Low power long-range radio networks mean enterprises are doing it for themselves

Enterprises are increasingly looking at low power radio networks to run their IoT applications and services. Here Daniel Quant, the vice president of product management and strategic market at MultiTech, tells George Malim that low power long range (LPLR) enterprise networks offers enterprises both large and small a compelling opportunity to switch from a monthly model of spiralling incremental fees to a capex up front model which puts them in control of their networks/

IoT Now: What is a Low Power Long Range (LPLR) enterprise network?

Daniel Quant: The question is really one of how different an enterprise network is to an operator’s network. The business model is fundamentally different. With an operator’s network approach I accept that there will be a delta in my monthly cost that I have to pay. For example, there’s a fee to onboard any additional device because I use but don’t own the network.

This works well, particularly for enterprises that have assets dispersed across the world, because it costs a lot to cover the whole world. However, if my assets are more clustered this doesn’t work well, especially for industrial applications. If I buy a mobile phone, there’s a benefit but only for two years whereas with industry assets, that are being specified to run for seven to ten years, the opex cost per calendar month far outweighs any equipment capex cost.

For example, if you have production facilities or supermarkets, an enterprise network has many benefits. You can go and buy the equipment and assets you need and install them in your facilities where your clustered devices are. Although you pay a bit more up front, it’s yours and low power radio effectively means you get to a wide area network (WAN) model without opex.

At MultiTech, we’ve learnt there are business cases where the operator model doesn’t really match the need of the customer organisation. Enterprises don’t want to be penalised for every asset they connect. They’re happy to pay small opex for secure infrastructure, load balancing and some other features but the opex is quite low and the capex is quite high up front, but it’s a one-off.

IoT Now: When is an LPLR enterprise network the right solution for companies considering using the IoT?

DQ: When they start to have some clustered assets – and they don’t need to have very many. The cost of a gateway is somewhere between US$200-US$300. Over five years, that could work out very attractively if you had, say, 600 assets to connect, for example: something around US$6 per month per endpoint.

You don’t need many assets to make this start coming alive. Even if one of these assets is mobile on a truck, you could still derive value because many LoRa apps don’t need to be real-time. This would mean the truck could communicate its data when it arrives at another of your locations. If you’re trucking frozen shrimp, you only need to know at the end that the cold chain was uninterrupted.

IoT Now: What is new that makes LPLR enterprise networks important today?

DQ: The bottom line is the technology. Digital spread spectrum and ultimately narrowband technologies have existed for some time, but the way LoRa, Ingenu and Sigfox have been put together has enabled really good noise immunity.

IoT-Now-Sep-Oct-2016.pdf
Daniel Quant, the vice president of product management and strategic market at MultiTech

The 2.4Ghz band is very noisy, as are the networks of utilities in the 900Mhz range. Noise can be high, and these technologies still work and it was that that enabled us to get the long-range capability. Previous technologies like Zigbee and others didn’t have the noise immunity, so you were forced to have meshing to achieve noise immunity, which didn’t work well for battery consumption.

In addition, the cost of all the gateways and repeaters dented the business model a bit. You also don’t necessarily always have access to places in the middle, so the technologies didn’t lend themselves to enterprise wide area deployments.

LPLR technology isn’t brand new, but by having noise reduced, the link budget creates momentum for public services, and enterprises haven’t missed the potential.

IoT Now: How does LoRaWAN fit into an LPLR enterprise network solution?

DQ: Very nicely, and from our perspective, much better than other options. We are a company that has provided analogue modems for 40 years and there have been no real developments to speak of in that business, although it remains a nice business for us. The other area of our business is cellular, which is showing great growth – we’ve already outperformed 2015 and we have more than a quarter to go in 2016.

Given that, we didn’t want to affect our cellular growth with unlicensed offerings. What we’ve tried to do with our unlicensed band strategy is open up use cases that cellular or other approaches alone can’t address.

We don’t subscribe to The Highlander model – that there can be only one successful option and the industry has figured out that more than one technology could be used to suit different use cases.

Unlicensed has grown our business without cannibalising our cellular business and, although cellular is growing fast, we’ve grown 5% of our business with LoRa. We have hundreds of design wins now so next year we’re gearing up for, perhaps, more than 10% of our business being LoRa without cannibalising cellular. A lot of our wins are where the cellular signal is poor or where 4G isn’t available.

