Amdocs has long been recognised as one of the industry’s leading software and services companies, supporting telecommunications, media and entertainment service providers around the world. With more and more M2M/IoT solutions looking to come to market, it’s fast becoming clear that new types of services and vendor relationships will be required to drive and support increasing demand. To get Amdocs’ views on these developments, Robin Duke-Woolley, CEO of Beecham Research, spoke with Yuval Mayron, head of IoT at Amdocs with responsibility for defining the company’s IoT strategy and building its offerings through Amdocs’ assets and partners.
Robin: We see Amdocs becoming more active in the M2M and IoT markets. What is driving this and how do you see it developing further?
Yuval: Indeed – we have been very active in the M2M and IoT markets for a few years already. Two years ago we launched our M2M Connected Device Platform and cloud-based Connected Home Solution. We’re seeing positive uptake in the market for both of these.
We continue to be proactive in these markets because cellular-based IoT is our natural playground. We provide the solutions and services that enable telcos or communications service providers (CSPs) to easily expand their offerings from traditional communications into IoT services.
The IoT market is characterised by large ecosystems with complex value chains, which must constantly change and adapt to new market demands and, across which, we believe there are several areas where Amdocs can deliver value. For example, in B2B, Amdocs’ M2M wholesale capabilities enable CSPs to shorten the on-boarding time of any IoT business partner, supporting complex settlement models and significantly cutting the costs of operations. Similarly, Amdocs can leverage its global BSS/OSS installed base to enable IoT application providers to extend their geographic reach and manage their SIM cards and devices, integrating their backend applications with Amdocs M2M platforms.
We also see an exciting opportunity for Amdocs customers to add value by bundling communications and IoT services together. The result: consumers enjoy a better, more holistic experience, increased value for their money, and a one-stopshop for service and support; the IoT application providers enjoy better market exposure without the need for significant upfront investment; while the CSPs can expand their customer base, increase ARPU and loyalty, while driving new revenues beyond just connectivity. OnStar and AT&T are a great example where Amdocs has added value to joint customers.
The growth in the number of connected mobile devices will also put networks in a very challenging situation that might impact on the overall network experience. Compared to regular smartphones, IoT devices are typically characterised by excessive signalling overheads and minimal payload (telco ARPU). Also, their network “behaviour” is not always predictable. Firmware upgrades to millions of devices in a specific location or random data bursts from millions of smart-grid sensors can create dramatic network degradation, requiring a paradigm change in overall network planning and costs. Amdocs’ network solutions enable CSPs to easily track in real-time where there are access bottlenecks in the network and apply rules in order to optimise the overall network experience, as well as increase efficiency in network planning.
We are also seeing a growing interest in Customer Experience Management (CEM) from emerging IoT service providers. These are, for example, car makers, who are shifting their focus to owning the customer and managing the holistic experience. Car makers seek solutions for customer management, predictive maintenance and intelligence to enable a superior after-sale experience and turn the car into a holistic entertainment and information unit. The car will enable parking payments, toll roads, UBI, content consumption, and WiFi connectivity. We’re already seeing some car makers and local dealers willing to become MVNOs as well.
And all of this is just the beginning. We’re being approached by both CSPs and IoT application developers asking us to help them push new IoT services to the market. The challenge is two-fold: the CSPs have limited resources to qualify the various IoT vertical solutions out there, while the application developers have limited experience in establishing an enterprise grade operation. This is a gap that Amdocs can fill like “operational glue” that will expedite the process. For the CSPs, we can scout for new ideas and applications, perform application testing and certification, provide business consulting, ensure compliance with regulations, and much more. For application developers, we can become a vehicle that exposes and extends their reach to the world’s leading CSPs and their subscribers.
Robin: And what about the data? We are heading for a market where there will be huge amounts of data available from connected devices, located everywhere. What is Amdocs’ view on managing it?
Yuval: Amdocs also brings significant value through our Big Data Analytics offerings. Through different analytics applications and our Big Data Insight Engine, we are able to analyse endless amounts of information from multiple sources and cross-reference them. This provides the necessary insight that CSPs and IoT application providers need to improve the experience of specific IoT applications or create new bundled offers to meet changing customer demands.
