IoT Leaders
IoT Leaders

Episode · 10 months ago

The Decline of Data: Moving from Volume to Value w/ Matt Hatton

ABOUT THIS EPISODE

History is littered with examples of technology companies that failed to adapt when there was a sea change in the prevailing business model.

Consider the companies that fell by the wayside when the software industry switched from a per-license pricing model to SaaS.

We’re on the precipice of a similar sea change within IoT.

In this episode, Nick talks with Matt Hatton, Founding Partner & Analyst for Transforma Insights, about how companies will need to pivot for the inevitable changes that are on the way.

Join us as we discuss:

  • Why we never reached 50 billion connected devices
  • The challenges of true global connectivity
  • Strategies for handling continued price erosion
  • The future players of the IoT market  

Mentioned during the podcast:

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You're listening to Iot leaders, a podcast from Si that shares real IOT stories from the field about digital transformation, swings and Mrs, Lessons Learned in innovation strategies that work. In each episode, you'll hear our conversations with top digitization leaders on how Iot is changing the world for the better. What IOT leaders be your guide to Iot, digital transformation and innovation? Let's get into the show. Hello and welcome to the IOT leaders podcast. For those of you who perhaps have not listened before, this is the podcast produced by Si, the company that I run. My name is nickel ceosis, a podcast that attempts to de mystify and shed some light on the complexities of Iot and how one of the Best Practices to become successful. And each podcast we have a we have a guest, and this week I'm delighted to welcome Matt Hatton, who is the founding partner of a company called transformer insights. And so, Matt, welcome, welcome to the OOT leaders podcast. Thank you. Nick, likes to be here. Okay, and Matt, one of the where I'd like to start. Actually, I know you're in big demand and the I see you a lot of on the conference agendas and speaking but in particular, I first got to know you a little while ago and a one of the things that came to my attention was a great little book. Actually, I give it to people when they join Si, and it was called the Internet of things myth, which I thought was a was a wonderful title, but it basically was a book, the way I described it as a book that explains, you know, why Iot hasn't yet happened and in particular, what resonated to me early ons the the claims from various companies, including the company I work for it at the time, Cisco. You know, we were got by two thousand and twenty and we're a year past it now. Of course we were all going to have fifty billion things connected. Life was going to be great, and in fact it's probably going to be more than fifty billion. It would be even more. And actually it turned out when the when the does settled and we looked at the numbers, it was eleven billion, and I think it's the book is one of the best explanations of of actually what happened in retrospect. So maybe we can just start off now. I know you co coauthored it. What would you say, just for our listeners and viewers when it see on social media of this podcast? What were the main reasons? Can you summarize why we had such an enormous miss on our predictions as an industry? Yeah, I mean the starting point you've got to go back to a little bit is where the fifty billion was a reasonable target or what the expectations really really should have been. And actually, someone who is doing market forecasting in around about two thousand and eleven of the Iota Market with my previous company, the Quenar Research, we didn't think it was going to be fifty billion devices. So there was kind of a expectation, a gap a little bit. So we pictured around think twelve billion was our was our first two thousand of not not bad, not bad. That was very good. We'd say that the figure now is, or the end of two thousand and twenty was around about nine billion, I think, something like that. So you know, I think we were we were pretty pretty close. But back to the question, I mean it's still a still a valid question in terms of okay, well, against those expectations, why did we not quite see the the take up? And I'm more important for me it's not necessarily about about numbers of devices. It's that it's the impact. People were talking about how IOT would have a world changing impact on all of these industries and it would completely transform everybody. And that has happened in some case cases, yeah, but also hasn't happened in a lot of other cases. Now you can look at things like on the consumer side of things, there were some some terrible business models. I mean things where you'd get your...

