It’s time to monetize IoT with Nokia
CSPs can capitalize on the Internet of Things with Distributed Edge Charging and Marketplace solutions
The Internet of Things (IoT) as we know it was “born” in the late 2000s. After a decade of major investments and years of patience for market adoption, global technology leaders are finally beginning to earn meaningful revenue, as evidenced by their 2020 IoT revenue shown below.
What exactly is IoT again?
IoT might still seem like a buzzy catch-all representing all things “next-gen tech” under the sun. To enterprises, purchasing IoT solutions might feel like a near-impossible task, considering the hundreds of IoT platforms that claim to be end-to-end and do it all. Allow us to frame the technology ecosystem of IoT through five main layers, each with its own market implications and distinct competitors, with representative logos of select leaders and innovators marked below.
Where is IoT monetization trending?
This tech ecosystem currently enables several IoT use cases, from mobility and monitoring aspects of smart cities to asset tracking and fleet management related to connected vehicles. While these are certainly new and innovative in many respects, the monetization needs of such solutions have so far been relatively lightweight and simple – think schemas that are per use, per device, per time interval, or even fixed pricing.
As the adoption of 5G networks continues to mature around the globe, a major IoT paradigm shift is underway. While the aforementioned “simple” IoT cases are becoming more widely commercialized, the development of more advanced IoT solutions is also happening in parallel, complemented by AI/ML, edge computing, and other disruptive technologies.
5G network (NW) slicing is a key enabler for the majority of these emerging “high-end” IoT use cases, from V2X (“vehicle to everything”) connected vehicles to telehealth and Industry 4.0 (as shown below). From a technology point-of-view, NW slicing is evolving from a highly manual and rather expensive 4G/LTE version to one that is highly customizable, dynamic and automated, and in which resources, speed, latency, reliability and coverage can all be allocated per slice at the network edge.
Monetizing “high-end” IoT via Distributed Edge Charging
“High-end” use cases include applications and computation expected to occur at the edge, especially those that are mission critical and which will benefit from having charging co-located at the edge. This ensures quality will be maintained and that resource consumption of the charging system is kept to a minimum. CSPs are on the hook and expected to support the massive data volumes and device density (one million devices per square km), high throughput (peak >10 Gbps, 100 Mbps), ultra-low latency (<1 ms) and ultra-reliable (6x9’s) capabilities that are behind “high-end” IoT. Distributed Edge Charging allows the monetization of these services in an optimal way.
Here the charging capabilities (eCHF) are instantiated together with services and applications on the edge node to enable high-volume low-latency performance. The distributed ledger is used to store all transactions that occur in this ecosystem, taking all monetization models into account, with charging occurring either in real-time or deferred in the cases of specified requirements (e.g. ultra-low latency, <1 ms).
Monetizing beyond connectivity – “anything you can measure, you can charge”
The more diversified CSPs have begun employing broader IoT monetization strategies, moving from mainly connectivity to an approach of “anything you can measure, you can charge” (as shown below).
As revenue from connectivity accounts for a relatively small portion of the overall IoT pie – GSMA (Global System for Mobile Communications) estimates that connectivity will account for ~5 percent of the $1.1 trillion of IoT revenue in 2025 – many CSPs have begun moving up the value chain to invest in various IoT applications, orchestration platforms, and marketplaces that serve as hubs for several ecosystem partners.
This approach calls for flexible and agile solutions that can monetize any use case, those involving IoT application network service APIs, data and more, not just standard network access and usage. Think measuring and rating any metric associated with a particular service offering – volume, speed, quality of service, etc. – and then monetizing this in real-time, while also providing the transparency of charges as they occur. To capture the full value of such opportunities, CSPs must have expansive IoT monetization capabilities.
The IoT marketplace
One of the trending IoT plays by CSPs is an IoT marketplace, attempting to serve as the primary go-to-vendor or “one-stop-shop” for enterprises either looking to buy or sell IoT-specific solutions for their business.
Enterprises and SMBs typically involve several technology vendors in their IoT implementations – ~60 percent have two to five vendors, and 32 percent have 11+ vendors – which often means disparate systems that increase both costs and time-to-market. So, it is no surprise that marketplace-like offerings are becoming increasingly popular, especially for CSPs who play a vital role in IoT.
We see monetization systems as a crucial enabler of “IoT Marketplaces,” involving flexible pricing and charging models with the ability to capture each new revenue opportunity, as well as ensure faster time-to-market for new offerings emerging from the wider ecosystem of marketplace partners.
If such marketplaces are to thrive, they must enable the flexible monetization of:
- API access and usage (data, analytics, development tools)
- Cloud & Edge resources
- Connectivity, incl. NaaS (Network as a Service)
- Devices & sensors
Even though IoT was “born” back in the late 2000s, this really is only the beginning.
And now that the first wave has begun to mature and the paradigm is already shifting, it’s time to monetize these incredible IoT opportunities.