The market is too fragmengted, even for the punk ethos of IoT, says LoRaWAN leader TTN
The LoRaWAN movement has something of the do-it-yourself ethos of punk music in the late 1970s. The Things Network (TTN), an Amsterdam-based LoRaWAN curation project, is one of its leaders, offering a simplified set of ‘internet-of-things’ (IoT) connectivity solutions and developer tools, and a stripped down message that says, ‘Here’s three chords, go connect stuff’. Promises about making fortunes and changing the world are, of course, mixed into the messaging, too. But star-making was never easy.
Wienke Giezeman, TTN chief executive and co-founder, is the Malcolm McClaren in this drawn-out analogy, an impresario with style pointers and a platform for a new generation of technologists to re-make the world in their own vision, by threading cities, services, and enterprises with connectivity and intelligence. But even punk music had rules. The global IoT market is unhinged, he says, and in urgent need of consolidation. Startups will continue to fail at an alarming rate, he says, until the fragmented IoT market finds a way to impose order.
Fragmentation of the IoT space is multi-fold, explains Giezeman, speaking with Enterprise IoT Insights at IoT Tech Expo in Amsterdam last month. Its complexity is exacerbated through each layer of the supply chain, through design, development, logistics, and certification. Startups must be masters-of-all-trades, he suggests, with working knowledge of every function in the system.
“You need knowledge of the supply chain, of hardware development, of software development. What you see, is nine out of 10 startups on Kickstarter, each with a fantastic idea, struggles to execute, and is bankrupt within 10 years.”
Giezeman explains: “The end market is very fragmented; it is a big hurdle. If you’re producing a smart mousetrap and a smart trash can, then your scope is way too broad. You have to go for a niche. There is fragmentation between regions, too; different regions have different standards. It’s just means twice the work to get stuff certified.
“The supply chain is complicated, too. Startups have to buy and hold stock; you need 10,000 sensors in a warehouse, and a trusted partner for that. Again, the scope is huge, and unlike we are used to working in the software space.”
Since setting up in 2015, TTN has created a loose-knit community of back-room LoRaWAN operators that stretches to over 600 cities around the world, providing a global platform for innovators to develop IoT solutions from scratch. In the UK, TTN meshed its footprint with tech incubator Digital Catapult’s LoRaWAN-based Things Connected network last month, uniting a LoRaWAN disparate infrastructure as a nationwide platform with over 400 base stations.
The challenge for startups in the IoT market, whether new entrants or old familiars from the IT space, is not to make a case for the technology anymore. “Some do it because of compliance and safety, and some do it to save money. The return on investment on smart mousetrap is 60 days, because it saves on 10 per cent of a workforce. So there are lots of efficiency use cases,” he says.
The use cases are clear, he says, reeling off a number of TTN examples: LoRaWAN is being used to monitor the temperatures of social housing in Manhattan; radio sensors have been installed around nuclear plants in Japan; the city of Amersfoort in the Netherlands is measuring micro-climates; the Port of Amsterdam is using LoRaWAN for smart parking sensors.
“The unique thing about LoRaWAN is you can build a national operator or a local network, for all kinds of applications,” he says, also pointing to its flexibility in terms of control over cost, quality and performance.
“NB-IoT is not really there yet as a mature tech, so it’s hard to compare what it can do. There are no low-power NB-IoT examples out there, really,” he says.
He suggests the rise of licensed low-power wide-area (LPWA) equivalents like NB-IoT and LTE-M has been over-stated. “There are different technologies for different needs, and certain parties telling their stakeholders they will be the winner, 100 per cent. That’s how this discussion comes up,” he explains.
“But while they say that, no one in the LoRa Alliance thinks IoT is not a winner-takes-all game. We are focused on certain use cases and characteristics, and will take a piece of the bigger pie.”
However, the business sustainability is not straightforward, he says, given the complexity of the market. “The business models and making money are not hardest part; making money in a repeatable way, like we used to in the SaaS market with highly scalable models and 90 per cent marginal profits, is the hardest part.”
Even higher-profile application enablement platforms and technology providers (“big horizontal platform players, with lots of venture-capital money”) are struggling with fragmentation in the market, he suggests.
“They are not delivering on their promise, at the moment. They can’t pull off this platform model, and get the repeat business, and end up just doing projects, really working as consultancies. A lot of IoT businesses end up there.”
TTN works this way, supplementing its network curation with consultancy work – rather like a punk musician moonlighting in a kitchen. “Exactly, except we’re in the canteen of the opera house,” says Giezeman. “But this is what everyone is doing in IoT.”
The market is crying out for consolidation, he says. “We don’t need 10 companies making temp sensors; we only need one to survive.” The answer, in the end, is to simplify the development process, as Apple did for smartphone apps.
“It starts with making it easy to develop,” he says. “Imagine if an smartphone app developer had to calculate whether your finger was swiping to the left or right every time. That stuff has been abstracted behind an SDK.”
The Apple model effect is informative, the model is less so, he notes. “It won’t happen in that way. This will be more like an open ecosystem like Linux, not controlled by single parties.” TTN wants to be the one to bring these abstractions over the top; he outlines its mission statement.
“We want to be like the AWS for the LoRaWAN IoT niche. We are already the go-to cloud platform, where you can get anything – connectivity, developer tools, services, enterprise services, products. Anyone that wants to build a global network with l LoRaWAN joins us.”
He also acknowledges fragmentation and consolidation in the market will run their course. “It just takes time, because it is hard. This is the struggle right now, but this is the future. Working within this environment is very inspiring.”