The internet of things (IoT) is having an increasing influence on companies’ revenue and profits. McKinsey estimates that by 2030, the economic value of IoT will be between $5.5 and $12.6 trillion.
IoT’s influence can be felt across many different industries, including logistics and transportation, fleet management, smart asset management, connected cars, smart cities, geo-fencing, micromobility, energy and utilities, and consumer appliances.
In order to put an IoT strategy into action, organizations need to work with a variety of external vendors across the hardware, software, and services spectrums, in addition to investing in their own internal IoT capabilities.
Procurement teams are critical to the success of IoT solutions. Procurement focuses on optimizing expenditure, velocity, and enablement while also accounting for the complexities of maintaining IoT products and services in an ever-changing technological landscape.
IoT connectivity is a frequently overlooked opportunity for product optimization. The right connectivity choice can gain efficiencies and reduce costs across the entire IoT technology stack, but is often treated as a separate part of a solution.
Table of Contents
The IoT technology stack
IoT is a collection of related fields and not a single distinct one. When analyzing solutions, procurement teams will look at a multitude of vendors and technology options under the three layers of the IoT technology stack: Device, Connectivity, and Cloud.
At the device level, decisions have to be made on the type of sensor suitable for the use case. The device might include a sensor for measuring location, temperature, humidity, acceleration, or any number of things happening in the surrounding environment. The device will then need software on it for managing the retrieval of data and possibly interacting with its surroundings as well.
This data then needs to be transported from the edge to the cloud. The connectivity layer is responsible for this. Starting with the modem on the device, data is transported through a wireless or wired medium to the cloud. You’re probably thinking about cellular, which is why you’re reading this report, but you might also have use cases that call for Wi-Fi, Bluetooth, satellite, or Ethernet.
The cloud is where data is ingested, stored, and processed at scale, saving edge devices from the need for unnecessary complexity and energy consumption. The cloud is also where applications are made that people interact with and extract value from.
Traditional cellular connectivity
Traditionally, cellular connectivity for IoT is seen as a pipe that ships data from devices to the cloud.
When choosing a provider in this case, procurement departments can only consider coverage, network technology availability, SIM card costs, and subscription costs.
For companies looking to scale globally, one option is to partner with major mobile network operators (MNOs) in each geography where the company operates. Thus, the sourcing strategy needs to take into account the long-term maintenance of relationships with multiple carriers.
Alternatively, it’s probably better to partner with a mobile virtual network operator (MVNO) that offers global coverage across a range of MNOs.
Network technologies with low power consumption, such as LTE-M and NB-IoT, are particularly desirable for power-constrained devices, which make up the majority of cellular IoT use cases. They have power-saving features such as PSM and eDRX and are optimized for IoT.
Cellular IoT pricing is typically broken down into regions, such as Europe, Africa, and North America, with subscription packages for data pooling across fleets or pay-as-you-go data based on active devices. Finally, the cost of the desired SIM hardware, such as MFF2 SIMs, which are soldered onto devices, will come into play.
In this traditional scenario, the distribution of costs across the technology stack would typically look something like this:
This is a narrow view of the capabilities of IoT connectivity.
In order for IoT to scale, we believe connectivity needs to play a more active role when connecting devices to clouds. That’s why Onomondo has integrated its core network with over 700 local networks (RANs, or radio access networks) worldwide. Our unified global network gives us the possibility to embed software in the core network, which helps devices and the cloud operate more efficiently.
IoT connectivity made for IoT
IoT doesn’t need traditional connectivity; IoT needs connectivity optimized for its needs.
By building a global, unified network for IoT, it’s possible to unlock new value within the network and optimize across all three parts of the IoT technology stack.
Now, picking the connectivity partner that offers the most value involves more variables than just coverage, network technologies, and SIM cards.
Here’s what you should think about when procuring IoT connectivity.
Reduce the cost of managing SIMs
Companies are typically locked into monthly SIM fees from the moment they activate their SIM cards. New devices accumulate cost as they sit on shelves. Processes need to be put in place to regularly activate and deactivate devices to avoid costs on inactive devices. End-of-life devices must be tracked and deactivated.
This old-school telco mindset is stifling IoT. Companies need simpler SIM handling to scale their IoT solutions.
IoT products are a lot simpler to manage without having to worry about SIM activation and deactivation or workarounds to avoid unwanted fees. That’s why Onomondo offers always-active SIMs that don’t require activation and deactivation management. Instead, you only pay for SIM cards that send data in a given month.
Always-active SIMs are a good idea for a startup that wants to make devices quickly but is concerned about the high cost of SIMs and data. Similarly, if you run a business and want to reduce the cost of your IoT-enabled business or fleet of devices, always-active SIMs can help.
