Does Ingenu’s CEO Search Portend Problems for Proprietary IoT LPWANs?

K. Weldon
K. Weldon

Summary Bullets:

• LPWAN provider Ingenu announced that CEO John Horn was leaving the company and that it has a new strategic direction with an emphasis on partnering with leading ecosystem vendors to offer turnkey solutions

• This may portend difficulty for all the proprietary LPWAN vendors, who face imminent, highly significant competition from Tier 1 mobile operators launching LTE-M and NB-IoT networks

The sudden departure of Ingenu CEO John Horn, who was also the former head of T-Mobile USA’s IoT division, may be a signal of things to come. The flurry of network launches and service expansions from proprietary LPWAN providers Ingenu, SigFox, and the LoRA Alliance over the last two to three years have given way to more recent and frequent news about LTE-M and NB-IoT build-outs and service trials from mobile operators. 2017 has already seen the majority of global mobile operators promising or delivering on their network promises with national LPWAN networks ready to take on customers. All of these networks have a common message, to lower the price of IoT deployments for lower bandwidth use cases such as non-real-time sensor data collection, while extending device battery life – an ideal combination for long-term deployments where devices may be out in the field without much action or human intervention. A surprisingly large percent of IoT deployments today are in this usage category (often estimated at 60-80%). These are the kinds of applications that used to take advantage of lower cost 2G networks, but the LPWAN providers expect huge growth in the number of connections on their networks over the next five to ten years.
Ingenu’s RPMA technology has a number of key benefits; for example it promises the ability to transmit thousands of messages simultaneously, important to scale to the millions and billions of devices predicted for the IoT. Ingenu also notes that RPMA provides better coverage for underground and in-building applications than other options, including cellular connectivity. But technical advantages do not always translate to market traction. As Ingenu has been building out its network in the U.S., SigFox and LoRaWAN providers have been signing up operator partners and customers – the LoRa Alliance now touts 500 members, 350 ongoing customer trials, and 46 operators. For example, Orange’s LoRa network in France already boasts close to 3 million connections. One strategy that some operators are leveraging is to combine LoRa with LTE-M in order to offer the best of both technologies, as LTE-M is generally better for bandwidth-intensive applications such as connected cars.

Ingenu notes that it is going in a new direction, looking to ecosystem partners to offer simple turn-key vertical applications. But it is not clear that this will provide it with traction quickly enough to offset the growth of LoRa and to a lesser extent SigFox. Even more important is the advent of standardized, licensed LTE-M and NB-IoT networks coming on-line this year from mobile operators. With this much competition, it is not clear that the LPWAN segment of the IoT market can support three proprietary network options. Many even predict the demise of these independent alternatives altogether. In the IoT Enterprise IoT Investment survey conducted by GlobalData in both 2016 and 2017, the percentage of enterprises surveyed that were using LoRa or SigFox declined by 55% in 2017, signaling that businesses are already less likely to go with an independent provider. The mobile operators are aggressively going after the LPWAN segment, which may be especially important to them, given the relatively low revenues they have generated from IoT so far (less than $1 billion a year on average) in spite of considerable investment and marketing efforts. They too appear to be having some difficulty selling/monetizing their services. In order to woo businesses, however, they can offer services that the independents cannot, such as a stable of end to end vertical solutions; bundles that include connectivity, device management, application enablement, and applications; consulting and professional services; cloud connectivity for device storage and processing; and in some cases, data analytics. Even if NB-IoT and to a lesser extent LTE-M are not as technically advanced as RPMA, they are likely to win over more customers.

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