SMEs can ‘punch above their weight’ with carrier-IoT as-a-service, says Vodafone
Small and medium sized enterprises can “punch above their weight” in global markets by taking IoT as-a-service from mobile operators. Where large organisations will go it alone, and develop their own IoT platforms internally, smaller companies must seek specialist partners.
At the same time, mobile operators must change, too, and go from sales operations, pushing SIM cards and airtime subscriptions, to after-sales operations, providing digital change and support on subscription. This was the message from Vodafone at IoT Solutions World Congress in Barcelona last week.
“Even though the risk of digitalization around IoT might seem disproportionately high for small or mid-sized companies, the benefits are also disproptionately high,” said Phil Skipper, head of IoT business development at the UK carrier.
He suggested large corporations have been incubating IoT-based change programmes for a period, already, and have a headstart on small and medium enterprises (SMEs), which have neither the ability or desire to put their operations at the mercy of experimental technology.
“Large multinationals have seen this coming. They have been early adopters of IoT, and responded in simple ways – to look at digitalization as an opportunity to open new revenue streams,” said Skipper.
“Most big organisations are almost as expert as we are in the way they use connectivity. Smaller organisations realise they can punch above their weight in global markets, but it is a different ask.”
Just 20 per cent of in-house IoT projects succeed, he said, compared with 60 per cent of third-party collaborations, developed in a process of ‘co-creation’ between technology buyers and sellers. (Whether the statistic was a SME-only figure, or counted-in results from large corporates was unclear.)
But he continued: “There is a disproportionate risk of failure [for SMEs]. They can’t have two gos at it; they need to get it right first time, whereas big organisations can afford to have multiple bites at the cherry.”
The counter narrative, of course, is about the role traditional telecoms operators will play in the the digital transformation of industry, and how or if they will change their own businesses to go beyond straight connectivity-selling. Vodafone is on the road, already, said Skipper.
“We are seeing interesting growth in the mid-market. These companies are coming to us, asking how to de-risk digitalization with IoT. We make it very simple. Because these organisations don’t want to be experts in IoT. They have bigger and better things to do. They want to buy [IoT solutions] as-a-service. The market is moving from what telcos want to sell to what enterprises want to buy.”
Vodafone pushed its new Invent platform, which seeks to enable enterprises to make their own IoT solutions, based on a take-away menu of IoT capabilities, with a localised discussion around the final garnish to make the solution properly bespoke. Skipper said the IoT solutions market can be simplified, at root level, as two ‘use classes’, plus a third that will come available with 5G.
“Forget all the 100s of use cases you see; forget all you know: there are only actually two use classes for IoT. The first one is remote monitoring; the second is mobile asset tracking. You can do every application out there with one or other, or both of these use classes,” he said.
“Interestingly, 5G opens up a third, which is about control – so when we have 5G for controlling turntables and AGVs, and the rest of it, you can start to use IoT as a control network. So over the forseeable future, there will be these three main use classes. You can put all of those together in a set of components, which takes you 80 per cent up the learning curve.”
Which is the basis of the Invent initiative: 80 per cent off-the-shelf technical gubbins, plus 20 per cent back-and-forth to make it a tailored fit, for whatever discipline in whichever sector.
“Companies can go on the platform and develop the remaining 20 per cent. So we are moving away from this idea of ‘co-creation’ towards this world where you have ‘co-configuraion’, so you are adding the 20 per cent you need to make it a connected rat trap, or a connected chiller, or a connected HVAC system, rather than starting froms scratch and having to build everything up.”
It was a polished performance. Skipper described the state of the IoT market, at large, where parallel narratives about industrial challenges and technological solutions are coming together. The kaleidoscope has been shaken, and the chance of change is in grasp.
“Global trends are forcing organisations to change, just as three technologies are reaching maturity – IoT, cloud, and data analytics. There is a fourth, as well, less talked about, which is the availability of low-cost compute power, in the cloud and at the edge. It is an interesting tipping point, where we have this need to change as we have a set of potential technologies coming to maturity.”
Enterprises of every sort must change their wiring to keep pace. The market is jumping to a new rhythm, and the rate of technological advancement has made the tempo-change hyper and disruptive. “It is about businesses changing their metabolic rate – about increaing their heartbeat,” he said.
“I used to send letters to complain, and three months later I’d get a letter back with an apology and a postal order for £5. You could run business on a three month cycle. With email, that cycle became compressed, and with social media it has become almost instantaneous – 20 seconds, and the issue not about the problem any longer, but about the speed of response.”
Digital change is not about technology, but about business practice, said Skipper. The spoils are transformative, potentially. “If we get it right, we take IoT to the next level.” But the spectacle must be seen in the round.
“IoT devices are not a means to predictive maintenance, but a means to generate data [for new opportunitues]. It is not about tyre wear, actually, but about how to run whole fleets [of vehicles]… You have to look at the other side to realize the true benefits. Yes, it is about data, but the question is how to capture value from it.”
The technological question is only about how to serve those business ends, by future-proofing solutions with high-value and low-risk technologies. There is no way back, in the event connectivity and automation fail. “It is a one-way street. Because you have to change from paper to electronic processes, and from manual to automated systems. You become reliant on a third party to deliver your service.”
Which, of course, was the message in the end: that operators like Vodafone, with services like Invent, are uniquely positioned to simplify and support digital change for enterprises that cannot, or will not, solve IoT alone.
“Put those things together and you start to hit the topics: local capability, application as-a-service, with 80 per cent as standard and 20 per cent configurable, and then you have an ecosystem you can rely on,” said Skipper.