This is, again, where platforms can play a significant role, in both simplifying authentication and provisioning and choosing the best network transport as defined by policy, use case, and service level agreement. In many ways, IoT presents the perfect use case for NFV and SDN.

RacoWireless has been active in this space by providing service providers with a platform that matched the best network transport for each use case. Not all services in IoT require high bandwidth and low latency, or must account for mobility. A smart meter, for example, can trickle bits of usage data once or twice a day, and is a static device, so it could utilize local Wi-Fi to talk to home base. A connected car, however, is a different beast entirely, as is a cargo ship, which must rely on satellite connectivity for asset tracking. Raco has published a free e-book titled IoT for Dummies, which answers a lot of these questions and is a humorous read, to boot.

The data play

The amount of data that will be shuttled through communications networks as a result of the IoT revolution is staggering. It’s also very valuable, both to the consumer and to enterprise. Imagine a microwave that scans a barcode on a food item and can automatically cook it properly based on information retrieved from the internet. Or a refrigerator that is integrated with a “healthy dieting” smartphone app that automatically places orders from PeaPod when supplies are low. The ability to shape the conveniences of everyday life has never been greater.

At the same time, the ability to understand consumer behavior and better align services and products with demand has never been greater. Imagine that same refrigerator, but that it can also send a coupon to a mobile device for a specific brand of tofu when a consumer enters Whole Foods. The data play for CSPs is enormous, and requires real-time big data and analytics engines to reveal new insights that can be monetized. Brands, retail outlets, insurance companies, content providers, advertisers, and many other groups are highly interested in this kind of data. The data play is much more lucrative, over time, than the “pipe play", because connectivity is becoming commoditized and behavioral data holds intrinsic value.

Hurry up and wait

The IoT ecosystem is still evolving--universally adopted standards are quite a ways off and, as a result, device interoperability and security concerns abound. Since consumer demand is linked to security and convenience, revenue from the consumer space (wearables, smart home) is unlikely to make CSPs millions in the next two or three years. However, connected cars, utilities, manufacturing, and municipal projects offer attractive growth verticals in IoT.

For service provider organizations, neither the devices nor the Internet are likely to be the long-tail value in IoT. Instead, it is the service environment, security, and data that offer the best path forward. The smartest strategies are essentially: the platform play, the data play and the QoS/QoE play. The final strategy also fits in line with the network virtualization trend, and IoT may be a wise area for CSPs to test NFV and SDN solutions.