Shifting Paradigms Set to Shape 6G

How is North America affecting policy change and industry competition?

The participation of White House and Congressional speakers at 6G World’s recent symposium shine a light on the strategic prioritization of next generation communications systems. Political participation matters in the context of 6G leadership ambitions, the practicalities of which I outlined in this three-part article series for 6G World - 1: Leadership, 2: Purpose, 3: Leverage. 

The event was equally important for shedding light on how industry stakeholders are approaching emerging 6G topics and market development activities. The mix of discussions spanned academic research, commercial and operational implications of 6G, industry competition, long-term Federal funding programs, policy priorities, standardization, and vertical-industry requirements. Rather than summarize each panel discussion chronologically, here are several threads that ran through the different sessions, beginning with the need to learn from the past. 

“6G Needs to Learn from 5G” 

There continues to be much reflection on the roll out of 5G, much of it tinged with disappointment connected to overhyped commercial expectations. Panelists from different parts of the industry as well as the Deputy Assistant to the President of the USA, Anne Neuberger, highlighted the imperative to learn from 5G. These are not solely lessons about commercialization. They include national strategy, supply chain considerations and the process of developing each new ‘G’. 

Technical and standardization experts who are less in the 5G marketing limelight challenged the narrative around 5G’s weak demand. One message was about the flexibility designed into 5G’s architecture, the benefits of which will be realized across the evolution of 5G and subsequent generation systems.

The process of 5G also prioritized eMBB (enhanced Mobile Broadband) over mMTC (massive Machine Type Communications) use cases, partly to manage the scope of work. As industry focus shifts beyond broadband, attention is turning to enterprise, IoT and closely related technologies such as digital twins and AI/ML. Looking ahead, the industry needs to prepare for a wider scope of use cases as 6G contains six categories which will shift market and industry paradigms. 

Competition and Industry Paradigm-shifts 

The cellular industry emerged from a market defined by voice, roaming and landline communications. This is no longer the relevant backdrop especially as cellular operators are no longer exerting their (central) role in the ecosystem. There is a view that they are not in charge of setting the requirements and that suppliers are not benefiting from the oversight they historically provided. To some extent, this is one consequence of the industry paradigm shift from vertically integrated businesses to open access infrastructure. In parallel, the telco developer ecosystem is giving way to Internet and App developers.

These changes are setting the stage for customized connectivity, full programmability, and resource sharing. Customized connectivity appeals to the enterprise sector whereas many cellular operators are often geared up to consumers. Full programmability sets the stage for a transition from automation to autonomous operations with implications for workforce size and skills requirements. Resource sharing heralds the end of building vertically integrated stacks with providers expected to do less with hardware and more with software with horizontal approaches. Through a transition that might take several years to take hold there are expectations for a shift from current, software-licensing frameworks to ‘as-a-service’ models.

Panelists outlined other technology and standardization paradigm shifts that the industry needs to anticipate. For example, the communications sector dominated the technology development progression from 1G to 5G. However, the industry can no longer depend on communications sector specialists when the next generations of communications systems will involve much higher levels of compute capabilities. In 3GPP Releases 17 and 18, for example, the “data plane is just a pipe with a few add-ons”. The compute world, however, introduces multiple data centric services which will require much greater intelligence capabilities. Since 5G has no ‘compute’ plane, compute awareness is handled as an over-the-top capability, with technical and commercialization and monetization implications. It remains to be seen how existing, telco-centric models will engage other industry specialists and absorb the new requirements they are likely to introduce.

Business Model Implications 

Across the industry, network operators are already flagging concerns about 6G-related investments and the need to avoid heavy CapEx network improvements. This is one of the factors favoring the adoption of cloud and open infrastructure offerings. Anticipation for one of the biggest business model changes relates to the commercialization of new capabilities for multiple ‘customer’ groups which include network operators, hyperscalers and multiple developer communities. As an example, Google’s representative put forward the idea of Google becoming the (communications) ecosystem and the developer ecosystem. Such ideas for ecosystem orchestration carry obvious implications for incumbents, industry competition and business model innovation. 

One area where communications service providers need to adapt is in the area of business support systems (BSS). This element in the technology architecture tends to hamper innovation and constrain service monetization opportunities. This is a case of a legacy turning into a liability.

