Consumer IoT will take off only if OEMs get the support to dominate the new value grid

By:
Natalie Bolger
Published on:

Moving to the world of Internet of Things (IoT) presents challenges for OEMs, giving operators a golden opportunity to support them in their digital transformation. Co-sponsored feature: Amdocs


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Yuval Mayron: Many players are involved in the world of IoT



Imagine a world where you can stay constantly updated about the location of your dog and the condition of his health, and get alerts if your pet is in danger of drowning.

Today’s technology already enables dog owners to utilise pet GPS trackers and smart dog collars equipped with many sensors, making all that vital information readily available at the drop of a hat. And it also allows you to control your home appliances from your office, adjust the temperature and humidity, and even watch your food cooking from your smartphone via an interior-mounted camera. You can even make a cup of freshly brewed coffee that will be waiting for you the second you walk in the door. 

Although there are actually a lot of exciting consumer IoT solutions out there, we’re not seeing widespread use of the technology. In fact, the consumer IoT world has barely scratched the surface of its vast potential market. OEMs are also struggling as they take their first steps in their digital transformation journey coupled with relatively slow consumer adoption. 

SO WHAT'S THE PROBLEM?

While the industrial internet is already saving enterprises around the world billions of dollars by increasing efficiency, reducing costs and providing better business visibility, the consumer IoT domain has yet to fulfil its full business potential. “The industrial IoT has produced a very simple value chain – enterprises buying connectivity from service providers for the collection of data from their connected assets. But the consumer IoT has a much more complex value structure,” says Yuval Mayron, general manager of the Amdocs Internet of Things product business unit. “The fact is that we’re not talking about a ‘value chain’ anymore, but rather about a ‘value grid’.” 

For every single consumer IoT service out there, there are many players involved. That’s what makes it difficult to provide a seamless consumer experience and this is a key barrier. Application developers, IoT service providers, technology enablers, connectivity providers, content providers, OEMs, store owners, and local distributers and channels are only some of those involved in providing a consumer IoT service. Together they create this value grid. 

Another key barrier is the lack of a ‘killer app’, which creates clear value and which consumers just have to have. Whether it’s for a smart car, smart home or smart city, the pieces have just not yet fallen into place.Another problem stems from the various business processes like registration, activation and charging, which aren’t integrated. The result is the inability to monetise current and future consumer services.

Mayron, who leads Amdocs’ penetration into the IoT world, defines consumer IoT as paid consumer services which use online data from connected devices. “This definition means that only if the consumer data coming from a connected device is used in real time, and there’s someone paying for the service, it is considered a consumer IoT service, rather than a traditional consumer service,” he says. 

So what has to change? Plenty. 

OEMS NEED TO STEP UP TO THE PLATE

In a way, consumer IoT is not a new phenomenon; we’ve seen the Kindle enabling us to buy books, the Apple TV allowing us to order movies and the Xbox offering our kids games in real time. These three successful IoT services demonstrate that in order to succeed in the consumer IoT world, a company needs to embrace and dominate as many roles as possible in the service value chain. Amazon, Apple, and Microsoft are all great examples of companies which produce devices, control the operating system, and own the store from which the apps are purchased as well as part of the content.

“When OEMs move to offer smart, connected devices and they look at these three examples, they acknowledge that controlling the value chain is vital for success,” says Mayron. “It’s very likely that OEMs, regardless of the solution domains and OEM location and size, will look to adopt this successful model and become the ‘king of their IoT consumer world’.” 

Nevertheless, as OEMs continue their transformation from providers of ‘dumb’ devices to providers of digital services running on top of their connected devices (a trend we coined as ‘servitisation’), they face many obstacles. Mayron believes that these challenges start from the investment phase. OEMs need to build solutions which incorporate a combination of device and service and then establish an ecosystem of business partners who will help them push the solution to the market. OEMs are faced with many challenges during the sales phase, too. And in the service period following the sale, they need to deal with yet other challenges like billing, settlements and providing consumers with technical and service support.  

“The largest OEMs, which also have deep pockets and a clear IoT vision, may try to overcome some of these challenges through an organic approach, but we have yet to meet a single OEM who didn’t ask for help in areas outside of their core business domains,” continues Mayron. “Medium and small OEMs are more in need of help because they face huge business challenges related to global operations on a large scale.”

A GOLDEN OPPORTUNITY FOR SERVICE PROVIDERS

While all this is going on, service providers are really trying to find a way into the world of IoT. Some have gravitated towards opportunities providing connectivity for both industrial and consumer segments. However, there’s growing recognition that cellular connectivity play is not going to be a needle mover in IoT. Analysts predict that mobile connectivity will account for only about 10% of the global IoT connectivity market by 2020. So service providers need to seek out other IoT revenue sources like acquiring telematics companies and targeting recurring consumer services like services for the smart watch or connected camera.


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“We do believe that there’s a great opportunity for cooperation between service providers, OEMs and other players in the value grid, where every player brings its own assets and the entire grid enjoys the value created out of the joint IoT solution,” adds Mayron.

COLLABORATION AND COOPERATION MEANS WIN-WIN FOR EVERYONE

Not only does IoT create the ideal platform for different players to come together to pool resources and create solutions together, but the added value for OEMs who partner with service providers is immense. IoT leverages several service provider strategic strengths, relying on ubiquitous connectivity across wide geographic areas, taking advantage of existing service provider network footprints. And as service providers already have extensive networks of channel and technology partners that can help them meet IoT challenges, practically all that’s left is for OEMs to just get on board. 

There’s a need for a “virtual entity” that will enable the different players to meet, create solutions together, use all needed resources to offer consumer IoT services. For consumers, finding devices and service offerings quickly within this “virtual entity,” regardless of their connectivity provider, directly translates into a win-win for both service providers and OEMs. 

“We call this virtual entity an IoT platform and we believe that Amdocs, as a trusted, independent and non-biased vendor, has the knowledge, experience and innovative drive to create, manage and offer this platform to all players in the consumer IoT value grid,” emphasises Mayron. “The IoT platform will serve as a single integration point and as a matchmaker between service providers, OEMs and enablers, and will offer consumers visibility to relevant devices and services.”  

“Relying on our close relationships with over 300 service provider customers and reaching 1.5 billion end consumers, Amdocs is best positioned to enable service providers to leverage their existing BSS assets and provide global support,” summarises Mayron. 

“Together, we can use our expertise as global service and experience providers to drive more innovative consumer services, using new business models and providing exciting experiences to consumers all over the world.” When all this comes together, you’ll never have to worry about losing your dog again. 

www.amdocs.com