The latest report from leading IoT industry analysts, Transforma Insights, highlights the need for communications service providers who are serious about tackling the Internet of Things to rotate to be hyper-scale IoT connectivity providers. Vodafone is the first global IoT CSP.
Transforma Insights released his todayIoT Peer Benchmarking Report for Communications Service Providers 2021‘which analyzes the relative strengths of 12 leading global IoT connectivity providers in areas such as networks, platforms, vertical solutions and business strategy.
The market for cellular IoT connectivity has recently become increasingly complex and competitive. Under these circumstances, Communications Service Providers (CSPs) they have to take a long look at their strategies and approaches to the market. There are actually two options: finding additional revenue streams or putting systems and processes in place to cope with the pressures.
Pivot to be a hyperscale IoT connectivity provider
This report focuses on the central role of the CSP, namely the provision of connectivity. To succeed in this endeavor it is necessary that a CSP evolve to become a ‘Hyperscale IoT Connectivity Provider. ‘
The assessment focuses on whether the CSP has implemented (or is in the process of implementing) the capabilities needed to provide scalable connectivity to support at least ten times the number of low-cost point devices. The report evaluates each CSP based on their aptitude as a hyperscale IoT connectivity provider, in seven key areas (in descending order of importance) as shown in the chart below.
Based on the evaluation against these seven criteria, the best score in terms of the capabilities needed to be a hyperscale IoT connectivity provider is Vodafone, followed by Deutsche Telekom, Telefónica, Telenor, KORE and Telia.
The opportunity associated with IoT for CSP it is not limited to providing connectivity. Many differ in other significant ways. Offering vertical solutions is an option. Many CSPs have very strong, in some cases market leading solutions in particular vertical markets. However, for most vertical markets, the barriers to entry are high and simply pursuing an ‘me too’ approach to launching vertical solutions in each attractive segment is doomed to failure. Once again, Vodafone scores highest for the strength of its vertical solutions portfolio, followed by Verizon, Telefónica and Orange.
There are additional opportunities in the IoT associated with horizontal consulting, consulting and systems integration services. The challenge with this part of the market is that it is difficult to scale. However, it is a valuable part of the market. CSPs with strong advisory and systems integration capabilities include Deutsche Telekom and Orange.
The chart below summarizes the Transforma Insights ranking. On the vertical axis are the Hyperscale IoT connectivity features. The horizontal axis provides an aggregate score for providing customer-specific solutions, both for vertical solutions and for consulting / consulting / integration of horizontal systems.
It should be noted that even the highest scoring CSP still has a long way to go to meet the requirements of what we consider to be an optimal Hyperscale IoT connectivity provider, as highlighted by author Matt Hatton:
“CSPs must continue to evolve towards the goal of being a hyperscale IoT connectivity provider, supporting the necessary suite of scalable technologies and capabilities needed to profitably address the growing opportunity of the cellular IoT market.”