...connected garage door bricked if you didn't comply with with terms of service, or you've got situations where something that you used to buy as a as a piece of hardware and owned forever, you're effectively going to a subscription model for lighting or for music or for any number of different things. And is that really the best user experience for people who are used to having something that would just work constantly for the life time duration of the device? Probably not. And switching over to the the enterprise sid of things, there was, I think, a quite a disconnect between how organizations in their it departments perhaps saw IOT is being. It's wonderful, bright shiny thing that we can we can go play with, and the reality within the the organization in terms of their operations and commercial models and so on, and how capable they actually were of taking advantage of of the opportunities that that Iot brought them. And this was part of the reason why you saw all of this POC hell, all trials and and and so on. That happened but never really went to commercial deployment. It's because, for the most part, companies of testing the technology and it was a kind of a proof of technology rather than a proof of concept, because there was never really a much of a thought on how this is going to change the organization and what it does. So you've got things like the operations, you've got things like, okay, if you switch to earn as a service business model. One of the big capabilities that IOT allows is in go from selling potato sort to selling potato sorting as a service. That's the example I always like to throw him. You can do that, but for that potato sorting machine manufacturer that involves completely changing how they do everything, from their finance, their operations, the customer service, just about everything, and very few companies have really thought through how that would how that would change, and so there was inevitably going to be a bit of a gap between what the promise was and what the the reality was. Is that. I mean there's a couple of other things. It was also pretty complex. You've seen, I think, in the last ten years, quite a lot of driving out of the the complexity. You've got a kind of platformization of the sector which makes it a lot easier. You've got more technologies available that more appropriate. FRYOT. I'm thinking about particularly some of the low power white area technologies. But in two thousand and eleven they maybe didn't exist and and maybe there was an expectation that they would peer and be much more widely deployed and used than then. As it happens, they did. So you've got you've got all those sorts of factors. I and and if I by the way, just as an aside, my previous lives. One of my previous lives, previous careers, I was at Cisco and was actually running the unit with it was tasked with doing the change management across the company from transactional box selling, essentially, to a newity. And you're absolutely right, the biggest issue was everything changes. I mean your finance system has to change, your operations system has to change, how you pay people that job descriptions your budgeting process. I mean it's just so fundamental pull and no one really understood it was so well, we just sort of charge for it as an annuity. But know all the back end systems have to change and but but you know, the other issue, that one thing that I saw in the book and one that here Si course, that we picked up on, is this issue of certain assumptions that we all had, whether we were saying it was a I by you saying thirteen that I think you were thirteen the most accurate, but there are a lot of people who said fifty. I mean Cisco was one of them. But I be Erics. I mean that a lot of people said fifty and and there wasn't a there are some basic assumptions and and maybe we...

...could just step through them. And one of the first ones was, well, connectivity is going to be like cellular connectivity is going to be pretty easy. I mean, you know we already we already done that. It's a problem the industry is solved. We stick a SIM card in a in a piece of hardware that has firmware and maybe a screen and because that's phone and we know how that works, and and it just works right. But it turns out that and you get a hundred percent connectivity. But it turns out those use cases that you talked about they require in many cases near a hundred percent connectivity. And it is certainly connectivity was not easy, was it? I mean, people don't know about hardware. The large global mobile network operators in the cellular consumer voice world. They sell great connectivity, but it's not at the sort of levels that often iot devices need. Is I mean, from an industry point of view, globible, truly global connectivity is a real challenge, is it is? It was more a question of, I think, optimize ation. While there's t two issues. One is optimization. So the the old way of doing things with with mobile friends, you know, you stick at anybody, see him in any device and it goes more or less anywhere in the world in it and it works fine. Doesn't really carry over into into Iot because you're dealing with much more extreme use cases, things that require, as you say, that much more coverage or longer battery life. So say you need to optimize the devices and the and the network and and all those various constituent parts for for delivering that that capability. So yeah, it was a it's a much more challenging environment and perhaps more challenging than everyone gave it credit for. There's also a bit of an inertia as well. You know, it's it's not just okay, there are these use cases and wouldn't it be wonderfully if they were connected and then suddenly they're all going to be connected. It takes time. It takes time and effort to pull together a proposition that that seems appropriate to those use cases and and to persuade the the the sectors involved that it's that it's a vital part of what they need to do going for it's one of the conversations I was having on a previous podcast. We don't put a few hours people were saying it was also the opposite of of the way we thought the world was going to go, and I just to explain that. You know, when cloud came, cloud represent to simplification. I mean a WS talked about simplification and driving costs down, something that will will come back to, I'm sure because of a blog that you've recently done. But essentially, a WS their promise was it's just simpler than owning a box, managing a box, operating a box. It just connect to the cloud with the credit card and we'll take care of the complexity and it's infinitely scalable. Of and we all sort of believe that and said, well, you know that that's hardware. Hardware is now gone. It's the personal device, say, or perhaps a PC, but basically I'm not having to design hardware or manage hardware. And yet they are. Along came Iot and, as you've just said, because of issues to do with the use case in the device, different sensors, battery life management, firmware settings, global deployment, linking to different MNO's, over eight hundred M's wilet. We're operators around the world. Suddenly hardware was front and centers as one of the big things in in IOT deployment. But most users, it's very rare for a user to have a hardware design department. To customer to our hardware design department and you know that they although there are cloud IOT platforms, the hardware design side of it suddenly became a huge issue and that and most people said, I don't want to be involved in that, I don't know how to do that. And yet the research says eighty percent of problems in IOT deployments can actually be traced back to something within the device. That we...

