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Kathy Gibson reports from the MTN IoT Conference in Sandton – Telecommunications operators are going to be key players in connecting the Internet of Things (IoT) – but they will have to change their operations somewhat to address the massive market opportunity.
The industries that are currently driving IoT are manufacturing, transportation, connected billing, consumer and utilities.
“You have to come out with focused offerings and a focused use case for each of these industries,” says Gopal Sharma, executive partner: cognitive solutions at IBM.
“IoT is going to be the largest growth area for telcos – but it’s not going to be easy.”
IoT will be an ecosystem play, Sharma says, and no single organisation can build this on their own.
“Not surprisingly, we have seen that people entering this business have had significant challenges in making money.”
The first challenge is a shift in mindset that needs to take place in creating products and delivering them to customers.
The next is about software business and architecture. “If you don’t have the right IoT software platform, and the right analytics, security and cloud – you won’t be able to deliver a use case to the customer in a cost-effective and fast manner,” Sharma says.
Telcos also have to learn how to partner, with partners that have the right commercial model. “It is about we, not I. That is how you will make money in this business. Otherwise you will continue to be in the low end of the market with little revenue and profit.”
So in order to drive profitability, Sharma says telcos need to firstly select the right use case that is scalable, in an industry where there are pre-built applications. “This will make you cost-effective and able to deliver to customers much quicker.”
An open IoT software platform is also needed. “How do you decide which is the right one? It must be easy to use, easy to connect and open. It must give you access to third-party developers and partners so you can drive innovation.”
The third imperative is to select the right partners to generate higher margins. “You need to select the right set of partners with the right sponsorship.”
The use cases that will make money in the IoT space include smart homes, smart buildings and connected vehicles. These three areas have a compound growth rate greater than 20% over the next couple of years.
Selecting the right platform is a bit more complex. “It must be able to connect the device to the network in a seamless way with an industry-standard protocol,” says Sharma. “And it must be able to manage structured and unstructured data as well as third-party or enterprise data.”
Data is being dubbed the new oil, so it’s important to be able to analyse it. “You need the right set of tools so you can drive insight.”
Security is the fourth imperative – and must run from the device to the network, the server, storage and beyond.
“Last but not least, this platform cannot sit in isolation – it has to integrate with the enterprise systems,” says Sharma. “It must sit on the DevOps cloud and integrate with existing systems.”
IBM offers IoT on its Watson platforms, he adds.