Stepping up the value chain


By Andrea Giacomini, Managing Director @ Datatrade Managed Services AG

Many application developers and hardware distributors in the M2M business are facing hard times if they do not step up the value chain of the product they offer. A trend already popular in the market is to focus on the M2M field of application and offer customers end-to-end solutions in vertical segments. Moreover, it does not have to be complicated for M2M solution providers to enter agreements with hardware distributors, application developers and connectivity providers thus being able to offer total end-to-end solutions that are simple to implement and easy to use for their customers.

By not adding value, M2M solution providers face tough times competing with subsidized solutions offered by several hardware manufacturers and Telcos in combination. It is easy for application developers and hardware dealers to add value to their offerings by including connectivity and connectivity/devices management. All they have to do is to team up with qualified connectivity providers.

1. Make a plan and get started
Many small and medium sized M2M businesses are hesitant to add connectivity because they are afraid of the hassle having to negotiate with a multitude of operators in many countries on prices, terms, local tariffs, roaming across borders etc. Connectivity and management partners will have done all this in advance and can offer ready to use connectivity.

Often small and medium sized businesses don’t take the necessary time to make a plan, but they ought to. Have a plan on how you can add value to your customers in your segment by including connectivity – and get started.

2. Have a choice of many options
Do not choose a connectivity partner that is tied to only one network. Instead find a neutral partner that can offer several networks but only one management solution.

Find a provider where you can choose from different price plans, roaming agreements, etc. depending on country or market, and with the security of back-up networks in each market. But make sure that you can administrate them all from the same platform.

3. Focus on value, not on lowest price
Low price on connectivity is not adding value for the customers. Instead offer better administration and management tools that can be integrated into the customers’ systems. Create alliances with others in the value chain to add this value.

Do not be lured by the price per MB. MB prices will always change and they do not in themselves add value to your offerings. The MB price is only one out of many variables, which make the cost structure complicated.

Focus instead on cost control and offer customers the opportunity to monitor and control cost of connectivity, rounding, payment terms, etc.

The key to this is a proper management solution that is easy to implement and to use both for yourself and for your customers. And make sure that you can run all your services for different clients and different solutions on the same management platform.

4. Prepare for the future
In designing your product value make sure to take future demands into consideration. You should be able to help the customers take the next step by including possibilities for administrating and managing bulk SIM, next level billing, system integration and so forth. And ensure that all these functions are built into the management solution from the outset.

5. Stay free
Make sure to choose a sustainable connectivity partner but do not enter exclusive agreements that bind you to certain operators or sign over your clients. Exclusivity is only an obstacle that restrains the market for everybody. Retain your freedom so that you can tailor your solutions in the best possible way for you and your customer.

6. Focus on platform
Make sure you can use the same management tool in all situations and that it makes life easier. A web-based platform for instance will enable you to be up and running in minutes – literally.

Make sure you can integrate with many different partners and still using the same management platform for different customers, networks, markets, countries etc

Look for platforms and solutions with management tools that allow you to delegate some features to customers such as activation, alerts, limits setup etc. Giving your customers better control also adds value.

A general advise
The M2M market is very turbulent and constantly changing. Consequently, it is important to be prepared and able to offer customers a solution to address future changes, due to the never settling nature of customers’ requirement. In this we strongly believe key is to stay open, create alliances and cooperate with other providers, competitors and customers in your segment. By adding value to our clients we all win.

Datatrade Managed Services AG
Bahnhofstrasse 1
+41 799 555 221


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