Understand how optimized connectivity improves IoT ROI
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The document discusses how optimized connectivity improves the return on investment (ROI) for Internet of Things (IoT) projects, emphasizing the importance of understanding real connectivity costs and minimizing downtime. It highlights various IoT and machine-to-machine (M2M) services provided by Sierra Wireless, including their solutions for automotive, healthcare, and industrial sectors. Additionally, it outlines the significant growth forecast for cellular M2M connections and the critical role of connectivity in driving enterprise IoT adoption.
![NBED Title in sentence case
© Analysys Mason Limited 2016
Our expertise in IoT is built on projects performed in multiple regions
4
Examples of
recentIoT and
M2M client
projects, by
geography
Assessed the regulatoryimplications and
regulatoryfeasibility for the
implementation of a new M2M servicein
a dozen countries
Conducted a study
on international
opportunities for a
European
operator
Provided an assessmentof
M2M marketopportunity for a
software vendor
For a global operator, provideda
forecastof the marketopportunityfor
IoT, includingallelements of the value
chain
Developedforecasts of M2M device
connections andrevenuefor Brazil, the
Caribbean,Latin Americaand worldwide
Conducted a study to
determine demand for
a satellite M2M
productand end-user
requirements for
hardware andsoftware
Developmentof a cost–benefit
model for operators and
enterprises for Ericsson
Sized quick-win
opportunities in the
internationalM2M
marketand helped to
develop a long-term
M2M strategy for a
leadingmobile
operator
Supported a leadingmobile
operator in developingits
strategy for IoT and M2M
services
For a European operator,
conducted a marketassessment
of a new type of sensor network
Overviewedfleet
managementin fiveSouth-
EastAsian countries
For a Japanese
operator, provided
advice on which sales
channel to use
M2M/IoT services in
Europe (including
assessmentof MVNOs)
For a major regionaloperator,
conducted a workshop to assistwith
IoT and M2M strategy
For an operator client,
developeda listof over
100 potential partners,
with key information for
each [e.g. details of
existingcontracts and
partnerships]
CountriesofIoT andM2Mprojects
Countriesofother
projects
IoT/M2Mclient country](https://image.slidesharecdn.com/understandhowoptimizedconnectivityimprovesiotroi-160519194849/85/Understand-how-optimized-connectivity-improves-IoT-ROI-4-320.jpg)
Understand how optimized connectivity improves IoT ROI
- 1. ProprietaryandConfidential 1 Michele MacKenzie Understanding How Optimized Connectivity Improves IoT ROI
- 2. NBED Title in sentence case © Analysys Mason Limited 2016 Analysys Mason has been advising telecoms clients for more than 30 years 2 1000+ CLIENTS THATHAVE BENEFITEDFROM OUREXPERTISE IN THELAST 5 YEARS 200+ EMPLOYEES WORLDWIDE 110+ COUNTRIES WE HAVE WORKED IN 12 OFFICES Our approach to every project is customised to the client’s requirement Clients see us as trusted advisers and partners who deliver honest,independent advice Our exclusive focus on telecoms sets our company apart We help clients improve performance and maximise profit, even in difficult market conditions Our advice on mergers and acquisitions has helped shape the industry Our consultancy has been shaping telecoms regulation since 1985
- 3. NBED Title in sentence case © Analysys Mason Limited 2016 3 IoT and M2M Solutions research programme Selected reports and forecasts for 2016 § The business case for LPWA networks § CSP strategies and organisational structures § Security service revenue opportunities forCSPs § EmergingAPAC M2M carrierscorecard § M2M in the Middle East and North Africa § CSP strategies forthe smart home § Connected caropportunities forCSPs § The role of regional alliances § The role of CSPs insmart cities § The impact of the eSIM on M2M § End to end solutions forSMEs § M2M RoIcase studies § Usage based insurance § Telehealth strategies:case studies § Worldwide M2M device connections and revenue:2016–2026 § Worldwide LPWA connections and revenue forecast:2016– 2026
