Solutions vs. Systems

Many years ago, while working on the GSMA’s “Beyond M2M” strategy, an M2M service provider described their service offering to manage office photocopier machines remotely. This included continuous status monitoring, diagnostics, and just-in-time replenishment of consumables. At a time when cellular hardware and network connectivity were costly, the provider chose cellular over Wi-Fi connectivity. This was for economic and user-experience reasons. The cellular approach avoided the costs of liaising with the customer’s IT staff to customize local area networking policies. It also reduced technical support costs that arose from dispatching support technicians when remote management was ineffective due to local IT and firewall configuration issues.

This situation exemplifies the type of OT/IT, shared responsibility, and user experience challenges that organizations will face as IoT systems are deployed more widely across the economy. They involve interconnecting systems. Some issues arise for technical reasons, as happens when combining sub-systems. Others involve procedural systems, when IT and OT departments need to collaborate or when two or more organizations need to agree on common rules. 

I was reminded of the remote photocopier story by a couple of recent news items. One is a SenzaFilli podcast with Google’s Preston Marshall. The second comes from an interview with Airbus in which they discuss their plans to migrate from Wi-Fi to 5G in industrial areas.

Small Factors Can Influence a Poor User Experience? 

“What should 6G do for us?” was the topic of the SenzaFilli podcast that included a segment discussing Wi-Fi’s poor user experience. That observation, made by Google’s Preston Marshall, came as a surprise because most users focus on the value of Wi-Fi as a solution for high-speed connectivity. It is superior in buildings and office spaces where cellular connectivity is either patchy or throughput constrained. What the criticism focused on was the few seconds or minutes that it takes a user to register with the nearest or official Wi-Fi hotspot. While short in duration, it affects how a user experiences a Wi-Fi system.

The experience can also extend to re-connecting to a hot spot a few hours or the next day after a first connection. Having to find the correct web portal or url that allows a user to navigate to the Wi-Fi sign-on page has frustrated me in public libraries, hotels and on Wi-Fi equipped aircraft over the past year. In the IoT context (no human in the loop and constrained devices), that is problematic. Dispatching a technician is not always feasible or economic.

In the absence of standardized procedural protocols, the design of connectivity and registration procedures needs to include additional sign-on steps and procedural safeguards. In the case of Wi-Fi, one idea from the SenzaFilli discussion was to leverage cellular/3GPP’s core networking capabilities for authorization and security. This is an example of system of systems design and one that will be increasingly necessary as the need to weave different technologies together with the rise of IoT and automation. 

Higher Threshold for Business-Critical Uses 

In the Airbus case, there is a move to replace Wi-Fi in all industrial areas over a three-to-five-year period. One trigger for this is the growing availability and evolution of 5G infrastructure whose flexible API-based approach makes it easier to combine solutions. Conceptually, there is a framework and toolkit to address IT/OT integration, cybersecurity compliance, and automation. This is another system of systems example that offers users greater configurability and control on top of connectivity. 

From Connectivity to Inter-Connectedness 

More widespread IoT deployments will need to accommodate multiple connectivity technologies including cellular, satellite, and Wi-Fi among others. Cellular would seem to be the integrative technology given the potential of its service enablement and orchestration capabilities. In the private networking arena, according to Siemens, cellular (5G) is viewed as infrastructure and Wi-Fi as an OEM technology.

Beyond connectivity and multi-connectivity (e.g., combination of terrestrial and non-terrestrial networks), IoT deployments will involve other interworking with other systems. Component systems include higher levels of data management (e.g. semantic interoperability), AI/ML, and digital twins. Discovery (or learnability), registration, and authentication procedures will need to operate without a human in the loop. Beyond thinking of people as the primary user, the expanding market to connect machines, applications, and digital entities requires an expansion in scope from connectivity to inter-connectedness. To meet new requirements, system architects will need to integrate solutions into systems, both technical and operational.

A $300bn Market for Telco-APIs

How much of the opportunity will mobile network operators capture? 

The business opportunity to access mobile network capabilities via application programming interfaces (APIs was one of the top stories at MWC 2024. Valued at $300 billion by McKinsey, the management consultancy, the scale of opportunity positions APIs as a vehicle to move the industry’s revenue dial materially.

However, the opportunity will be complex to realize. From this GSMA webinar, it was evident that business model and monetization frameworks are a work in progress. In addition, market realization depends on a multi-party service delivery chain; critical elements to the telco API ecosystem reside outside of mobile network operators’ (MNOs) control. Finally, the mobile industry’s focus on API monetization and revenues puts the sector at risk of overlooking wider considerations and key market-development levers. 

2022 in Review: A Sudden Shock of Realism

Amazon opened 2022 with announcements targeting the smart home community that is forming around the Matter protocol and opportunities for IoT in non-residential sectors. These two initiatives are examples of how some large organizations are trying to have a “finger in many pies” to make the most of the variety and scope of IoT opportunities. 

