The 4 Main Challenges to Become An Internet of Things (IOT) Service Provider

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Why there is none or lack of IOT service providers around? Why it takes so long for incumbent telcos that already operate M2M as their primary line of business to adopt IOT as their natural evolution from their M2M? We have seen various IOT platforms being developed by various companies. These platforms are divided into two – connectivity platform and applications platform. M2M used to be at the connectivity layer where it connects to the different devices, but mainly telcos are interested in devices which utilize Sim-cards. Nowadays, the proliferation of applications platforms for IOT makes it easier for IOT solutions provider to create new applications to suit the end-user needs. These platforms are more “open” for devices to connect to any Internet applications using “REST”, “MQTT” etc. But still, the initial question remained – where are these IOT Service Providers?

Here’re my first thoughts and wishes to hear more from the readers. These are some of the reasons:-

1 – M2M business is not equal to Internet of Things Business. Traditionally, telcos are interested in M2M because they felt that every sensor or connected devices must be dependent on 2G/3G/LTE network either via simple GPRS or SMS or 3G/LTE mobile. Imagine billions of devices connected via this network. That would generate Billions of Dollars of revenue, right? Wrong – IOT is similar to OTT. They don’t require the Simcard to get connected. Anything that supports TCP/IP can be connected to Internet easily. Then, how does a telco charges this “OTT” service?

2 – M2M is like LTE and IOT are like WiMAX. We still remember the days of the “4G Battle between LTE and WiMAX”. WiMAX claimed to be an all-IP based network. Flat infrastructure. LTE is a natural evolution of 3G which still requires Simcard to activate the service. Thus, incumbent telcos with 3G/LTE infrastructure “think” differently from the Internet Service Providers (ISPs). Connectivity vs. Applications if you want to think that way. Thus, it requires a change of mindset and skills if current and incumbent telcos want to embrace IOT.

3 – Cloud and Big Data Analytics are new Game Play. It requires a new way of a business model and thinking approach. It’s no longer selling “pipes” but the value of the “water in the pipe”.

4 – B2C vs. B2B – All this while, telcos are in the business of providing services to the consumers. Only recently they have tried to provide mobility solutions to their enterprise customers. No longer packaging smartphones with new enterprise voice tariffs, no longer selling enterprise mobile data packages, no longer selling leased lines. IOT requires them to understand the actual pain points of the enterprises. They must know how business operates and how they can provide solutions that can either enhance their revenue or become more productive and efficient in their operations.

The list above might not be exhaustive enough, but I wish to listen to the readers views regarding this topic. You are very welcome to provide comments and share this article for further discussion. Thanks!

About the Author: 

Mazlan-Abbas-e1468839685939Dr. Mazlan is ranked No. 20th Thought Leader in IoT by 2014 Onalytics Report – “The Internet of Things – Top 100 Thought Leaders” , ranked Top 100 in Smart Cities Top Experts by Agilience Authority Index May 2016 and ranked 2016 Top 100 IoT Influencers by Postcapes. He is currently the CEO of REDtone IOT and is a public speaker at leading IoT events. You can get in touch with him on LinkedInFacebook, and Twitter.

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