Eliminate subscription overheads on devices
Closely linked to the SIM activation/deactivation management problem illustrated above, a big headache in IoT is managing cellular device subscriptions. It’s usually the case that SIMs are part of a subscription that keeps ticking even when devices aren’t creating value.
Onomondo’s pay-as-you-go data pricing allows costs to scale directly with revenue or data value. As a result, you can concentrate on building a better product. For example, don’t waste time figuring out how you’re going to pay 3 EUR per month for all devices, regardless of data value to you. And being tethered to fixed-term data contracts is something you want to avoid with a ten-foot pole.
Onomondo offers flexible data pricing with billing for active devices only, delivering a pay as you go model that you can pass on to your customers, with each IoT “ping” costing as little as €0.02. Customers can buy as many SIMs as they need to meet their quarterly and annual goals without having to worry about the exact date of deployment, separate testing connectivity packages, or shelf life time.
Streamline and optimize development
Prior to deploying IoT devices, it’s important to identify as many issues as you can and optimize hardware performance.
Testing solutions in labs will give you access to the data you want regarding connectivity-related issues because you can tap directly into the device and lab-based cell tower to get data on a multitude of scenarios.
But nothing beats testing solutions in the field prior to deployment. So why not use your future production network as the development testbed?
Onomondo makes it possible to test IoT devices on a live global IoT network. Debugging devices using 2G, 3G, 4G, NB-IoT, and LTE-M has never been easier. TCP, LTE, Attach, HTTP, and CME errors are common cellular problems that you can quickly analyze and resolve on Onomondo thanks to our deep network insights.
Learn how to remotely debug and fix problems with IoT devices and how Onomondo reduces downtime with timely global network diagnostics: How to troubleshoot common issues with IoT devices.
Increase uptime with faster troubleshooting
Whether you have deployed a few dozen or tens of thousands of devices, you want real-time data on their behavior so you can intervene if needed.
What if 200 devices in Southeast Asia suddenly stopped working? Maybe you’ll decide the technology isn’t reliable and scrap the whole project. Or maybe you’ll bear the cost of sending someone to the devices to figure out what happened to them.
Typical connectivity is riddled with barriers to troubleshooting deployed devices. Third-party carrier (roaming network) customer service tickets and lengthy wait times are commonplace when problems arise.
Onomondo provides its users with a single operator to call on for all networks. When using Onomondo SIMs, real-time troubleshooting and self-service logs (traffic monitor, signaling logs, network logs) are available via our API or platform.
Having immediate access to deep connectivity insights allows you to identify issues and take corrective action, reducing downtime by days and increasing project ROI.
Optimize power and data consumption
One of the main goals when developing power-constrained (aka battery powered) IoT devices is to minimize power consumption.
Typically, developers focus on picking the right components, keeping device processing to a minimum, and using modern LPWAN network technologies (LTE-M and NB-IoT).
But much more can be achieved when optimizing devices. Connectivity takes up a significant amount of the power budget for IoT devices. A regular data transmission of 100 bytes to Azure IoT Hub or AWS IoT Core takes 30 packets, over 3 seconds, and 8500+ bytes on average.
That’s why Onomondo developed a new type of IoT infrastructure architecture that moves connectivity logic off of devices and into the core network. We call them Cloud Connectors, and they’re available for Azure, AWS, IBM, and other cloud IoT platforms.
In short, Cloud Connectors do the following:
- Remove the cloud SDK, attack vectors, and overhead from the device.
- Place the SDK and the overheads within the network.
- Future proof devices for any changes in the cloud.
- Allow for smaller batteries and reduce the bill of materials.
With the Onomondo Azure IoT Connector, the above example of a 100 byte payload to the Azure IoT Hub is now limited to 1 packet, an unmeasurably short time span, and less than 150 bytes.
By optimizing your IoT devices with Onomondo Cloud Connectors, you can save up to 95% of the data you use and up to 70% of the power you use during active transmission. And we have more low-power IoT innovations on the way.
The actual connectivity cost
Put simply, procurement departments must plan for the future across the entire IoT technology stack when establishing an IoT connectivity strategy.
By using embedded software in a globally distributed core network, companies stand to gain significant cost savings throughout the lifetime of their devices.
You need to think about the how to minimize total cost of ownership for cellular devices.
Here’s a rundown of how IoT connectivity can help you save money on all of your IoT product’s direct and indirect costs.
All of the innovations presented in this document influence the actual connectivity cost and should be thought about when procuring IoT connectivity. If you’re just focusing on cheap data, you’re not having the right conversations.
Onomondo has more to offer than what can be presented in the scope of this document.
Download the full buyer’s guide to procuring connectivity below or reach out to one of our IoT experts to find out more.