...suddenly went in a back almost back to the future. We went back to something we thought we'd let go of as an industry. Yeah, well, to use the the well worn and slightly hackneyed phrase, hardware is hard. You've got certification of the advices, you've got such a and I come back to it again, the diversity of use cases meant that if you wanted to develop a solution for your particular requirements, then probably you had to almost build it from the ground I'll commit in many cases and if you didn't, then okay, user, user gateway. Fine, that's okay, but the cost associated with with using a gateway was probably well out of proportion with with what you'd be prepared to spend. So you do end up with with with quite significant challenges where and and certification on to networks. You know the particularly the the US operator a very restrict about what gets approved for going on to their networks. It's a challenging thing. On the subject of networks, one of the other significant things was compliance. So, particularly in this in the cellular words, you had some some horror stories of companies trying to support their or network operators trying to support connections in other markets based on roaming and the host operator saying, Hey, I'm not really happy with with you having these permanently roaming devices on my network, notwithstanding regulatory but this was just now operator Inter operator relationships, and they say not having this, I'm switching those, those net those connections off. And if you've got hundreds of thousands of vehicles in the US, as some European network operators did in cars, what do you do? You've got stranded devices and none of this helps to reinforce this idea that IOT is going to be easy and a great thing to do. If you'RE A if you're a car manufacturers, say so, it's you. That's just another, another thorny issue. That was was a bit of a problem back in ten years ago or so. Yes, actually it was. That was one of the reasons, you know, I when I joined their side. We see, they said to me, I will we do this ubicharous global connectivity, but we've also got this team of people over here, and I said, well, one of those guys do and said, well, that's our hardwood design even I said Hardwood Design team. You know, I'm well, what sort of an old fashioned concept is that? And actually, as you just said, it turned out to be incredibly important because the devices you can't use a gateway off and it's just too expensive, it's physically too big, it's not right for the use case. You have to put connectivity into the device, of security into the device. That get the firm we're settings and, as you say, the certification is different. I mean even in the US the way you know, a t and t GSMAD heritage verising with a CDMA heritage. If a device wants to go between one and two, you're now connecting to networks that have different requirements, and so that that just that. That one thing means if your networks going to localize or connect onto both, it's got to have firmware that actually converts things and puts them in at the other way around. And so anyway, that so we got. You know that that's back to this this point that we it didn't happen, but it is happening now. IOT is growing. Now we're starting to simplify things. Now we're seeing some great use cases. We talked about that a lot. You've talked about it a lot. We talked about a lot on this podcast series. We often have our customers. We have two thousand customers. We often have our customers are and talk about their use cases. So they we're actually showing. Look, you know, these guys have found a way through and I'm now doing some amazing things. But I think what what's now happening, and I want to come back to your blog that you've recently written. There's something else over and above. You know, have this...

