As published by IoT Evolution World, September 12, 2017
As networks become more flexible, and network creation and management more agile – largely based on the growing densification of internet capacity and broadband access – it’s a wonder more Industrial IoT companies selling endpoint equipment, gateways, software platforms and more – are not accessing the value of managed services opportunities and recurring services in general.
Tier One network operators and large Internet access, cable and mobile service providers have forever dominated the landscape in delivering quality connectivity, meeting the intricate challenge of offering managed network services with a very high degree of quality.
Some companies argue they don’t want to compete with their connectivity partners, and are happy to “just sell the razor” while not worrying about selling the blades. Other companies are bundling services into implementations, and calculating that into their pricing. Still, other companies are giving their customers the choice to buy their “things” with or without communications subscriptions, purchasing directly from them or from a partner, with special pricing and flexible packages.
We caught up with Bruce Chatterley, CEO & President of Senet, a fast-growing LoRaWAN network services company specializing in connecting long-life battery end-points. Senet provides critical network infrastructure for smart parking solutions, environmental sensors and water meters, among other applications. These endpoints – in large quantities – communicate with the cloud for computing, reporting and analytics, ultimately enabling businesses to revolutionize their operations.
Despite Senet being only a few years old, the company continues to invest in Points-of-Presence, including in the “NFL” cities in the U.S., and more recently began expanding into global markets with its Managed Network Services for IoT (MNSi) offering.
They have been able to attract some of the most established IIoT companies, in the utility sector, enterprise market, precision farming and more, providing connectivity services in a variety of business models.
“There is a macrotrend in the industry we’re seeing in reports coming out from analysts and consultants, as well as in announcements coming out from large systems integrators,” Chatterley said. “It’s no secret that investors in businesses enjoy seeing recurring revenue, and stickiness which keeps customers close for many years at a time. One-off sales of systems are exciting, particularly as the IIoT industry continues full steam ahead – but adding higher margin recurring service bundles builds relationships and profitability faster.”
Earlier this year, Senet announced its work with Sensoterra, a European company with a “stake” in the ground, literally – one that measures various information optimizing water, fertilizer and addressing challenges associated with harsh winters, summer droughts, floods, pests and more. Sensoterra is bundling their solution with Senet communications services – three years of “free” connectivity is included, making it easier for customers to plan and buy.
“Just as there are many, many combinations in IIoT, and just as LoRaWAN is great for some but not all IIoT deployments, business models today must be agile to keep up with industry innovation,” Chatterley said. “We’re finding that when we get creative with our customers and partners, amazing things happen! They understand that we’re ready to go with not only the network services themselves, but with the billing, operating, and device deployment system that was built in an open framework, including powerful APIs.”
Another company bundling services into their offering is EnerTrac, a Fuel Delivery Automation solution, which Senet co-created.
EnerTrac combines integrated back office software and revolutionary eSensor technology with Senet’s LoRaWAN network to capture fuel tank levels multiple times per day. Each customer’s tank data is sent to the dealer’s instance of the cloud-based application to provide a continuous report on the status of every tank. Dealers can consolidate deliveries, forecast fuel usage and schedule servicing to avoid run-outs, contributing to significantly increased profits and an improved bottom line.
EnerTrac’s solutions are now beginning to demand a bundled service/sensor hardware solution, often bundling five-year’s connectivity service in the up-front costs of each device. This in turn gives dealers more flexibility in how they view the financial investment.
And how are the incumbent network service providers responding?
According to Chatterley, “Today there is a wide variety of traditional and non-traditional challengers. Big guys are the known brands, like AT&T, Verizon, BT, Vodafone and more. Challengers are companies like Senet. We believe we’re succeeding and growing fast because we are very nimble, very flexible and able to invest in very cost-efficient ways. Further, our entire cloud-based technology platform, and our company for that matter, was purpose built for the massive scale and flexibility required by this unique IoT market.”
Only one thing is certain though, according to Chatterley: “What is clear is that completely new business models are needed to move IIoT into a bigger sphere. You cannot apply a fixed model to this industry. You cannot apply a cellular model to this industry. Every aspect of the ecosystem – from devices themselves, to deployment and provisioning hardware, to security, scaling and management – is different. Putting it all together and orchestrating services, not just sensors, is so critical, and so much fun to work on within the most exciting ecosystem I’ve seen in my career.”
Chatterley says that the challengers, including all those in the LoRaWAN game, as well as those pioneering in other modalities like NB-IoT, need to be creative, flexible and good with math as economics are also completely disrupted in IoT. “The big players do bring assets and resources, but they risk getting stuck in an inflexible paradigm and not being able to move fast enough. Their lack of flexibility in business processes, business models and their technical debt, can hold them back and make them difficult if not impossible for innovators and ecosystems to work with.”
Senet and similar companies are not right for all IIoT and IoT deployments. “There will be places where applications need other connectivity solutions, but most analyst agree that approximately 55 percent of IoT is best served by LPWANs.
Chatterley sees Senet’s four main connectivity models being unique, with disruption including new ways of buying, selling and trading capacity:
- Public network that has been built and deployed nationally
- Hybrid model where some locations can be plugged into the public network, others need unique and secure private networks (in this case, application providers buy gateways and get revenue when others plug in)
- Wholesale model where customers buy bulk messages along with bulk devices and so forth, and sell big baskets of usage to systems integrators, often with multiple applications
- True Managed Network Services for IoT, where a network operator sets up their own gateways and use Senet’s back end OSS and BSS solutions
Regardless of the gateway type, they all can connect on Senet’s network and all of these business models are actively in place today.
“This is the vision,” Chatterley shared. “Cloud based, cloud-native centralized deployment and automation that can make dumb gateways and sensors smart. Deployments can start locally, then easily scale nationally and globally. With a next-generation, software-driven OSS/BSS platform – cloud-native and multi-tenant in our case – we can support single instances, multiple instances and any number of variations required by our customers.”
Chatterley pointed to their SenRa installation in India to prove out the cloud-native actuation. “SenRa set up a network operation a few months with a multitenant cloud-based solution. There were no special appliances – they used standard cloud servers and virtual machines, with no special appliances needed. The solution is 100 percent fault tolerant and redundant – it is an extraordinary example of a true case of virtualization of the network, making the creation of individual IIoT networks possible in hours, not days, weeks or months. We’re disrupting the old networking world, and accelerating our customers’ and partners’ roll-outs, and making a real difference in how IoT will ultimately scale up.”