Jim Dunlap, CEO of Cycle30, tells Robin Duke-Woolley of Beecham Research that Internet of Things (IoT) service providers are overlooking significant business opportunities if they confine themselves to mobile cellular connections.
RDW: The Cycle30 platform caters for cellular mobile connectivity, but do you also have an interest in non-cellular connectivity for M2M?
JD: Yes, we do. A little history to explain why. For eight years I was a CIO in the telecom and cable industry. Our parent company, General Communication Inc (GCI) agreed to fund and spin off Cycle30 as a wholly-owned subsidiary but independent operating company. I’ve been on both sides of the fence, both as an operator and dealing with the issues that operators face, then as a service provider.
RDW: Looking at it now from these two viewpoints, what is it that the service providers are doing in the IoT space? How are they thinking about connectivity?
JD: I would say primarily this is wireless cellular. Not even just wireless, but mobile. I think that is a limiting perspective.
RDW: Can you explain what you mean by that?
JD: There are a couple of reasons. Firstly, large scale commercial solutions can very easily be fixed wireless solutions, Metro WiFi for example. There are many solutions to be developed in the public and private sector that just do not need to move around, so mobile connectivity is not the only answer.
Secondly, coming out from the cable industry, you recognise quickly the very significant bandwidth that the cable industry has. They`re waking up to that and starting to deploy commercial enterprise solutions that really take advantage of that bandwidth. And of the cost advantage of it.
RDW: Do you think that relying on mobile cellular connectivity is too limiting?
JD: Yes I do. Mobile cellular is an important part of this sector. However, it is not likely to be the lowest cost connectivity option for many situations. We think there is a need to look at the design of a solution from the ground up and build in the redundancy and flexibility to help you migrate as technology changes and as the cost structures change. In typical wireless models, once your solution is on that operator’s network, you’re locked in.
What if instead, down the road, you have the ability to make that a WiFi solution? If you had already built that in to your solution design, you could then shift over to a lower cost operating model. What if you had the opportunity to make that a Bluetooth connection? Or you’re in the maritime industry and wanted to have initially satellite but eventually a WiFi connection? There is an opportunity to take a broader view on future connectivity needs.
RDW: So who do you think in particular this would benefit?
JD: I’m talking mainly about OEMs (original equipment manufacturers). If you’re a global OEM and building, for example, a global parking meter business you really want to think whether you only put SIM connections into that device. Should you build it with capability for WiFi, or other types of connectivity? We`re trying to work with innovative thinking OEMs and distributors, like Arrow Electronics, to look at devices as connectivity agnostic and try to work with the OEM to build in that flexibility, to future-proof their technology.
We believe the OEMs with that sort of forward thinking will survive and do very well from the lowest operating cost for connectivity. Otherwise, if your entire model is mobile wireless only, you’re really at the mercy of the operator.
RDW: So among other forms of connectivity do you see a role for the cable industry in M2M?
JD: Very much so. The advantage really sits with those that have fibre already in the ground and that’s predominantly the cable industry and so we’re working to develop solutions specific to the global cable sector. It’s an area we are very focused on and we see almost no competition at all.
RDW: What sort of M2M applications would that target?
JD: Mainly commercial, industrial type applications – the parking meter example I think is great where they have a metropolitan WiFi network or even a wired network where you could provide electronic parking meters all on a cable network – they wouldn’t need to be on a cellular mobile network.
RDW: So these are cable networks in cities?
JD: Yes, every city has one now. They are broadband providers who are providing some kind of broadband cable network and we think many of them are developing metropolitan WiFi as part of that. It’s a trend in the sector and they can begin to supply commercial solutions over that kind of connectivity.
RDW: That’s very interesting. There’s not a lot supporting that type of connectivity yet in M2M, I think.
JD: Yes, we are working with cable companies to build out proof of concepts for the cable sector and then taking them out and showcasing them.
RDW: That looks like a diversification for them. Are they looking at this as a mainstream revenue opportunity?
JD: Yes, and that’s where our background is very relevant. We’re part of the fraternity and we know what they are looking for. They are looking for cheaper ways to provide greater value over the network instead, not simply television and cable content. They’re finding ways that they can move in to the commercial enterprise sector and provide valuable solutions. That is an important direction for their future.
RDW: So that’s a business-to-business play as opposed to a business-to-consumer play. Are they comfortable in that environment?
JD: They are aspirational in that environment. They need to be there and be a serious player. Where they could start talking immediately is to the home control market using their broadband network and that is a business-to-consumer play.
RDW: Turning now to multiple connectivity types, there’s the possibility of using cellular and different forms of cellular, the possibility of using WiFi and then various forms of fixed lines, as you’ve just mentioned. Can you switch between those?
