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.

Mobile IoT and Adjacent Industries

How time flies! Over 10 years ago, I was part of a GSMA strategy team that looked at new growth markets for the mobile industry. Our report – entitled ‘Embedded Mobile: M2M and Beyond’ – identified opportunities for growth in adjacent industries. This would need the GSMA to promote the collective interests of the mobile industry in several ways. One recommendation was to work with supply-side partners. This would lower the barriers to adoption of mobile in non-mobile industries.

A second recommendation focused on stimulating demand by fostering a dialog with non-mobile industries. Besides highlighting the value of connecting assets, it would provide a channel to feed user needs back into the mobile eco-system.

In the aftermath of the 2008 financial crash, the GSMA’s initiative survived and thrived. Soon, senior executives from the automotive and pharmaceuticals sectors became keynote speakers at Mobile World Congress (MWC). And, the composition of MWC attendees changed with an influx from non-mobile industry sectors.

Why does this history matter now?

Looking up the IoT Value Chain

People are so preoccupied with everyday tasks that they often miss out on what is around them.

Walking down the street, how often do you catch people looking up at the features of old buildings or roof-level signage? The same is true in business life. Let’s consider how this plays out in the IoT market.

Recently, I heard a telco executive explain why mobile network operators (MNOs) focus on connectivity. He pointed to two factors. One is that connections and data connectivity are straightforward things to measure, with a well-established legacy from mobile phone sales. In effect, businesses manage what they can measure. The second is that it is easy to look down at the network from the MNO’s vantage point in the IoT technology stack. It takes an effort to lift one’s head and look up. That’s much like missing out on the architectural features and art work when we walk head-down (even without the excuse of a smartphone) along a street.

Occasionally, however, it makes sense to look up, not just to appreciate your surroundings but also to get a sense of whether the world is changing and how you might need to adapt.

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.

2018 in Review: IoT puzzle-pieces falling into place

Compared to previous years, the pace of corporate activity in the IoT arena has settled down. This is to be expected in a maturing market cycle. This impression may be at variance with wider industry sentiment where the use of AI/Blockchain/IoT/Machine Learning labelling continues to sensationalize.

As a sign of IoT market reality, the opening event of 2018 dealt with the commercial reality. It took the form of Telefonica O2 withdrawing from the smart home market through the closure of O2 Smart Home. The year ended with a couple of more promising events for the mobile and IoT industries. I’ll touch on these later.

Most activity was concentrated among three groups: technology vendors; network operators (mobile, low-power and virtual); and, platform providers.