Surviving IoT: How Telcos Can Thrive [Webinar Q and A]
Surviving IoT: How Telcos Can Thrive [Webinar Q and A]
How will IoT impact the telco industry and how can those companies make the most of them? Check out this Q&A from a downloadable webinar to see what's happening.
Join the DZone community and get the full member experience.Join For Free
VoltDB and Beecham Research teamed up to host a webinar in July called, “Surviving IoT: How Telcos Can Thrive in the Next Industrial Revolution”. We had such excellent questions during that session, that we decided to post them here. For those who missed the webinar, download it here in its entirety.
There were many questions unanswered during this session. Look for a blog post coming soon that will highlight those and answer them.
Editor’s note: Unless otherwise noted, the question is coming from a webinar attendee via our chat functionality during the session and voiced by host Robin Duke-Woolley. Most answers were provided by VoltDB’s Duane Gabor, but are sometimes augmented with thoughts by Duke-Woolley. In those cases, DG and DW denote the answers of each.
These answers have been edited for clarity and grammar.
Q: “What kinds of applications are leading the way in terms of IoT deployments?”
A: The first to market are the high volume, financially meaningful types of use cases. To me, that’s industrial automation, process management, alerting and alarming in security. There’s clearly a market for managing that. An example would be – technically the Internet of Things includes the use case where your tea kettle can alert your phone when your tea gets a little bit too cold. It’s fascinating. It’s wonderful to do, but I don’t think there’s necessarily a lot of revenue. Where there is an enormous amount of revenue is shipments of thousands of cars are arriving from a dock somewhere distributed throughout a country, or food is distributed throughout the countryside and the temperature control on that is absolutely essential to keep everything fresh, or medical supplies must be tracked carefully, because there’s vaccines and lives at stake. I think those high volume, financially impactful use cases are going to be first to market, first to revenue. So automation, process management, alerting alarming security, etc.
Q: “The big question is what is the business case for a telco? Just providing connectivity with the majority using only little data will not bring a sustainable business for a telco.”
A: I think the world of telco, the history of being a mere pipefitter is not going to be enough. We don’t have to look very far back to see that the person that builds the widest pipe for the cheapest cost may not survive. When you look at companies that are leading this revolution, companies like Nokia, AT&T, BT, Telefonica, their investment is in value added services. Not only guaranteeing that the transaction can safely get from one end of the network to the other [but] then making sure it’s done securely at the right price with complete guaranteed accuracy every single time. It’s that ability to add value in the cloud and in the network that I think will differentiate the winners from the has-beens.
Q: “One of the biggest problems telcos have is that they do not have the knowledge and expertise to connect into the vertical industries, that’s where they need to work with system integrators. Would you agree with that?”
A: I would absolutely agree with that, and what I would also tell you is when you look back on the slides from before, when I talked about what’s the vision of a CSP for the future, one of the things that we talked about there is all customers are unique. We may not have everything, and if you’re a telecom provider, you may not have everything. Value added services are great but you may be a platform provider, providing integration options and third party partnering options in your network just in case somebody needs to build bespoke, just in case an integrator needs to do something unique for that customer. All customers are unique, and I think telcos will embrace that diversity and embrace that challenge. I think systems integrators are the way to go for that. In some cases, do telcos have vertical expertise? I would probably guess they would argue they have some expertise. I would agree with the questionnaire that systems integrators probably have the most expertise to bring and I think there’s a core place for everyone.
Q: “What do you see is telco’s biggest challenge in IoT?”
A: I think right now it’s alluding to a concept that you’re going to need to be a bigger solution set than a pipe. You’re going to need to figure out what are the value added services that you can provide. Some of that’s core. Security, billing, partnering. You may also end up providing other services that are needed – integration services, device management services, end-to-end operational management. There may even be some opportunities where telcos provide a diverse revenue choice just like they’re doing with certain internet services – this is your free version of the service and this is your premium version of the service, the one includes advertising and data sharing and the other one does not. I think the challenge of your telco is how do you find a way to figure out the appeal and the unique fit that you have for each of your customers? How can you add value to each of their business needs and each of their transactions in a way that suits the end customer? The model that telcos were used to for so long is we’re going to build a monolith and you’re going to use it. And we knew exactly what services were in the stack. Well, IoT changes all of that. Your customers are now in control and your customers are telling you what your network must do. I think that is the big challenge is figuring out how to be flexible and meet the needs of your customers.
