Want to be a DSP? Start with IoT device management as a digital service
Throughout my two decades of experience in the industry, I’ve met with a lot of communications service providers and despite their differences, they share surprisingly similar ambitions these days. Most of them want to evolve into digital service providers, or DSPs with the Internet of Things naturally being the biggest driver. It’s been a long time since CSPs have had such an exciting opportunity to grow their revenue base.
Of course, given the different markets in which they operate, there are many routes to DSP-hood. It isn’t a straightforward transition. Some will opt for the quick step of adding digital services on top of their existing infrastructure. Others will take the bigger step of virtualizing their networks. The latter will take more time and money, but provide greater agility and scalability over the long-term.
Analysys Mason’s recent report1 identifies four approaches:
- Connectivity services
- Generic platform services providing additional capabilities such as device management
- Vertical-specific platform services providing further capabilities such as specific applications for verticals
- End-to-end solutions, which would include all the components for a given turnkey application service.
I think this gives a pretty comprehensive view of the situation. – with the caveat that any service provider looking to move beyond mere connectivity, is going to have to tackle device management in one of the other three scenarios. With literally billions of IoT devices set to join the world’s networks, this is a pressing issue due to security concerns, and is also the most natural fit for the CSPs/DSPs.
It also demonstrates a new revenue opportunity – IoT device management as a service will rise at a CAGR of 44.6% between 2017 and 2021.
Let’s face it, putting together a fully fledged, turnkey IoT solution is not territory in which most CSPs have a lot of experience. When it comes to device management, on the other hand, they are well versed at using these solutions for their own needs, particularly those that offer mobile, cable and broadband services.
Many CSPs use device management systems to manage network-connected devices such as mobiles, tablets, home gateways, routers, etc. for consumers. They offer capabilities to remotely update software and diagnose issues on the devices in real time. They have proven cost reduction associated with false or unnecessary dispatches, and are able to further increase savings by implementing customer self-service.
For CSPs, extending their device management expertise to the IoT segment won’t be much of a stretch in that case. I It will also be a low-cost initiative, particularly where adopting a cloud-delivery model for device management solutions in concerned. As with most other Software as a Service (SaaS)-type solutions, there are negligible upfront costs and the CSP can grow the service on demand.
This means they can tackle lower margin markets where volume will potentially be high, such as consumer IoT devices for home automation, as well as small to medium enterprises where a multi-tenant device management solution is needed to lower operational costs. Using an SaaS-based IoT device management solution gives service providers more flexibility and speed, getting them into the digital services game with the ability to scale rapidly.
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1 For more information, see Analysys Mason’s Operator approaches to IoT: from connectivity to platforms and full solutions. Available at www.analysysmason.com/operator-approaches-iot-jan2017.