Many companies, when they begin their IoT journey, try to keep it simple while still covering all their bases: they want to connect devices, get a good overview, have good service quality and security, and they also want to optimize and control costs. That’s a lot of things to consider and the solution taken is often the easiest: signing with a single supplier with a single technology.
What companies often don’t include in the decision-making mix is this: as their IoT needs become more complex the solution they start with may not be the solution they need as their business grows.
So while it may sound like planning the divorce before you even get married, when you meet an IoT supplier there is one question you should ask before any other:
“How will you help me leave you?”
Prepare for the supplier to be startled by you demanding the ability to switch (eUICC) before you’ve even signed on the dotted line – but make sure you listen carefully to their answer on how this will actually be done. If they don’t have an exit plan for you or are going to make it difficult or expensive for you to leave at some point you’re going to run into one very big problem: lock-in effects.
Choosing your supplier based on not just your initial IoT needs but the needs you might have in two, five, or even ten years can mean the difference between failure and success. You can’t predict the future but you know your business and your goals better than anyone else and should plan accordingly.
What Could Lead to Lock-in Effects
Some scenarios that might put you in a lock-in position
• You might be moving into markets you didn’t initially expect to be growing in – maybe another region, another country, or even another continent and need roaming services
• You may only need 500kB of data per month when you start but as you mature and customer demands rise, you might need 10 Mb per month
• Customers’ demands have changed and you need to involve different types of connectivity, such as cellular for some and another solution for customers with locations where cellular doesn’t work
• When you started you only needed your device to connect once an hour or once a day. Growth means it is essential for it to connect every minute in order for your business to not just continue to grow but to succeed
Moving to a new supplier can be – and usually is – prohibitively expensive. Here’s why: just say you have 50 thousand SIM cards deployed and you need to both deploy more and also use several different types of technology across several regions. Unfortunately, your supplier doesn’t offer different types of technology, nor does it have roaming connectivity. Additionally, it wants to keep charging you the same rate you’ve always been charged.
Because you chose a supplier who lacks the flexibility you now need and you didn’t have a long-term strategy in place you’re not in a great position to renegotiate the terms of your contract. If you want to simply switch suppliers you may find that you’ll have to go out into the field and manually switch out SIMs, which is both cost prohibitive and labor intensive. The result is that you’ll probably end up multi-sourcing your connectivity in order to meet the demands of your customers, making your IoT solution all that much more complex. Why? Multi-sourcing means multiple platforms to manage, and multiple suppliers to overview for cost control and quality of service.
In an ideal world from the moment you received your trial kit you were thinking long-term strategy and making decisions based on not just your needs of today, but also the needs you’ll be addressing in the future. Developing both a short-term and long-term strategy and involving key people in your organization, such as the CEO or the CIO, right from the start is key. A company-wide perspective, along with having the right people involved at ground level will help you successfully facilitate your company’s IoT transformation, as well as fully reap its benefits.
We don’t live in an ideal world, though. You have deadlines, you need to move fast, and IoT takes time to think through. The good news is that if you have fallen into a pitfall there are actions you can take.
Finding a supplier that is technologically agnostic and who doesn’t work the whole vertical is important. And working with a supplier who can offer enabling services will allow you to both unify your data and help you see how you can better use it.
This is where lock-in effects can be turned from a challenge into an opportunity. Enabling services allow you to aggregate and optimize your data, even if you’re locked in. And planning for the future with a truly flexible IoT supplier will mean the difference between success and failure.