One of the practical issues with internet of things, as developed for enterprise customers, is that each specific industry vertical has unique apps, value chains and requirements that are hard for a “horizontal” connectivity provider to supply easily. But if 5G connectivity suppliers are going to be anything more than the network access supplier, some moves across the ecosystem, in one or more verticals, might be necessary.
To illustrate, each IoT platform, in each industry, requires hardware, connectivity, service enablement of many types and then the actual applications used in each industry. To the extent that it is “easier” to move into ecosystem adjacencies, rather than further across any ecosystem, the logical areas for connectivity providers might be either devices or enablement.
Thinking back many decades, the analogy is connectivity suppliers trying to diversify, in the competitive era, into devices or computing infrastructure. It has proven quite difficult to do so. Most service provider forays into the role of data center operation have produced mixed results. Only a few service providers have tried to create devices. In the pre-Internet era, one might note France Telecom’s MInitel, for example.
In the early 5G era, many are looking at edge computing facilities as a possible way to expand into the enablement role. A few connectivity providers believe they have the resources to emerge as app providers in connected car apps, for example.
In the consumer space, many connectivity providers have tried to become home security providers, perhaps with moderate success. In many areas of Africa, mobile operators have emerged successfully as suppliers of banking and payment apps.
Still, the point is that, longer term, movement into other key areas of the IoT value chain will be looked at, primarily because the financial return from IoT connectivity, while important, appears relatively limited, as dumb pipe connectivity products tend to feature.
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