March 11, 2016

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IoT Driving “System” to “Ecosystem” Integrator by capitalizing on the IoT opportunity

Telco Landscape Transformation…

IoT creates a significant opportunity for Telcos to bring industries, silo solutions, and technologies together to create an end-to-end fully tested and commercially ready solution that provides meaningful value to customers.

A large ecosystem that spans across devices, software, platforms, technologies, standards, and industries gives rise to a new potential role of Ecosystem integrator over traditional system integrators,that can establish the linkages between industries in a meaningful, business-driven manner.

IoT is not a Buzz anymore!

Internet of Things (IoT) is not a hype anymore; it is real and happening, right here. Although the concept of IoT, connected machines, and smart cities have been discussed for almost three decades, it is only recently that carriers have started to make forays into IoT devices, IoT platforms and services. AT&T recently announced deploying 4G in 10M Ford cars by 2020. AT&T also announced the AT&T Drive studio, an Atlanta-based lab, consisting of various vendors and automakers to test various connected cars services options. Similarly Verizon has set a clear focus on smart cities and a number of pilots are in progress. Europe has launched an initiative to have 80% of smart meter penetration level by 2020, and has also mandated the inclusion of automotive safety system in all new car models. Efforts by operators will trigger similar initiatives globally.

The telecom industry can expect nearly four-fold boom in cellular IoT connections between 2014 and 2019, growing from 252 million to 908 million globally. The growth primarily is dependent on several key factors - the first is the ease of access to and reduced costs of hardware and broadband for enterprise customers. Secondly, the maturity of cloud, data management, and analytics IoT platforms, means machine-generated data can be hosted and utilized quicker than in previous years, according to 451 Research.

IoT Creates a Breather for Telcos

It is clear that smarter devices with sensor technologies alone will not create significant value. But connecting a plethora of devices via technologies and networks, generating and analyzing useful data in a way that leads to valuable insights will be the key. Telcos play a central role in realizing value out of legacy and new IoT platforms and systems. Successful implementation of convergence in communication and the broadband industry (4G LTE, IP, IMS, Wifi, etc.), emergence of smart devices with built-in sensors, IoT ecosystems, IoT platforms, maturing security, and big data are driving the feasibility and monetization of IoT.

Opportunities linked to IoT provides incremental revenue opportunities to offset pressure from declining legacy revenue and high operational costs. According to IDC, the global installed base of IoT is expected to hit 28.1 billion devices in 2020, generating revenues of $1.7 trillion. This provides numerous opportunities spanning across verticals such as Auto, Health, Smart cities, Smart homes, Smart Agriculture, Transportation and many more.

IoT comes with its own Complexities

Emerging technologies such as IoT are breaking the boundaries of traditional supplier-vendor model, services and customer solutions. New players are emerging with niche but plethora of connected devices, and new services and solutions creating large and complex multi-vendor/supplier ecosystem span across various industries beyond the traditional target consumer market. The complexity is further multifold due to multiple standards, software platforms, databases, and enhanced security needs.

In order to identify new revenue streams and offset declining voice revenue, Telcos need to adapt a new open business model to build a stronger IoT ecosystem, offer innovative services and establish broader partnership beyond current vertically-integrated value chains, to provide end-to-end solutions to customers.  

To capitalize on the IoT opportunity, Telcos need to:

1) Expand their reach to broader industries,

2) Follow Co-Opetition model to develop creative services, and

3) Leverage their valuable assets before the value diminishes.

The number will grow multifold as Telcos add revenue opportunities across various verticals and so will the complexities.

Emergence of the Ecosystem Integrator

There is a significant opportunity to bring industries, silo solutions, and technologies together to create an end-to-end fully tested and commercially ready solution that provides meaningful value to customers.

A large ecosystem that spans across devices, software, platforms, technologies, standards, and industries, gives rise to a new potential role of Ecosystem integrator that can establish the linkages between industries in meaningful business-driven manner. An Ecosystem Integrator with experience, established relationships, and know-how of various verticals and enterprises could be a potential partner of choice to engineer a new Telco ecosystem and partake in the portion of investments to be made by converged ecosystem. One who has several decades of deep knowledge, presence, and relationship with verticals could potentially take up the role of Ecosystem integration partner. The chosen partner would connect the dots and act as a glue between disjointed offers coming from both sides.  This creates opportunities to jointly develop vertical industry solutions, alliances, joint GTM, and potentially drive industry-level vertical connect program.

HCL as IoT “Ecosystem Integrator”

HCL has long standing relationships, deep strategic engagements with large enterprises across various industries, telecom know-how, and global presence. Through its global presence, HCL caters to 9 industry verticals*– covering major software and product engineering markets. HCL has in-depth knowledge of both Technology Engineering and IT to provide holistic IoT solution from inception to post commercialization support.

HCL’s presence in multiple verticals and know-how of their business operating models along with its own IP, frameworks, automation, and alliances can help Telcos accelerate IoT monetization. 

HCL Credos – Enabling IOT Platforms and Smart Services

Experience: 30+ years of engineering experience & Managed Infrastructure capability

Focus Verticals: Manufacturing, Travel Transport & Logistics (TTL), Med Devices & Healthcare, Energy & Utilities

Partnerships: Joint incubation center with IBM; Service Offerings with Microsoft Azure on Cloud Infrastructure Services. Partnered with companies like Hitachi, Intel, MOOG, PTC and Tele2.

Smart Industries: Remote Access and Monitoring Solution for a Large Engineering MNC

Smart Offices: Smart Replenishment for a USD 26+ Bn Office Automation Major

Smart Healthcare: Remote Installation and Monitoring Solutions for a Global Healthcare Giant

*HCL Vertical Presence: Networking and Telecom, Aero, Auto, Consumer Electronics, Semi-Conductor, Medical, Software, Industrial Manufacturing, Servers and Storage