There are ample IoT opportunities for communication service providers if they have the right plan in place to capitalize on the opportunity
This is the first article in a three-part series examining the opportunity, challenges and course of action for service providers as they tackle the “internet of things.”
Connectivity is the underpinning that drives the internet of things, so communications service providers should be sitting pretty, right? Not so fast. Not only are there critical business, technology and operational challenges that service providers need to overcome as they look to chase the IoT dream, but because the IoT potential is huge, service providers also need to focus their efforts on where they can find short-term and subsequently long-term success.
Let’s quickly take a step back and look at why the IoT market is so compelling to service providers:
• Cisco: Global IP networks will support up to 10 billion new devices and connections, increasing from 16.3 billion in 2015, to 26.3 billion by 2020.
• BI Intelligence: Businesses will invest nearly $4 trillion in the IoT globally between 2015 and 2020, and overall, nearly $6 trillion will be spent on IoT solutions over the next five years.
• GE: IoT will add $10 trillion to $15 trillion to the global gross domestic product by 2020.
That’s right, we’ve realistically started talking about the IoT in trillions of dollars, all happening within the next few years. It’s clear why service providers not only want a piece of the pie, but also to own the ecosystem. There’s a lot of money at stake and those early to the table have the opportunity to capture a bigger piece of the pie.
However, opportunity also comes with a good dose of reality. While some service providers have been quick to devote resources to develop their IoT strategies, determine the challenges that stand in their way and work to overcome those issues, many are still looking at the opportunity and wondering where they fit in.
The IoT train is not slowing down and it is time for service providers of all shapes and sizes to embrace machine-to-machine and IoT. Doing so will allow them to generate new revenue streams by monetizing existing network assets and reducing cost. In order to experience the benefits, they need to figure out where their strengths are, where they best fit within the ecosystem and develop business models quickly.
Connectivity is one element and seems to be the least-common denominator (read: easiest) way for service providers to get involved. Most providers are already involved at this level – data is data, after all – even if they don’t have a formal plan in place. The risk here is that when connectivity is at stake for the IoT, the network becomes a commodity.
There are services providers on the other end of the spectrum, however, actually working to create demand instead of just reacting to it. They are doing this by creating end-to-end solutions in vertical markets through their own products or partnerships. One place we’re seeing this play out significantly is in the smart home, where on their own or through partnerships, service providers are offering home security systems and services, with varying degrees of success.
Stepping further outside the connectivity picture, two other U.S.-based providers have – through partnerships and on their own – upped the ante in the IoT game:
• Comcast has partnered with Boomtown, a startup accelerator, and opened an IoT development lab in Boulder, Colorado, in early 2015. The lab is accessible to IoT technology entrepreneurs looking to create products and applications specifically for IoT. There are dedicated spaces for storage, working stations, 3-D printing and conference rooms. Comcast takes on the role of a technology accelerator and IoT lab initiatives are a great match for the Comcast Platform.
• Verizon Communications has attracted both clients and developers with its ThingSpace program and Solutions Lab. Verizon’s ThingSpace program provides developers looking into IoT with application programming interface documentation, developer kits, community support and tools for building IoT applications. The provider’s Solutions Lab provides IoT solutions and publications for businesses that span across industries in the private and public sector.
Comcast and Verizon Communications have been pushing the envelope in the United States on encouraging IoT adoption and others are close on their heels. The same is true with providers around the world. With a well thought out, effective IoT strategy in place, providers can own and monetize the ecosystem.
James Comfort is the manager of service delivery at Excelacom. Comfort has seven years of experience in the IT consulting and telecommunications industries and is PMP certified. He has held various roles during his tenure at Excelacom, including project management, deployment and strategic planning of delivery systems. Comfort’s responsibilities include working with onshore and offshore resources to identify and implement quality solutions, as well as maintaining effective relationships with clients and supporting their business and operational needs. Comfort earned a Bachelor of Arts degree in Language and International Trade from Clemson University in South Carolina.
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