...vision of we sort of fight through the complexity and we we somehow. We get the device designed, we get the global ubiquitous connectivity. We sought out the issues to do with roaming and the whole e Sim and ECC movement is really helping on that. have been multiple podcast on that subject, but let's just say for them, but we battled our way through. Now we have some industry changes that are putting pressures on business models and one of them in particular is the decline of data. So I wanted to ask you about your blog, because the one that you've written, I make sure I'll get the title right. How will connectivity pride as cope with one dollar Iot. So could perhaps you could just explain a little bit about what that means and what the challenges are? Yeah, of course this is really about price erosion, simple as that. We're seeing quite well continued price erosion. It's always something that's happened and to the point where we're heading in the direction of a prevailing price point, particularly at the lower end in terms of the amount of data being used, of about a dollar per year. We've seen some eyecatching pricing of exactly that kind of kind of level. If you look at China, they're already at about the sort of one to two dollar per year level. If you do the sums on the net hands that are being being added by a lot of the the operators at the moment, they're probably in this sort of four to five dollar per year kind of a range versus cross standard base of maybe maybe a dollar a month. Yeah, we see this this this gradual but notable decline heading in the direction of a dollar a year. Now that's not all bad news, of course. Bentally come on to that common enterprise point view. It sounds like great names, absolutely, and the use cases that are enabled obviously many, not least because you might be able to use cellular where previously you mighty use Wi fi, using set, using Wi fi, for instance, collect connector a fridge. Okay, well, you can sort of see the point, but having to manage the keys and and connected on to your own Wi fi network and whatever, it's a pain, whereas cellular is up and running and and it gets going right. So the question is, does the margin erosion? Is that reflected in growing adoption where, of course, to a certain extent it's ineviting to go every inevitably going to be. The question is whether it whether it more than makes up for it. Probably doesn't. And so you're in a in a scenario where, okay, well, where do you generate your your revenue from? Where does the money come from? All what approached you need to take in order to make sure that's that's still profitable, and there's a couple of things you can do. One thing is, and you alluded to it in the in the previous comment, was it's about know how. Okay, so it stops being about providing connectivity and it comes about having the hard yards in helping companies to deploy I owed to be and therefore being able to support them. So it's not just selling sins, it's selling this nohow, okay, how do I connect things? How do I make sure my device is optimized to work on the network? All of these sorts of, in a way, value added services, but it's the kind of stuff that a lot of the more long in the tooth connectivity providers have been doing for a for a very long time. So that compensates to a certain extent. But you've also got a situation, I think, where you have to see the communication service pride as the the connectivity providers making a bit of a pivot. Some are further on this along this pivoting than others to what we're terming hyperscale iot connectivity provider, and...

...that involves things like making sure that you're on boarding and and sin management, connectivity management platforms are right size and have the appropriate scalability for that sort of low touch, no touch on boarding and managing, and there's a whole whole series of things cloud integration, having a ultra simplified way of integrating the data into the cloud, just to remove the requirements to touch the device or touch any any element, to effectually just streamline getting that that connectivity working and you know that by adopting that approach, we think the cost comes into line, mean with where we see the the revenue heading. But that is a change management challenge, isn't it? I mean, if you assume the price, you know, a dollar per year and who knows him, five years time we could be saying for fifty cent thirty cents. I mean it's kind of like a more's law type truism. If you assume that that's going to happen. Then the challenge is, can businesses pivot their business model? And now we're talking about the supply side, not the enterprise. Seems to be all good news for me, Das a pivot your business model to team, but as it isn't compatible because if you've been if you've built up over the years sort of muscle memory that is around selling sims and there your proprietary Sims, they have your ms in so the moment you sell the same you get the connection. You choose, you're in the seat that chooses the roaming or whether you roam or not, and you know you choose the pricing. You've got a lock in because you've got a proprietory SIM. And suddenly here you have this world where is first of all, it's not a proprietory sim anymore. It's an e SIM, so it's programmable Ota over the air. So you no longer have a lock in in the device. You've got Ey SEC standard, which enables states to be wholesale transferred from one operator to another operator. So again, your lock in, if you like, has been loosened at the on the connectivity level. And now here we are saying, oh well, all you have to do is climb the stack where you know and you can monetize services. I mean essentially services what you're talking about. You know device design, you can monetize know how or advise what we call advisory services, which is, you know, advising people on Best Practices of how to go through this journey. And what you're what you're actually saying is, is is. But there are companies who will just be the kings of low data and they will, they will know. The Aida will us is data if you like, but they, they, they will absolutely drive this price down and you'll see a bifurcation between it seems to me that what we're entering into is a bifurcation between volume and value, and that bifurcation is can be broadly categorized as platform and services on the value side, and things like security, which I want to come up back to in a minute. But volume is almost like data and choice of data and which is in gives you the ability to switch. The EU se see the ability to switch provider. So do you see that that world that I'm describing making making sense? A bifurcation into volume and value almost like an uncoupling of the data and the platform and and enterprises as such take control of the value side of the equation. And then you have a challenge for M's and MBA, those IOT partners, how quickly they can move up the value start, because if they can't, they're going to get eaten essentially from the bottom by the by the volume cost goes. Yeah, you you can sort of think of it as a you sell the connectivity, but what you're really trading off is the other things that you that...

