Service Provider Selection for IoT Varies Substantially by Vertical Industry – Good News for Telcos
August 24, 2016 Leave a comment
- A recent Current Analysis survey on IoT investments showed that companies vary substantially on what kind of service provider they trust to provide them with consulting and professional services.
- While equipment vendors and professional/IT service providers were selected most often, enterprises in several verticals consistently preferred communication service providers or software providers for integration and app development.
Enterprises investing in IoT deployments nearly always need help along the way. Some go to third parties for proof-of-concept testing and upfront business and technical consulting, while others need help in assembling and managing disparate hardware and software elements. Many also need an outside developer for application development and many go to professional service providers for data analytics. In a survey conducted this spring among 1,000 U.S. and global enterprises, Current Analysis asked businesses what kind of provider they sought out for these functions; choices included equipment vendors, software providers, professional/IT service providers, and communication service providers (CSPs).
Overall, equipment vendors and professional services companies were chosen most often; for example, 46% of the 1,000 enterprises preferred equipment providers for systems integration, while 47% preferred professional services companies. But, there was much more disparity among respondents when looking at the base by their vertical industry.
- Companies in education, manufacturing, and travel and leisure verticals noted that they generally looked to software companies as their preferred provider for IoT systems integration.
- CSPs were selected as the preferred provider for systems integration among finance companies, government agencies, media and entertainment, retail, and transportation companies.
- A bit surprisingly, CSPs were also selected as the preferred provider for application development by automotive, finance, government, media and entertainment, retail, and transportation companies. In fact, they were noted as the preferred provider for this function by a third of survey respondents, i.e., 31% of the 1,000 enterprises.
- Unsurprisingly, professional/IT services companies were chosen most often as preferred providers for business and technical consulting, proof-of-concept testing, and data analytics across all vertical industries.
These results highlight the progress CSPs are making in delivering value-added services for IoT, in spite of the fact that they are often associated with connectivity-led, low-ARPU deployments. It makes sense that many of their existing customers would choose them for systems integration, as they often position themselves as bringing together the ecosystem to provide much-needed simplicity via a one-stop shop. CSPs are also targeting many of the verticals that noted them as the preferred provider, such as retail, transportation, and financial services. To see that they were also viewed so favorably as providers of application development was surprising, but CSPs are increasingly getting involved in providing the applications used for IoT, either by engaging in custom development efforts themselves, by providing development resources and toolsets to other developers or directly to enterprises, and/or by bundling third-party applications along with equipment, management tools, and connectivity.