Telcos face a strategic decision: is their Internet of Things (IoT) position that of a family or of a business?

Leo Tolstoy opens Anna Karenina with the line:

Happy families are all alike; every unhappy family is unhappy in its own way.

By this he means a family must satisfy all of a number of criteria in order to be happy; a failure in any one leads to unhappiness and there are more ways to be unhappy than happy.

So too with telcos and the Internet of Things – there are more ways to fail than to succeed because telcos must satisfy many criteria simultaneously for there to be a happy and sustained outcome.

This much is evident from many telcos’ public recognition that they cannot “do it all themselves”, and the subsequent search for partners or family members, an ecosystem, if you will, that in aggregate compensates for each others’ shortcomings.

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By GlobalData

This effect shows up in the case studies many telcos offer as evidence of their happiness.

Orange Business Services recently highlighted four vastly different but common IoT –dependent case studies; a smart city consultancy, healthcare for the aged, an asset predictive maintenance system, and a connected car system with three monetisation angles – use-based insurance, smart parking, and car sharing.

These use cases are all familiar to the telco IoT community. In the sense that their key success factors are common knowledge, the use cases are all happy families.

However, the deliverable in each case was unique to the customer.

While there is some common ground in each vertical use case, there is hardly any common horizontal ground between the use cases beyond a customer name and account number.

In that sense, from the telcos’ point of view, these use cases are uniquely unhappy families; they have limited vertical scale, and hardly any horizontal scale.

It is no accident that telcos’ greatest IoT success (to date) has come either from specialisation, as in connected car applications, or from providing connectivity.

Specialisation allows them to control all the elements (or family members) that could cause failure, while a pure connectivity play absolves them from family entanglements – but also minimises their revenue potential.

Vodafone estimates that connectivity can earn a dollar per month per connected device, but providing a response to a situation reported via that connectivity can earn 10 times that, whereas OBS notes how its IoT activities drive revenue in applications, networking and information processing.

Peter Thiel, the technology investor, argues that what makes a business happy is the opposite of families.

All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition.

Telcos should therefore consider, is their IoT strategy to be a family or a business – Tolstoy or Thiel?