IoT has been around under various names for a long time but today it’s the hot thing. Being able to connect and remotely manage a plethora of devices is quickly becoming just the way we do business.
In its most basic form, an IoT, or IoE ecosystem will consist of three essential building blocks to take your things to your apps:
Application Enablement Platform
Many players touch these building blocks but we typically concentrate on the OEM Suppliers who are creating the building blocks, and the End Solution Providers who are integrating these building blocks into a cohesive offering.
OEM Supplier Companies: What to offer?
While some IoT, IoE or M2M supplier companies are moving towards a full ecosystem offering, the majority still specialize in one building block and leave it to their customer to select others.
While this may be a viable strategy for some, it may also hinder the company in multiple ways. For example, let’s take a hardware provider that does not have a PaaS or connectivity offering. They are limited with: 1) No Recurring Revenue and 2) Vulnerable to Commoditization. Let’s face it, they are now less sticky and easier to replace. This is especially true for the finished hardware provider, and the embedded module manufacture, they can be up in the next board spin.
The OEM Supplier Company needs to decide if they are:
Willing to continue as a one building block solution
Build, Acquire or OEM the other building blocks
Create a best of breed partnership
There are many dynamics to consider, what is the best strategy?
The first two options are straightforward but the third option can be tricky. A best of breed partnership can provide incremental value but it must be handled correctly. For example; If integration for this best of breed partnership is required, what kind of engineering resources do you devote?
If the sales teams are not properly aligned success could be limited. Even then, it could still go sideways as companies outside of this partnership may perceive it as a threat and cut off a once lucrative lead channel.
How do you decide? Each of these choices brings an associated risk.
End solution providers: Create a best of breed ecosystem or select a turnkey ecosystem?
If you are integrating these building blocks into a cohesive offering, you must decide between:
An OEM supplier company that offers all three of these IoT building blocks
Choose each building block yourself and design your own IoT ecosystem
Let’s take the first option. If you choose the full ecosystem approach you need to keep in mind that most of these companies have all three building blocks as a result of acquisition. They started out as a hardware company and then purchased the MVNO and PaaS offerings. If they integrated these business units well, the end result is fantastic. If the integration was less than desirable, this could weaken your offering. There could be a whole host of issues behind the green OZ curtain.
On the other hand, let’s say you hand pick your own best of breed building blocks. What happens if a technical issue arises and fault is unclear? Congratulations, you just inherited a new job title: “Issue Project Manager” and you are now charged with solving the problem. If you would have chosen a full ecosystem supplier you could simply have just told them to fix it.
How do you decide which direction to take? We have a tremendous amount of insight that you can leverage.
There are quite a few IoT platforms on the market today. While many of the original players have been snapped up, expect more consolidation to come.
The term “Platform” in itself is misleading and cause for much confusion. Eventually the discussion centers on Cloud IoT platforms (or mega platforms) and Edge Platforms (which are also cloud hosted). Unfortunately both of these offerings are expanding into each other’s territory so the waters will continue to muddy.
What is important in this building block? This is a question for a much larger discussion but at a high level you should consider:
Last the connectivity portion of this conversation. This MNO, MVNO, MVNE, building block presents a whole list pluses and minuses depending on which direction you take. MVNO’s claim a more personable touch but they are reselling the airtime of the MNO. As with platform, this is a much larger conversation but in general, larger deployments will go to an MNO and smaller ones will take the MVNO route.
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