Beyond the dumb pipe: The IoT and the new role for network service providers

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Beyond the dumb pipe

The IoT and the new role for network service providers

"Beyond the dumb pipe: The IoT and the new role for network service providers" is a collaborative effort between Philip Wilson (a director in the Telecommunications, Media, and Technology practice at Deloitte Consulting LLP) and Michael E. Raynor (a director with Deloitte Services LP and the Innovation theme leader for Deloitte). The report shows that with the rise of IoT, smart and connected objects, companies will be able to compete not only over functionality but also over the information created by the use of products and services. Mapping the options for sensors (legacy versus new) and communications networks (best-efforts versus managed) reveals different categories of IoT deployments. It is by deploying managed communications at reasonable price premiums in ways that work today while opening a path to tomorrow that (communication service providers) CSPs and companies relying upon them to deploy IoT solutions can move beyond the dumb pipe, creating an IoT that is smart at every level.

Viewpoints / key findings

Deloitte's analysis-based view for telecom operators, device manufacturers, and application developers on how to deal with and profit from rapidly changing consumer behavior toward 4G networks, smart phones, mobile Apps, mobile payments, and wearable devices is as follows.

A summary of our key findings:

1. Sensors and networks: A value-creation framework

  • The rise of IoT makes companies compete for the information created by the use of their products and services. Mapping the options for sensors (legacy versus new) and communications networks (best-efforts versus managed) is very important.
  • Sensors: Companies face a dilemma whether to augment existing sensors or to make the high cost choice to replace legacy sensors with smart, connected devices.
  • Communications: Best-efforts communication networks have disadvantages, while managed networks can better satisfy customer needs.

 

2. CSPs and the IoT: What’s now and what’s next

  • Customization: There are currently few cases of customization, lower costs and increased modularization are needed to improve customization solutions.
  • Cost: Replacing sensors can be costly and complicated. Deploying IoT can rely on upgraded communication networks based on legacy sensors.
  • Control:  Managed wide-area communications can bring a series of new approaches.
  • Convenience: Legacy sensors have limitations in cross-network environments, but are more user-friendly in managed communication networks.

 

3. The Telcos’ role

  • Communication service providers should build partnerships with companies, connect with IoT through managed communication networks, and capture its full potential.
  • CSPs need to implement QoS capabilities in a standardized way and continue to evolve technologies, as well as fairly price managed communication network services to improve customer loyalty.

 

4. Toward a new partnership

  • The close connections and structured relationships between IoT system's sensors and actuators can improve the efficiency of company processes, and combining sensors and communication networks can create value.
  • CSPs and companies that cooperate and deploy managed communication network services at reasonable prices can create smart IoT solutions.
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