Fright Night 2014: Misunderstood Service Provider Opportunities – Part One (IoT)

Peter Jarich

Peter Jarich

Summary Bullets:

  • In many conversations about the Internet of Things (IoT), operators play a central role – supplying the connectivity layer and (sometimes) broader end-to-end IoT solutions.
  • Where operators are left out of the broader IoT discussion, in spite of their efforts and assets, they need to ask “why.” So do their vendors.

Halloween is just over a week away. While many people get much more excited about the day after Halloween (you know, when all that pumpkin-shaped candy becomes suddenly cheaper), just as many relish the idea of taking some time to focus on all the things that scare them. Haunted houses. Spiders. Zombies. That pile of unpaid bills you’ve been ignoring for weeks. It truly is the one time of the year when you can revel in everything frightening.

It’s fitting, then, that I spent a good amount of time in October at conferences – IoT World Forum & Wi-Fi Global Congress – that flagged a few things which should be scaring service providers. The issues here aren’t so much about competition or new expenses or even zombies, but rather about opportunities that carriers could be missing out on. Big opportunities. Scary big opportunities. Scary big opportunities that they may be actively TRYING to target.

Let’s start with the IoT World Forum (IoTWF). By way of background, the IoTWF is a Cisco-organized event aimed at driving a recognition of IoT market opportunities along with workable IoT solutions. In other words, it’s about demonstrating that IoT is real, is delivering benefits, and is set to be a huge market. Helping to make this point is the fact that in its second year, the IoTWF was 50% funded by sponsors like Intel, Rockwell Automation, Schneider Electric, IBM, Siemens, Freescale, Bosch, GE, Sprint, and many more. Notice anything about this list? How about the fact that service providers weren’t a major component of the event’s sponsors (Sprint was the only one) but companies focused on vertical market opportunities and industrial IoT were? In a nutshell, that’s a fair representation of the sentiment at the event. A panel including Sprint, AT&T, and Orange Business Services gave a view into their specific initiatives, but – beyond that – the discussion of where operators fit into the broader IoT ecosystem was severely limited.

This might not seem surprising. Connectivity is just one part of any end-to-end IoT solution. Where operators are seen, primarily, as connectivity providers, it’s only natural that they’d be marginalized. Yet, if not surprising, this should be where things take a turn for the scary if you’re an operator.

There’s no shortage of carriers with end-to-end IoT solutions. Yes, connectivity is a part of those solutions. So are a bunch of other things: device provisioning and management, reporting and analytics tools, business consulting, service delivery platforms, etc. With many operators fielding dedicated M2M organizations for five-plus years, sales teams and corporate partnerships have been engineered to tackle “hot” IoT verticals like utilities, transport, healthcare, retail and the public sector.

So, what’s going on here?

  • It might be the event. There are plenty of IoT events where carriers are front and center. In an effort to get its enterprises to move on implementations, Cisco and crew may have (consciously or not) chosen to look outside of the carrier space.
  • It might be Cisco, more broadly. Where Cisco’s IoT efforts are, largely, driven by its enterprise teams, you wouldn’t expect a lot of focus on the carrier.
  • It might be the complexities of IoT as an ecosystem. By definition, an ecosystem consists of multiple, diverse players. Who gets the glory, visibility and attention depends on your perspective. If you think of carriers as connection providers (vs. integrators) then you’re likely to view them as bit players.
  • It might be a reluctance to disclose momentum. Every operator in the IoT space can point to a laundry list of customers across a wide array of verticals. Few explicitly disclose their M2M connection counts, making it hard to gauge if they really are IoT market leaders, or just pretenders.

It’s probably a bit of all these. It’s telling, for example, that the IoTWF carrier-focused panel missed an opportunity to talk about Cisco’s work with GE’s Predix platform alongside Verizon and Vodafone. It’s also true, however, that IoT has been talked up as the “next big thing” for years; this is why the IoTWF aimed to showcase working use cases and why carriers may not be doing themselves any favors by not disclosing more about their successes and momentum. This makes it all the more important for operators targeting the IoT space to work with solution suppliers who make them an integral part of their messaging – if not the center of the IoT universe. If nothing else, those vendors should be willing to put on a mask of support, and not just at Halloween.

About Peter Jarich
Peter is Vice President for the Current Analysis Consumer and Infrastructure services. Peter and his analyst team monitor and evaluate activities in the markets for Consumer Services and Devices, Digital Media, Fixed Access, IP Services, Mobile Access, and Transport and Routing Infrastructure, Telecom Vendor Services, and overall coverage of the Mobile Ecosystem.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: