OK, you know I said yesterday that telco APIs would fail to move the profit needle for both vendors and operators, unless they linked to features of transformational new services. There’s a Light Reading piece that calls the telco API picture as it stands into question, so what might those transformational services be? I’ve offered my own view of what would ignite a major change in network operator and vendor fortunes, but what do enterprises think? I have data from only a limited number, 93 to be exact, who commented on my prior blogs on telco APIs, and I’ll analyze the views here.
Let’s set the stage on a point. It’s very difficult to imagine how a telco AI strategy could be launched to drive a consumer service initiative. Consumer services today are almost exclusively linked to social and other experience delivery over the Internet. The market opportunity builds, crests, and passes too quickly for any standards to readily accommodate. It’s business-linked services that offer a potential opportunity for APIs, because the value proposition of a business service is less than fad and more one of specific transformation benefits. So how enterprises see API value may be how API value really is, for all practical purposes.
The key point that comes from my 93 enterprises is that they do not see any immediate prospects of a major increase in their spending on telecom services. Will you spend more in 2025? No more than we have to. Are you looking at projects that could increase spending? No, we’re looking at ways to cut it. What could your operator do to increase your use of telecom services? Make them cheaper. There was a time a couple decades ago when these answers might have been different, and a very short period during the pandemic when that might also have been true, but not today. Business buyers don’t see an immediate value to this whole API thing.
Inside this 93-enterprise group were 18 “futurist” planners, looking to drive business transformation. They are the only ones likely to have developed a view that goes beyond those “immediate prospects”. What are they thinking might be an aid to the transformation they hope for? Could it be offered as an API?
Well, maybe. Of the 18, 12 said they’d be very interested in having telcos offer APIs linked to a variety of public IoT sensors. Some of these enterprises are looking at industry-specific projects, often in transportation, and others recognize that a lot of their workers (40%, overall, as I’ve noted in past blogs) are out in the wide, wild, world and need to be supported with real-world activity context, conditions, and intelligence. But note that what this group is really asking for is telco deployment of public IoT, and the API is only how they’d get the information.
The likely founder of the IoT concept, Kevin Ashton of MIT, said this in 1999: “If we had computers that knew everything there was to know about things, using data they gathered without any help from us, we would be able to track and count everything and greatly reduce waste, loss, and cost. We would know when things needed replacing, repairing, or recalling and whether they were fresh, or past their best.” I think this clearly shows that the origin of IoT was linked to a concept of public sensors, because gathering that scope of data without human involvement couldn’t happen any other way.
But how do you get public sensors? Obviously not by having people go out in install sensors here and there. Two things are needed. First, you need a trusted entity who will assure that the sensors are not misused, meaning used for something illegal or that compromises privacy. Second, you need to have an entity who can invest in the sensors.
Who do enterprises trust? For that, I’ve got 434 responses, and it’s not government (trusted by 28%) or credit/financial companies (trusted by 44%) or tech companies (trusted by only 12%), or even utilities (trusted by 54%) it’s telcos, who are trusted by 79% of enterprises. I think this shows that only utilities and telcos have the level of trust needed to build a chance of getting public IoT out there.
In terms of investment, you only have two paths to get public sensors deployed, because it’s clear that the deployment would have to resemble the infrastructure-building a public utility would do. One is to launch a new IoT utility or leverage a current one, and the other to take advantage of the utility past of the telco world. Utilities are characterized by low internal rates of return (IRR), which means that they can be capital-effective on projects with a low ROI, and can tolerate a high “first cost” while they build out and prepare for their service.
You can see from this why enterprise transformation visionaries would see telco IoT deployment as a positive, but if you dig in a bit it’s even more obvious. You cannot simply deploy public sensors; they’d be attacked, hacked, exploited in minutes. You need to deploy sensors that are “public” through their APIs and services based on them, and that is something that best fits the telco model. Electrical utilities have a similar infrastructure, but often have a very limited geographic scope compared to a telco. Telco networks already gather data, telco services are regulated in a way similar to the way we’d need to see public IoT regulated.
But of 88 operators I chat with fairly regularly, none said their company was exploring public IoT deployment, and while visionaries in 17 of them said they believed it was a good idea, none of the 17 believed their companies would be willing to take the step any time soon.
What would convince them? Of that 17, the top answer (by 12 of the 17) was government subsidization. The question there would be “what government”, and what legal framework would be needed. In most cases, legislation would be needed, and in addition there might have to be regulatory changes adopted. For sure, there are policy issues that relate to how any public investment could be protected, and how the deployment would be shared. In addition, there’s the question of the terms (financial and usage policy) that would be imposed to use the sensor/data population.
Government subsidization is possible, but not likely in the near term, and less likely absent public pressure, which isn’t going to come about without some highly publicized successes, which as it happens was the second-most-often cited convincing factor with support from 8 of the 17 (some gave multiple answers). Some believed that early success could come about through local subsidies/investments, but most thought it would have to be brought about by players like Google, who they believed launched local government broadband initiatives by sponsoring FTTH in some under-served areas. They may be right.
