In the technology world it’s impossible to escape the hype around the Internet of Things (IoT).
According to Cisco, which knows a thing or two about networks, IoT spending will increase by $772.5 billion by the end of 2018 as organisations look to take advantage of the efficiencies and new markets that increased connectivity opens up.
The message from vendors and analysts is simple: IoT is going to change every industry and businesses will need to adapt to survive. But where do you start? The operators think they have the answer.
It’s no secret that traditional revenues are falling within the industry and providers need new sources to maintain growth. Although there are a number of communications technologies vying for supremacy in IoT, the telecoms industry will have a key role in connecting the IoT.
But speaking at the Smart IoT London event this week, O2 outlined its view that operators can help customers navigate the world of IoT and that partnerships and collaboration will be essential to creating an IoT ecosystem.
IoT partnerships
“It’s obvious to us that customers want a solutions provider,” says Dominic Hulewicz, O2’s IoT innovation manager. “The only way this is going to work is through collaboration. Businesses want to innovate but they don’t know how to do it. They’d like to partner with someone who can hold their hand and find the best of breed solution.”
Hulewicz explains that O2’s large enterprise customers have been working on IoT projects for some time and have a pretty good idea of what they want. Normally, it wants O2 to provide the connectivity in the most efficient and cheapest way, but the operator wants to get more involved – even if that means bypassing its own mobile service
“We’re moving more towards offering a new solution, not just ‘here’s a bunch of SIMs and here is some connectivity’,” he adds. “It may not be that our cellular network is the best fit. You look at [Low Power Wide Area Networks] LPWAN and these devices don’t fit with a traditional cellular higher-power solution. We partner ourselves with other providers to give the best solution that our customers are trying to do.
“When you’re building an end-to-end product, you’ll lose focus of what you’re trying to do. You don’t want to get bogged down.”
Unlikely allies
His calls for cooperation are echoed by Sigfox, which has LPWAN networks in several countries around the world. It believes that most IoT devices won’t need significant bandwidth and that LPWAN is the only technology that can bring the cost of connection down because most mobile networks are built for smartphones.
Vodafone is a great supporter of Nb-IoT, which is LPWAN that uses cellular infrastructure, while Sigfox has its own standard. However Kevin Maher, Sigfox’s UK head, told the same event that he believes there is room for coexistence.
“Sigfox’s view is that 80 per cent of the devices out there that are going to be connected via IoT don’t need high bandwidth,” he says, adding that technologies with additional capacity might be needed to occasionally send video.
“If anyone is going to claim that one technology is going to suit all, then they’re crazy. I don’t think making a multi-standard modem even makes sense, it would be too expensive.”
Trust
What surprises Hulewicz the most is that many smaller businesses outsource the communication components of their project and have no idea how it works. This can make it difficult to ensure it is futureproofed and can scale up, he argues.
“Is it a carrier-grade solution if it grows? Does it scale?” he asks. “Yes, it’s about partnership but its about choosing the right partner that gives you the breadth and not just one or two bits and will grow with you.”
Trust, he says, is essential to these partnerships. Sometimes the ideas come from the customer and sometimes it comes from O2 who will provide thought leadership. In the early days, his team will work with the customer to understand their needs and create proof of concepts that might not even amount to revenue because the biggest fear is having to change operator.
“Churn is a major headache,” he continues. “You really want to avoid changing operator because of the cost. You might have to get someone to change equipment because network doesn’t cover it anymore.”
Future developments in network technology and advances in areas like eSIM should reduce this risk, but it’s still a concern.
“There are things that are going to be low powered and untouched for ten years,” says Hulewicz. “It could be buried in tarmac or in an air conditioning unit. That means you need to get as much as you can in to the network … as you don’t want to touch that again until it runs out of power.”
The culture of openness that has spread across the IT sector over the past decade or so has clearly spread to the world of telecoms. Different companies with different goals are prepared to work together and work even more closely with their customers.
This is true in 5G development as well, where there is an understanding that startups and smaller firms will become integral parts of the ecosystem and drive innovation.
“I think the technology is in the right place,” concludes Hulewicz. “The bit that the industry needs to work on now is on that joined-up solution and making sure that those who will integrate all these solutions are geared up towards doing so.”
