James Savelli-Holt, Technical Pre Sales Consultant at Cerillion, investigates the hype surrounding the ‘Internet of Things’ and assesses the impact on business and operational support systems.
The renowned management consultancy McKinsey & Company reported in March 2010
that the growth of internet-ready embedded objects (‘Internet of Things’ or ‘IoT’) was on the rise along with the resulting promise of new business models, improved business processes, reduced costs and risks.
Four years on, with the deployment of ARM’s new Cortex-M
chip and the manufacture of the world’s smallest micro-3G transmitter, the u-blox SARA-U260
, this proliferation appears to have come to the fore. In fact, Cisco anticipates that the number of ‘connected devices’ will expand from 25 billion to 50 billion by 2020
with the market estimated to be growing five times more quickly than originally forecasted.
As the predictable pathways of information change and become an essential component of the global economy, IoT is opening a world of new ubiquity-based products and services into daily life.
Communications Service Providers (CSPs) traditionally reliant on largely static information architectures face challenges as new ways of creating value arises, and new competitors emerge. The latest Gartner projection for IoT predicts that by 2020, there will be $300 billion in incremental revenue
opportunity for IoT suppliers
, mostly in services. How, therefore, might this impact BSS / OSS suppliers?
Naturally, the array of products will invariably increase, along with it new methods of monitoring, mediation, provisioning, and charging usage. Smart metering technologies and dynamic charging models, such as real-time pricing, will become necessary to cope with the range of newly connected devices on the market and their myriad of applications.
Along with this, the commercial landscape changes considerably too. BSS / OSS systems will need to be able cope with new business models focused on high volume but low margin transactions. Account structures will pose new challenges, not only in terms of billing many thousands of services per account, but also requiring the administration and provisioning of connections in bulk. And without doubt there will also be a need to draw insight from these ‘Big Data’ environments and offer the flexibility to incentivise, provide and manage new wholesale intermediaries.
One-trick BSS / OSS platforms will no longer be able to effectively leverage the opportunity presented by IoT. Systems will need to become more advanced and offer more levels of configuration options; they will also need to become more automated in order to build additional recurring revenue streams, increase offering exposure and provide the necessary efficiency savings to CSPs.
Pricing models will be forced to flexibly account for wholesale and retail relationships, long-term and short-term client commitments, complex service bundling and multi-partner settlement. In addition, the production of clear and concise invoices detailing each connection or ‘thing’, and each additional service, in a fully automated way will become even more necessary.
Plainly, it is imperative that CSPs take advantage of this technological evolution and invest in BSS / OSS systems that offer the necessary headroom, flexibility and speed to reap the benefits of this rapidly changing environment.