Over the top service providers are wise to business operations issues and actively looking for disintermediation strategies. One of the examples discussed applied to cars, many of which only get about 200 hours of use per year. While innovators are interested in tailoring subscription models around usage measures, their approach contrasts with annual subscription models which tend to be the default for many communications service providers.

Subscription management is a middle-person role; in the personal data sector, innovators want to disintermediate telcos. As one speaker noted, this dynamic is reflected in a growing use of the #ownmydata social media tag. 

Rationales for Interoperability 

The personal data reference illustrates how the scope of the communications industry is changing from its initial voice + roaming + landline paradigm. The many greater uses of data will multiply the application possibilities with corresponding long-tail monetization possibilities. This is one of the reasons to advocate for interoperability.

Another reason concerns the business and operating environments that 5/6G’s flexible open and architecture will enable. Since these will not be vertically integrated or vendor-specific walled garden environments, concepts such as end-to-end service quality and joint optimization on an industry-wide level depend on sound interoperability foundations. This also applies to a future where federated sub-systems are able to support distributed compute and compute-as-a-service offerings. 

“Understand Verticals to Interpret Demand” 

One way for service providers to gain commercialization leverage is by understanding and addressing demand. The 6G Symposium agenda included panels that addressed agriculture, automotive and digital media sectors. As the NextG Alliance demonstrated in its research into vertical industry needs, to which I contributed, many requirements highlight opportunities for better packaging of communication systems capabilities rather than ground-breaking innovations.

The Agri-sector discussion contained several examples such as the need to plan for a one-week window for seeding or harvesting. That requires a fleet management solution that provides farm managers with information about vehicle availability, vehicle type, operating status, and location. In case of vehicle problems, remote diagnostics can improve workforce management. Farmers currently rely on off-line map data for their fields. Online data would avoid re-farming and re-seeding situations. At some point in the future, it would be desirable to track a seed over its lifecycle, from seeding to harvest. 

Innovation vs. Engineering 

None of the Agri-sector requirements depends on breakthrough innovations typically associated with 6G. If anything, there is a need to balance 6G research investment between technology innovation and engineering or utilitarian solutions. Examples of the latter include research on energy efficiency in communications systems and developments that can improve spectrum use. 

One speaker commented that a promising role for 6G is to make 4G and 5G work together by offering a framework that integrates multiple technologies and fixing the foundations of 5G’s flexible architecture. 

North America’s Market-economy Paradox 

North American businesses have a strong presence in most of the sectors that make up the communications ecosystem. This is also the case for 6G’s wider scope which covers industrial players that will drive demand and suppliers of cloud, computing, and content capabilities. Market economy principles contribute industry dynamism, market responsiveness and wealth creation to an unprecedented degree. There are a lot of dynamic, short to medium-term activities. 

And yet, when it comes to longer term developments, there is a palpable concern that North America is not doing enough to maintain and develop its leadership record. For example, market-economy principles are not producing a large enough or suitably trained workforce for the expertise and jobs that will contribute to the 6G economy. Nor does the current system facilitate basic governance activities – in areas such as site permitting and spectrum management - in ways that support long-term planning and timely deployments. 

Market economics also encouraged off-shore technology development and manufacturing leading to long-term supply-chain vulnerabilities and loss of technology sovereignty. As a result, the ecosystem is trying hard to readjust itself with a call for government involvement. 

Adjusting for the Future

Industry participants acknowledge that government agencies will have to play a stronger role in 6G and the national agenda. This is coupled to a strong appetite for public-private collaboration. The big challenge is how to incentivize and stimulate dynamism in areas where outcomes take time to materialize and where market-economy principles are not delivering. 

A few ideas came up in the panel session I moderated. Firstly, the industry needs to go further in thinking about value chains. As an example, technology suppliers need to explore ways of creating new revenue opportunities for their network operator customers to alleviate the commercial squeeze that the latter face. This is not a short-term undertaking and will raise profound issues about industry structure and value sharing.

Secondly, the communications industry needs to plan for the IT-telco divide giving way to a platform infrastructure that all ecosystem participants can leverage (via multi-sided business models). The foundations for this exist in the flexibility designed into 5G.

Thirdly, learning from 5G’s emphasis on eMBB use cases, 6G developments need to address a broader scope and to do so in a way that is more connected to drivers of demand. That entails closer and earlier involvement with industry verticals. The same applies to the drivers of societal needs, many of them emanating from less privileged and digitally dependent populations.

