The Role of the MVNO: Advancing the Internet of Things

We are entering an IoT (Internet of Things) era, in which billions of connected devices will communicate over the Internet with other devices and systems in a myriad of ways. Forecasts range from 12B to 50B devices connected by 2020, but whatever the final figure, the result is clear: there will be a huge, new market in which innovative solutions will abound. MVNOs2 (Mobile Virtual Network Operators) will play a pivotal role in driving this adoption. However, as M2M devices and Internet “things” primarily need data connectivity, the term Managed Services Provider verses MVNO is often employed as it reflects the need for value-added services such as management of remote devices.

The Value Chain is a Key Issue

In order to maximize the huge IoT opportunity, a development and deployment environment is needed to enable easy, fast creation and robust deployment. This cannot be realized using the regular M2M value chain, which has three main components. The term “value chain” indicates that the value of acquired data rises when it is processed into actionable, real-time information. 

Similar functionality is required for IoT solutions, but new entrants cannot simply assume that IoT apps involve M2M concepts applied to new types of devices and sensors.

The interface between the first and second components is the key issue. A deployment and management platform is needed in order to configure the devices, monitor / manage their performance and measure the traffic so that it can be billed. That is the baseline functionality. Deploying solutions involving tens of thousands of M2M devices is therefore a significant task, but it is not a practical proposition for IoT deployments, where the figures for consumer applications will typically run into many millions. This means that there is a clear, compelling need for a new model. 

Smartphone Apps

Smartphones are an IoT device and over one billion were shipped in 2013 according to research conducted by IDC. As any user knows, configuration is seamless and zillions of apps can be downloaded from on-line stores: it’s hard to imagine a better model. In this case a custom-designed chip is used instead of a wireless modem: expensive but affordable when production runs are so high. These devices have powerful computing and communications resources and developers write to APIs3 (Application Programming Interfaces), which removes the need to know anything about the way smartphones function. This model cannot be replicated for the relatively low production runs of “regular” IoT devices, but something similar is needed in order to maximize the opportunity of tomorrow’s “Connected World”. 

The New Model

The new model  retains the intrinsic functionality of M2M’s three components, but from a developer’s perspective they merge into a seamless platform. This is realized by effectively dissolving the links between the components, the most important of which is the interface between devices and communications networks. Do that and there is no need to know how the data is acquired and transmitted: now they can write to APIs. The basic IoT software development model is therefore similar to that of smartphones.

Telit recognized this need several years ago as well as the fact that the creation and deployment platform should be provided as a service. In other words, it should come from a Managed Services Provider. Therefore in July 2011 we took the first step towards creating a platform and becoming a de facto provider of managed M2M and IoT services. We acquired Global Connect, a company that provided cellular data connectivity services, and this was followed by a strategic partnership with Telefonica. Telefonica is not only a leading MNO, they are also one of the few operators that employ a separate network for M2M and IoT traffic. 

This combination resulted in a joint development known as m2mAIR, an innovative concept that enabled out-of-the-box connectivity as well as a comprehensive portfolio of value added services. m2mAIR effectively dissolves the interface between Telit’s data monitoring and managing component and the connectivity service of Telefonica. This was followed by the acquisition of CrossBridge in January 2013, a step that facilitated the development of m2mAIR services for the U.S.

Customer Benefits

The first part of the value proposition comes from the fact that employing a delivery entity allows companies to focus on their core competence and simply write innovative IoT apps. The need to understand the complex technology mix and the different parts of the value chain disappears. The application and deployment platform provides a seamless path to and from the applications and the wireless modules that are embedded in the devices. Remote module management is the key value added service.

The second part is enabled by Telit’s comprehensive portfolio of value-added services, which are primarily used to remotely and proactively diagnose and troubleshoot network performance and other service metrics. This is done using an ePortal. The assets of the remote module management include the ability to manage module inventory, perform mobile network diagnostics, and proactively manage Quality of Experience (QoE).

“Boost” is a value-added service that will be critical in an IoT era involving tens of billions of devices. It queries the quality of network service received by each device in the field and if necessary it will enforce registration to a different available network having better performance. This means that connectivity can be guaranteed. “Aware” is an advanced and customizable monitoring and risk management service that provides a constant view of the behavior of an entire m2m deployment according to rules that can be configured to your specific needs. This service also allows a number of actions to be automatically triggered based on alerts.

Enormous Potential

The IoT market has massive potential in terms of economic impact. However, IoT companies need to look beyond connectivity and consider how they position themselves with partners and also in the wide area value chain. IoT consultant Ken Figueredo: “Companies need to consider how they position themselves with partners in the wide area value chain. They also need to conceptualize their next-generation products in order to capitalize on new business models based on the cooperative use of data from a variety of connected devices.”

The cooperative use of data coming from millions, maybe billions of devices has profound implications and time will tell how it is used to generate actionable, real-time information, but using it to manage traffic in smart cities would seem to be an obvious area. But one thing is clear, we are entering a new information and communications era and Telit is both proud and excited at being actively engaged.

Telit’s One-Stop Shop

The journey towards becoming a leading provider of managed M2M and IoT services was followed by the acquisition of ILS Technology in September 2013. This resulted in a unique extension to the company’s the one-stop shop offer: unique because now it goes all the way from the devices through to the cloud and on to the enterprise environment. This indicates that Telit has created a seamless end-to-end entity that can deliver additional benefits to SMEs and Systems Integrators. This extended offer, which is marketed as ONE STOP. ONE SHOP, is enabling the IoT “Plug & Play” environment that will advance the deployment and usage of devices and applications in tomorrow’s IoT era. 

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