- 4. NBED Title in sentence case © Analysys Mason Limited 2016 Our expertise in IoT is built on projects performed in multiple regions 4 Examples of recentIoT and M2M client projects, by geography Assessed the regulatoryimplications and regulatoryfeasibility for the implementation of a new M2M servicein a dozen countries Conducted a study on international opportunities for a European operator Provided an assessmentof M2M marketopportunity for a software vendor For a global operator, provideda forecastof the marketopportunityfor IoT, includingallelements of the value chain Developedforecasts of M2M device connections andrevenuefor Brazil, the Caribbean,Latin Americaand worldwide Conducted a study to determine demand for a satellite M2M productand end-user requirements for hardware andsoftware Developmentof a cost–benefit model for operators and enterprises for Ericsson Sized quick-win opportunities in the internationalM2M marketand helped to develop a long-term M2M strategy for a leadingmobile operator Supported a leadingmobile operator in developingits strategy for IoT and M2M services For a European operator, conducted a marketassessment of a new type of sensor network Overviewedfleet managementin fiveSouth- EastAsian countries For a Japanese operator, provided advice on which sales channel to use M2M/IoT services in Europe (including assessmentof MVNOs) For a major regionaloperator, conducted a workshop to assistwith IoT and M2M strategy For an operator client, developeda listof over 100 potential partners, with key information for each [e.g. details of existingcontracts and partnerships] CountriesofIoT andM2Mprojects Countriesofother projects IoT/M2Mclient country
- 5. NBED Title in sentence case © Analysys Mason Limited 2016 5 The evolutionof equipment withrespect to time and intelligence Smart connected devices will redefine many industry sectors and transform companies and user experiences ‘Dumb’ physical equipment Smart equipment with embedded system Smart connected equipment with networking capabilities Past,present & future Present &future Recent past,present & future ProductIntelligence Time 5
- 6. NBED Title in sentence case © Analysys Mason Limited 2016 Cellular M2M connectivity is set to grow at a CAGR of 19% 6 Cellular M2Mconnectionsforecast,2015-2025,worldwide 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Connections(billion) Automotive and transport Financial services Healthcare Industrial Other Public sector Retail Security Utilities
- 7. NBED Title in sentence case © Analysys Mason Limited 2016 A lot depends on IoT connectivity 7 Key enablers and drivers for enterprise adoption of internet of things New providers The lowering cost of service provision has led to hundreds of new start ups New revenue streamsNew providers The lowering cost of service provision has led to hundreds of new start ups Reduce operational costsNew providers The lowering cost of service provision has led to hundreds of new start ups Awareness New providers The lowering cost of service provision has led to hundreds of new start ups Cost of IoT deployment has decreased $$ New providers The lowering cost of service provision has led to hundreds of new start ups RegulationNew providers The lowering cost of service provision has led to hundreds of new start ups ROI
- 8. NBED Title in sentence case © Analysys Mason Limited 2016 Reducing costs has been a key driver for IoT connectivity in many verticals and ROI is significant 8 Cellular M2M connections, 2025,worldwide, selectedverticals Smart transportation Aftermarket Connections PoS Connections Fleet management Connections 145m 116m 35m “ROI depends on the major fleet issues in each market. It could be oil theft, driver behaviour, route optimisation, vehicle recovery and cold storage monitoring. However, on average, an ROI in the 15– 20% range can be expected.” Head of M2M, Middle East telco
- 9. NBED Title in sentence case © Analysys Mason Limited 2016 And the role of connectivity is often under-stated 9 Internet ofThings:genericvalue chain § Offer the network for data transmission of the IoT services § Connectivity providers Systems integration § Offer the end user module, with the embedded M2M chipset § Device OEMs § Provide the actual applications thatmanage the data collected by the device § Application developers § Manage the distribution, supply chain and fulfilment § Billing and support § Provide system integration services § System design/ development § Solutions provider § 5-30% 100% DescriptionSpend Service provision ApplicationDeviceConnectivity § 5-20% § 30-60% § 20-30% § <20%
