Intelligent connectivity is set to enable devices to connect to the internet everywhere with minimised complexity. Nick Earle, the chief executive of Eseye, tells George Malim that this is the piece of the disruptive jigsaw that IoT has been missing. Flexible access to different mobile network providers according to location, application and device needs will take the complexity of connectivity away from the business side of IoT, turning it into a simple fact. This will supercharge a new wave of IoT visionaries, and the good news is the intelligent era is already underway
George Malim: What does the term intelligent connectivity mean to you?
Nick Earle: For us at Eseye, intelligent connectivity means the ability to provide embedded universal integrated circuit card (eUICC) enabled orchestration via a single application platform interconnected to multiple mobile network operators (MNOs), offering the widest choice between localisation or roaming on a country by country basis. Only by doing this can you provide ubiquitous connectivity as a service to every IoT device with no MNO lock-in. This near 100% global connectivity capability for every device is enabled via an eUICC compliant eSIM that can rotate between embedded international mobile subscriber identity (IMSI) numbers and multiple bootstraps, as well as have new IMSIs pushed into it over-the-air (OTA). The rules sit at the platform level and determine which mobile network operator gets used at what time, under what circumstances. The key here is that the rules are defined by the enterprise, not by each mobile operator individually.
Once you enable out-of-the-box global connectivity through a single platform you achieve device connectivity rates far higher than possible through a single MNO solution, and you open up a huge opportunity for enterprises. Essentially, by having multiple MNOs connecting to the platform, each of which allows localisation of each of their networks via a single eSIM, you enable enterprises to deploy large numbers of devices globally, with a single product stock-keeping unit (SKU). This massively increases manufacturing, supply chain and deployment process efficiency and saves them a huge amount of money. It is also good for the MNOs as well because they make more money from devices connecting locally.
GM: What is enabling the existing model that is dominated by tier one mobile operators to start to break down?
NE: Let’s start by examining the deficiencies in the traditional model. Most people think ubiquitous coverage is a given because their mindset is in the consumer mobile phone model, and the industry coverage statistics talk about coverage by percent of population. But IoT devices are often outside the major population centres and so you need to look at coverage by territory. When you do this businesses are often surprised to see the data that shows the average 4G coverage is 60% per operator. Yes, you can roam but often you’ll struggle to get above 80%. IoT needs 100% coverage not 80% to be truly successful. So, you still have to use a combination of regional operators to achieve 100% coverage and that means the enterprise still has the task of stitching fragmented solutions together. They want to focus on their business not on integrating the various carriers.
More critically, the commercial model for roaming is broken. If you’re a tier two or tier three operator it’s really difficult as there’s an unfair share going to the tier one providers who sell the original deal. That’s why it’s often impossible for MNOs to make money from IoT. So, the net effect is that nobody really wants to accept inbound roaming and it’s the customer and the business case for their IoT projects that suffer. This is a major problem because connectivity is critical to disrupt the business process and enable businesses to get value from IoT.
So, what’s needed to solve this problem? From a business point of view, it’s the model of an eUICC-compliant SIM that has multiple bootstraps, that can deliver complete freedom of choice and power to the enterprise to be able to implement the digitisation of business processes, that their CEO is going to be demanding as we go into 2021 and beyond. That’s a lot to do with interoperability and it’s a lot to do with whose intelligence it is. What’s happening is the intelligence that rules network choice is passing from the mobile network operators, who offer a choice of their network plus their roaming portfolio, to the end user who can now access many more networks and many more roaming agreements. In a word – interoperability.
This open MNO interoperability choice is enabled through a federation of MNOs connecting to our Connectivity Management Platform. The best analogy is the Star Alliance in the airline industry which was good for the consumer and the airlines. Rather than be limited to one airline and it’s choice of smaller airline connection partners for the next leg of your trip, the Star Alliance enabled the traveller to have a much bigger choice of global and regional airlines to plan and book a trip with a single ticket. To help achieve this in the IoT world, Eseye has created the global AnyNet Federation which currently includes 12 localisation options through our platform, with a path to more than 20 in the next 12 months. We believe that the AnyNet Federation is the largest MNO federation in the industry today and it’s getting larger as more MNOs see the commercial advantages, and as more enterprises adopt our solution.
GM: What role does intelligent connectivity play in enabling business process digitisation?
NE: In the post-Covid world, enterprises will be under increased pressure to dramatically reduce costs and become more competitive. One of the big trends we are seeing is the disintermediation of traditional value chains to focus on the true end consumer, and to turn products into pay as you use services. For example, Costa Express with its vending machines has reinvented the coffee vending experience by targeting the consumer, who doesn’t have to walk into a coffee shop to get a quality cup of coffee. Their machines deliver a personalised coffee experience that they call ‘a barista without a beard’ and are installed in other companies’ premises – like convenience stores. The store owners make money from having the machines in their location and the machines themselves are highly profitable for Costa Express.
We’ve also got a great customer in South Africa that’s a spice company called Freddy Hirsch. It is collapsing the value chain so, instead of selling spices to people who make sausage machines and who then sell the machines to the butchers, the company is selling IoT-enabled sausage machines as a service that are optimised to use their spices. The company is selling direct to the end user, the butcher, and cutting out the middleman as well as disrupting their spice competitors.
But it’s not just end-user innovation. When you can deliver near 100% connectivity for every device all of the time you add value to other companies as well. For example, one of our partners, RelayR, enables industrial companies to shift from capex to opex based offerings to their customers by providing a unique combination of IoT technology and an insurance based policy to guarantee the business outcome. Higher connectivity means less risk all round.
