5 IoT pricing trends to watch in 2021

Alexis Susset of Soracom

Every IoT project starts with a plan. As IoT deployments scale up in 2021, it’s become clear that the plans that consider the cost and flexibility of connectivity up front will be the ones that don’t end up with big “gotchas” when the bills come due, says, Alexis Susset, VP global product & EU sales, Soracom.

Even when the finance department is included early in IoT planning, product managers may need to make connectivity decisions with long-term repercussions. In addition to basic pricing, PMs need to consider connectivity and operational challenges both for where the product will actually be developed and for all the locations in the world where it might actually be deployed.

Meanwhile, the finance department is always looking for cost predictability to support accurate monthly and annual budgets. The problem, Many IoT pricing plans require long-term commitments and a static rate for each device connected.

Fortunately, IoT connectivity providers face the same challenges, and 2021 is bringing the industry closer to alignment with real customer needs. Below are five upcoming trends the industry should expect for cellular IoT connectivity pricing in the coming year:

1.Regional pricing plans. When a business begins to think about who they are building products for and where they will be used, they rarely get it right the first time. Not every product is intended for every market, and global connectivity may not always be needed. Regional pricing plans are now emerging to support products that will be developed, tested and rolled out in a single geographic region. This enables businesses to receive pricing for their main markets or an extended pricing plan for all countries.

One recent trend, Companies are no longer interested in which IoT connectivity provider has the most geographic coverage they want the coverage that’s right for them. Nonetheless, it is important not to underestimate the advantages of a single SKU that can efficiently support different regions. Truly global providers offer a SIM card that can be remotely upgraded with regional connectivity options, which leans into the second trend below.

2. Multicarrier service. Along the same lines, IoT projects in industries such as real estate, construction, agriculture and transportation can benefit from multi-carrier coverage to ensure maximum connectivity in remote areas. There are two key reasons service from multiple carriers is attractive:

  • Carrier redundancyWhere providers can perform the upgrade on the network rather than SIM side, this is especially valuable as emerging cellular technologies roll out at different speeds. Multicarrier service brings an extra layer of redundancy when needed and also helps when new generations of technology like 5G emerge.
  • Geographic manufacturingMulticarrier service means the devices can be manufactured and tested in one geography and then shipped to their destination with the same SIM cards still in place.

3. Commitment-free billing. At the start of IoT projects, some businesses may seek to lock in a low price that comes with a long-term commitment of as much as 10 years. A year or two later, many are looking to get out of these contracts, either because a proof of concept (PoC) didn’t pan out or the product evolved more quickly than expected. Technical innovators need a pricing plan that aligns better with their speed of innovation. Minimum monthly data rates for individual SIMs just don’t make sense, and long-term commitments can stop a project in its tracks during prototyping and testing. Commitment-free billing can help alleviate these pain points, and some MVNOs are starting to move in this direction.

4. Built-in volume discounts. Built-in volume discounts let IoT initiatives scale freely without going back to the negotiating table every few months. Some customers are becoming increasingly sophisticated with their IoT implementations and as they get deeper into a project, they might need to connect more devices than originally forecast. They want to understand not only how easy billing is to set up, but how it improves the value of their product or service overall. Some know to ask their connectivity provider about built-in volume discounts, but others need a simplified approach.

Until recently, many IoT service providers have been offering per-device billing, but an emerging trend is per-account pricing. This “data pooling” allows users to work with devices that require different data usage and incorporate total cost across devices instead of assigning a static data rate for each device. For example, if one device is using 10MB of data per month and another 30MB per month, the user would pay for 40MB in total. This data pooling can drastically reduce cost, increase flexibility and help to ensure predictable monthly data bills.

5. Predictability. Not knowing what your IoT pricing will be from day to day or month to month can throw the economics of IoT deployments into a tailspin. Pay-as-you-go pricing can cause a rift between the product development team and the financial team that is paying the bills. Product teams are simply looking at getting a PoC out the door, while the financial team wants more of a fixed rate price for IoT connectivity so they have a known cost. Flat rate and pay-as-you-go pricing with automated alerting and management capabilities can help IoT project owners better ensure they are always within budget.

The major theme driving the trends we’ll see in 2021 is flexibility is your IoT connectivity provider expecting you to conform to their way of doing business, or are they working to provide the flexibility you need to accelerate your product or solution without worrying about the cost of scaling? Providing a simplified approach to IoT pricing will go a long way to driving more IoT products to market successfully.

The author is Alexis Susset, VP global product & EU sales, Soracom.

Comment on this article below or via Twitter: @IoTNow_OR @jcIoTnow

FEATURED IoT STORIES

9 IoT applications that will change everything

Posted on: September 1, 2021

Whether you are a future-minded CEO, tech-driven CEO or IT leader, you’ve come across the term IoT before. It’s often used alongside superlatives regarding how it will revolutionize the way you work, play, and live. But is it just another buzzword, or is it the as-promised technological holy grail? The truth is that Internet of

Read more

Which IoT Platform 2021? IoT Now Enterprise Buyers’ Guide

Posted on: August 30, 2021

There are several different parts in a complete IoT solution, all of which must work together to get the result needed, write IoT Now Enterprise Buyers’ Guide – Which IoT Platform 2021? authors Robin Duke-Woolley, the CEO and Bill Ingle, a senior analyst, at Beecham Research. Figure 1 shows these parts and, although not all

Read more

CAT-M1 vs NB-IoT – examining the real differences

Posted on: June 21, 2021

As industry players look to provide the next generation of IoT connectivity, two different standards have emerged under release 13 of 3GPP – CAT-M1 and NB-IoT.

Read more

IoT and home automation: What does the future hold?

Posted on: June 10, 2020

Once a dream, iot home automation is slowly but steadily becoming a part of daily lives around the world. In fact, it is believed that the global market for smart home automation will reach $40 billion by 2020.

Read more
RECENT ARTICLES

Scality’s 2022 forecast: Storage solutions get AI/MLOps upgrade, enhanced ransomware protection

Posted on: December 8, 2021

London, UK. 7 December 2021 – Scality announced its data storage predictions for 2022, coming off a year when ransomware attacks have exploded, skills shortages remain, and cloud adoption continues. This year’s forecast homes in on how storage solutions will evolve to meet these challenges and how emerging technologies will impact the data storage landscape.

Read more

Virtana free tier offering lets enterprises experience simplified hybrid cloud optimisation at no cost

Posted on: December 8, 2021

Virtana announced the immediate availability of a free version of Virtana Optimize, its cloud optimisation solution. The Free Tier offering complements the Premium version of Virtana Optimize, allowing for frictionless customer adoption.

Read more