If we just think of home appliances alone, built by different vendors and replaced every so often – do we fully understand the complexities of managing these? Can we really make the individual consumer the “integration point” of all these connected devices and the hundreds of applications that will be available to better utilise the resulting web of devices?
There are three large concerns – IoT/Device interoperability, IoT/Data interoperability and customer ownership. Then, on top of those you have to add the role of regulation and the challenges of data security. We also must keep in mind that within the IoT domain the challenge of customer ownership also coincides with the challenge of identity management. The industry needs ways to foster both device interoperability and data interoperability. We will need to look seriously at ways to change the paradigm of how data is stored, shared and owned, potentially by open software models that break the current trend towards fragmented silos.
Now, in regard to customer ownership, every CEO from every industry wants to own the consumer. There are no exceptions. This drive spans the car OEMs, the telephone companies, the insurers and, of course, the internet giants like Google. But we believe that eventually the customer should own the customer. Ownership boils down to who owns the data and we strongly believe that individuals own their data! As an industry – or rather a set of combined industries – we need to cooperate to solve the interoperability issue and to find ways individuals can own their own data.
To partially address both the interoperability and data ownership problems, we are leading open standards and open source projects to make IoT secure and ubiquitous – breaking down vendor silos while attempting to provide a set of secure data vaults for real-time data persistence (availability) in the internet. This initiative is called Matrix.org. We are adapting it from lessons learned in the core communications market where there is no interoperability between communications apps (for IM and VoIP, for example). We welcome the industry looking into the Matrix, critiquing it, improving it and participating in its open source community.
Matrix.org is only one approach to solving these problems and other similar approaches are being pushed in different industry groups. The main thing however is that we solve the problem for the industry’s overall benefit.
Robin: Amdocs offers a broad set of BSS/OSS solutions for communications service providers. How did you approach the development of your IoT offering?
Yuval: We asked – “Who is the customer?” and “What is the value we can bring to them?” Those two questions lie at the heart of everything we do in this market. In the complex IoT ecosystem there are many different players or “customers”. Each type of customer in the ecosystem has different needs. The trick here is to identify the relevant customers that Amdocs can provide value to by addressing their unique needs.
Robin: So what types of customers do you support in the IoT market?
Yuval: Amdocs currently defines 4 different types of customers:
1. Mature Communications Service Providers. These customers have been operating in the M2M/IoT market for some time, mostly focused on connectivity, with significant initiatives mainly around the connected home, connected car, and remote health. These providers have big plans to take IoT to the next level.
2. Emerging Communications Service Providers. These are the providers with limited IoT business today. They are looking for partners like Amdocs that will help them to penetrate the IoT market with low-risk solutions and minimal upfront investment.
3. Emerging IoT Service Providers (“IoT SPs”). These are the product manufacturers who have traditionally sold standalone consumer products, such as suppliers of PC laptops, wearables, car manufacturers, home security agencies and more. Now they want to sell services alongside their products, both to provide richer offerings and to build closer relationships with their customers. Ultimately, the IoT SP wants to increase the value to their customers and consequently win their loyalty.
4. IoT Application Developers. These are the IoT developers who come with great ideas. They have a core technology and are trying to approach the market to distribute their offerings worldwide and provide the service around it. There’s a long list of technology companies in this category, developing car sensors, location modules, smart switches, and so forth. For example, in the drinking water industry, Amdocs is engaging with a start-up company that produces smart waterpurification public coolers that can be distributed in urban and developing countries’ rural areas. The coolers also serve as cellular charging stations, providing WiFi access and digital advertising. All these requirements need management, billing, integration to local operators, and mobile payments. Amdocs can provide these capabilities and bring them to relevant CSPs and markets.
Robin: So for each of these customer types you aim to provide a different business value?
Yuval: Absolutely. Let’s take the mature communications service providers, for example. They already have significant assets such as customer service practices, billing, collections, analytics, and others. Amdocs can help these providers leverage these assets and better monetise them by offering them to IoT application providers, as-a-service, on their behalf. Another value that Amdocs brings is helping the mature communications service providers leverage their enormous customer base asset. For example, we’ve developed an end-to-end white-labelled, connected home solution that is already being deployed via a partnership with a world-wide Security Service Provider. In this model, Amdocs provides the platform, the Security SP the home devices, panels and call centre, and the Communication SP the access. Those models might go through changes in the future as Communication SPs would like to enjoy a bigger piece in the value chain.
