Proving the Business Case for the Internet of Things

Four keys to IoT expansion

Jeremy Prince
April 15, 2020

Jeremy Prince, president of Sigfox in the USA, discusses how the IoT is transforming the enterprise.
Digital transformation in the enterprise has taken off in every direction. From artificial intelligence to robotic process automation, there has been a massive adoption of technologies to help companies become more efficient, connected and optimal in their day-to-day operations.
Year after year, analysts made huge forecasts anticipating that IoT adoption and expansion were going to be in the trillions. To be honest, this took more time than everyone believed. The good news is that it’s happening now, and analysts might have missed it again. But this time, it should be bigger than they think.
The keys to unlocking massive IoT are already available, especially when considering technologies such as 0G that are, by design, suited for massive IoT. This is enabling the huge growth that we are already experiencing to get even stronger. For me, those main keys are cost, energy consumption, a global network and simplicity.
IoT is all about extracting data from the physical world and using it efficiently to make a difference. This extraction comes with a cost (device, connectivity, maintenance, installation and so on) and you always need to ask yourself if this cost makes sense, if your use case has a positive RoI.
Take a simple example: a pen. You can probably build a device to monitor if your pen is open or not. But does this provide an RoI, and is it useful information? Probably not, knowing this will be more expensive than buying several pens, and the benefit very small, if any.
Cost is an essential key to unlocking massive IoT. If we take the example of DHL, one of our European customers, it’s easy to make the point. DHL uses several hundred thousand roller cages in its different offices. Each one of them is worth a few hundred euros, which adds up to a considerable amount of money.
Unfortunately, some offices would have too many, some offices wouldn’t have enough, and they’d sometimes lose track of them. It was very hard to optimise, inventory was a nightmare and led to increasing numbers of roller cages, costing the company a significant amount of money. In this context, and at that price level for the asset (the roller cage), it’s worth investing a few tens of euros per device in tracking, because optimisation, and therefore RoI, is pretty quick.
Sticking with the same customer, think about what will happen when you lower the cost of a device. Every time you do so, you open new possibilities. Today, there are already manufacturers that have reached a price point of €1 for some devices using Sigfox. The vision of the Sigfox founders is that we will one day reach devices that only cost a few cents. When we get to that point, it’s not only hundreds of thousands of roller cages that you will be able to connect, but billions of parcels.
As you can see with this example, the lower the cost, the bigger the number of potential use cases and volumes. Linked in some ways to cost is the second key: energy consumption.
Sigfox is by design for small messages. It has tailored a lightweight protocol to handle small messages. Less data to send mean less energy consumption, hence longer battery life. On top of that, if you look at a device you know well, such as your mobile phone, you have to charge it all the time because it uses loads of energy. One reason for this is because it’s always pairing with the network. Hence, if you put your mobile in flight mode, energy doesn’t go down that quickly.
On the contrary, Sigfox devices are probably asleep most of the time. They are designed to transmit when something triggers them, such as movement, or when they have been configurated to send a message, say every so many hours. And when it does send a message, given the very small size of the messages, and the specificities of the Sigfox technology, it will use an infinetismal and defined amount of energy. This is why 0G is truly optimised from an energy consumption point of view, and why Sigfox is probably the only technology allowing accurate battery lifetime predictions.
First of all, this is important because if you are a partner such as Michelin, you don’t want your container to suddenly stop being tracked in the middle of nowhere because the battery has gone down. It’s also important because you can save money on the batteries (less power needed) and on installation and maintenance. When you’re looking at massive loT, you’re looking at hundreds of thousands or millions of connected devices. So it takes a lot of time and human resources to install them. You don’t want to add regularly changing or charging the battery time to that. You want them to be there, up and running for a very long time.
The third key is offering a global network with a huge capacity. When you talk massive and large corporations, you automatically think of multinational companies.They need to have something that works seamlessly in different countries. You don’t want to have to go through the pain of dealing with different SIM cards, roaming fees and agreements. You also need to be able to predict accurately the communication costs.
With Sigfox, when your device travels to one of the more than 70 countries we cover, your device will be seamlessly sending data to the same Sigfox cloud. You will access it in the same way as if your device was in Mexico, the USA, South Africa, France, Hong Kong, Australia, Russia and so on. On top of that, the pricing will be crystal clear.
To take the example of the USA, you will pay from $1 to $14 per year depending on your chosen plan and volumes for the whole of North America – USA, Canada and Mexico. Sometimes, for as low as a few more cents per year, your device can travel to anywhere in South America and, if you add a litte more, it can travel anywhere in the world.
This is important because when you look at the potential RoI as a customer, you don’t have to factor in different countries, how long it’s going to stay in that country, what country is it going to go through or if you need to change SIM cards. You just choose your option and then you’re done. Offering real global coverage is vital if you want to address massive players.
The fourth key is simplicity. The basis of the 0G network is to be a simple technology to use.
Sigfox offers software based communications, where all the network and computing complexity is managed in the cloud, rather than on the devices. Sigfox operates the network and this cloud.
Our customers do not have to set up and maintain the network, with IoT becoming their IT team’s nightmare. They also do not need to go through complicated pairings between their devices and the network. Basically, they just turn the device on and it starts communicating. This is very important when you’re looking at setting up and maintaining huge volumes of data. It’s got to be simple if you want customers to adopt the technology massively. We want them to be able to focus on their business and driving revenue.
loT allows you potentially to do anything. That’s the beauty of it and also the danger of it. Sometimes you have to give up on a lot of ideas to come up with the right idea. Often it’s the simplest one that does the trick.
When you get the balance right, and use the right keys, the potential for the IoT is infinite. In a very few years, on top of the huge impact on the economy as we know it, some new companies will use the power of the right IoT technologies to revolutionise entire markets and create new ones. They will follow the steps of players such as internet giants that used a new means to create totally new business models and disrupt existing industries. In the end, the one thing that we can count on is that no one will be able to predict the full potential of the IoT and how much it’s going to change business.