2022 closed with a flurry of Matter-compliant product launches from a range of large and small businesses. The year-long journey and commitment to an industry-alliance model point to a degree of realism about the IoT market. Behind the technology fanfare, they highlight how businesses and getting to grips with commercial market-development and the technical challenges associated with interoperability, both of which are needed for scale. Meaningful collaboration seems to be taking hold compared to “go-it-alone” strategies. 

2020 in Review: Corporates Adapt Their IoT Business Models

This review of 2020 corporate initiatives in the IoT market builds on a history of tracking strategic industry developments for over a decade. Two sets of corporate events that bookended the start and end of 2020 provide instructive examples of the roadmap and dead ends that characterize today’s IoT market. In the intervening months, organizations in different parts of the industry ecosystem bolstered their IoT strategies. Some developed complementary capabilities through M&A while others addressed go-to-market issues through business reorganization and product-innovation initiatives. For many organizations, however, there remain challenges in balancing short term imperatives with strategic positioning goals. There is a degree of comfort in embracing the familiar. The risk is that this leads to an under-investment in properly integrating new business approaches and complementary technologies.

Where the IoT Market is Heading

I delivered a presentation some weeks back at an online conference for the managed-services industry. My talk was about the implications of IoT for digital transformation [1]. To prepare for the presentation, I began by looking back over the past decade of market developments, joining a sequence of past and present developments to see into the future of IoT. This exercise provided useful insights into the evolving pattern of customer needs, consequences for where the market is heading and, implications for strategy and business innovation.

2019 in Review: A changed IoT landscape

The turn of the year has triggered many people to reflect on what they were doing 10 years ago. With that in mind, I looked through my tracker of M2M and IoT corporate initiatives to see what has changed and what we might learn about the future. The main categories of initiative include the following: technology innovation, market entry/expansion, partnering, acquisitions/investments, distributor agreements, product/service innovation, business reorganization and outsourcing.

A more tightly knit IoT value-chain 

A snapshot of the 2009 industry covers a relatively well defined mobile-industry ecosystem. This largely centered on mobile operator initiatives, driven by leading operators and supported by GSMA efforts to develop a new market for the mobile ecosystem.

Rumelt on 3G: Lessons for 5G and IoT

The consultancy McKinsey recently republished a 2007 interview with Richard Rumelt [1], professor of strategy at UCLA’s Anderson School of Management. Rumelt opened his commentary on strategy by noting that most corporate strategic plans have little to do with strategy. Instead, they typically end up being “three-year or five-year rolling resource budgets and some sort of market share projection”.

What senior managers want out of the strategy process, according to Rumelt, is a pathway to substantially higher performance. That can happen in one of two ways. A firm can either invent its way to success or, it can quickly and skillfully exploit some change in the environment. Examples of such change include technology, consumer taste, resource price or competitive behavior factors.

The telecoms industry finds itself at the intersection of many such changes. On the supply side, the arrival of 5G networks and the standardization of low-power IoT devices provide two industry transition opportunities. These developments will usher in new service concepts and business opportunities.

A change in perspective reveals new IoT strategies

My last post examined the direction that several MNOs are taking with their IoT strategies [1]. Applying these trends at an industry level, I questioned whether MNOs are approaching the commercial opportunity with a broad enough strategic perspective. Think about it from the perspective that traditional mobile connections will supposedly account for roughly 10% of all IoT connections. That proportion should rise now that low power cellular technologies (NB-IoT family) are firmly on the deployment roadmap. Since this raises the credibility of a vibrant supplier eco-system, more adopters should gravitate to mobile connectivity to take advantage of more compelling economies of scale.

Nevertheless, it’s clear that mobile connectivity will coexist as one of several IoT access technologies. However, unless MNOs find ways to stake an economic role in activities higher up the value chain they will lose out on promising commercial prospects. They will also find themselves dis-intermediated from end customers and their needs. How might this play out?

A fresh look at MNOs' IoT strategy

Over the past few weeks, there have been several commentaries about IoT strategies for mobile network operators (MNOs), several of these expressed at Mobile Europe’s 2018 IoT in Telecoms conference.

Vodafone’s Director of IoT, Stefano Gastaut [1], expressed visible frustration about the ‘dumb pipe’ label attached to MNOs and the implied commoditization of connectivity. Enrico Bagnasco, Head of Innovation at TIM articulated [2] a ‘horizontal services’ view.

And, finally, Ericsson published a study [3] drawing on interviews with 20 mobile operators about the status of their IoT priorities and the strategic opportunities for growth. One highlight in Ericsson’s findings is that 70% lack a well-defined strategy. While many are testing different roles in the IoT value chain, 80% plan to move up to higher layers.

On the whole, it therefore looks as if the industry has got second wind, aiming to build on a first phase of growth, triggered by the GSMA’s ‘M2M and Beyond’ industry strategy.

So, are operators on the right track to capitalize on the opportunity or has the market passed them by?

Blockchain and the Mobile Industry

With almost no industry untouched by blockchain-mania, what opportunities does the technology hold for the mobile industry? Recognizing the issue, the GSMA has begun to explore the applicability of its Mobile Connect, identity management proposition. And, at this year's Mobile World Congress, several mobile network operators (MNOs) bandied together to launch a collaborative approach [1].