Robin: How is this connected home solution being brought to the market?
Yuval: The home is the most important long term battleground for IoT. Home Security adoption rates in NA are 25%, in Europe they are closer to 3% and in the developing markets are less than 1%. This will be a domain where subscriber uptake is relatively slow but very long lasting. The average consumer contract term for a security service provider is seven years. Those CSPs that
are able to bundle a wide range of digital appliances on top of basic home connectivity will have a huge degree of customer stickiness.
We are also rolling out multi-country programs today where we provide an end-to-end home security solution from the apps on the smart phone, firmware on the security panel, and business logic in the cloud. We go to market with a world-wide security hardware and services supplier which brings all of the regulatory aspects, installation and maintenance and supply chain capabilities. This combined offer allows CSPs to enter this domain with very low cost and friction – almost in a pay-as-you-grow franchise model.
Robin: What particular value are you providing to communications service providers for connectivity management?
Yuval: There are several commercial cloud-based solutions out there for SIM management, as well as each CSP’s home-grown solutions. For the current market situation, these solutions are reasonably okay, but looking forward there will be new challenges for both the CSPs and the enterprises. For example, the popular revenue share model will become a business barrier in the low-ARPU IoT market. On the infrastructure level, regulation and security for sensitive verticals such as smart grid and government applications will become a priority. We also anticipate a challenge in the ability to support new identity methods for multiple access technologies as well as for the scalability which is required to support billions of devices with guaranteed qualities of service. Global reach at predictable cost is another important issue that is currently not being well addressed. For these reasons we built Amdocs M2M Connected Device Platform (CDP) in such a way that we can offer it in three models: as a service in the cloud, as a stand-alone platform, and as an add-on for Amdocs’ existing BSS customers. With this flexibility, we address the CSP’s key requirements and provide a secured, scalable, comprehensive solution.
Robin: We have talked about the first category of customers – the mature communications service providers. What about the emerging communications service providers?
Yuval: The main challenge for these providers is their limited know-how and available budget to invest in establishing a new line of business. In many cases they don’t even see much demand for IoT services today. For these CSPs, Amdocs serves as their trusted long-term partner, with solutions offered in a “pay-as-you-grow” model to minimise their risk. By packaging Amdocs’
products and services – CDP, managed services, systems integration and consulting services – the CSPs can significantly reduce their required upfront investment and time to market. This is a smooth entry point for the emerging telco to prepare for the future without incurring unnecessary risk. And we also bring to the table, from day one, multiple IoT application partners, from various industries, so these emerging providers can pick and choose the ones most relevant to their IoT strategies and generate demand. We constantly work on expanding this list of vertical companies, to address new sectors.
Robin: You mentioned the “Emerging IoT Service Providers”. What value does Amdocs offer them?
Yuval: The Emerging IoT Service Providers are trying to move up the value chain from selling just products towards the world of serving the customer after that sale. Their main challenge is in establishing a global service operation that’s available 24×7. This is not their strongest competency. Amdocs’ value for these providers lies in helping them to connect their back-end applications to the CSPs’ networks to manage their devices globally. Amdocs can provide a single point of access to any device they manage. This is of huge value for the Emerging IoT Service Providers as this information helps them to better serve their end customers. For the larger Emerging IoT Service Providers, that require a full blown CRM and Billing solution and for this cohort Amdocs offers a suite of proven products and services, as well as a wealth of know-how focused on customer experience management.
Robin: What about your fourth category of customers – IoT Application Developers?
Yuval: Many IoT Application Developers are small start-up companies with great ideas. They need to convince the market that their service is mature and can be deployed on a large scale. These CSPs can be a great vehicle to do that, but they will do it only with enterprise-grade applications. Amdocs partnership programs can enable these application developers in many aspects such as match-making between them and relevant CSPs, and by becoming an aggregator who will team up with application developers, certify and scale-proof their applications, and provide the necessary operational support and guidance.
Robin: I can see a lot of thinking has gone into Amdocs’ approach to IoT with a particularly broad set of solutions proposed.
Yuval: These are exciting times with significant challenges. The fact that Amdocs has expanded its offerings into new domains such as the network, big data analytics and mobile financial services, opens more doors for Amdocs to help our new and existing customers accelerate their IoT strategies.