- 10. NBED Title in sentence case © Analysys Mason Limited 2016 The cost of connectivity failure can be measured in more than just financial terms 10
- 11. NBED Title in sentence case © Analysys Mason Limited 2016 As IoT matures enterprises need to be aware of the following pitfalls.. 11 SIM Connectivity Monitoring/ Management Scale
- 12. NBED Title in sentence case © Analysys Mason Limited 2016 12 But an unmanaged approach risks undermining the IoT business case Objective Impact of connectivity failure Reduce costs • Higher operational and maintenance costs to identify and replace SIMs • Downtime costs if connection fails New revenue streams • Downtime impacts on customer contracts • Inability to correctly bill customer Scale business • Additional costs to build new IoT solution to be able to scale Trust and brand • Failure undermines customer trust in your organisation • May result in customer churn Source: Analysys Mason
- 13. ProprietaryandConfidential 13 Understanding How Optimized Connectivity Improves IoT ROI Dan Martensson VP Cloud & Connectivity Business Line
- 14. 14 SIERRA WIRELESS: Building the Internet of Things 2015 revenue: $608 million 1,100 employees worldwide Customers in 130+ countries 2015 revenue: $608 million
- 15. 15 35.0% 20.7% 20.4% 23.9% Sierra Wireless is building the IoT Building the IoT with intelligent wireless solutions 120 Million Devices Shipped #1 in cellular devices for the IoT (1) Source: ABI Research– June2015 Cellular Embedded Module Revenue Market Share in 2014 (1) Sierra Wireless Innovative open- source embedded platforms Technology leadership Industry’s broadest portfolio 20+ years of wireless M2M experience IoT specific Connectivity Complete device to cloud offering
- 16. 16 Our complete device-to-cloud solution Your applications & enterprise software Your devices Cellular Devices Embedded Solutions Gateways Solutions IoT Cloud Services Connectivity Management Application Enablement 360 Operations SIM & Connectivity End-to-End Security & Differentiation
- 17. 17 Well positioned in key IoT segments Automotive & Transport Energy & Industrial Enterprise Residential & Healthcare • Automotive • Fleet Mgt. • Toll Collect • User-based Insurance • Smart Meters • Smart Grid • Industrial • Public Infrastructure • Sales & Payment • Distributed Enterprise • Mobile Computing • Home Security • Residential Automation • Patient Monitoring Strong global base of blue-chip customers
- 18. 18 Our IoT Learnings Global operator independent IoT Services delivered by the worldwide leader in cellular modules 1000+Customers >2MSubscribers 180+Countries Small & Medium Enterprises Large Enterprises & OEMS
- 19. 19 Our Customers IoT Goals Mission Critical Fixed location EU-Wide Difficult to service Urban & Rural Latin America Access Control Deep Indoors EU-Wide Maximizes potential customers & minimizes deployment costs Maximizes market potential & simplifies management Enables an SLA & minimizes downtime service costs
- 20. 20 Our Customers IoT Challenges ROI, Complexity, Time-to-market, Scalability Securing expected ROI from IoT projects Transforming into a service driven business Lack of focus on business value of data, customer experience Underestimating technical complexity and risk
- 21. 21 Need to Focus on Measurable Objectives in ROI Reducing: • Service Costs • Customer Down Time • Mean time to Repair (MTTR) Increasing: • Service Revenue (MRR) • New Customers • Service Efficiency Gains (fewer truck rolls) • Customer Satisfaction
- 22. 22 Need to Understand Your Real Connectivity Costs • 30% of IoT OPEX is connectivity • Hidden costs often underestimated and can double TCO • Real cost per MB = network communication costs + Support Costs • Downtime costs significantly impact service levels and revenue
