Jul 21, 2015

5 Tips to Help Service Providers Get into IoT

By Yossi Abraham

Yossi's blog first appeared in IoT Evolution.

Communications service providers are right there in the thick of things with M2M communications and the IoT. Platforms and applications are critical, of course, but nothing gets done without reliable connectivity. That makes service providers an indispensable part of the M2M/IoT ecosystem.

However, simply being there isn't enough. Service providers must implement strategic and operational shifts in their businesses to capture and maximize M2M/IoT revenues. With the right strategy, they could actually own larger portions of the M2M/IoT ecosystem. Already we're seeing service providers build closer bilateral relationships with module and device makers to industrialize M2M and stabilize profitability. It's essential to gather, analyze and distribute the vast amount of data generated by M2M and drive sales, investments and innovation for this margin-driven business.

Excelacom 5-Key-Business-Strategy-Elements

The question is how can service providers entrench themselves more deeply within this market? They need a solid foundation and a business strategy that encompasses five key elements:

  1. Organizational structure. The M2M organizational structure is ideal for innovative, flexible and integrated services and solutions. More service providers will enter the M2M/IoT arena by establishing separate business units with dedicated personnel to focus on the unique characteristics of M2M/IoT solutions. They need to bring to market flexible solutions that accommodate different technologies and system architectures, and incorporate connectivity, integration services and application development.
  2. Billing systems and pricing. M2M contracts currently have no standard contract or revenue split; every deal is custom. These custom deals need to become standardized. Business model innovation will help resolve the pricing issues. M2M/IoT services are often characterized by a small number of customers with a very high number of connections, in direct contrast to traditional telco services. Service providers must create new business models and develop innovative and user-centric applications to truly find success.
  3. Sales and marketing Improvements. M2M/IoT enables marketing and sales strategies that leverage analytics, monitoring and real-time reporting. Suddenly, marketers and sales people have access to a huge volume of data. It's how they are able to shape and use that data to customize programs and campaigns that define their success.
  4. IT Innovation. Innovation and collaboration centers will play a critical role in bringing together the device, application and service components to show customers how M2M/IoT solutions and applications will address their unique requirements. Detailed knowledge of the vertical sectors and the differentiators will help explain how the applications will be deployed and the business benefits of the applications within each sector. At the same time, operational frameworks must be secure from hackers and maintain privacy to ensure the customer's trust. Systems should undergo routine and frequent testing for device configuration and management. The massive growth of M2M/IoT enabled systems also has the potential to strain the existing network and there may be a need for a new network devoted solely to M2M devices. Therefore, research in implementing 5G technology will be crucial.
  5. Partnerships, partnerships, partnerships. The market is too big for service providers to go at it alone. Business models are deeply in flux and the M2M/IoT ecosystem is still complex. Partnerships can help spread risk and test innovation. Vertical partnerships can help enhance service capabilities and help create new business models that better suit the emerging market. In addition, partnerships can help fill in the gaps in a provider's strategy, supporting, for example, the M2M requirements of multinational organizations that want to deploy M2M solutions across regional networks.

Providers can lead the M2M evolution and provide a leading edge to vertical partnership and innovative business models. So how do we get there?

Short term – providers need to strategize, conduct market research and make an initial assessment of their business, technology and operational strengths and challenges.

Longer term - providers need to implement a business strategy that accounts for organizational structure, billing systems and pricing review, marketing and sales tactics for both residential and business services, and a strong partnership plan. They also need a technology strategy that focuses on backend systems and network capacity bandwidth.

M2M has the potential to open new streams of revenue for service providers by monetizing existing network assets in a brokered ecosystem and reducing cost. Now is the time for providers without a foot in the M2M/IoT door to make their move, and those with existing strategies to make sure they have incorporated all of the key elements above to ensure future success.

To find out more information on how Excelacom can help your company get involved with IoT, please email us at

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