Q: “What are your insights for Low Power Wide Area contribution in the turnover of telecoms? That’s the Low Power Wide Area, low data rates connectivity options that are now coming into the marketplace.”
A: I’m not an expert on it. I believe that you’re correct, the RPU on that is low compared to other choices. That said, anything – an upscale may be a market. There were pioneers in the telco game that figured out a way to create a profit on an $8.00/month bill in the third world when everyone thought that was an un-addressable market. I think that the questioner is correct, that is probably traditionally a lower RPU, but I think it just depends on the use case. I mean if it’s the low RPU and it doesn’t take a lot of work to manage it, is there still a profit to be made? Perhaps. I guess we’ll see.
Q: “How does the team view compressive threat from deregulated spectrum providers’ impact on traditional telcos?”
A: I’m not an expert on deregulated spectrum providers, necessarily presumably that might be small-sell deployments or something, I don’t really know. I guess what I would say is, if you’ve got a solution set like that, you may have a customer base, but I would argue that certain other value added services on top of that [like] billing, security, application integration – potentially even advertising – potentially revenue splitting, those kinds of value added services will likely be a factor in who wins the IoT. Because from an end-to-end standpoint, being just a pipefitter to connect the one packet of data from one side of the room to the other, I don’t know that that’s going to be enough to be a global leader. I honestly just don’t know enough about deregulated spectrum providers to give an intelligent answer.
I think there is another point here. I noticed that we see lots of new connectivity types coming into the marketplace, and they all have a part to play in the overall scheme of connecting as many things as possible. Sometimes the deregulated space is cheaper and it’s more immediate and it provides a good answer, and sometimes it doesn’t. I think that it depends on the application. I think that when you put it all together, that’s going to be a business for regulated and deregulated space, and it’s a question of how much more than there won’t be any, I think. I think there’s going to be so many different types of devices that need to be connected. Everybody needs to find their own space, their position in the marketplace, and then specialize in that, and go for that. Your costs in approaching that market will be dictated by that approach. I think that there are huge opportunities in all of the areas both regulated and deregulated, and it’s more a case of just finding the right applications to make that business plan work.
Q: “Do you see the cable companies like Comcast as having an advantage over a telco like AT&T from a fiber and Wi-Fi perspective?”
A: When you deal with terrestrial technologies that cable providers have, one strong advantage is obviously speed and capacity. You can have gigabit speeds on the wire, and wireless technologies haven’t caught up to that speed yet. That is one advantage. The other thing that cable providers have done very well is to accumulate content and media. When you’re looking at folks like the cable providers, they’re very, very good at essentially capturing and delivering content which is, again, that value added piece that we talked about earlier. I think they may have some strong advantages. I guess we’ll see what happens to the AT&T’s of the world. When you look at the Verizon’s of the world buying AOL, it probably wasn’t for their email application, it’s for their content. I think they’ve seen the writing on the wall as well.
Q: “Since the RPU is low in IoT, what can telcos do to get in the chain? All of them claim to have IoT platforms. Will they succeed?”
A: Well I was going to say when you say the broad statement of “RPU is low in IoT,” I guess it would depend really specifically on the application. Pratt & Whitney dealing with a multi 10-million GDP engine and monitoring all that data didn’t occur by accident. It’s because the value of that data in preventing downtime and managing maintenance and keeping billion dollar industries like airliners afloat has a tremendous value. I don’t know that it’s true that all RPU’s low in IoT, but in terms of getting in on the chain, I think it’s – again, the real value is there’s so much data. Where is your core skill? It is the data and finding the needles in the haystack. Those pieces of critical information to pay attention to in an ocean of noise. Yes, all telcos have an IoT platform. What’s the niche? Is it security, is it performance, is it guaranteed data accuracy, is it guaranteed billing, is it partnering, revenue sharing? There certainly are value added ways that you can add on to the IoT story versus just transaction processing.
Q: “Do you see any impact of data privacy concerns on the growth of IoT?”