- 23. 23 Network Communication Costs Re-occurring Cost to Connect Devices • Monthly access fee – expensive if your deployment includes periods non-connectivity • Optimizing Monthly Data plans – Pay-per use – cost effectivewith low usage or fluctuating usage – Pay per device for fixed amount of data • Overage – Additional charge if your usage fluctuates • Roaming – Devices on the move pay roaming when out of primary coverage area
- 24. 24 IDC – Essential to Minimize Data Usage Costs üSeamless network switching between high & low speed networks üHigh usage & low devices usage on same data plan üNo overage costs because of malfunctioning devices üMid-cycle rate plan changes
- 25. 25 IOT Support Costs • Tech Support Call cost – Diagnose the problem – Troubleshoot • Service Visit Cost – Cost to roll a truck to fix device – Service Efficiency (truck rolls)
- 26. 26 Cost of IoT Downtime • Downtime Cost – Lost Revenue – Poor Service Level – SLA Compliance Penalty
- 27. 27 Nube: Transforming LPG supply NubeChallenge Sierra Wireless Device-Cloud Solution devices platformconnectivity AirPrime Embedded Modules üFully Integrated • Innovative start-upcompany based in Mexico • Focused on delivering bestin class B-to-B-to-C services • Start ofoperation in Mexico; global expansion plan • Gas levels • Consumption • Alerts • Orders Consumers • No knowledge ofgas levels • Constantly refueling gas tanks manually Gas Companies • No knowledge ofcustomer gas levels • Ad hoc supply,ordering and delivery; inefficientlogistics • Payment Status • History • Analytics üReady to deploy üGlobal Solution Sierra Wireless Smart SIM IoT Acceleration Platform Customer Snapshot
- 28. 28 Coverage Data quality Flexibility Simplicity Nube’s Connectivity Challenges IoT deployments require a consistent& resilient data connection without human intervention. UNTIL NOW CONNECTIVITY SERVICES WEREN’T DESIGNED FOR IOT TECHNICAL CHALLENGES IoT deployments need the broadest possible coverage to ensure machines are always connected. Customers connecting globalproducts need a SIM and tools that simplify logistics and operations. OPERATIONAL CHALLENGES IoT deployments have long lifespans. Customers need the flexibility to update providers and networks.
- 29. 29 TOO COMPLEX FOR IOT Nube’s Connectivity Options OPERATIONALSIMPLICITY EASY TO SCALEDIFFICULT TO MANAGE TECHNICALCAPABILITY LOCAL SIMS • Geographically restricted • Many MNO’s needed for coverage • Very complex SIM logistics • Poor support for OTAupdates (eUICC) LACK FLEXIBILITY & COVERAGE ROAMING SIM • Coverage restricted to alliances • Costs sky-rocket outside of footprint • >1 MNO needed for coverage & cost • Poor support for OTAupdates (eUICC) Smart Multi-Operator SIM & Dedicated IoT Core Networks
- 30. 30 Sierra Wireless Solution = Simplicity Best Coverage Best Quality Most Flexibility Multi-Operator Connectivity Quality centric and resilient service Carrier-agnostic subscription management Simplicity of a Single SIM for Regional or Global IoT Deployments
- 31. 31 End-to-End Connectivity and Platform Services • Bring your own SIM and/or Sierra. • Open to any bearer: cellular, fixed, satellite, LPWA • All you need to connect your machine: – Data collection – Monitoring – Billing Connectivity Management Application Enablement 360 Operations Third party SIM eUICC SIM & Connectivity
- 32. 32 Real Cost per SIM Real monthly project cost Pricing Options ComparisonTable for PowerPoint Number of SIMs Project Timeline Cost per MB Number of Issues Level 1,2 Support Cost $1.00 4,020 $20 @100% $1.00 1,327 $10 @100% Roaming SIM Sierra Wireless Smart SIM Typical Telematics Customer Connectivity ROI Downtime/Compliance Penalty Average Cost per Issue $50 @1% $30.50 $1.61 $50 @1% $15.50 $1.10 Data Usage/SIM/Mth Field service visit cost $200 @5% $200@2.5% DeploymentSupportCosts Real LT Project Cost $19,416,600 $13,293,738 TCO 201,000 1 MB 5 Years $323,610 $221,562 Reduced by 2/3 by Smart SIM Faster resolution time Lower cost per issue Lower total cost of ownership Visits cut in half
- 33. 33 Improve Your IoT ROI by üFocusing on Measurable Objectives in ROI üUnderstanding Your Real IoT Connectivity Costs = network communication costs + Support Costs üMinimizing Downtime Costs
- 34. 34 Thank You Dan Martensson,VP Cloud & Connectivity Business Line dmartensson@sierrawireless.com