In a crowded IoT connectivity market, vertical expertise, contextualisation and managed services offer a route to differentiation. In a recent podcast discussion with Hiran Ravat of Go2SIM, I explored why understanding the customer’s business is becoming just as important as the connectivity technology itself. The full podcast recording can be found here: Podcast with Go2SIM: What really matters for cellular IoT connectivity?
Price competition remains a significant challenge for providers of cellular IoT connectivity. With many suppliers offering broadly similar network access and connectivity management capabilities, it can be difficult to differentiate on the underlying service alone. For customers, this can turn connectivity procurement into a largely price-led exercise. For providers, it puts pressure on margins and makes it harder to establish lasting customer relationships.
Our conversation explored how connectivity providers can move beyond competing primarily on price, why specialisation in particular industry verticals matters, and how a more consultative approach can help providers become trusted advisers to IoT adopters.
One of the central themes of our discussion was the extent to which IoT deployments differ from one another. Every use case has its own requirements, and even deployments within the same application area can vary considerably depending on the operating environment, the devices being connected, the consequences of connectivity failure and the regulatory obligations involved.
This makes it difficult to treat IoT connectivity as a standardised product that can simply be deployed in the same way for every customer. A connectivity service might provide the necessary network coverage and connectivity management functionality, but that is only part of the solution. Customers may also need help with integration, deployment, ongoing management, security, regulatory compliance and service assurance.
The challenge is therefore one of contextualisation: taking a broadly horizontal connectivity offering and making it relevant to a specific customer and their operational requirements.
That requires providers to understand not just what their technology can do, but how it needs to be applied in practice. The distinction matters. A provider that can support a particular type of deployment is not necessarily equivalent to one that has already delivered comparable projects and understands the associated challenges.
Experience in the relevant application segment can help providers anticipate problems, recommend appropriate architectures and give customers greater confidence in their decisions.
This leads to a strong argument for IoT connectivity providers to concentrate their efforts on a defined set of industry verticals rather than attempting to serve every possible application.
Specialisation allows providers to develop deeper knowledge of the requirements, deployment models and commercial considerations within their chosen markets. It can also help them build a more relevant proposition around the connectivity itself, incorporating the support services and operational capabilities that customers need.
Compliance and security are particularly important examples. Both are increasingly prominent concerns for IoT adopters, but their implications vary between industries and applications. The requirements associated with a connected device in a regulated industrial environment may differ substantially from those of a fleet-management deployment or a connected consumer product.
Customers may need assistance interpreting these requirements and translating them into practical decisions about connectivity architecture, data handling, security controls and ongoing service management. A provider with relevant vertical experience is better positioned to offer that guidance than one relying on a generic connectivity proposition.
There is also a commercial benefit to specialisation. Marketing resources are limited, particularly for smaller connectivity providers. Attempting to address every vertical means spreading those resources across a wide range of industry events, customer communities and potential partners, many of which may have little relevance to the provider's actual strengths.
By contrast, a focused vertical strategy makes it easier to identify the most relevant trade shows, industry associations and routes to market. It also allows marketing messages to address the specific challenges faced by prospective customers, rather than relying on generic claims about global coverage, flexible connectivity or device management.
The objective is not necessarily to abandon horizontal capabilities. It is to package and communicate them in a way that resonates with particular markets.
Another important implication is that IoT connectivity should be understood as a managed service rather than simply a means of transporting data.
For many adopters, purchasing a SIM, selecting a network and accessing a connectivity management platform are only the beginning. They may also require defined service-level agreements, help bringing devices and applications online, advice on compliance, security support and assistance when problems arise.
The extent of that support will vary according to the use case, but the principle remains the same: the value of connectivity depends partly on how effectively it supports the customer's wider operation.
Providers that can combine connectivity with appropriate guidance, implementation support and ongoing management have more opportunities to differentiate their offerings. They can also establish a stronger basis for commercial relationships that are not determined solely by the cost of data or the price of a SIM.
This is especially relevant when customers are making decisions early in the development of an IoT solution. Connectivity architecture, device selection, deployment geography and security requirements can all influence the eventual design. If the connectivity provider is involved only once those decisions have been made, its role may be limited to fulfilling a narrowly defined procurement requirement.
IoT connectivity providers frequently express a desire to engage with adopters earlier in the buying process. Doing so can help them influence architectural decisions and demonstrate value before procurement becomes a straightforward comparison of prices.
Vertical expertise is an important way to achieve this. Providers that understand an industry's operating environment can contribute to discussions about the overall solution, identify potential risks and explain the implications of different technical choices.
That changes the nature of the relationship. Rather than simply supplying connectivity against a specification, the provider becomes a participant in determining how the IoT deployment should work.
It also creates a more credible basis for discussing technology choices. During our conversation, we touched on areas including 5G, eSIM, non-terrestrial networks (NTN) and connectivity resilience. These technologies can all be relevant to IoT deployments, but their value depends on the requirements of the application.
The starting point should therefore be the customer's objectives and constraints, rather than the technology itself. Does the deployment require greater resilience? Is there a need to manage connectivity profiles across multiple markets? Would 5G provide a meaningful benefit? Could satellite connectivity address coverage gaps? These questions are more useful than treating each technology as an objective in its own right.
A provider that can help customers answer them is more likely to be involved in the decision-making process from the outset.
We also touched on artificial intelligence, a subject that is becoming increasingly difficult to separate from discussions about IoT.
AI may introduce additional requirements for connectivity providers, depending on how and where models are trained, deployed and managed. Applications that depend on timely, reliable delivery of data may place different demands on network performance and service assurance. Edge AI deployments may also require mechanisms for distributing model updates and managing models across geographically dispersed devices.
These requirements will not be uniform. Some applications may process most data locally, with relatively limited connectivity demands, while others may depend on frequent communication with cloud-based systems. The appropriate connectivity solution will depend on the application architecture and the consequences of delays, interruptions or data loss.
As AI becomes more deeply integrated into IoT solutions, the need to tailor connectivity to specific use cases is likely to become even more pronounced. This reinforces the case for providers to understand the application rather than focusing exclusively on the network.
The broader message from our discussion is that IoT connectivity providers need to look beyond price as the primary basis for competition. Network access and connectivity management remain essential, but they are not always sufficient to distinguish one provider from another.
Vertical expertise, contextualised propositions, implementation support, compliance guidance, security and ongoing service management can all contribute to a more differentiated offering. They can also help providers engage with customers earlier, when there is greater scope to influence the solution and build a relationship based on expertise.
For connectivity providers, the strategic question is not simply which technologies to offer, but which customers they are best equipped to serve, what those customers need and how the provider can demonstrate relevant experience.
That is the foundation for moving from connectivity as a commodity towards a managed service with a clear role in delivering the customer's IoT objectives.
Listen to the full podcast episode featuring Matt and Hiran Ravat of Go2SIM to hear more about vertical specialisation, managed connectivity and the importance of putting customer requirements at the centre of IoT connectivity strategy.