Adapting to these realities might be the biggest paradigm shift for North America’s 6G ecosystem.

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. 

IoT Day: Strategy and Competitive Advantage

Over the past few years, the World IoT Day movement [1] has drawn considerable attention to the opportunities presented by IoT technologies. As the industry scales up, strategists will want to study long term and structural changes that will shape the market in years to come. This is important, both for organizations intending to adopt IoT and solution providers hoping to strike it big. 

Late in 2021, the strategy consultancy McKinsey updated its 2015 study and concluded that the IoT was coming of age [2]. If nothing else, the investment in making this update sends a signal that IoT is firmly on the corporate agenda. Firms need to treat IoT as essential to future business prospects. IoT is no longer a headline grabber, a discretionary investment, or a niche application. 

2021 in Review: Competing Segments, Strategies and Time Horizons

Much has changed over the last 10 years that I have published this annual review of corporate initiatives in the IoT sector. I do not track each and every development in the way that the professional market analyst firms do in this tracker of 1200 IoT start-ups [1]. 

Instead, I focus on industry patterns and structural developments that correspond to emerging market opportunities for new and established businesses. Continuing this approach leads me to reflect on three themes in this review of 2021 activities. The first theme touches on market structure and segments that are taking shape. Such specialization is a phenomenon that occurs when a market attains scale. The second explores strategies for different strategic horizons in a couple of key segments. The third theme deals with communities of interest and how industry players are tackling issues related to wider economic benefits beyond those delivered by individual IoT solutions. 

I conclude this review by touching on some of the emerging developments that adopters should factor in their system design and IoT procurement plans. These also carry implications for product development managers on the supply-side of the industry. 

Market Structure & Segments

Looking through some fifty corporate events over 2021, the supply side market challenge is to make it as easy as possible to bring new users onboard by tailoring distinct channels to market. Roughly a third of these events involve organizations lower down the solution stack partnering with service providers that operate higher up the solution stack. This type of arrangement provides the means for packaging a vendor’s offerings (hardware components or an IoT application) to gain access to new markets or to target the service-provider partner’s customer base. 

In terms of developing such channels to market, two segments are apparent. One involves specialist service providers whose pedigree can be traced back to M2M and mobile communications roots. These include businesses such as 1NCE, Eseye, Evrynet, Kore Wireless and WirelessLogic. In addition to building up operational scale, these service providers have also been the target of investor interest. Investment initiatives represent a mix of strategic stake building (e.g., Telus investment in Eseye, SoftBank stake in 1NCE) and scale-up ambitions linked to industry consolidation (e.g., WirelessLogic acquisitions of Com4 and Things Mobile). 

The second category involves cloud service providers such as Amazon Web Services, Google Cloud and Microsoft Azure. These providers acquired M2M connectivity expertise several years ago. In addition to commercial partnerships with established M2M service providers, Amazon acquired 2elemetry in 2015 while Microsoft acquired Solair in 2016. Since then, however, the cloud service provider segment has tended to focus more on tools and developer environments for the application of analytics and visualization as the driver of value. This segment’s strategy is a race to co-opt developer communities and to tie them to the different IoT platform environments.

Segment Strategies and Timing Horizons 

Structurally, the market is segmenting into groups of service providers that are looking at different ways to build scale. While the traditionalists, comprising M2M/IoT connectivity service providers and mobile network operators, focuses on connections, new-comers in the shape of cloud service providers are building scale around the concept of ‘walled gardens’ of IoT data. 

In the case of connections, an important driver of change is the eSIM. This technology enables new operating processes which help to streamline the stock-keeping unit (SKU) complexities associated with manufacturing devices for many different geographical markets. New operating processes also extend to managing connectivity and data handling charges that arise in large or regional deployments where several mobile network operators (MNOs) might be candidates for connectivity. eSIM technology helps connectivity service providers to mask the complexity of handling contracts with multiple MNOs. To some extent, the software option to switch connectivity providers also mitigates against provider lock-in and price escalation risks. 

