Adopting platform-based business models to successfully compete in the digital ecosystem

One of the biggest challenges for CSPs is how to differentiate and add value in a saturated marketplace. With a tsunami of tech change upon us – IoT, Cloud, NFV/SDN – followed closely by e-SIM, 5G and AI – surely there is a way to leverage this new technology to create growth opportunities?

Let’s take a closer look at the combination of 5G and IoT. 5G is built on a foundation of four technology pillars relevant to IoT:

• Higher throughput for enhanced mobile broadband – addresses ever-higher throughput requirements e.g. mobile-gaming and enhanced video services
• Ultra-reliable low latency communications – enhances many of the existing industrial, medical, drones and transportation requirements e.g. autonomous drive
• Greater scalability for massive machine type communications – caters for the broader set of IoT applications with a high number of endpoints i.e. the connected world ecosystem
• Tailored networks – with network slicing it will be possible for enterprises to “own” their own private 5G network, precisely set up according to their specific business needs. 5G will certainly have much greater capacity across a much wider range of spectrums, but it will also use that space more intelligently, assigning only the resources necessary for each application.

From this it’s clear that 5G is more than just another network technology – rather it is an enabler for a set of IoT use cases which require specialized connectivity solutions leveraging high data rates, rapid scalability and very low latency.

Use cases involving IoT and 5G will unwittingly turn vertical players into resellers of connectivity – every autonomous drive car will be connected, so by selling cars they will be reselling connectivity – every new healthcare device with sensors will share data, so healthcare players will become resellers of connectivity. While the connectivity will be embedded and transparent for the end user, there are still orchestration processes that need to be performed behind the scenes – from configuration and monitoring, to support and settlement.

Furthermore, use cases for 5G, IoT and NFV/SDN are far more reliant on a partnering ecosystem to generate attractive return on investment, which means that driving innovation through partner ecosystems has become increasingly important, if not essential.

Every use case that will leverage 5G and IoT involves an ecosystem of technologies, applications and business partners (from devices, connectivity, security, analytics and AI, all the way to vertical-specific applications). What this implies is that every player/every enterprise who wishes to leverage such a use case will have to facilitate an ecosystem of partners to realize it. Alternatively, for enterprises who would prefer someone else to manage this for them, they will need to partner with an ecosystem facilitator.

CSPs can leverage 5G and IoT use cases through their network ownership and expertise to deliver a piece of the overall solution – the specialized connectivity. But in addition to this, CSPs also have a unique opportunity to become true digital innovators – CSPs can push the opportunity a huge step up the value chain by creating new business models leveraging a partnering ecosystem, thereby becoming the ecosystem facilitators themselves.

Regardless of the play you choose to make, here are some things you’ll need to consider:

• Managing a partner ecosystem – can you integrate with your partner IT environments, span complex value chains and manage revenue share arrangements within a full partnering ecosystem?
• Ecosystem of partners – how easily can you collaborate, co-invent and innovate with them?
• Managing new services – do you have the capabilities to easily onboard and manage the new technologies and services required to create specialized solutions?
• How will you package up services into complete connectivity solution offerings priced right for the vertical market players?
• How can you easily, consistently and non-intrusively put the control over specific business capabilities into your clients’ hands?

And finally, consider carefully how you plan to start with any of these models without disrupting your existing business. Is your current IT capable of handling the complexity of selling and fulfilling such advanced offers – whether it’s true seamless connectivity solutions, supporting e-SIMs, or managing the combination of connectivity solutions, coupled with vertical specific technologies and applications, and IoT devices – all potentially supplied from an ecosystem of partners?

For more information please visit the blog on TM Forum Inform