...you lay are on top of it, and there will be. Then there's a lot of those you look at. Okay, we talked about communication service providers as a homogeneous block, but actually there's a whole load of different approaching. I think of somebody like orange. Okay, orange has orange business services. They provide a lot of systems, integration, consulting, you know, very heavy stuff, and the connectivity piece is more of a support act to that, if you if you like and sense to be so. They've said, you know, our focus is probably more on doing that consulting piece. The bit that that that where we can add the value and we can we can differentiate ourselves rather than the rather than the pure play connectivity and the I think you're right about the the bifurcation. When I took about one dollar Iot, that's sort of a guess some medium level of a dollar and probably we're looking at five years before we get to that that sort of a level. So you're talking about a lot of connectivity that is still high value, high volume. There's a lot of additional value to be able is that. But but that can still be done more efficiently. Okay. So this, this application of the concept of being a hyperscale IOT connectivity provide applies equally to to that as well in terms of just being more efficient in the way that you you address the market and therefore improving improving margins it. If I'm a an EMMINO mobile network operator. As I say, there's eight hundred of them and I know a lot of them watch this podcast because I get linkedin messages and Huh and whatever. What are the attributes of a hyperscale would you call it a hyperscale IOT connectivity provider? So why? Why hyperscale? And secondly, what are the attributes of of that as compared to what they how they are and how they go to market today? Why hyperscale? It's a bit of a borrowed term really, because it's obviously that the cloud providers were considered. That was to be the hyper scalers and we yes. The thinking is that you've got to apply similar sorts of principles to the provision of connectivity. And in terms of what the characteristics are, well, a lot of it is that is that low cost, low touch on boarding and management capability that I was talking about earlier. There's also a lot about integration up and down the stack, take king out some of the complexity associated with the hardware, with the cloud integration. Those are a couple of the other big and significant pieces. So, for instance, we discussed okay, it's very complex to get your your hardware of APPs and optimize for the for the appropriate device. Well, with the there's an increasing move from a lot of players to integrate that hardware piece into the into the proposition have the devices pre integrated into platforms, pre certified, those those sorts of activities. And in terms of the hyperscale cloud, the integration the cloud, what Iot will happen in the cloud? Or are the application piece of it will happen in the cloud, and so the most critical thing is to have efficient delivery and management of that of that cloud based data, which means that you've got to have the sort of plugs to to push data into the cloud in the most appropriate it almost to the point where you maybe you go to the cloud provider as you're as your first board of corn. Then they say, okay, well, these the connectivity options associated with it and we're we're pulling data and actually you don't need to worry about the conductivity. Yeah, the I have got a cloud background,...