By contrast, the cloud service provider strategies put a greater focus on data and data applications than connectivity. These strategies also appear to target a longer time horizon. There are two aspects to how these strategies manifest themselves in the market. One involves getting users familiar with each provider’s platform tools and environments. In the process, enterprise IT/OT teams accumulate expertise and become invested in one ‘home’ environment. This applies equally to developer communities that each cloud provider is cultivating through developer outreach efforts, on-line self-help tools and application development resources. The second aspect relates to the build-up of IoT data in a single environment. For large, user organizations, there are benefits from having a common interface to access a single (logical) repository of data that might span multiple IoT applications and several business units. In theory, this makes it easier to share data and to explore operational patterns that might exist in several manufacturing plants or locations. Easy access to data and to mixing-and-matching of data opens up new innovation possibilities. There is now an option value embedded in return-on-investment calculations because users have a pathway to developing second-generation IoT applications because they can access new data sources or implement solutions that tackle cross-silo business needs. 

IoT Communities of Interest 

For a different perspective on market scale, let us is to consider IoT communities of interest. One example is the Zigbee Alliance which rebranded itself to become the Connectivity Standards Alliance (CSA) around mid-2021. It also rebranded its Connected Home over IP (CHIP) project under the ‘Matter’ marketing label. This change is a good example of the need to shift the emphasis away from a technology, that would have been ground-breaking ten or so years ago. Now, the focus is on persuading adopters that those technologies are now largely mature and usable at scale. The investment in market development is also a sign that participating members see value in a collaborative initiative and neutral brand. 

Another community example involves the Industrial Internet Consortium which rebranded itself to become the Industry IoT Consortium. By evolving beyond a generic reference to the Internet, this community is now signalling the importance of solution approach that encompasses a wider set of technologies and business approaches associated with the IoT. 

The IoT technology-push of ten years ago is evolving to a market-pull now that IoT has grown to become a mainstream market. The change is down to adopters and users, including those at the margin, acknowledging the tangible benefits and value-potential of IoT solutions. A side consequence is that different industry participants are considering the impact of IoT systems not just in industry verticals but also for their impact on the wider economy. An example that illustrates this point is Filament STAC which is an IoT industry cluster in Scotland. This multi-company initiative was launched as an industry-government partnership aimed at producing Scottish IoT companies capable of scaling rapidly. It has a three-year target to create more than 25 IoT companies supporting around 750 jobs. In December, it announced backing from several, US tech businesses including Twilio, Plexus Corp, Intel Corporation, Keysight and Arrow Electronics. While this initiative focuses on a localized, geographic cluster it illustrates the growing importance of strategic, national initiatives. 

A well-known example that began several years ago is the UK’s Catalyst program which targets promising segments. Another is the business and technology ecosystem approach promoted by Business Finland which brings together local businesses and promotes complementary expertise and technologies such as AI and IoT. These examples suggest that government and regional development agencies will play a greater role in part-funding and orchestrating strategic areas of the IoT market. 

Developments To Watch 

While the journey to implementing IoT systems looks like a well-trodden path, it is not free of risk and there are still grounds for acting with prudence. Adopters and supply-side innovators need to weigh the long-term implications of initial design decisions and the opportunities that might be sacrificed against the allure fast-to-market strategies. The first issue is the extent to which a user locks itself into a vendor, solution-provider, or technology environment. How real are the switching opportunities in the future and, what might be the associated costs? Also, as a user’s needs evolve, is the underlying technology or supplier team capable of adapting to support deployments that might operate and evolve for periods of 5 to 10 years? 

One "Pane of Glass" (source IEEE, 2021)

A second development to manage stems from the vast opportunity space for IoT applications when considering combinations of data sources and applications. This is where businesses need to focus on interoperability. Consider an example from the early days of the M2M market. Then, application enablement platform (AEP) providers would talk about a single-pane view when overseeing a handful of applications. The metaphor comes from an operator avoiding the need to swivel their chair from one display unit to the next when supervising several applications. This remains an issue in today’s IoT market to the extent that it featured in a cloud computing standard that the IEEE announced in December to facilitate intercloud interoperability and federation [2]. 

In the wider scheme of things, there are multiple facets to the concept of interoperability. It can apply to the interchangeability of components sourced from different suppliers, or to the ability to switch connectivity across different communications networks. In the future, interoperability will apply to silo-applications and IoT data with the aim of making data discoverable, recognizable, and shareable in multi-user environments. While hardware and connectivity interoperability is important today, an important topic for the future concerns data interoperability which applies to combining data hosted in different cloud-provider environments to highly automated IoT systems that depend on semantic capabilities. 