For example, a sensor in a corn field or under a fruit tree simply can’t make a cellular connection but you can use LoRa and pick up cellular backhaul. We see similarly strong opportunities and design wins in building automation.

What we’re seeing with unlicensed band strategies is the ability to connect assets that technology or communications couldn’t make work before, but they can now. In the cellular business, higher value data streams suit that technology, but not all streams are high value or addressed by cellular coverage.

IoT Now: Which applications have been early LPLR enterprise network adopters?

DQ: Smart agriculture, building management and facilities management automation are where we’ve clustered a lot of design wins and enterprise OEM providers.

IoT Now: Why did MultiTech invest in this new offering?

DQ: We got into this simply because we needed to and we knew there were markets that were untapped and not going to be addressed by cellular technologies for technical and commercial reasons. We knew that Zigbee and others wouldn’t work because of the requirement for meshing. We looked at SigFox and Ingenu but they wouldn’t work for us because of the service model – even on ten devices over five years, it just doesn’t work.

We wanted to put our resources into a technology that wasn’t operator driven, which narrowed the choice to weightless or LoRa. LoRa is a better choice because its ecosystem is better developed and it suited the business model and the target customers. The Link budget is good, the battery performance is good and availability is easy.

IoT Now: What are the business models that you see as best served by LPLR Enterprise networks?

DQ: We have a number of design wins in large and small enterprises that don’t want to be nickel and dimed on every endpoint. If I came to your house and used your Wi-Fi, would you expect to have to pay your provider? You wouldn’t so I think that enterprises should have the same option.

You built a Wi-Fi network so you have a better product as a company and visitors can access it to tell you things when they visit. In IIoT, it’s exactly the same. For example, if I want to connect a few more pumps in a production environment and I’ve paid for the network, why should I be paying for adding them? If I put 2,000 pumps in, yes I understand that I should buy another gateway and balance the load a bit more but for a small increase I don’t think it’s fair to be charged.

sideOur strategy is to provide customers with capex strong investment in all the equipment, the modules and the gateways and our Device HQ platform for monitoring the assets. We were first to announce an IIoT app store that enables us to push customer applications into our equipment.

For example, in a situation where rat traps are monitored in a food and beverage facility, it can be easy to put intelligence at the edge to monitor when a trap is triggered if you own the network and have access to specific apps to run the equipment. However, in a network where I don’t know what the equipment or app is, I can’t put intelligence at the edge.

We’re trying to distribute resources better through the enterprise and trying to establish things more effectively. To imagine enterprise networks are deployed and never changed is a little ludicrous. What the enterprise is looking for is something that enables product lifecycle management for the equipment that it has bought and enables this at very low cost.

IoT Now: Do you see network operators getting involved in LPLR enterprise networks?

DQ: Yes, for sure. Every enterprise that deploys its own network weakens the business case of the cellular operator and that is not a fact that’s wasted on them. This is why operators have made very loud low power radio announcements about what they’re doing – the launches are loud because every enterprise that takes a DIY approach potentially hurts their business.

The difference for enterprises in low power, which wasn’t seen in cellular, is that you can bring your own gateway.

IoT Now: Enterprise networks like Wi-Fi are in the IT domain. Does an LPLR EN follow the same path or does the IoT edge aspect put it in the OT domain?

DQ: There is definitely an IT and OT (operations technology) play going on. Part of driving success in enterprise markets is focused on IT because the network will site in the IT department and be managed by IT even though network services are more of an OT offering. OT is essentially using the service and IT is hosting the service. This is a fundamental shift because when you use an operator you bypass IT, so IT starts to become involved if you do this yourself and build your own network.

IoT Now: When is LPLR enterprise network operation a make decision and when is it a buy decision?

DQ: It’s super easy to make the calculation as I did at the start. There’s some maths in IT and management and little bit of opex in enterprise deployment, just as there is in Wi-Fi. You might see services such as managed onboarding at a small cost per user. There is an opex component, but I think you can see that you don’t need many assets to justify buying that infrastructure and running it over a five-year period.

Low power might be a bit more industrial than connecting people and printers, for example, but it is still in the enterprise domain. Smart enterprises have already made up their minds to deploy low power solutions. The case for smaller enterprises is perhaps a bit more marginal because cellular operators make it easy for them to have connections without having to build networks but I think the business case speaks for itself

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