms, such as Pebble, Razer, Android Wear and Apple WatchKit in the smart-watch segment for example, will evolve in ways that allow developers to orchestrate data streams into valuable scenarios for users. Soon, the ability to manipulate data streams will become so easy that everyone can become a ‘developer’. Or, to use a term that I introduced in an earlier post [2], we should expect a data 'taker' class of user to emerge, paralleling the ‘makers’ of the hardware world.

The second IoT developer survey comes from the Eclipse Foundation [3] and this draws on a small (about a tenth of the Vision Mobile sample) sample of real IoT developers (Eclipse eliminated respondents who did not meet its criteria for IoT developers).

The study author admits to a skewed sample base because of factors such as the channels used to recruit participants. Nevertheless, amongst details about the most popular programming languages, protocols and use of open-source technology there was a surprising revelation about the highly visible industry alliances that are evangelizing interoperability and the IoT market.

IoT is not the end game

Over the past few months, I have been working with the Telco2.0 initiative who originated the concept of a 2-sided telco business model. Our collaboration focused on the evolution of the M2M market. Where is it going? And, what strategies can companies apply as M2M evolves into the Internet of Things (IoT). Here is a link [1] to their recent research report which includes extracts from some of my previous essays.

The central theme of the report is that M2M service providers need to adapt to an IoT world as characterized by:

• billions of devices, connected via a variety of (short- and long-range) technologies which interact with applications that draw data from a variety of sources including other applications.

• a convergence between ‘Digital’ and IoT which arises because many M2M/IoT devices will rely on smartphone/tablet interfaces and associated identity-mapping relationships.

How will mobile network operators (MNOs), who are at the nexus of these changes, react in relation to the new addressable market opportunities and the organisational models necessary for commercial success?

MNOs have three choices.

IoT Roaming

The mobile industry and users of its services are very familiar with the concept of roaming. Roaming allows users to access mobile services outside their home-operator’s footprint. Most users are familiar with roaming in the context of foreign travel. Roaming also occurs when users cannot access their service provider network at home and need to ‘roam’ onto other, local service-provider networks.

M2M service providers and IoT technology developers are now beginning to think about new service scenarios where ‘foreign’ devices enter a local operating environment; I have been using the term ‘IoT roaming’ to describe this situation. There are several reasons why IoT roaming is important, and different compared to traditional ‘roaming’. This is because IoT applications need the ability to recognize and inter-operate with roaming devices. There are knock-on implications for service provider business models and the platform capabilities needed to support IoT applications.

2014 Corporate Initiatives; market rules are changing

Following several years of rapid growth, the 141 corporate initiatives in 2014 almost matched the 147 events that occurred in 2013.

In 2014, companies in the M2M eco-system were less active in several areas. As illustrated below, there were fewer recorded events of companies either: expanding into new market segments; promoting new technology; and, entering into partnering agreements. Product innovation saw a rise in activity as companies launched new products and services. In general, these addressed the needs for specific customer applications.