A final consideration is about anticipating and positioning for continuing evolution in the IoT market. How do hardware providers deal with the value squeeze arising from economies of scale and impact on per-unit pricing? In a different segment of the market, connectivity providers have experienced many years of per-device revenue dilution. How do they position themselves to drive revenue and profitability growth through complementary services and entry into new markets linked to the rise of AI and data management? Unlike the start-up scene from the beginning of this article, established service and solution providers companies are higher up the IoT staircase. While they are up and running, there are many more steps to climb. 

[1] The 1,200 IoT companies that are creating the connected world of the future – IoT Startup Landscape 2021 https://iot-analytics.com/iot-startup-landscape/ 

[2] IEEE Approves Cloud Computing Standard - https://www.standict.eu/news/ieee-intercloud-interoperability-standard 

IMAGE CREDITS: Jukan Tateisi and Lindsay Henwood via unsplash.com

Hyperscalers and IoT Market Prospects

The analyst firm, Transforma Insights (TI), recently published a report comparing the cloud hyperscalers – Google, Microsoft, and Amazon Web Services – and evaluating their readiness for IoT and digital transformation solutions. The report is a timely reminder of the role of IoT in digital transformation. It is also a reflection of latent demand for IoT-enabling services and solutions.

Microsoft is marginally ahead of the pack, scoring just over 50 out of a possible total of 100 points in Transforma Insight’s evaluation framework. Each hyperscaler continues to deploy a range of capabilities and developer tools, which would correspond to a higher score, with the aim of maximizing their share of the market opportunity. However, issues about the role of platforms in on-line advertising and social media markets suggests that complications face the hyperscalers.

IoT Platforms and Digital Regulation

A couple of recent and seemingly unconnected publications provide food for strategic thought on the topic of IoT platforms. 

Platforms are an important topic for the following reasons. As businesses deploy Internet of Things applications, many will turn to the service provider market for affordable, feature-rich, and well-engineered platforms. Platforms also represent an important topic for the large Cloud-providers, such as Amazon Web Services, Google Cloud and Microsoft Azure, who understand the importance of platform strategies and data. 

The first publication that caught my attention is a short article on the IoT Agenda site. It outlines that issues of IoT technology fragmentation and discusses the trend towards concentration in the IoT platform market [1]. The second is a study by a group of economists with an expertise in platform economics and competition policy. They studied the EU’s Digital Markets Act (DMA) and its regulatory implications for large and dominant digital platforms [2]. 

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.

Privacy payoffs in smart cities

A few weeks ago, I spoke at the Connected Cities Privacy Summit (CCPS) in Washington DC. This was a 'first of a kind' event focusing on data privacy issues. Other smart city events tend to feature pilot-projects and technology demonstrators.CCPS drew speakers from Google’s Sidewalk Labs and public-sector officials from Canada. US presenters came from a range of academic, consultancy, legal and technology organizations [1].

Many of the CCPS presentations took a cautious approach to privacy protections. To some extent, this reflected the nature of the audience. Roughly half of the attendees hailed from legal, compliance and policy professions. I took a somewhat different approach. My presentation covered the opportunities arising from data sharing. This drew on some of the lessons learned from oneTRANSPORT.io, one of my consulting projects over the past few years [2].

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?

Innovating and Investing Strategically in New Service Categories

A few weeks ago, the UK mobile operator O2 decided to shut down it smart home business [1]. O2 stated that it had not seen "category-leading take up" of the service to justify continued investment.

This episode encapsulates a recurring challenge for businesses in the mobile eco-system, laboring under the opportunities to exploit mobile technology in adjacent industries and new application categories. Just think back to the promise of mobile money and mHealth (another category that Telefonica entered and subsequently exited a few years ago [2]). The new waves of opportunity today are in the industrial IoT and smart city markets, to name a couple of examples.

AT&T and GE Digital hit IoT road bumps

Over the past few weeks, AT&T and GE have featured in the news because of issues connected to their IoT business units.

AT&T seems to be having second thoughts about its Digital Life commitments with some news reports suggesting that it might divest this business unit [1].

In GE’s case, its Digital business unit is emerging from a hard re-alignment following internal activities to stabilize its software platform and to adjust its financial targets. Now, the focus will prioritize profitability over unfettered spending [2].

So, what’s been happening to these two IoT industry pioneers and what can other companies learn from their experiences?

