Looking beyond the module
There is a significant shift in the way IoT is being perceived. From the excitement generated by the concept of ‘billions of connected devices’ - it’s now becoming much more about ‘delivering the data’. The hardware itself is now seen as simply required as a means to an end – in other words, it became a commodity market.
Of course, there’s no doubt that the market is still growing – and there’s certainly no argument about the potential of the sector. But it’s long been the view from here that delivering only hardware will not be enough to support a viable business model in the longer term, if you intend to be a meaningful player in the IoT market.
In order to be in the lead in a fast moving and competitive market, any business should be focused on delivering the most added-value to its customer base; it should be constantly looking for the maximum benefits that can be achieved from each product, service or solution.
It’s critical for businesses to study their customers’ needs – what they want to achieve, and the best way of meeting those requirements.
The rapid pace of IoT adoption and indeed its evolution as a technology means that the way customers procure their ‘networks’ needs to change. Hardware-only suppliers – and that’s where Telit started out – had good business initially, but as the technology matured, more and more new players are looking to compete on price alone.
Many companies did not survive or turned to acquisition or consolidation as the market moved on beyond the hardware to the added-value solution. In order to survive in that market, you need experience, expertise and the ability to scale to meet demand.
So we made a conscious business decision to aim high and to look to give our customers more. We looked at the business strategy, and how to bring more components into the offering. Our module is effectively a high quality, industrial grade phone that integrates into the machine and communicates the data. The next step is adding value to the data communications – that data needs to be sent somewhere so that it can be analyzed and actioned. That’s what an IoT solution is, it’s about a device that gets connected, transfers data, and that data becomes valuable information when channeled correctly.
So we look across the entire value chain, and seek out the areas where we can contribute – we don’t want to use the data ourselves, but we do want to enable more links in that chain, to avoid data being trapped in silos, and become a complete solution.
In the ‘old’ world, customers would try to design a system for their IoT needs themselves, with heavy investment, a lot of engineers, the need to negotiate connectivity with the service provider, and a requirement to design the complete back-end.
In our new world, there is no need for that weighty financial and resource commitment from our customers. We have the scale and the knowledge to deliver the complete solution: the module, the connectivity to the cloud, the ability to manage the data – both in the cloud or on premise – and the expertise to push the data to the ERP system or to another cloud to run the appropriate business application or software.
In our new world, it’s a complete IoT system, cutting the time to market by up to two years, and materially reducing the initial investment. By having the scale to deliver a modular solution rather than remaining as a component manufacturer, the price competition in the modem market becomes irrelevant – we are delivering a completely different IoT proposition.
By accelerating our capability to transform the way we do business, we are firmly positioned as the leaders in enabling the digital transformation of the vertical markets that we serve.
By creating an IoT solution, we are creating an ecosystem to deploy the IoT in a much faster and cost-effective process than in the past. Those cost savings, and that rapid time to market, become a bigger picture story, enabling our customers to deliver better service to their customers. So it’s not just digital transformation of the business, but of the industry. That’s the value of looking beyond the module. And there’s more to come.