In my blog yesterday, I talked about what operators thought about vCPE and how their views and the demographics of the service market could impact an NFV vision driven by service chaining. I also had a chance to talk with the same operators about the Internet of Things, and I think their views in that area are at least as interesting. Most interesting, perhaps, are some of the preconceptions they hold, or at least profess to hold.
The most important question about IoT, as it is for anything else in the tech space, is how the business case will be made. What do operators think? Dive through their views and it comes down to “LSODDI”, meaning “Let Some Other Dude Do It.” You could say that some think IoT will simply happen, and that others think it will emerge as OTT-like players enter the space. Virtually none of the operators think that they, meaning the network operators, will be the ones driving it.
This interesting view may explain why operators are so focused on the connection side of IoT. If IoT is going to happen automatically, all they really do need to do is to sit back and let the 4/5G connection revenue roll in. I don’t have to tell you, I’m sure, how illogical and destructive I think this particular view is, but in a sense it’s not surprising.
The most significant phenomena in networking in modern times was the Internet, which created a residential data application that transformed residential communications, and eventually just about everything. The Internet sprung up on its own, essentially, independent of any operator support and exploiting only the connection services then available. Operators then developed Internet access to suit the emerging market. Why not think that would work with IoT?
Good question, in many regards. Could a Google or Microsoft or Amazon be the genesis of the new IoT wave? All of these companies have IoT initiatives, but you can see that they’re mostly focused on supporting someone else’s IoT applications rather than developing their own IoT framework (at least for now). So who do operators think will drive things, if they aren’t going to do it?
About a third think that the current OTT giants I just named will be the IoT giants. Another third think that there will be some new startup wave, a kind of social-media-like explosion. The final third admit they don’t know who will do it, but they’re confident somebody will and that they’ll know IoT when they see it happen.
So could this work? It depends on a lot of undependable factors that all net out to the question of whether IoT is more like OTT, or more like the old Bell System.
The big challenge with IoT versus the original Internet is the lack of a single, clear, technology core concept. The Internet was created not by a network at all, but by HTML. There was an Internet before anything we’d recognize as one, and it was consumerized by the notion of the web, which was based on HTML. A simple HTML engine—a browser—makes anyone capable of rendering pretty pages, and with that we were off. What is the simple centerpiece of IoT?
The next challenge is a massive ecosystemic dependence. For IoT to work you need a huge collection of sensors and controllers, networking to connect them, applications to exploit them, security and compliance, and partners—all of which means an enormously complicated business case. Anyone who wanted to put a server behind a bank of modems could have created an Internet of One. By nature, IoT is more complicated.
Complicated, but this may be the core of what operators think will happen. Most operators with IoT aspirations are supporting IoT with developer communities, which is the classic strategy for building co-dependencies. Sadly, most of these communities are focused around managing the connection side of IoT, which apparently is about all the operators can visualize. Is that true? Do they see the rest?
No, not much. The majority of operators actually do see IoT as the media describes it. There are a zillion sensors and controllers on the Internet, each with a spanking new 4/5G radio (when you ask who’s paying for this, they have only vague answers). People write applications to exploit the data, sell the applications, and oh yes, pay the “thing-phone-bills.”
You’d think that if anyone believed that IoT was “Bell-like” it would be the telcos, but comments from operators suggest that they’ve become used to the notion that regulations aren’t a way of protecting investment but rather a way of putting it at risk. Even those who think that another regulated monopoly is the way to go (they exist, but in a decided minority) don’t think there’s any chance that the government would take that kind of action today.
Absent regulated monopolies of some sort, I don’t think any party would invest in open sensors in the quantity needed to drive IoT forward. There would be a way, though. All you have to do is forget the notion of sensors on the Internet and move to the notion of “virtual” sensors online. If we leveraged the vast number of sensor/controller devices out there, selectively posting their data under the proper level of social control, we could build a community of information large enough to drive an OTT-like opportunity. But then we get rid of all those lovely-to-the-operator “thing-phone-bills”.
In my view, operators are stuck in an IoT dilemma of their own making. On the one hand, they want to collect new revenue from wireless attachment of “things”. On the other hand, they don’t want to drive “thing” deployment even though, financially speaking, it would be easier for them to do that given their public-utility roots.
What this suggests to me is that despite the promise of IoT, realization is likely to be delayed because of a lack of a sensible way of moving forward, a way that deals realistically with the investments and risks that IoT will pose. And when it does move, it will likely be driven by a non-operator player or players, and operators will then complain about being “disintermediated.” This time, at least, they’ve had plenty of warning and a direct example from their past OTT experiences, and they’ll have no one to blame but themselves.