Which way next for CSPs in IoT?
Every year Machina Research publishes its CSP Benchmarking Report, analysing what the world’s major Communications Service Providers are doing in the world of machine-to-machine and Internet of Things. The 2015 edition of the report is due out in just a few weeks. In this article we provide a glimpse of just a few of the key areas that are influencing CSP thinking.
We have seen quite a substantial increase in the focus on cultivating the maker/developer community. AT&T has been particularly active in this space, but it has certainly not been the only one. Hackathons, developer kits and various tools and support mechanisms have started to be noticeable from CSPs. As part of this push into supporting application development, there has been a significant push into deploying application enablement platforms from third parties, from the likes of Etisalat and Docomo. Orange has even rolled out its own in the form of the Intelligent Apps Enabler.
On the subject of platforms, we can’t ignore the fact that CSPs are abandoning what was previously generally a monogamous relationships with a single connectivity support platform. There is no doubt that Jasper and Ericsson have done excellent work in penetrating almost all of the world’s serious M2M players (Vodafone notwithstanding). However, at the same time CSPs are becoming more willing to use multiple platforms. Telenor Connexion has adopted Jasper in order to tap into the M2M World Alliance. Other operators are increasingly making use of their own more-or-less in-house platforms for supporting substantial portions of their user base. Vodafone is licensing its GDSP platform to players around the world, and we anticipate a flurry of announcements soon en route to its target of 50. And it’s not really anticipated that GDSP will oust existing platforms. It’s more likely it’ll work alongside it. For a lot of players, particularly regional ones such as Etisalat or Singtel, the key to success is in being the partner of choice for lots of different players.
Major trend number three is the push for Low Power Wide Area (LPWA) networks. KPN and Tele2 have made announcements this year, and we expect Vodafone and numerous others to make some interesting and aggressive announcements in the next year. CSPs clearly see this as both a complementary technology to cellular as well as, to a certain extent, a defensive measure to ensure they don’t lose out to competitors in the event that these networks are deployed and prove successful.
Channels to market are also coming increasingly into focus. I would emphasise a couple of trends, although there are many others. Firstly CSPs are building much more concrete partnerships with SIs, recognising that they are a very strong route to market in IoT. Secondly, we continue to see more refining of a targeted vertical focus, aimed at those sectors where CSPs hope to build strong positioning. The most prominent example is automotive, where AT&T continues to evolve its offering, and Vodafone has acquired Cobra Automotive to extend its capabilities into device manufacture and installation.
The final trend I want to flag up here is data analytics. CSPs are just starting to make their first forays here and start to understand what the opportunity is. Orange, for instance, launched Datavenue. Vodafone has also diversified here, offering and exploring potential solutions in areas such as insurance (via UBI data), automotive (crash analysis), and asset management (footfall analytics using beacons in campus environments).
About the Machina Research CSP Benchmarking Report
Machina Research has been looking at the CSP role in M2M/IoT for many years. As a key part of that research, every year we publish our CSP Benchmarking Report the definitive guide to what the main CSPs are doing in M2M and IoT. The report analyses and compares the strategies of the main CSP groupings and provides analysis of best practice. The key criteria that are assessed fit into 6 categories, our 6 ‘P’s:
- Pedigree – The experience that the CSP has in addressing the M2M market. This will often be vertical-specific.
- Platforms – The software platform(s) that the CSP uses for supporting its M2M connections.
- Place – This includes analysis of geographical footprint as well as horizontal partnerships with other CSPs.
- Partnerships –The focus is on vertical partnering (i.e. tying up with other players in the value chain to meet specific needs).
- Process – Examining a variety of processes involved in the supply of M2M services including application development, device certification, troubleshooting, SLAs, project management/ systems integration, and client support.
- People – This section examines the number of dedicated M2M professionals, the CSP’s organisation and the fitness for purpose.
This year the CSP Benchmarking Report covers 17 operators: AT&T, China Mobile, China Unicom, Deutsche Telekom, Etisalat, KPN, NTT Docomo, Orange, SingTel, Softbank/Sprint, Swisscom, Telefonica, Telekom Austria, Telenor Connexion, TeliaSonera, Verizon and Vodafone.
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By Matt Hatton, Founder & CEO, Machina Research