JD: Through API (application programme interface) sets for provisioning, activation, usage data collection and usage management, we have the ability in the platform to cater for multiple connectivity types and they can be running in parallel. To illustrate that, I am thinking of a particular example of a maritime executive I was talking with recently. This is a multi-million dollar company, shipping goods all around the world.
I asked her, “What is the biggest challenge that you have in your industry?”
She said, “It’s something that most people don’t understand. We are taking containers full of materials and we know what they are, we know the value, we move them around the globe. We want to ensure that if that container needs to stay at a particular temperature that it’s done and we need to prove that in effect in an informal SLA (service level agreement) with our customer. We want to let the customer know where their container is, when it will arrive at port, when it will get through customs, and when it will get to their distribution facility or manufacturing facility.”
She said: “If I can track that sort of information and I can make that available to a customer, I have increased my value to them exponentially.” So if we take that model and we think about a ship going overseas, the ability to use satellite technology initially for the core communications down to the ship, the ability then to use a broadband WiFi network throughout the ship to collect data off of those containers and then even more specifically there could be a Bluetooth type of application that you use within proximity of the device.
In addition to this, let me tell you about a different set of data. She said, “If you can layer on to that the ability to help me operationally with Health and Safety issues – where are my employees? Are we tracking where they are on the vessel? Where are our assets? Help me track our assets and know that our assets didn’t leave at the last port.”
Those sorts of interesting challenges lend themselves to a model where you have cellular activity, satellite activity. You have cellular in port, you have WiFi within the ship and then you may have a Bluetooth application all in one maritime solution. These things also apply to the oil and gas industry. Lots of things like that where you can use a combination of connectivity types based on the lowest cost and the most appropriate set. That’s what we do.
RDW: Do you then actually manage the connectivity or are you looking more at the data that comes off and making value out of that data or are you doing both?
JD: We’re doing both. We’re not the underlying network operator although we work very closely with them to integrate directly in with their network provisioning platforms.
RDW: What about the connectivity management to make sure you are getting the data from the right sensors whatever form of connectivity it is coming over?
JD: Yes, we do that ourselves. Our role in the process is to manage the activity and usage and then to alert if you are not getting usage out of particular devices. We have a threshold alerting set of functionalities in the platform which tells us, based on business rule pre-sets, the data you are supposed to be getting in a particular frequency at particular times.
The example I like, although it’s a little gruesome, is if you’re monitoring cattle the idea is you are monitoring – where is my cow? And, is my cow pregnant? What happens if you are no longer getting data on moving – if that cow is no longer moving? If it has been sedentary for a period of two hours, what does that tell you? Does it tell you that the cow is sleeping? Or does it tell you that the cow is no longer pregnant – that the cow has delivered, or worse that the cow is no longer alive? We manage the usage analytics around that data and what the data is telling us and then we push that up to a visualisation layer to do things like mapping, reporting, charting, graphing – all to aid the management process.
RDW: Can you also connect that into the revenue side as well? For example, identifying a chargeable event?
JD: Absolutely. A good example of that would be we’re now seeing the forward looking people in the oil and gas sector starting to put electronic markers into their fuel at the refinery because they want to be certain it has not been diluted as it makes its way through the process to sitting in a retailer’s pump. There is still a very significant amount of petroleum delivered by trucks from a
refinery over to an actual retailer. The problem is that it is fraught with fraud from diluting the petroleum. It is one of the biggest problems facing the petroleum sector globally. How do you charge for the value of insuring the validity of that petroleum? Well, maybe you charge based on gallons.
RDW: You measure what’s actually being delivered?
JD: Yes, you measure the markers and ensure that it has not been diluted. Maybe you charge based on how many gallons of undiluted fuel are delivered.
RDW: So these markers, are they sitting in the fluid that’s being delivered?
JD: Yes, they are. The leading company in it came out of the Sandia National Lab Group in New Mexico. It’s developed some very innovative markers that can be inserted into fuel at the refinery, that do not in any way affect the quality or the veracity of the fuel itself. Instead, what they do is just allow you to track that this fuel has not been diluted. It uses chemical composition analysis to identify that there is no water in the fuel or whatever else they use to dilute it.
There are all sorts of unique industrial applications. It will have great value but you need a way to read them and you need a way to ultimately bill for them.
RDW: So, part of what you do is to look at new types of sensors that can add value to the overall process?
JD: Yes. New sensors and new business models. The reality is that those sorts of solutions do exist and they are of extremely high value ultimately for the companies who produce those types of commodities, like fuel.
The point is, we can connect diagnostics and actual data and not only do it just for the device but also for the revenue model. You can take any parameter and make it into a chargeable event and that has tremendous new value.