Webinar Review: Surviving IoT: How CSPs can thrive in the next industrial revolution
The Internet of Things (IoT) era is finally upon us but for those in the telecoms industry, the advent of IoT is creating anxiety. However, as we explored in a recent VanillaPlus webinar, there’s no reason for communications service providers (CSPs) to be afraid. In fact, IoT ushers in a new world of opportunity, which is at least partly reliant on an old world of telecoms expertise.
To explore the opportunities and address the challenges, we assembled a channel composed of Robin Duke-Woolley, an analyst and the chief executive and founder of Beecham Research. With more than 20 years’ experience as an analyst and consultant in telecoms, he is one of the best-known and most respected names in machine-to-machine (M2M) communications. Beecham Research combines successful business experience and extensive analysis expertise in both research and consulting practices. The company operates globally and has research partners in many parts of the world.
Robin was joined by Duane Gabor from the Telecom Solutions Group at VoltDB. Gabor is a telecoms executive with more than 20 years of experience in the sector. He oversees VoltDB’s direction and business performance in the North American telecoms sector and is passionate about helping CSPs deliver world-class solutions for their customers. Previously he has worked in the OSS/BSS, big data analytics and CEM markets.
Our webinar, which is available for playback here, began with a presentation from Duke-Woolley setting the scene. Describing the topic as “a big theme with many implications,” Duke-Woolley asked the audience the first of two poll questions. This asked: Where are you in your process to fund IoT systems?
Encouragingly, the largest proportion of respondents – 36.7% – said they have budget and are spending money now. This positive attitude was supported by no respondents selecting the answer that they are not investing because the IoT opportunity isn’t real.
Duke-Woolley then moved on to share Beecham Research’s view of the IoT ecosystem. In a simplified but still complex illustration, Beecham has divided IoT into nine key vectors to demonstrate the scale and scope of the entire market place. Those sector then, once the power of connected devices have been added lead to new opportunities. The illustration suggests more than 300 applications but, Duke-Woolley acknowledged, “There are many, many more in real life, there’s a huge variety of applications because this is a multi-speed sector in lots of different markets.”
He went on to detail some statistics to back up the scale and scope of IoT. Beecham’s research projects there will x20 growth in endpoints between 2016 and 2020 and those endpoints will transmit and receive much more data, resulting in a huge rise in the data traffic requirements being placed on CSPs. In addition, he said, there will be a new emphasis on service revenues and solutions that are global as opposed to local.
“There will be a massive need for managing connectivity for everything, everywhere,” he said. “That connectivity is not actually a commodity, so how this will be provided needs new thinking all the time. In addition, there’s a need for increasing interoperability between different partners and different parts of the service opportunity. All need to work together and interoperate in real-time and in a highly secure way.”
Duke-Woolley then handed over to Gabor who continued to affirm the sheer scale and size of the IoT opportunity. “The stats are stunning,” he said, sharing recent research from analyst firm IHS Markit that predicts there will be 30.7bn connected devices on the internet by 2020, a doubling of the current number.
Gabor also had statistics to support the result of our poll. “We’re at the point where real spend is happening,” he said. “One estimate I’ve seen expects global spending on IoT to hit US$737bn in 2017, while Business Insider predicts that almost US$6tn will be spent over the next five years on IoT solutions.”
A US$6 trillion market is evidently a very real opportunity and organisations are increasingly keen to invest to get their share. “Investment is the norm rather than exception now,” Gabor added. “So, who’s going to win and why? I strongly believe telcos will win for three key reasons.”
Gabor’s first reason is the availability of mobile data. He said traffic has grown 63% in one year and the growth curve doesn’t level off. He cited a prediction that, by 2020, networks will be handling 600 zettabytes of data per annum. “Telcos are probably the world’s leading experts on handling avalanches of data so they’re well placed,” he said.
The second operator attribute singled out by Gabor was their ability to manage and distribute huge numbers of devices. He said that, by 2021, there will be 27.1 billion connected devices and, in the same year, M2M modules will account for 51% of networked devices. It’s a tipping point, more machines will be connected than people. “Telcos have the pedigree and infrastructure to handle this many devices simultaneously, they’ve proven it,” he confirmed.
Finally, Gabor sees CSPs’ ability in decisioning as a critical attribute. “The skill is to decide which information is relevant and useful,” he said. “The challenge here is less about data processing and more about finding the needles in the haystack. Telcos are good at this and support for IoT devices will have to be in real-time, which they can do.”
However, there are significant challenges facing telcos and the further development of IoT. “Traditional batch processes won’t be enough,” Gabor explained. “Finding out that a process has failed at the end of the month isn’t useful, you need to know in real-time.”
“IoT changes the telco business model as well,” he said. “Monoliths won’t work anymore because the data must be shared from devices to partners and others. The models where the device might be a consumer and producer of information requires billing, for example, to be altered and bifurcated.”
“The future for telcos really is one of becoming communications service providers with focus on services,” he concluded. “If you’re a telco, IoT is a revolution, but it represents only an evolution of many of the things you already do well. Telcos really do have an expertise that will play well in the IoT economy, it’s a really exciting time to be a telco.”
Duke-Woolley then opened the floor to a second poll and a vibrant Q&A session but if you want to know what happened in those, you’ll need to listen to the webinar!