Wireless Noodle Episode 23: They may be virtual but the change is real

Matt dives into the obsessions that IoT companies have with value chains and their position in them, plus a look at the increasingly vibrant IoT MVNO world. And a little bit on Everynet's new US LoRaWAN network. 

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An approximate transcript of the podcast is available below. 

Tech vendors are excessively obsessed with the concept of the value chain, to the detriment of delivering value to their customers. Welcome to this week’s Wireless Noodle. I’m delving into value chains this week, as well as looking a the IoT MVNO market, which has been vibrant recently, plus a little bit on Everynet’s US LoRaWAN deployment.


IoT companies are (implicitly or explicitly) excessively obsessed with the value chain and their positions within it. It means the focus is always on how the product fits relative to their peers rather than relative to customer needs. 

The first problem with the value chain in IoT is that it’s not a true one. In a true value chain any given element procures product from the segment to its left, adds value, and then sells to the element to its right. That’s not how IoT works. The entry point to the sale to the customer can be almost anywhere along that line. They could buy the different elements separately. Or almost any one of them can pull together a full offering to sell to the customer, for instance a device manufacturer could resell connectivity and support a deployment using its own management platform. The ‘value chain’ is more of a description of the different functions that need to be part of delivering a solution.

The more important problem with the value chain, however, is less obvious. It is that vendors in the space over-obsess with what they’re selling while ignoring the far more important question of who they are selling it to. The result is products that are built to occupy a position in the value chain rather than built to address as specific set of users. This is quite particular to the Internet of Things. Other technology segments are much better able to focus: Salesforce is aimed at sales people, Github is aimed at developers, Wordpress at website owners with little development expertise, DataRobot at data scientists with no programming skills. All of them understand very well their community. Some will seek to evolve beyond it, adding additional features and functionality, but they critically know their customers.

This is a reinvention of the age-old problem of the technology sector being supply driven, rather than demand-led. IoT is still supply driven, with the result that hardware and software capabilities are developed to meet a perceived technical ‘gap’ rather than to address the needs of the potential adopters.

But the organisations that ‘get’ that the focus needs to be on tailoring features, functionality, roadmap, positioning, price etc to the needs of the individual they’re targeting will win. For instance it’s good to see a bunch of vendors focused specifically on the needs of developers (Edge Impulse, Blues Wireless, Pycom being just a few examples that spring to mind). The real secret of the success of the ‘outsiders’ who will eat IoT (Amazon Web Services (AWS) Microsoft, SAP, Twilio Inc. etc.) is in putting together a consistent offering aimed at the needs of the user.

In a recent Transforma Insights report I dig into examples of organisations that have not been sufficiently focused on the needs of the actual end users. And make some recommendations about how best to do it. 


One a related subject. Thinking about nimble organisations that are better at meeting the needs of their customers, I wrote another report the other week looking at IoT MVNOs. 5 years ago I’d have said that part of the market was stagnant, but there’s a new breed (although some are old companies) of MVNOs doing v interesting stuff. And they’re in the news a lot:

- Wireless Logic acquired Things Mobile in Italy

- Blues Wireless, backed by Ray Ozzie, secured $22m in funding

- Giesecke & Devrient, the SIM guys, bought Pod Group

- FloLIVE secured $15.5m in funding

- JT IoT spun out from Jersey Telecom for a surprising GBP200 million. 

And that’s on top of KORE Group’s float which I talked about a few weeks ago. 

Ones doing interesting stuff include 1NCE, Blues Wireless, Eseye, floLIVE, Monogoto, and Soracom.

The changing commercial dynamics in the provision of cellular IoT connectivity, particularly margin erosion, has resulted in an even greater impetus to find sustainable competitive differentiators on something other than the pure provision of connectivity. This is true for Mobile Network Operators (MNOs), but it is even more true of MVNOs. The focus of my report was to examine which differentiators, including software platforms, scale, tariffs, coverage, cloud integration, vertical solutions and pre- and post-sales support, will prove to be the most effective.

To take just one of those, tariffing, historically it was based on some combination of per-device and per-MB charges, reflecting in large part the way in which MNOs charged for their legacy services. In many cases this isn’t particularly appropriate for IoT devices. Tariff innovation has come slowly. To the point where offers such as Soracom’s of no minimum charge and pool plans across a fleet of devices seem innovative, despite the fact that it still charges per-MB. What we’re likely to see in future is a move to charging per MQTT message, API call, or similar, or maybe even pay per outcome. Sierra Wireless has a couple of interesting offers, including of USD1 per device per month with unlimited API calls, or another with USD1 per 1,000 messages. This type of approach removes the complexity for developers who, essentially, don’t want to have to think about how many messages there would be in a MB. This harks back to the value chain question from earlier: focus more on the specific needs of the customer.

The truth is that, of course, there’s no magic bullet. A number of tactics will be effective in securing a sustainable future for any MVNO. Some better than others. Things relating to vertical services, consulting and anything not easily replicated in software, is a good bet. Having your own connectivity platform or having a dedicated core network is not the differentiator it once was. Most importantly these MVNOs need to be nimble, continuing to evolve their offering to avoid getting overtaken by other new-comers. Secondly, they need to look at multiple methods of differentiation. In such a competitive market, a single differentiator will not be enough. Finally, they need to identify which part of the market they are pursuing and develop a proposition accordingly. It might be embedded developers, the retail sector, AWS customers or any number of other sub-segments of IoT.

The report itself is available to TI subscribers. 


Kudos to the folks at Everynet for announcing the roll out of a US LoRaWAN network. Initial efforts will focus on providing coverage to 36 urban areas and 100 logistics intersections by the end of this year. This is extremely significant news for IoT and many industries within the US. The availability of an extensive public, carrier grade LoRaWAN network will prove crucial to furthering the adoption of a variety of use cases. Likely early adopters can be expected to be from the logistics sector, supporting track & trace and monitoring of transported goods – cold chain monitoring being a particularly relevant use case given the current requirements for vaccine distribution. Urban centres will bring demand from smart cities uses cases, building automation and perhaps smart metering. 

Previously 5G mMTC technologies, LTE-M and NB-IoT, have been the more popular choice for use cases where a public, carrier supported network was required. The availability of alternative choices for such coverage is only going to drive further IoT growth. Competition in the space is only going to further encourage innovation, expansion and development, ultimately providing a greater choice and better service for end users. Crucially for LoRaWAN such a large public network rollout furthers its legitimacy in the LPWA space, and end users that baulked at the complications that come with the operation of a private network will be encouraged to consider LoRaWAN in future projects.

It’s worth noting a synergy here though: any campus-based LoRaWAN proposition (such as, for instance, in an agricultural, oil & gas, healthcare, or retail park context) can potentially now benefit from ‘roaming’ onto a wider national network to support connectivity when devices are beyond the reach of a private network. A potential approach might be for a large end-user to deploy LoRaWAN private networks at key sites and rely on the nationwide network to support connectivity in-between those sites.

Either way, it’ll be interesting to watch it evolve.

Blog post from my colleague Matt Arnott is available on the Transforma Insights website.


Last thing, you may remember from a few weeks ago I spoke about a report comparing the digital transformation capabilities of the hyperscalers AWS, Microsoft and Google. Well, we’ve built on that to develop a report looking at 16 Digital Transformation Service Providers (DXSPs) and assessing their capabilities in helping enterprises navigate their Digital Transformation journey. We include companies like Accenture, IBM, Wipro, CGI, KPMG and so on. I will share some more about that in the next episode.

Just a reminder: if you’re enjoying the podcast I’d be obliged if you could leave a review. It’s much appreciated.