Page 84 - SAMENA Trends - March-April 2023

ARTICLE SAMENA TRENDS

Human connectivity is largely saturated, IoT is Different we have yet to envision. This complexity
and it’s getting harder to make money The CSP business model is largely built is well-represented by a recent Deloitte
selling voice and data services. Most around productizing clearly defined report, Growing IoT Platforms.
devices, however, remain unconnected, services and metrics for driving revenues.
and IoT unlocks this Greenfield opportunity This is a classic, linear approach from the Digital Transformation, the Real
for monetizing new services on a massive, analogue world, where CSPs sell services Driver for IoT
global scale. like telephony, conferencing, bandwidth, Without commercialization, IoT is little
etc., and bill them increasingly on a flat rate more than a set of technologies extending
According to The Internet basis per subscriber. This model has been connectivity, albeit on a massive scale.

of Things 2020 report, the proven over time, but margins are declining To effectively monetize IoT, CSPs must
understand where the utility lies, and those
as these services become commoditized,
IoT market is forecast to and CSPs have limited capabilities to add opportunities are being created by digital
grow to over $2.4 trillion new services in this realm. transformation.
annually by 2027, with IoT is different by virtue of being a product All sectors of the economy are going
over 40 billion connected of the broader digital transformation through this process, whereby all things
process that all industries and enterprises
products,
information,
–
analogue
devices. are adapting to. The role of CSPs will processes, etc. – are being digitized to
be different here, since IoT itself is not a better align with today’s digital world. This
According to The Internet of Things 2020 product, and nor is it a technology. Rather, transformation will take years – and may
report, the IoT market is forecast to grow to IoT is an architecture around which many never be finished – and some sectors are
over $2.4 trillion annually by 2027, with over different technologies will interwork to transitioning faster than others.
40 billion connected devices. Projections create new services, applications, and
from the United Nations show the global forms of business value. This makes IoT The key impact of
population approaching nine billion by a platform, not a product play, where
then, which translates into three or four the platform not only enables these digital transformation is
connected devices for every person. In the technologies to work together, but also automation, from which
developed world, that number will likely be serves as a destination for end customers
far higher, making IoT orders of magnitude to access new services as well as discover many forms of new value
larger than the market served today CSPs, others not previously considered. In this are being created, such as
at least in terms of connection points. model, CSPs must become orchestrators
Given the limited opportunity remaining for to make these elements work together in a streamlining processes,
human connectivity as a growth driver, the way that adds value for end customers and reducing errors, faster
potential for IoT is simply too big for CSPs is profitable for the CSP. results, lowering costs, etc.
to ignore.
IoT is Complex These forms of automation
IoT is... Rather than selling familiar, discrete ser- are ideal use cases for
While CSPs should rightly be drawn to the vices like telephony, CSPs will be providing
scale of this opportunity, each of these new services, utilizing digital technologies, IoT, and the monetization
three elements needs to be understood and relying on a new ecosystem of part- scenarios are endless.
and addressed for CSPs to have success ners to create this value. IoT is very much a Everyday examples include
with IoT. volume business with low ARPUs, and with
the complexity that comes with all of these smart cities, smart homes,
IoT is New new pieces, CSPs must have the right ap- and smart cars – as well
As connectivity scales both between proach and the right capabilities to make
people and devices, as well as among this a profitable undertaking. as smart factories, smart
devices, endpoints and “things”, there offices, smart hospitals,
will be virtually unlimited opportunities to Not only are the new technologies complex,
create new forms of utility that represent but so is the new value chain that emerges etc.
monetizable value. That potential has yet from developing a web of partners spanning
to be realized by CSPs, but IoT has now many touchpoints that create these new The key impact of digital transformation
reached a critical mass that is attracting services upon which future revenues will is automation, from which many forms
entries from across the entire value chain. be derived. When this complexity can be of new value are being created, such as
As providers of the connectivity that effectively managed, IoT platforms will streamlining processes, reducing errors,
enables this opportunity, CSPs are in a provide sustainable differentiation, as well faster results, lowering costs, etc. These
prime position to capitalize on IoT, and if as a growth engine for tomorrow as 5G and forms of automation are ideal use cases
they do not, others surely will. other technologies drive innovation that for IoT, and the monetization scenarios

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