Transforma Insights has identified a series of aspects of the Internet of Things that are going through a period of fundamental transformation. These IoT ‘Transition Topics’ are the subject of a series of reports identifying the key aspects of change and how organisations should position themselves to be best placed to realise the opportunities generated. One of those topics, the subject of a recent Position Paper and Virtual Briefing (details below) is focused on the Connectivity Management Platform (CMP). In this blog post we provide a summary of some of the key talking points from the report.
The CMP is one of the key underlying pieces of middleware used by Mobile Network Operators (MNOs), Mobile Virtual Network Operators (MVNOs), and even some enterprises wishing to act as their own operator, to manage connections, handling activation/ deactivation, billing, analytics, reporting and various other functions.
If we look back 3-5 years the Connectivity Management Platform (CMP) space was relatively stable. The functionality included within CMPs was well-established with not too much evolution, and the market landscape was well defined, being dominated by two large players. The focus of the users of CMPs, predominantly Mobile Network Operators, was not generally very focused on the CMP space, and vendors of such solutions were mostly interested in incremental refinements to the service offering.
This has changed and will change further in the coming few years. We are currently in a period of transition with ownership, functionality, market structure and buying behaviour all in a period of flux. Ultimately, 3-5 years from now we expect there to be a ‘new normal’ in CMPs based on a more pluralistic market structure, with a wider range of, in many cases very feature-rich, platforms.
The biggest piece of news in the IoT connectivity space for many years was announced in December: Aeris Communications would acquire the IoT capabilities of Ericsson, including its Connectivity Management Platform, IoT Accelerator (IoTA). Ericsson is one of the 'big two' in the Connectivity Management Platform (CMP) space, along with Cisco's Control Center. Cisco has also been through something of a transition in recent years with some price changes that weren't always welcomed by their mobile network operator customers.
These changes demonstrate a big challenge in the CMP space: how can vendors continue to support operator customers at declining revenue per connection, sometimes as low as USD0.20/year, at the same time as supporting their complex requirements, and all while trying to turn a profit.
As well as these changes by Cisco and Ericsson, the whole of the CMP space has been undergoing a set of changes in the last few years. New arrivals are stirring the pot, with alternative, agile cloud-native offerings with strong functionality delivered in a very cost-effective manner.
There is also a growing demand on the part of MNOs and MVNOs to find low-touch on-boarding suitable for addressing the whole of IoT in a more cost effective way, particularly the low-tier prepaid segment. Increasingly it is seen by MNOs that the way to achieve this is by way of a separate, often lower functionality, CMP.
The range of functionality covered by the umbrella term ‘Connectivity Management Platform’ is also evolving, from simple SIM management and some analytics and reporting (covered by ‘Thin’ CMPs) to include elements of more advanced analytics, eSIM/remote SIM provisioning, core network functionality, and global connectivity orchestration (the ‘Thick’ CMPs).
The incumbent players in the ‘Thick’ category are Cisco Control Center and Ericsson IoT Accelerator. The general consensus is that Cisco is the market leader, but with some complaints from MNO clients that its roadmap could have been more progressive in the last few years, and some gripes about its recent price changes. Ericsson has been catching up somewhat, particularly through its eSIM offering. Its position in the market has been thrown into some uncertainty by the handing over of ownership of IoT Accelerator from Ericsson to Aeris. Both Cisco and Ericsson are increasingly being challenged by some of the alternative CMPs, such as floLIVE, in part over considerations of cost.
Stimulated by these changing dynamics on both the supply and demand side, there is a pronounced trend in the last few months for IoT connectivity providers, and particularly the Mobile Network Operators, to be more proactive in reviewing their CMP strategy, looking to diversify into using alternative platforms. In some cases they may want to find a replacement for existing main CMPs provided by Cisco or Ericsson. In others they will be looking for low-cost variants as a secondary platform. The good news for MNOs is that there has never been a better time to look at options for CMPs.
The Transforma Insights Position Paper, sponsored by floLIVE, looks at the key changes that have happened in the Connectivity Management Platform market in recent years, examines the functionality that is now required of CMPs, identifies the roles and capabilities of the different players in the CMP landscape (including specifying the functionality delivered by ‘Thin’ and ‘Thick’ CMPs) and offers some recommendations to MNOs and MVNOs about their strategy relating to CMPs. The Position Paper report is free to download.
Subscribers to the Transforma Insights Advisory Service can access the full report upon which the Position Paper is based, here: IoT Connectivity Management Platform (CMP) market landscape. This report includes further analysis of the market including profiles of 16 vendors. It is available here: IoT Connectivity Management Platform (CMP) market landscape.
On the 16th May, Transforma Insights delivered a Virtual Briefing with floLIVE, addressing the Connectivity Management Platform Transition Topic. It highlights some of the recent research published by Transforma Insights, including the Position Paper on the subject. It considers:
A replay of the webinar is available here: Virtual Briefing: The future of IoT Connectivity Management Platforms in an era of transition.