...as you are aware, from my work at Cisco running the cloud program and the and I do believe the lessons from the hyper scale, they won't call the hyperscalers of many years. We looked at them initially saying what's going on here and they're not. They're losing money. Of course we didn't realize what the what the strategy was, but it was basically simplification and reducing pricing, very analogous. But what's happening is that the data, what we've found certainly was the the data. This issue of integrating the data from Iot use case into your back end systems is so complex that in many cases what people are saying is, I'm not even going to do that, I'm actually going to put it straight into the cloud. And then you get the well, how do I do it? I mean just at it's very basic level, you've got data and you've got to convert it into M Qtt messages. I mean just that in itself is that will. How do I do that? And then how do I pay for it? Well, you pay for M Qtt messages and capacity packs. You Buy Fiftyzero messages at a time from, in the case of a Wus, the aws, a marketplace. And then how do I handle security? And of course now you have a set of managed services that are like device defender for for aws that does that and then you have to get security cificate back in. And how do you do a nominally detection behavior. So it comes back, I think, to the your issue or your point about know how one of the things that we did about two three years ago, when we saw all these issues and we saw how complicated it's it is for people, and we saw the directions that it's going, with the hyper scales, the true hyperscalers, beefing up in terms of what they're doing, having a much, much lower price for unit of compute. Data. Pricing inevitably going to come down and still, when it does come down to this level, it's still way above what we're paying on our cell phones for data. So you know it's going to come down even more. And then you look at all of the back end integration problems and we realize that that what people actually need is is is advice. We call it advisory services, or to be a guide. You know, be a guide. It's actually one of the reasons that balloon he had ahead. The idea is that you don't take a balloon up on your own. You go up in a balloon with a guide and they actually, you know, let you rise above the problems and take you to where you want to go. So we actually rethink our whole company around advice and guidance. And because too, because this was but people just don't know what to do and and the stats that are bandied around about the number of Iot projects fail are really scary. In a this, as you point out, at least ten years. And of course, when IOT projects failure has consequences on people and the careers. So we absolutely believe that the advice on a whole variety of areas, all of which all of the ones that we we talked about, is one of the biggest gaps in the industry. And and you it isn't just stand them and consulting how that people use. It's got to be advice in the context of Iot and in the context of what they're trying to achieve. So what you get is that, you know, there isn't any such thing as a connectivity company. You almost need a consulting hardware connectivity blend as a company to actually help people go through this journey. But it is going to be tough, isn't it? Do you? Do you think, if I go back my career, whenever there was a big change like this, a business model change, I remember when software was sold on a per license basis and it became stats and what happened was the model got adopted, but there were casualties. A lot of the companies that were selling software licenses, enterprise software, didn't make the transition. They just couldn't. Their financial model. You know, you we can't go from collecting the money net thirty to collecting more of the...

...money. But over a three year period the financial model collapse. So do you think that that everybody will be able to make the transition? I mean there are eight hundred mnos, most of which on doing. You mentioned orange, but most of which are not doing what you say. Apparently, according to one research report, I read that there's a thousand people who claim to be an IOT company. MM says. No shortage of people say I'm an IOT company. That's not an Emino. Do you think there's going to be a lot of casualties as these issues, as data drops, interoperability of rides, in terms of Easterremony, U see seeing some people have to move from volume to value. Casualties is a bit of a difficult thing to to to define for a start. Okay, so you think about, for MNO's network operators. Okay, there's eight hundred of those but for the vast majority of them Iot isn't more than one or two percent. It is less even declare in their financial result exactly. So realistically it doesn't make an awfer lot of a lot of difference to the to the top line or the or the bottom line really. But what you'll see is is with some a retrenching going much more to a wholesale model, I think is how we describe, where they're the carrier, but in terms of go to market or any of the other the other additional cost items, they don't do much other than work with them being no set maybe sell, and that's part of this bifrigation that I was to hear that, yeah, they won't even try, they'll just they'll just make sure they're one of the there are wholesale providers to the value provided. Yeah, and and they're typically part of a Triopoli in most market. So there will you know, they'll, they'll go for a fair share of their revenue in the in the market in which they're present. And and that's fine, and that's already the strategy of the vast majority of those eight hundred you mentioned. You know, if you're a third operator in a small market it. It's very unlikely will have an Iota Eam. You probably won't even have an IOT person. It's likely that the the person with any kind of responsibility variety sits in the wholesale team anyway, and so it's thought of as being more of a wholesale opportunity. Yeah, so when you look back at lessons of history and in terms of it, then whenever there was a change in the business models, they were often casualties. And what I mean by that is, let's just take one that we're all very familiar with. In the s most enterprise software was seld on a license baces. You bought a one, two, three year license or by a number of users a but essentially it was a transactional cost. You bought it, you paid for it, you put it on the shelf and sometimes you used it in sometimes you didn't. Along came Sass and and actually what happened was the suss model rose to the top. But but most eighty ninety percent of the companies that were in large enterprise space weren't able to make the transition, just for these issues that you mentioned at the beginning of the podcast and the back end issues. The fact that instead of getting all the revenue up front you you then got it over a monthly basis over three years. But everything had to change internally and the financial model dropped and of you a public company, that you share price dropped because the fact that your next year's revenue was going to decline but longer term it would grow. So my question then becomes, when we talk about the change that the people have to go through, a Mo's many NBA Nos. Do you think there will be casualties or and or do you think there will be rather than casualties because they have protected interests, regulatory protection in many cases? Do you think there will be? What we're seeing is going to see a wave of consolidation in the industry? Yeah, I think it's inable to. Casualties is probably a bit strong and leave on the certainly on the...

