So often, the creation of a sustainable business model lags behind the development of the technology. Excited with the possibilities, the technologists charge ahead with their grand schemes but somehow neglect to develop the nuts and bolts and the backend required to monetize their achievements. In the rush to be first to market, developers are caught up in proving the technology and catching the world’s attention before they consider the less glamorous, but critical, need to make it pay for itself.
Such a pattern has been repeated in the world of M2M technologies.
The world has been captured by the potential of the Internet of Things (IoT), but despite the major investments which have been made, the BSS/OSS systems which are needed to commercialize IOT applications have been secondary until quite recently.
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This is a process or a cycle, however, which was seen earlier in the development of 3G and 4G, and there are indications that telcos are beginning to move and play catch-up in developing B/OSS for IoT.
After all, there is a lot at stake. If telcos sit on their hands all they will be providing is the network - the classic dumb pipe. And in a highly competitive world with disruptors lurking at every turn, that is the worst of outcomes.
A report from Verizon, released in April, underlines the urgency of addressing the opportunity and says the IoT has now “gone mainstream.” Data monetization is cited as the top revenue growth driver for IoT but only 8% of businesses are currently using more than 25% of their IoT data.
“The B/OSSs are lagging behind in their ability to support the existing and coming models,” says Alita Wong, Asia-Pacific spokesperson for Amdocs. “However, telcos are still in a good position to take the lead, as they have many assets, like close relationships with consumers. They are a trusted vendor, they have physical stores, they have relatively strong IT capabilities.”
Wong adds that service providers will need to upgrade their capabilities in supporting IoT monetization for the sake of the entire ecosystem, “but based on recent market developments with our customers, we do see that they are working hard to achieve this.”
At CSG International, product marketing director Siobhan Ryley agrees that B/OSS has been something of an “afterthought”, but also sees progress being made.
“The first phase was devising the connectivity and the remote sensing and the data gathering and the status monitoring and all the technology behind it,” she says. “And now we are seeing how all these nuts and bolts fit together, so you are seeing things like connected cars and home automation. I think we are entering a phase where people are saying ‘we do need to make a lot of money out of this because we have invested a lot.’ So now we are seeing the Tier 1 operators waking up to that - they are coming out with requirements so they can appropriately monetize the IoT.”
Keeping up with the IoT
The move to creating an effective B/OSS is complicated by the fact that the new IoT environment has advanced in its sophistication even from the world of mobile applications. It is a complex ecosystem of network and platform providers and application developers whose demands for their slice of the revenue pie mean that older B/OSS systems need a significant overhaul.
To help the IoT world realize its commercial potential, the B/OSS needs more than tweaks and customization - it needs major re-engineering to reflect an environment that is driven much more by consumer demand than the older supply-side model. It also needs to address the fact that most connections are via Personal Area Network technologies like Wi-Fi and Bluetooth, which present challenges for connection revenue.
SIM provisioning will become a renewed focus, with more flexible provisioning making it simple to deploy and scale, and collect vital usage information. Previously dominant billing methods of usage and subscription based charging will be insufficient. Billing will need to be real-time, device and service agnostic and support partner settlements between carriers, enterprises and content partners.