Oct 30, 2017

Innovation at ETSI IoT Week 2017

Last week, I attended ETSI's IoT Week, an annual event to explore the IoT standardization landscape and to see how industry and academics, around the world, are testing IoT implementation ideas for the future. Not surprisingly, the oneM2M standard featured prominently in the program and the display zone of demonstrator projects given that ETSI is one of 8 standards development organization (SDO) partners in the oneM2M project.

However, not everything on the agenda centered on oneM2M. Other standardization efforts were also represented including: ESMIG (energy); SigFox and LoRA Alliance in the LPWAN sector; ZigBee Alliance; and, international organizations such as ISO, IEC. And, several companies, including MNOs, demonstrated how they are addressing new business and revenue opportunities beyond IoT connectivity.
In light of the broad participation of standards bodies, industry alliances and pioneering IoT companies, my first observation is about the importance of standardization in business strategy. Taking the LPWAN sector as an example, it was instructive to see SigFox promoting a work program through ETSI (rather than plowing a lone furrow) to standardize the LTN (low throughput networks) category. This initiative signifies the importance of becoming integrated into the global standardization process. It is also a testimony to the institutional benefit that organizations like ETSI provide in sustaining an open, collaborative and smooth-running forum to develop and maintain standards. Less well-structured industry alliances struggle to emulate this process and regular output of work products.

The standards development process takes time - up to 10 years from inception to full market adoption when considering benchmarks for successive generations (2G, 3G, 4G) of mobile technologies. Aged about 5 years, oneM2M seems to be over half-way through this journey. One sign of progress was the presence of a few mobile operators demonstrating their application of oneM2M to tackle complex ideas, beyond the relatively straightforward cases of connecting devices to a cloud application. Deutsche Telekom and TIM, for example, discussed their work to link smart city applications in Berlin and Turin. Separately, Orange and Deutsche Telekom (T Labs, Qivicon) demonstrated interoperability and service enabler capabilities in the smart home sector and as a means of encouraging third parties to create new applications and services on their oneM2M APIs.

MNO experimentation above the connectivity layer and therefore higher up the value chain seems to be a timely response to a standardization issue that another speaker raised. To date, everybody has been focused on standardizing connectivity and communications technologies, low down in the IoT application stack. This has led to worries about competing standards and fragmentation, potentially holding back market adoption.

Now, organizations that depend on IoT solutions are working on interoperability and addressing challenges related to semantics (the exchange of meaningful data across boundaries). The long view is that middleware standardization, of the form that oneM2M provides, will be essential for high-volume applications and those that are broad in scope (e.g. smart cities, smart factories etc.). Interestingly, ETSI is in the process of establishing a new Industry Specification Group, called City Digital Profile [2], which aims to become a city-led initiative to speed up the delivery of integrated citizen services based on standards in a replicable solution stack.

Among the general discussions during this event, there was a recognition of the benefit of an IoT standard like oneM2M and questions about the need for regulatory intervention as a driver of adoption to realize the full benefits. This reminded me of the argument that Bruce Schneier, a security guru, made about government intervention in the IoT market being inevitable because the security risks are too great [3].

Out of the public gaze, there were side discussions about the role of mobile operators in the IoT market as they peer over the NB-IoT wave and see poor commercial realities starting to materialize. MNO executives have recognized that high-volume, low revenue connected devices will not have enough of an impact on top line revenue growth or on profitability. Moreover, the real world does not just contain mobile devices; it is a heterogeneous environment where service providers have to accommodate a mix of connectivity technologies, device vendors and their proprietary communications protocols. On paper, a strategic move higher up the value chain seems the right way to go, if they can abstract away the lower layer technology complexities. If they fail in this endeavor, there is a risk that a utility-business-model mindset will forestall business-model and service innovation relating to the IoT.

In the long-run, the mobile industry will only have itself to blame if it recreates the conditions (ubiquitous and affordable bit-pipe communications) that encouraged the OTT business model in the Internet services market.

[1]ETSI IoT Week 2017 - http://www.etsi.org/etsi-iot-week-2017

[2] ETSI, Industry Specification Group for City Digital Profile - https://portal.etsi.org/tb.aspx?tbid=861&SubTB=861#5068-home

[3] Regulation of the Internet of Things - https://www.schneier.com/blog/archives/2016/11/regulation_of_t.html

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