An interesting battleground has developed in the data capture part of our big data analytics reference architecture, related to IoT connectivity (highlighted in the image below).
There is a complex and shifting landscape of technology options with varying vendor interests at play. When it comes to connecting your IoT devices – who is going to win out – Sigfox? LoRa? NB-IoT? Or one of the others I’ve offended by leaving out of this list…? And not forgetting that around 70% of all M2M is over short range technology like Wifi today anyway.
Like many developing markets, there is a technology standards and market share battle being played out here, but it’s more complex than other comparisons like Android vs iOS (ignoring Microsoft here 🙂 ) or the classic oft-quoted battle between VHS and Betamax. Whilst it may not have felt like it at the time, these competitions were between broadly similar technologies that really competed on the edge cases. This one has a few killer features over that one, was a bit faster/a little more storage/higher quality/better user experience etc – but 90% of the functional and non-functional footprint was pretty much the same. Most users didn’t care – the fear was more about getting stuck with the wrong one that doesn’t have a viable long-term support model and ecosystem.
In the low-power wide-area networks (LPWA) arena, it’s less of an Apple-Google comparison, and more of an apple-pears comparison. There are really sub-markets here, and comparisons across them are not as helpful. Some IoT use cases can live with higher comms latency and low bandwidth where battery-life is paramount and some absolutely cannot. Some scenarios mean a mains-powered device is feasible so power consumption is not a constraint. Another key design constraint is cost – for IoT volumes to reach the fantastical projections that have been published, the price points for devices and data transmissions need to drop a long, long way.
Size of the prize?
An interesting dimension to this as reported nicely by the Register here is that the chicken and egg relationship between volume and installation/run cost means that there’s not really a fat new revenue stream in it for the telcos. This is despite the massive focus they are paying to IoT as a means to incremental revenues in an otherwise saturated mobile market. To summarise, if estimates that global mobile subscriber revenue are correct at $3.7tn by 2020 (excluding M2M/IoT), then even 20 billion connected IoT devices using data at 20 cents a month (assuming that the majority of devices don’t need to ship huge data volumes really) means that IoT/M2M data only contributes 1.3% growth on top of subscriber revenues. Not exactly game changing for the telcos – although no doubt the attractive of IoT as a revenue stream to telcos will vary by geography.
Back to the standards debate, my expectation is that there is room in the market for at least one dominant standard (and standards owner) in each market segment. At the Sigfox end of the spectrum, with 12 bytes per message, low (e.g. <200) daily message volumes but potentially years of battery life – then you’d expect long term TCO to be lower than NB-IoT which can achieve 250kbps. One risk for NB-IoT I guess is that it tries to be all things to all people – offering low power consumption but not low enough to have truly unmaintained devices, and higher bandwidth that is overkill for many use cases.
An attraction for telcos is the ability to reuse their existing mast infrastructure to support NB-IoT, but this is also a potential weakness as it could mean devices that are “bloated” (in a firmware/silicon sense) due to their mobile telco heritage. This would be a cost/complexity/speed-to-market tradeoff that would mark them apart from the more cut-down offerings from LoRa and Sigfox.
I guess all this depends also on how big each sub-market turns out to be – as we know planning is guessing, but one analyst forecasts that 14% of connections in 2024 will use LPWA technology. So there’s plenty to shoot at. The issue for buyers will be whether they end up with a big sunk cost of LPWA devices out in the field that have a wonderful 10 year battery life but the standards and vendor they rely upon lost the standards war 5 years into that 10 year period!
Addendum 23rd Feb 2017 – Interesting news related to this post, with Telefonica doing a deal with Sigfox and therefore offering both Sigfox and NB-IoT to the market. Covering both bases, but at the exclusion of LoRaWAN.