5G, with its increased bandwidth and intelligence, promises to propel the Internet of Things forward. Smarter connectivity and more bandwidth mean more connected devices, which means more data. This abundance of data (or the value one can extract from it), is driving players across the IoT ecosystem toward this opportunity.
Communication Service Providers (CSP) are no exception. They are working to bring the 5G infrastructure to market while exploring ways to play a more active role in storing, analyzing, and monetizing the data that flows through their network.
As CSPs plan their product and go-to-market strategies, it is useful to evaluate the lessons learned from other companies that have tried similar models.
Capitalizing on the data that flows through a system is not a new concept. In fact, this idea has driven hundreds of companies to enter the IoT cloud platform market, allured by the possibility of accessing IoT data, many without acknowledging the immense complexity.
While there are countless lessons from IoT platform companies, here are the three most useful conclusions for CSPs.
Focus on adding value to your customer
It is important for CSPs to perform market and user research to discover how they can bring value to IoT solution providers. Let’s not forget that accessing user data is a CSP goal and not something customers are asking for.
From the perspective of IoT solution providers, the CSP is usually just a means to an end. As long as the data transfer is reliable, secure, fast, and cost-effective, it doesn’t matter which CSP they use.
What can CSPs provide to IoT solution providers to be perceived as value-added partners, as opposed to non-differentiated infrastructure?
Realize the privacy challenges your customers face
With the recent privacy scandals, consumers are more aware than ever about how companies acquire and treat their data.
IoT solution providers are fighting the privacy fight on two fronts. On one end, they need to gain the trust of their customers, requiring tighter SLAs and clear restrictions on what vendors can do with customer data.
On the other hand, IoT product companies are negotiating with every partner and vendor across the technology stack who is also interested in their data. This includes vendors for sensors, IoT cloud platform, analytics, etc.
Everyone is looking to access the data collected by the IoT company. CSPs need to compete with the other players, providing an extra level of value to convince IoT product companies to share their data with yet another vendor.
Entering the data business is hard
Often, infrastructure companies pursuing data strategy through an IoT platform realize too late the complexity and steep cost of building and operating a cloud platform. These companies have invested billions of dollars building their IoT platform offerings, only to realize they are unable to pull it off.
This is particularly challenging for companies whose core expertise is not cloud software, as the challenge then becomes technical and organizational.
Companies that don’t have a software culture find it very difficult to compete in this space. Beyond building the solution, they have to support and monetize it. CSPs would benefit from a strengths and weaknesses analysis to determine whether they are equipped to embark on this journey and what it would take to succeed.
The Bottom Line
It is true that there are lucrative opportunities for CSPs to play a larger role in the data economy. Before diving in, the successes and challenges of IoT cloud platforms and other IoT component vendors should be evaluated—saving themselves from preventable headaches down the road.
Note: I wrote this article as part of a collaboration with Ericsson (#EricssonInfluencer). Download Ericsson’s report: Realizing IoT Strategies.