Mass-market data monetization

The motivation for this article comes from several recent and groundbreaking announcements relating to the commercialization of consumer data. In one of these, Proximus [1] launched myAnalytics, a service that sells aggregated customer data as a ‘market research’ service for businesses such as tourism agencies, event organizers, marketers and those in charge of mobility management.

Telefonica, one of the larger communications service providers, announced plans to create a personal data bank for each of its 350m customers [2]. This will allow customers the means of storing, managing and selling their own data. When questioned about Telefonica’s plans, Vodafone’s CEO expressed puzzlement as to whether this is any different from everyday protection of customer data [3]. This reaction should set a few alarm bells ringing.

Rumble in the IoT Jungle

I recently participated in a debate, hosted by the IEEE Communications Society, about the pros and cons of IoT standardization. My debating counterpart was the North Americas President of SigFox, a company that has so far raised over US$150m. SigFox is in the process of deploying its proprietary networking technology in 18 countries specifically for the purpose of energy-efficient and low-cost IoT applications.

Much of the debate and several of the audience questions focused on the worry about standards proliferation in the IoT market. This creates a confusing picture for business that have to make long-term product development decisions. My observations on the issue of IoT standardization were fourfold.

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 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.

Long term prospects for IoT and 'digital'

Last month, I was invited to chair a panel for the eponymously named company, Apigee. Although it was billed as an API event, Chet Kapoor (Apigee’s CEO) opened the 2-day conference by framing today’s market in terms of the transition to ‘digital’, with APIs being a key implementation enabler. His opening remarks summarised the situation as follows:

• Every business is a digital business

• Every business needs a digital platform

• Every business has a Chief Digital Officer 

In the past, I have written on the topic of telecoms operators launching ‘digital’ strategies [1]. It was therefore reassuring to hear this development being so firmly validated. It was also positive to witness several enterprises discuss their digital strategies and early implementation successes.

As the market develops, enterprise demand will continue to drive demand for enabling services. These are opportunities that telecoms operators and specialist M2M/IoT platform providers can capitalise upon. There is early evidence of this trend in the recent investment activities of companies like SingTel and Telstra.

LTE to spur IoT?

A few years ago, it was standard practice to associate M2M with low data rate characteristics that could be served using 2G networks. In fact, there was quite an uproar when some operators started to announce 2G network shut-down plans. Ignoring the economics of operating cellular networks, some industry commentators also talked of retaining a portion of 2G spectrum for M2M devices.

Recently, a representative[1] from Google reiterated the special characteristics (low bandwidth and inexpensive) of IoT applications and the need for a brand new network. Over the past few years, several initiatives have been launched to address the potentially massive, low data and low power requirement segment of the M2M/IoT market; Neul and SigFox are two examples that spring to mind.

It was therefore interesting to hear of a development that has been working its way through the 3GPP standards process. LTE, traditionally associated with high data-rate mobile services, is now being engineered to address M2M/IoT applications. This is not a case of data-intensive video surveillance or digital display applications but the use of LTE in moderate data rate, low cost and long battery life scenarios.

Google NEST – a case of déjà vu?

Almost 10 years ago, Amazon formed a team to work on a groundbreaking, highly integrated consumer product. Amazon began with a goal of improving the user experience surrounding physical books. The initiative was led by Gregg Zehr who brought considerable pedigree having previously been the VP of Hardware Engineering at Palm Computing.

The new team was set up outside of Amazon and its strategic objective was complementary to Amazon's mainstream activities. This was the genesis of Amazon’s Lab126, a start-up that focused on product innovation around a new generation of connected devices. Amazon's connected device road map has progressed from the connected eReader to tablets. Most recently, Amazon’s Kindle has been talked about as a point-of-sale device.

If we fast-forward to the present day, it is difficult to escape a sense of déjà vu when looking at Google’s acquisition of NEST. Here we have a separate entity with core competencies in creating highly aesthetic consumer products, led by executives with a strong Apple-design pedigree. And, according to Google’s CEO Larry Page, Google and NEST are “excited to bring great experiences to more homes in more countries”.

However, relative to Amazon's start-up costs ten years ago, it seems that the entry cost for a new category of innovation in the connected devices arena has gone up to the order of a few billions dollars!

So what did Amazon accomplish with Lab126? What might we expect from Google/NEST? And, what does this mean for companies that can’t afford billion dollar initiatives?