One of the prevailing trends in IoT is that connectivity is increasingly becoming seen as a feature rather than a product in its own right. What we anticipate is that within three to five years a substantial portion of IoT connectivity will be procured indirectly as part of a relationship with a communications service provider, cloud provider, hardware manufacturer, systems integrator, or solution provider.
Much of the discussion around IoT in the past centred on connectivity, i.e. how to connect the ‘thing’. While it remains a critical part of any IoT proposition, it is clear that the situation today is more complex. Enterprises are increasingly interested not just in how the device is connected, but how best to collect, manage, and analyse the data coming from connected devices.
We partnered with Oracle to conduct a global survey of 800 leading enterprise IoT adopters. The results indicated that enterprises no longer need direct input on selecting or procuring connectivity.
According to survey data, when asked to name the top three costs that they are trying to manage, survey respondents rated connectivity as the lowest priority overall, trailing behind the cost of hardware, licenses or subscriptions. Controlling the cost of connectivity is no longer an overriding challenge for adopters, reflecting lower prices and more flexible pricing models.
Also of interest from the survey is the fact that increasingly connectivity is something that users neither want or need to purchase independently. They are happy to entrust the provision of connectivity to their communications service provider (CSP) or other solutions provider indicating that pure connectivity is much better delivered and therefore not needing their direct attention. Three-quarters of survey respondents want connectivity to be provided by the IoT solution provider and 25% are happy for it to be completely bundled into the solution.
This trend is even more pronounced when respondents were asked about in-progress projects. For those that are in the planning phase, 80% of respondents want connectivity to be provided by the IoT solution provider, and 35% want it bundled as an opaque part of the solution. This neatly illustrates that the direction of travel is towards more connectivity integrated into solutions.
Further emphasising the preference for connectivity to be bundled with the solution, another survey question identified which of eight capabilities of IoT solutions needed the most attention. The requirement to have them come with connectivity ‘built in’ was the second most popular choice, with 43% of respondents picking it as one of their top three improvements.
If this trend plays out, the it is incumbent on connectivity providers to do more than simply provide connectivity. Providers will own the end-to-end remote message and data delivery to and from an IoT device. In a recent blog post, we explored the concept of CSPs pivoting to becoming Hyperscale IoT Connectivity Providers, a role with much more of a requirement for a richer set of capabilities, including transport layer orchestration and cloud integration.
None of this should be interpreted as implying that all the issues related to connectivity have been entirely ironed out. Far from it. There has never been a greater array of choices of connectivity options, with new arrivals including 5G, low power wide area (LPWA) networks, and low earth orbit (LEO) satellites. There are also numerous largely untested technologies currently arriving in the market, which promise to upset tried-and-tested business models, including eSIM and core network virtualization. And finally, new commercial models, vendors, pricing options and so forth, are emerging every day. Perhaps that’s part of the reason we see an increasing demand for opacity when it comes to connectivity: there are so many options now that adopters are demanding that partners remove decision-making complexity and provide them with the right technology options for their needs.
This blog post is based on a survey conducted by Oracle, of 800 leading IoT adopters in Australia, France, Germany, Mexico, Spain, Switzerland, UK and US. All of the results of the survey can be seen in the report ‘Five Best Practices of Leading IoT Adopters’.