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Business Models: Waking Up To The Connected World Opportunity

After displaying signs of relative indifference for many years, people and companies across the globe are finally waking up to the fact that we are entering a new era of connectivity.  The world is rapidly evolving beyond the point of cell phone and traditional PC internet connectivity.  In this new cycle physical assets and devices are being connected and enabled with sensors on a daily basis.  Recognizing this scenario, technology suppliers around the world are now devoting major resources to addressing the opportunities associated with Smart Systems.

What will be required of the technology supply community?  Here are the success factors:

  1. Systems Integration:  Ability to pull together the hardware, software, and network elements of Smart Systems.  These solutions will not work if they are a collection of separate hardware, software, and network products from different vendors unless, and until, there are clear standards and protocols that define how each part works with the others. Those standards and protocols for interoperability, security, and performance will come in time. But, for now, vendors that can provide all the elements of a full solution, and can do so as a product that can be sold to many clients, will have the edge.
  2. Expertise:  For vendors that go after vertical industry solutions, balancing horizontal infrastructure elements such as systems configuration management, asset management and contract life-cycle management (to track and manage the contracts related to these assets and liabilities) will be key.  Successful vendors will need to have analysis tools and  skills, and the ability to design systems to create awareness of asset status, structure the analysis of this data, define rules and work flow, and identify the right applications to initiate the appropriate actions.  Further,  for those vendors that pursue a vertical industry strategy, choosing which verticals to go after will be a key success factor. Because balance sheet challenges tend to be unique to an industry, crafting the right combination of Smart System elements to address these challenges requires deep understanding of that industry and those challenges.
  3. Service Delivery Platforms Are Key To Success: With more carriers focusing on the Smart Systems opportunity the competition for customers is heating up.  Network operators realize that in order to be profitable it will be necessary to connect large volumes of devices since many M2M applications require just minimal bandwidth, therefore limiting the data/usage rates that carriers can charge.   In-turn operators are seeking ways to differentiate their services since already low data rates limit the opportunity to compete on price.  One emerging area for differentiation centers around Service Delivery Platforms (SDPs). Connecting and managing networkable devices has traditionally been a problematic area for customers.  In the past, it took several months to get a device network certified.  Once the device was connected there was often little visibility into how it was performing on the network as well as limited back end control.   SDPs have emerged as a critical tool that can help address these areas.  SDPs provide configuration services, provisioning, SIM management and reporting, billing, upgrades, and troubleshooting services.  Realizing that these services are crucial to end customers, carriers are increasingly developing their own SDPs and/or partnering with platform providers in an attempt to customize their services and meet the needs of their constituents.
  4. Alliances Are Key To Success: The dynamics surrounding the Pervasive Internet are incredibly complex.  Basic enablement, network connectivity, middleware services, value-added services, and other device management functions are all needs that generally must be addressed when customers seek to connect devices.  Given all of the aspects that must be addressed from the customer standpoint, alliances between suppliers often represent the best available means to address the issues facing the end customer and also create maximum value for all parties involved.

By addressing multiple customer needs, technology suppliers have a better chance to be profitable in the long run.  From the customer standpoint bringing a device to market is a multi-step process in an industry that is difficult to navigate.  Suppliers that choose to go at it alone will have a hard time solidifying their place in the Smart Systems arena as they will be unable to meet the many needs of the end customers.  On the other hand, those suppliers that form alliances will be able to provide a host of customer solutions from cradle to grave, thereby speeding time to market and simplifying device management issues.

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