BUSINESS

The advantages of fixed-price connectivity for IoT deployments

The advantages of fixed-price connectivity for IoT deployments

By Neil Hamilton, VP of Business Development at Thingstream

Enterprises wanting to deploy global IoT solutions across their network need a quick and easy-to-manage solution, allowing them to rapidly capture data and instantly act upon the insights gathered, passing these benefits onto customers or improving internal efficiency.

The exact connectivity solution required is not of paramount importance to businesses; they are happy to be lead by a IoT/connectivity provider on what is best for them. However, with so many potential overheads for enterprises wanting to quickly implement these solutions, costs can quickly spiral.

This necessitates a secure, fixed price solution with an all-in-one bundled pricing plan, essential in planning for future IoT outlay. According to McKinsey&Company[1], 127 new global IoT devices are connected every second, emphasising the need for businesses to have full visibility of every device in their ecosystem. This is crucial in intelligently pricing long-term IoT solutions for businesses, although there are a number of key factors to consider.

What to consider for fixed-price IoT connectivity

Before businesses choose the level of connectivity required, they must ensure they are paying for what they actually require, rather than what they think is needed. This starts with deciding what their connected ‘thing’ will need to send. In the Industrial IoT (IIoT) landscape, where fixed-price, sensor-based connectivity is becoming increasingly common, data packets of over 160 bytes per message and device rarely need to be communicated.

One of the most efficient connectivity to utilise when deploying sensor-based IIoT solutions is through the GSM voice network. Communicating across simple USSD technology, connected IoT devices can send up to 160 bytes per message across an established, global network, available in more than 190 countries.

Furthermore, if an enterprise needs an application which sends approximately 100 bytes of data every day, per device, there is little requirement in purchasing a 1MB per-month plan for every device on a high-speed, Low Power Wide Area Network (LPWAN) connection.

This setup makes commercial sense for enterprises, for a number of reasons. Global coverage ensures that connectivity isn’t lost when travelling across borders or roaming. An IoT connectivity provider that has contracts in place with multiple mobile network operators, in multiple countries, provides true, global connectivity, all under one fixed price.

Furthermore, these devices can be programmed to only send data when they are ‘active’, i.e when certain parameters have been met. Using a device that is not constantly connected enables businesses to better predict data usage in the long-term. Such a pay-as-you-go, subscription-based contract ensures enterprises are only paying for the data they need, breaking the traditional carrier model of ‘always-on’ connectivity, maximising longevity of the device through reduced battery dependency.

As a result, should a business be able to accurately determine how often messages need to be sent, it can therefore predict how much data will need to be used every month or year, allowing it to commit to a flat-rate IoT contract. Utilising this type of connectivity, with capped data in every message, provides flexibility for enterprises, dependent on business requirements.

This positions this type of IIoT messaging favourably when compared to internet-connected solutions. These can present serious limitations in terms of cost, unreliable connectivity when roaming and a lack of security. For example, utilising unlicensed connectivity spectrums, which are not entirely based on an existing infrastructure, could require increasing CAPEX to be invested in building networks, inevitably increasing subscription costs.

This again highlights the need for enterprises to consider their requirements; they must only pay for data and insights where it’s necessary. Taking this strategic approach will not only help businesses to accurately predict IoT expenditure; it will also enable a more intelligent means of collecting only the most vital data from connected devices, minimising unexpected costs.

Catering for changing business models

 Similar to any lease or hire agreements that consumers enter into, the most convenient and cost-effective way of enterprises purchasing connectivity is for all aspects to be bundled into one, fixed monthly cost, providing full transparency on monthly or yearly expenditure, providing total peace of mind.

As well as the level of understanding the level of connectivity, businesses must also work with their connectivity providers to understand how the collected data is processed and understood, and how to ultimately act upon the insights generated to provide a tangible business benefit. This will require an effective means of processing the data and the know-how to subsequently apply these insights.

This is increasingly important due to rapidly changing business models. Customers are no longer being charged for the physical use of equipment, rather the knowledge and data coming from a connected IoT device, enabling the end-customer to increase efficiencies.

From a IoT provider’s perspective, they must also consider whether systems need be developed to act upon the collected data, and/or data scientists need to be trained. These must be considered when pricing IoT connectivity and clearly communicated to the customer, ensuring they know exactly what their spend is getting them.

The importance of bundled IoT billing 

As the desire increases to rapidly deploy IIoT solutions across a wide range of equipment and devices, it’s increasingly crucial for enterprises to have full visibility of their costs, per connected device. Whether these solutions have been introduced to offer new revenue streams, improve internal efficiency or provide predictive maintenance for customers, an all-in-one package is the only way for a business’ IoT ecosystem to remain efficient.

As a result, IoT connectivity providers need to provide a complete, end-to-end solution that includes the collection, measurement, storage, processing and analysis of data – while automatically and seamlessly integrating billing and payment collection – based on a reliable network that can consistently deliver data, regardless of location.

Enterprises want to be presented with a fixed cost for all IoT devices that includes all of these features, enabling them to quickly roll-out IoT solutions, while remaining scalable per their requirements.

[1] https://www.mckinsey.com/industries/high-tech/our-insights/unlocking-value-from-iot-connectivity-six-considerations–for-choosing-a-provider

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