Growing up in a time of phones with dials and long cords provides on with a true understanding of being connected, literally. There was only so far you could get away from the wall before your cord fully extended and you were stuck. For me it was from the kitchen door to the edge of the couch in the family room. Today, we look at the idea of being connected in a completely different manner, today “digital natives” scoff at us old folks when we talk of the days of a phone with a cord, and, to be honest, they scoff at us at the idea that a phone is meant as a device that you simply use to talk to people with. To put it in context I look back to a conversation I had with a colleague a few years ago who worked at NASA. He would talk often about how there is more computing power in an iPhone than there was in the computers found within the Space Shuttle.
This fundamental shift, where a phone is no longer a phone, but a super computer sitting in your pocket is having a dramatic impact on the telecos that have to provide the backbone infrastructure and services that allow that super computer to realize its full potential. And now the innovators in our world have thrown a whole new level of disruption at the industry with the explosion of IoT devices that have branched out from our mobile phones to create a connected world the likes of which science fiction authors have been promising for decades. To put it into perspective, IDC forecasts that the global installed base of IoT devices will hit 28.1 billion by the year 2020 , this is in contrast to the current smart-phone install based of approximately 3 billion devices. That same prediction put the possible revenue of IoT at $1.7 trillion.
To handle this rise of the machines, Telcos are having to reimagine their infrastructure, product models and consumer experience models, and many are seeing this as an opportunity to move into new spaces becoming the new hub for IoT as devices. For the purposes of this discussion, let’s look at two major areas where Telcos have an opportunity to evolve; consumer implementations and Machine to Machine (M2M interactions.
Consumers have now become accustomed to having their smart phone with them at all times to the point where the idea of it being a phone is a bit arcane. With IoT the smart phone becomes a hub that connects the consumer with their world and the telcos are in a unique position to take advantage of this as they control the network infrastructure that allows that hub to connect to the outside world. But with this opportunity comes risk as the networks were not originally designed to handle this new reality. To take advantage, telcos are having to greatly expand their network capabilities and coverage. Along with this, they are having to change the way in which they market to and provide services to their customer base. We are once again seeing a shift to unlimited data plans as consumers expand the number of devices they interact with on a regular basis and demand that anytime connections are simply available to them.
The idea of expanded networks and unlimited data are simply becoming table stakes in this new environment, but the telcos are expanding past the idea of simply infrastructure evolutions to provide new products and services to enterprises that allow them to take advantage of all the new capabilities users are receiving due to these devices, and this is where things get interesting.
Everything is now connected, from our homes and cars to the streetlights and electric meters. This expansion of connected devices is providing an entirely new opportunity for telcos to own the connection of M2M interactions, but more importantly, to own the big data analytics behind those connections. As data grows, telecos are in a unique position to more away from data monitoring to data utilization opening up new marketing and product opportunities based on the infrastructures that carry that data. This enables them to become data providers to enterprises in ways not previously imagined creating new revenue streams, but also fundamentally changing the DNA of the telcos themselves.
There are any number of possibilities in the future for the modern day telco and their evolution has really just begun. The iPhone is only now just 10 years old and IoT is still in its nascent stages. Telcos, today, are still in catchup mode as the expand their network coverage to accommodate this explosion of devices. However, players in the industry who are looking beyond the required expansion of the network, who are focusing on “what’s next” will have an opportunity to fundamentally change their industry and reap the benefits that come along with that change.
The Digital Enterprise and Other Musings 