Is the IoT becoming the IoE?

Written by on June 10, 2015 in Opinion with 0 Comments

Multicolor sewing threads textureWith apologies for proposing yet another acronym for the ever-expanding portfolio of three letter acronyms being wielded by IoT commentators, let us examine the IoE. The IoE has two meanings. One is the Internet of Everything, which is fine. It denotes that vastness of the next wave of connections. Everything – and everyone – who can be connected will be connected, even if it makes little sense.

The IoE also has another meaning and it is one that needs our attention. The Internet of Elephants. As in ‘elephant in the room.’ And the elephant in the room is how operators make money out of the IoT.

The IoT market – or series of arenas – is huge. IDC believe it will be worth $1.7 trillion by 2020 and Gartner says that 25 billion devices will be connected by then as well. Huge.

It is easy to see how most of this IoT pie will be carved up. Device manufacturers will have a field day. Consultants will be laughing. Data scientists will be sought after by everyone. IT will be integral to its workings. But what of the operator?

Of course, operators will provide connectivity.

But when you think beyond connectivity, the discussion becomes cloudy. ‘Well, operators have the billing relationship.’ ‘There are IT services to offer.’ ‘Perhaps something from the Cloud?’ According to an email from DisruptiveViews’ friend and consultant, Chris Lewis, “Telcos got themselves and the rest of the world over-excited by the promise of M2M. But M2M represents islands of telemetry. It doesn’t represent the full picture of data that empower decision-making, some of which may not even make it onto a telco network.” He believes, according to his promotion of The Great Telco Debate, that IoT is irrelevant to telcos. And yet, as he also points out, “Orange CEO Stephane Richard [recently] outlined the company’s new strategy, with aims to make €1 billion in revenue from new areas in the next five years – including IoT.”

All may not be lost. Take one IoT Catalyst at last week’s TM ForumLive event. BT has teamed up with Milton Keynes – a town outside London. The population is expanding fast and car parking and a range of other facilities are at breaking point. Conventional wisdom says that the city will have to spend £110 million on additional car parking within the next five years. Unconventional wisdom, backed by analytics and intelligently connected devices, says that this investment can be put off for some years by intelligently managing the existing resources. For example, interactive maps can guide cars to car parks and meters with spaces. £110 million is a significant saving.

What, though, apart from the connectivity, is in it for BT? The response from BT is that Milton Keynes is a proof of concept and they are preparing to take the idea, as a package, to other cities across the UK. The trick is that they also provide the intelligence that allows cities to manage their resources and thus defer the investment.

This means that one model for operators is to become IT services companies. For some, that will be hard, for others, who have been supporting enterprises with a variety of solutions, then it will be an extension of their core business. This will be yet another cultural, as well technical overhaul.

The critical thing, though, is that the place of operators in these arenas is discussed now, otherwise the danger is that operators will go back to their ‘factory setting’ and believe that they can make a business out of connectivity. Perhaps, just perhaps, they can.

IoT is one example of how the business model for operators is changing, margins shrinking dramatically and scale increasing exponentially. And there is potential to make very serious businesses out of the IoT, but let us discuss the IoE and the elephant in the room properly, and now, before it is too late and all that is left is connectivity.

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Alex Leslie

About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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