...on the network operated side of things. Right. So you've got one or two percent of revenue be accounted for by by Iot. It's not going to drive consolidation on on network operators. It's probably not going to make an awful lot of difference to to the top line or the or the bottom line if they change strategic approaches to to Iot. But what we might see is as a bit of a retrenching two more of a wholesale base model, and we have seen examples of this from from one or two operators. We've got a report coming out on Thursday ur CSPIOT benchmarking in and some of those operators that were profiling have made a notable move towards being a little bit more wholesale focus. So effectively they're not the go to market engine for Iot. They're providing a network, but it's never going to drive consolidation for those kinds of place for the NV and nos. Yeah, absolutely. I think there's probably a bunch of companies at the bottom end, the sort of long tail providers, of which there are millions. A lot of people came from consumer side and just basically do roaming in cellular, roaming MV and no's from then from the voice consumer side that I say, Oh, we do the same for Iot. But that that seems to be the bit that it's going to get caught between the two bricks. Okay, I think so. And and also you know, the story of MV and no's and Iot has been one of consolidation over the years. You get new companies appearing and they tend to a period about the same sort of rat as they get merged into into others. So you've you saw that with core acquiring or being the result of the acquisition of a whole bunch of companies in there in the US in the sort of two thousand and fourteen, fifteen sixteen sort of time frame. And wireless logic is going through a process of acquiring companies over here. You know that's about gaining scale, geographical scale, or protecting yeah, exactly, and it's the natural reaction to h get bigger quicker. Exactly. So, so pricing pressure will naturally lead towards that. But but for me it's a bit of a short term approach. I think it only comes to tied from coming in for a period of time. But ultimately the water stilling the world of use, that analogy still comes in absolutely, and that's not to be litterally either. The organizations that I mentioned orders to jest that they haven't done that. But but doing it through Ma is probably not the optimum way of doing these things. There are these internal systems and approaches that you need to get right rather than just going for scale, and I'm just to finish and we could talk for hours. But then it's actually interesting because the lot of our podcasts are to do, as I said, with case studies or our other aspects of the industry. This is more become a discussion on the future of the of the IOTEA market, on the players and what strategies they have to deploy. So it is one of those subjects and going for a long time. But I did mention that. I wanted to come back to security and our own view is that, driven by things like he see in EUICEC, the rise of the hyperscalers, the decline of the data I mean there's a lot of head winds which are coming in now, and the in the attractiveness of Iot is a business case because it really is attractive if you can get it right, and it really will disrupt and create a new user experience. We think that the bar has to be raised even higher. It's certainly something we're trying to do. It it's not easy, but it's something we're trying to do, which is to go and actually again learn lessons from the industry, and one lesson that I just want to refer to is that when that Sass model did change that. We were talking about the it architecture was fragmenting at the time and it was going to minis pcs and cell phones, mobile phones. But...

