Intelligence Brief: Can you compete with cloud vendors in IoT? - Mobile World Live

Intelligence Brief: Can you compete with cloud vendors in IoT?

07 FEB 2019

In a recent GSMA Intelligence Research Brief, we examined the lessons from GE’s Predix spin off and Samsung ARTIK’s closure. Both announcements underlined an overlooked challenge in the IoT market: scale alone is not a precursor for success.

Driving IoT adoption is as much about customer education as it is technology. We highlighted GE’s peers such as Siemens, Bosch, or PTC for having expanded their portfolio capabilities through closer cloud integration as demanded by their enterprise customers. Cloud infrastructure, while a key component of any IoT solution, is still only a technology solution. AWS, Azure or IBM may seem ubiquitous in any IoT discussion, but customer education is equally important.

We fully expect a newly liberated GE Predix to stir market demand for analytics and applications, especially in their industrial markets, because customers need to learn how to turn accumulated data into insights. Industrial platform vendors such as GE, Bosch, Siemens and PTC have the granular understanding of customer requirements that can drive the necessary education.

The ubiquity of cloud vendors in any digitalisation effort
2018 was an important milestone year for IoT with new market entrants, M&A and pragmatic partnerships with cloud vendors. For example:

  • Siemens and Bosch signed partnership deals with Chinese cloud vendors Alibaba and Baidu, respectively, to capture future manufacturing 4.0 opportunities in the country.
  • PTC, also a direct competitor to GE Predix, was integrated with Microsoft Azure, to directly address customers’ demand for rapid integration with a cloud vendor.
  • Mid-sized platform vendors such as Wind River also integrated with cloud vendors to fulfil enterprise demands.

If we consider 5G for enterprises to be an important turning point for telecoms companies in terms of network architecture and new service delivery modes, then cloud will become even more entrenched in this fully autonomous future. The question is how should the broader ecosystem co-exist with cloud vendors?

Bring customers to the table
An important lesson from the announcements by GE and Samsung is that customer education and technology are equally important. The broader ecosystem compete with cloud vendors by being more effective in bring customers to the table:

  • Help customer identify data centric use cases: Given the massive volumes of connections and revenue projections, it is tempting for the IoT ecosystem to capture as many customers as quickly as possible and enterprises to deploy IoT without fully understanding what problems technology would be solving. IoT has had more than ten years to move from M2M, but not every enterprise customer is aware of the IoT data repository in-house and how they might utilise derived analytics. Those IoT vendors with capabilities to identify business pain points offer the unique customer insights that cloud vendors would not have.
  • Help customers connect the previously unconnected: 2019 will be an important year for LPWA. Unlicensed LPWA in LoRa and Sigfox have enjoyed an early-mover advantage while mobile IoT (NB-IoT and LTE-M) become standardised on 3GPP. But, 2019 will see increased competition as mobile operators begin to connect new devices to their mobile IoT networks. At the last count in December 2018, the number of mobile operators deploying standardised LPWA such as NB-IoT and LTE-M increased from 30 in 20 countries in 2017 to 83 in 40 countries. Whatever the access technology, these customers require IoT solutions bundled with analytics, platforms, and cloud integration.
  • Be smarter about collaboration
    In our research brief, we identified that the broader IoT ecosystem needs to be smarter about collaboration. This means a departure from the traditional sell-with or sell-through agreement for distribution channels. Smarter collaborations also means unbundling traditional ways of revenue share.

The unusual partnership between Sprint and Ericsson bears close monitoring. Announced in September 2018, Sprint IoT is building a dedicated IoT network with Ericsson and bills revenue not from network traffic, but through APIs that encourage the IoT community to build applications on the network. The desired outcome of smarter collaboration is to drive IoT adoption by developing applications that matter to customers.

– Yiru Zhong – lead analyst for IoT and Enterprise, GSMAi

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.