Orange

With 10 million Orange Livebox customers in Europe and 5 million M2M SIM cards deployed globally, Orange is poised to be a major player in IoT. The company is hoping these figures, plus M2M APIs and a dedicated offering for IoT startups, will attract both entrepreneurs and customers. Key areas of focus for the company are personal services, connected home, healthcare, and smart cities.

Orange recently began marketing a connected home device, My Plug. This small outlet is configured with a GSM modem and an Orange SIM card. The device is compatible with all operators and multiple sensor types, so it serves as both a device and a platform for development--vendors and innovators can build additional services on top of My Plug to talk with and control all the devices in a home. Orange is marketing the device with 3 years of free usage in France.

On the enterprise side, the company has been very active in healthcare solutions. I spoke with Thierry Zylberberg, head of Orange Healthcare, at Mobile World Congress, and he explained the unique challenges presented by the healthcare vertical. “It’s the most complex ecosystem I’ve ever encountered,” he said. “There is no global answer--each country is so different. In France, for example, you need government approval to host medical data. Our job is to transport and store information. This is what we do and we do it well.”  When I asked him about the rise of activity trackers, he was quick to delineate the difference between trendy wearables that monitor and legitimate medical devices. From the point of view of a healthcare practitioner, “that data is garbage,” added Zylberberg.

New opportunities

For service providers, one key to profitability is to think beyond connectivity and to value added services. It helps to think of these emerging connected devices not as a physical thing, but as digital lifestyle integration points.

In the example of my Shine activity monitor, I would be willing to pay a small monthly fee (similar to SK Telecom’s Smart Green Button fee) to automatically enforce call policies on my smartphone and tailor my music selections during my morning commute based on how much deep sleep I enjoyed the night before. I would also be interested in providing my activity records to several health insurance companies to determine if I were a candidate for a discount.

“To avoid monthly monitoring fees, consumers are willing to let their service provider adjust their thermostat during peak hours,” wrote Tom Kerber, Director, Research, Home Controls & Energy, Parks Associates. "There is also interest in in-app purchases and advertising, which could be a source of incremental revenue for product manufacturers and service providers."

Imagine a consumer who is in the process of buying groceries. They could check their home inventory via a connected refrigerator with her smartphone. That’s a basic IoT use case, and there isn’t much room there for a service provider. However, the incremental value comes from service bundling, loyalty programs, incentives, and service automation. Instead of poking through the app or the refrigerator, a custom shopping list based on need, budget, dietary restriction, or any other variable could be created at any predetermined interval. The appropriate groceries could then be delivered, saving time and money, and the entire process of shopping could be re-defined. (This is something that NTT DOCOMO has been exploring.) A CSP could bundle all connected services in the home onto a single bill and offer incentives for using the new services, like a free movie download or an extra gigabyte of mobile data.

A smart meter could be configured to switch providers based on price per time of day. An inkjet printer could automatically order new inks as needed for a reduced cost. The opportunities are only limited by the imagination. This is one reason we’ve seen both service providers and vendors invest heavily in IoT start-ups and incubators.

Lessons learned

As we examine the IoT landscape, its players, and the latest market research, some key strategic guidelines emerge.

IPv6: Mobile networks must support IPv6 across the board in order to accommodate the proliferation of connected devices and assign a unique IP to each device.

CEM: In the consumer space, seamless, easy-to-use solutions will predominate. Likewise, personal devices must be beautiful or invisible if they are to catch on.