...what was happening is the threat limiter was getting bigger and so although the costs were coming down and the software was it's now available on an Iphone, it was available on a Samson phone, etc. But what was happening is the security concerns, we're getting bigger, and so this issue of setting central policy and deploying it to the edge started to become the biggest gating issue of whether or not these models were adopted. And the reason I mentioned that is, as Si we've just published a report on interview a few hundred users around the world of one of the biggest reasons right now for not implementing it and scale. Couple of years ago and for the last few years it has been this complexity that we talked about now. Very clearly number one issue is security concerns. The the the the idea of having these devices which in many cases are not protected, they don't have age in security software on them, the idea of having deploying them at scale. People can easily hack them because often if there is a password on it, it's for Zeros or something like that. Easy hack them and then tunnel in and you've oh you by solving all these technical problems, you've actually built the tunnel for people to hack you. And so one of the big differentiators, and it's not solved yet for the industry, but we believe is going to be a policy management with auto deployment to the edge, of which security is the main one, but the security compliance, configuration management, a whole series of things which is as the edge expans, we need to actually we're going to see a swing back to the people in the center saying, unless you can show me how to do network level deep packet inspection, a nominally detection behavior, for example. And I don't care how good the business value prop is, if we get hacked and they take all of our data, we can be out of business or or we can have a ransom bitcoin attack before whatever. And so it's a subject for few to future podcast. But I think we're going to see another abstraction of value which is to do with enterprise value. CIO, CSOS, CFO concerns, which for many is is yet another change management challenge because now you have to come across as an enterprise software company and previously you've been an Mvno or you've been a roaming partner. And again that ultimately the put. Whoever cracks that will probably become a platform and a standard, if you like, for the interpase. Yeah, there's one thing that we as analyst like more than anything else and that's category creation, defining definding a category of things as technology. Of Yes, something back in the macinary research days. We do it with LPWA. That was one of the ones that actually we are. We came up with as an organization of it said, okay, there's a bunch of technologies here all doing much the same thing. Will create that craft. Yeah, and I think there's a category around what you're talking about there, which is over and above connectivity management. Is that quality management, is security, and I think you're right, there's another abstracted layer about supporting global connectivity with compliance and all of those those various different elements. I think it it's still needs defining, but I think there is certainly a there there, if you know what I mean. There, as the Americans stay exactly so I think we it needs it's positive. It's a positive thing that the requirement for this is possessed appear, because the implication of that is it's yeah, it's entering, it's coming into the mainstream, it's maturing. It's not one of those things that's out there and it's a project or science, but project. It's entering mainstream and therefore it has to be held the same standards. Yeah, anything that goes in and well, listen to Matt, when you when you write the report and you define it as a category. Just remember.

I remember who mentioned but I know you've already been thinking about it. Anyway. Listen, we could go on forever, but we will exceed the time limit in the patients of our listeners. So I just want to end it there. Thanks very much. As enjoy our discussions. We also we always get off into what could happen next, what's really going on, and one are the challenges in the players and I know a lot of people find those conversations very useful. So I hope that's the case for everyone who's watching this listening to this this time. So you've been listening to the IOT leaders podcast with myself, Nicol CEO SI and Matt Hatton of, as it says, behind his head, transformer insights, but also there's a lot of work on the blog side and if you go to his linkedin profile, there's lots of links there and he's a frequent speaker of many industry events. So, Matt, with that, I really appreciate the discussion and I wish you well and I look forward to this category being created and getting similar advice and what's going to be needed absolutely my pageonic. Thank you all right, thanks very much. Goodbye. Thanks for tuning in to Iot leaders, a podcast brought to you by Si our team delivers innovative Global Iot cellular connectivity solutions that just work, helping our customers deploy differentiated experiences and disrupt their markets. Learn more at SICOM. You've been listening to Iot leaders, featuring digitization leadership on the front lines of Iot. Our Vision for this podcast is to be your guide to Iot and digital disruption, helping you to plot the right route to success. We hope today's lessons, stories, strategies and insights have changed your vision of Iot. Let us know how we're doing by subscribing, rating, reviewing and recommending us. Thanks for listening. Until next time,.

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