GM: How far away are we from a situation in which intelligent connectivity abstracts all the complexities of connectivity away from organisations when they deploy and utilise IoT devices and apps?
NE: Technically, we’re not very far because most of the technology exists today. But I think if you’d have asked me that a year ago, I would have said it’s two to three years away because the market was not moving. If you ask me now, I think Covid has accelerated the change and 2021 is the year in which it happens. The market is clearly changing rapidly right now.
The mobile network operators, particularly the people who are outside the tier one category, are all recognising that they need to work together to be able to meet their customers’ requirements – both regionally and globally. One indicator is the demand we are seeing from mobile network operators to join the Eseye AnyNet Federation and another is that the increase in the number of RFIs and the RFPs that we’ve seen in the last six months. What we’re now seeing is bigger RFIs and RFPs and an increased recognition that enterprises want to control the subscription management secure routing (SM-SR), which is another way of saying they want to control the intelligence around connectivity. That didn’t happen very much at all during 2019.
It’s always hard to tell when markets are changing, because the signs are small, and they tend to get overlooked in the noise. There is a lot of noise right now, primarily from a technology point of view. It’s all about narrowband IoT (NB-IoT), Sigfox, LoRa and what’s going to be the universal standard, as well as the potential of 5G. Take NB-IoT for example, there’s a lack of roaming agreements which makes it difficult for customers, particularly the larger enterprises, to universally adopt it and some major MNOs like NTT Docomo have dropped it completely. 5G is all over the news and the business process disruption potential is huge, but it is still some way off.
As we’ve discussed, the business model disruption is now possible by connecting everything together, but a lot of people in the industry still wallow in the technology. That’s because it’s cool and we like to talk about it, but actually, from the enterprise’s perspective, if you’re a coffee company you want all of this to be invisible; you just want to sell more coffees. If you’re a spice manufacturer, like Freddy Hirsch, you just want to sell more spices. What we’re seeing now is the emergence of platforms and capabilities that make the technology invisible to the end user and, as a result, we’re seeing accelerated business model disruption.
GM: How difficult is it for organisations to identify real opportunities among the false dawns that we’ve seen throughout the IoT era?
NE: It’s not easy. You have to obsess about the customer experience and not the product and that’s hard for product focussed companies to do. Engineers want to load products up with features, because they can, and users just want a simple, great experience. Many of the companies that have emerged and flourished over the last couple of years have taken the outside in approach.
Going forward we’re going to see an explosion in disruptive business models as people look to look to innovate and change their business processes more than they’ve probably done in the last 15 years. Supply and value chains across every industry and every process are being totally rewritten. Now, in order to do that and harness the enormous potential of IoT, there is huge urgency for everyone to work out what is their role in the new world and how they are going to deliver it. And the thing that makes it all work is data and that is why IoT is so important.
Without data, you can’t do it. The reason that you need ubiquitous connectivity is to get as much data as possible from the customer’s use of your product or service, so you can enable a differentiated consumer experience and create a business outcome, which is based on a new, slimline, disruptive business process.
There are several historical parallels to this where exactly the same thing happened. One is the emergence of the internet in the mid-1990s. When the internet first came along, we talked about the Internet Protocol (IP) standard. We talked about HTML and then the browser wars but pretty quickly, after about four or five years of it all being about technology, we suddenly started to hear talk about business. Suddenly companies like Amazon just said: ‘I’m going to disrupt’ and they collapsed the value chain. Amazon disrupted the bookstores, Netflix started to disrupt Blockbuster. Suddenly it became a snowball effect because if you’re in that industry and someone starts disrupting it, you’ve either got to go and disrupt or be disrupted. And that is what is happening now. With IoT, I think we’re moving from technology discussion, through the hype curve, to business process disruption, and that causes a stampede.
Visionaries change things. I remember in the late 1990s when I was running the internet programme for HP out of Silicon Valley, I had to take Amazon’s Jeff Bezos to the HP analyst conference we were hosting in New York. I found myself with a five-and-a-half-hour journey, one-on-one with Jeff Bezos and, although it was an overnight trip, we probably had about half-an-hour before we could get to sleep so I thought, what do I ask Jeff Bezos?
After a few pretty lame questions I came up with: “What’s next for Amazon, Jeff?” He almost jumped out of his seat and started waving his hands and said, “I’m going to be the biggest retailer in the world.” I said, “Oh, you mean in books and CDs?” He replied: “No, no, in everything.” I said: “You mean, okay, everything digital,” and he said: “No, everything. Everything you buy in a shop, including food.”
Don’t forget, this was in 1999, eight years before the iPhone. Then he said: “The only way they can stop me is to put lead cladding around every retail store in the world,” because that would be the only way to stop people price comparing with Amazon in retail stores. Now, he doesn’t even need that because the stores won’t exist, but the point is that he understood that new business models were possible, enabled by the technology. There will be the Jeff Bezos-style visionaries in IoT. The moment you make connectivity ubiquitous, all pervasive and invisible, you unleash the potential of previously unimaginable business models, which will mean that new, innovative companies get formed. We just can’t imagine them right now but in a few years’ time, we’ll know exactly who they are and what they do.
GM: How do you see intelligent connectivity transforming everyone’s approach to IoT connectivity?
Every example, including the unknown innovations from the visionaries, require ubiquitous global, out-of-the-box connectivity. This needs to be available without anybody needing to think about connectivity – it is just taken for granted. We need to make the connectivity problem disappear and the moment it disappears, business innovation explodes. That’s what is happening right now. This is absolutely the core of our mission at Eseye, it is what we do. Our mission is to make connectivity ubiquitous across any network, either localised or roaming, and into every device – globally. We want businesses to be able to innovate and disrupt – without limits.
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