A general trend in the Internet of Things (IoT) is that connectivity is increasingly being viewed as a feature rather than a product. We anticipate that within three to five years, a significant portion of IoT connectivity will be indirectly procured as part of relationships with communication service providers, cloud providers, hardware manufacturers, system integrators, or solution providers.
Enterprises are shifting from connecting things to analyzing data.
Much of the discussion surrounding the Internet of Things (IoT) in the past has focused on connectivity—how to connect "things." While it remains a crucial part of any IoT proposition, it's clear that the situation is more complex today. Businesses are increasingly interested not only in how devices are networked, but also in how to better collect, manage, and analyze data from connected devices.
We partnered with Oracle to conduct a global survey of 800 leading enterprise IoT adopters. The results show that enterprises no longer need to make direct investments when selecting or acquiring connectivity.
According to survey data, when asked to list the top three costs they were trying to manage, respondents ranked connectivity as their lowest priority, after hardware, license, or subscription costs. Controlling internet connectivity costs is no longer the primary challenge for adopters, reflected in lower prices and more flexible pricing models.
Users trust their suppliers to provide connectivity.
The survey also revealed that users are increasingly unwilling and unable to purchase connectivity separately. They are happy to delegate network connectivity provision to their communication service providers (CSPs) or other solution providers, suggesting that pure connectivity is better provided and therefore requires less direct attention from them. Three-quarters of survey respondents expect IoT solution providers to offer network connectivity, and 25% want it fully bundled into their solutions.
This trend became even more pronounced when respondents were asked about their ongoing projects. For respondents in the planning stage, 80% wanted network connectivity provided by IoT solution providers, and 35% wanted it bundled into their solutions. This clearly indicates that the direction forward is towards integrating more connectivity into solutions.
Connectivity bundling is the preferred approach in the Internet of Things (IoT).
Another survey question further highlighted the preference for tying connectivity to solutions, identifying one of the most important features among eight key functionalities for IoT solutions. Demanding "built-in" connectivity was the second most popular choice, with 43% of respondents listing it as one of their top three improvements.
If this trend takes hold, network connectivity providers will have a responsibility to do more than just provide network connectivity. Providers will have end-to-end remote messaging and data transfer capabilities with IoT devices. In a recent article, we explored the concept of telecom operators transforming into hyperscale IoT connectivity providers, a role that requires richer capabilities, including transport layer orchestration and cloud integration.
The wide range of IoT connectivity options still requires management
All of this should not be interpreted as an indication that all connectivity-related issues have been fully resolved. Far from it. With the advent of new technologies including 5G, low-power wide-area (LPWA) networks, and low Earth orbit (LEO) satellites, the choice of network connectivity options has never been richer. There are also many untested technologies on the market that promise to disrupt long-established business models, including eSIM and core network virtualization. Finally, new business models, vendors, pricing options, and so on are emerging daily. Perhaps this is part of the reason we are seeing a growing demand for opacity regarding connectivity: with so many choices available, adopters are asking partners to eliminate the complexity of decision-making and provide them with the right technology options to suit their needs.