A: Yes, in my experience – and I worked out of Europe for about a decade – privacy concerns are absolutely critical. You can’t open a newspaper today without seeing a CEO get sacked for a data breach. I think it goes back to what we talked about earlier in the world of the CSP of the future. That flexibility to include a platform option, so that certain pieces of data or certain transactions may live on a premise-based solution or a hybrid cloud or a public cloud, or essentially, allowing the customer to end assemble their solution as they see fit so that privacy information is managed internally and operational data that is not distinctive and does not have PII can be managed in a different system. I think the real value of the telco is providing options to customers to do that rather than prescriptions for exactly what to do.
Q: “Do you think that geographical expansion, new markets and countries of telecoms through IoT offerings is more possible than through traditional telecom services? Does it provide telcos with more of an opportunity to expand geographically?”
A: My gut says it does. What I am not an expert on is regulations at the geopolitical level in terms of how do you get a spectrum license in each country and whether you can transverse those borders with IoT information. Is that different than PII for consumers? I don’t really know. I do see the one thing that IoT does offer is scale, meaning when you’re selling traditional telco services, you’re selling generally to people or business made up of people. You have to market to them, you have to do customer care and manage that stuff at a pretty small level. But IoT, that solution set is enormous potentially and scalable to an even larger thing. If you are to manage an entire company’s manufacturing network across Latin America, that may be a way that you can literally have a much more addressable market, a much more scalable market, a much more reliable revenue stream. I think geo expansion may be a strong incentive to look to IoT solutions, absolutely.
Q: “What is your opinion on when the healthcare sector will take off with IoT applications?”
DG: This is an interesting question because I was just recently in hospital and you can’t do anything without a barcode in a hospital these days. Everything that they touched, everything that they handed me, every result was scanned, automated, electronically sorted, and amalgamated into records. I mean, loosely, it looked like an incredibly precise manufacturing process. Healthcare IoT is for sure going to follow the model of M2M and IoT. All of these pieces of data are going to have to be talking to each other, the interfaces are going to have to be standardized, the transactions are going to have to be guaranteed, the security and the privacy need to be guaranteed – yes, I think there’s a lot of fingerprints in our experience with M2M that are going to fit the healthcare model.
DW: I think the situation with healthcare is that it’s all very much bound up in national health services which then take quite a long time to actually get new ideas implemented that do not have a good track record of being used before. It’s more a case of getting through the system and getting things implemented, and typically, things like IoT applications start as trials and then they progress forward into larger implementations, and then they get adopted in a larger scale. That can take quite a bit of time, particularly if the health service is not well endowed with financial resources, put it that way. I think some of these things can take much longer than they anticipate. I think we all anticipate that remote patient monitoring and all sorts of related services which IoT has a great opportunity of providing for are going to be very big opportunities in the future. Not least of all, because it will free up hospital beds and provide for caring for the community. The chances are that people are likely to recover more quickly in a home environment than in a hospital environment. I think there’s a lot of evidence to suggest that that’s correct, but it’s a case of getting it through the system and implemented. That has taken a great deal longer than as originally anticipated, but is now beginning to happen. I think it’s beginning to happen particularly in the US market, much more slowly in the European markets.
DG: You know, I think that there are examples both ways. We’re talking about this problem right now as it stands. One of the more I guess blunt ways to think about this is through automation and through standardization, there may be tremendous cost savings. That may be the incentive for some of these national services to adopt these technologies en masse which means we can just do our job better, faster, and cheaper than we were doing it yesterday. While some national services are traditionally a little more conservative to adopt solutions, I think IoT might offer that possibility to save a lot of money, and that may be the incentive. In terms of the US market, I think it really depends. My hospital’s quite innovative. Everything is digital. I’m sure that’s not consistent depending on where you are, so wait and see, I suppose, is my answer.
Q: “The emerging Low Power Wide Area RPU will be very low. Does it still make sense for telcos to address IoT?”
A: I’m not an expert on those examples. What I can tell you is the people that I’m speaking with, my telco customers and their end customers, they are deploying these solutions for a reason. There is a need for the solution, there is enough of a concern for getting the data that they can make the investment in it. So in terms of whether it’s a good investment for a telco, I think it really depends on the customer use case, but I am not seeing those solutions go away. I’m only seeing them being invested in, so there must be something there.
Published at DZone with permission of John Piekos , DZone MVB. See the original article here.
Opinions expressed by DZone contributors are their own.