As IoT fragments, CMP needs to handle all the demands on a global scale

Helmut Lehner

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Helmut Lehner is the founder and chief executive of MAVOCO. The company provides an advanced connectivity management platform (CMP) software that manages IoT and machine connectivity demands across industries, geographies and technologies. Here, he tells George Malim about the new demands being placed on CMPs by vertical industry requirements, performance criteria, costs and legislation in an increasingly fragmented IoT market.

George Malim: How are you seeing the transformation of the telecoms market and what impact is that change having on the uptake of connectivity management platforms?

Helmut Lehner: The first thing I see is that the IoT market will become more and more segmented. As every industry develops, IoT won’t simply remain the same as it is today. It will become massive IoT, mission-critical IoT, telemetry IoT or industrial IoT. The IoT industry will develop into many subsegments, each with different requirements.

Because of these specific requirements, I believe we’ll see fragmentation also extend to connectivity management. SIM cards that deliver connectivity for 50 cents are not comparable to SIM cards that cost €1,000 per year. You can’t expect the same services, technology and platform capabilities at these vastly different price points. As more CMPs come to market, we will see a mixture of offerings for low, mid and high average revenue per user (ARPU) SIMs. The second transformational trend is that global companies want to deal with one mobile network operator (MNO) or mobile virtual network operator (MVNO), who offers worldwide connectivity at a consistent quality and price. Such a comprehensive service is not available, so the setup of global IoT business solutions is a complex issue. A good analogy for what is needed is the airline alliances who team up to provide contiguous high-level service around the world. I think we’ll see agreements between network operators to deliver such necessary global offerings.

Another aspect that will have a significant impact on the IoT industry is the legal constraints that exist between different countries. Privacy, data sovereignty and security concerns require companies to keep US customer data in the US, and the same applies to the EU, Russia, China and other countries. These laws mean that a service provider needs to have data centres in various regions of the world if they are to offer a truly global service.

We do see this happening by the large operator groups. However, this requires costly, high-tech infrastructure or the co-operation with vendors such as Nokia’s WING (worldwide IoT network grid) offering. WING solves this critical compliance issue by supplying the infrastructure required for the localisation of capabilities. Further challenges associated with globalisation are concerning latency. If a network operator in Europe sells connectivity to a manufacturer selling cars in Mexico, the data traffic must travel around the world. That creates a problem if the application involved requires low latency. CMPs that rely on local capacities will be necessary to alleviate this issue. They will then have to recognise the data source, destination, and the requirements of the app.

It is quite a complex system to set up, and the emergence of more convoluted business models that involve multiple parties is compounding the complexity. For example, where an operator used to sell network access only to a car manufacturer, that manufacturer now sells a portion of the connectivity to a customer to access music streaming services, and uses a separate data stream to communicate with the vehicle.

That’s actually a relatively simple B2B2C model but the increasing number of partners involved in IoT value chains will involve multi-directional business models, the increased sharing of functions and the need to apportion costs and revenues accurately and fairly. The CMP must understand the business chain and have the capability to do the billing as well at all the different levels involved.

GM: What differences are there between MNO and MVNO approaches to connectivity management platforms?

HL: There is a thin line between an IoT service provider that sells connectivity as part of its offering and an MVNO. If an IoT service provider supports, for example, 500,000 devices it could well be seen as an MVNO. It’s not crystal clear where a CMP ends, or whether it automatically becomes a mobile virtual network enabler (MVNE) and what a reseller needs to have to become an MVNO. There is a whole range to consider from a lightweight reseller up to specialist MVNOs.

I know customers that see connectivity as a service. For example, Amazon sells a Kindle with a SIM card and there are probably millions of those deployed. Whether they are an MVNO or not, or whether they could become an MVNO is really determined more by intention than the situation in reality. If the business idea is to sell connectivity, they’re probably an MVNO, but if the business idea is that the connectivity is useful to help them sell another services, they’re probably not an MVNO.

I don’t think that money is the key factor to choose between MNOs and MVNOs. In IoT it’s critical that the connection works, it’s all about trust between the network operator and the IoT service provider and its customers. Just because something is two cents cheaper, it doesn’t become attractive if it’s perceived as likely to fail.

We shouldn’t forget that connectivity makes up a relatively small percentage of the costs of an IoT solution, as the device and the application account for most of the expenses. Failure in the connection means that the expensive device and app don’t generate revenue, so sometimes this is not an area of cost-saving priority.

GM: Please explain the main attributes of MAVOCO’s CMP. What does it offer that makes it different from other CMPs?

HL: MAVOCO has the vision that the market will be a global business. Therefore, the CMP has to be able to handle additional connectivity from other partners, and our software has to support a multicore environment. It’s like an aggregator platform. All networks have existing CMP systems and can simply connect to ours. For example, if a customer has already deployed a Jasper system, those SIM cards can also work within our system. We have the vision of a distributed core network with local breakouts for collecting the data for billing, for example. We also have real-time rating, billing and rules engine that is a vital necessity for this wave of IoT.

With our global rating grid, we’ve built-in capability where you can rate every event. We can do parallel rating so we can bill the network operator’s customer but also rate what that customer is providing for some event to their own customers. This P2P2P model necessitates that completely different plans can exist in the same environment.

In addition, we can do non-telco billing, for smart meters in electricity, gas or water utilities or for transport applications, for example. A typical model we support could involve fees for telematics, connectivity and hardware rental that are all brought together in one bill.

GM: You’ve recently launched MAVOCO Sienna v5.0. What does it add to the product and how does this enhance your MAVOCloud offering?

HL: I believe that the biggest success is when your customer loves your product. For us, the functionality and the capabilities are the core of our offerings but it’s the design of the applications that makes customers love the product. I think Sienna in Italy is a beautiful city and that’s why we chose this name. However, it reflects the design work we have done on the user interface to make it cool and easy to use. In addition to the attractive user interface, version 5.0 includes a new type of split that enables different criteria to be billed for. For example, in a vehicle, the car manufacturer wants to collect and transmit data for its own purposes, while an insurer wants to know how many miles are being covered so it can charge per mile. On top of this, the private person might be using a music streaming service. All three models need to be supported and it’s a new concept to split the traffic for the different uses and bill accordingly. We now have this capability and it’s especially attractive for industries where you share the connection. In addition, it simply doesn’t make sense to have three or four SIM cards in a vehicle, it’s far better to share.

As IoT continues to develop and we see more and more B2B2C activities and a wider range of resellers involved, this type of functionality will be increasingly in demand. I think we’re in a good position to enable future business models and the success of our customers.

http://www.mavoco.com/

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Photo: Maria Hollunder Fotografie

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