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Enterprise and M2M: The Network Angle

Mon, 10/15/2012 - 9:18am
Elliot Drucker

Over the past few years many savvy businesses have come to appreciate the enormous potential of harnessing specialized wireless features to improving workforce productivity, reduce costs, and indeed provide the very basis of whole new product and service offerings. It’s taken a while – some would argue far too long – but network operators have finally awakened to the opportunities afforded by serving the needs of enterprise customers. Most importantly, the more progressive carriers have invested technology and marketing resources into understanding and meeting the specialized requirements of specific industries and individual enterprises. 

Such resource investments can be risky.  It takes much more than a couple PowerPoint presentations to sell a Fortune 500 company on: (a) how a specialized wireless service or feature can improve their bottom line and (b) why your network is best suited to deliver it.  But the rewards for success can be significant. Or not. It turns out that the economics of providing enterprise solutions can be as complex for network operators as the technologies involved.

In order to understand this, it’s helpful to stratify the underlying technical platforms for providing enterprise wireless services. At the top, wherein the requirement for specialized network technology is at a minimum, are application-based services that communicate over the Internet and run on mobile operating systems like Android.  In many cases the network operator will be essentially uninvolved in the development and marketing of such applications, but their operation can have a significant impact on the wireless network. Consider, for example, an application that provides mobile video conferencing. With the new 3G and 4G-connected tablet computers having integral video cameras, this sounds like a real winner, but the high-bandwidth requirement and very low latency tolerance for such a service could hammer affected areas of the serving wireless network.

This is why operators need to be careful in defining and enforcing rules for broadband utilization by enterprise customers, even if (actually, particularly if) the enterprise contract is mainly for providing conventional network service. A simple monthly data cap, as in a shared “bucket of gigabytes” is not an adequate protection. The problem is peak network loading, not monthly throughput. This is not to say that enterprise customers have to be prevented from utilizing bandwidth-hog apps, but it does suggest that the network operator needs to receive sufficient revenues for such services to support the costs of delivering the required network capacity.  One way to do this would be to base enterprise pricing not just on monthly utilization but also on peak throughput demand.

A second level of technology stratification may utilize specialized mobile devices that are geared to unique requirements of a particular enterprise. An example would be the handheld computing devices, carried by express parcel delivery personnel, which have means for scanning package codes, recording and uploading recipient signatures, and the like.  In these cases the wireless network operator may provide a number of specialized technical capabilities such as a virtual private IP network (VPN) to connect the mobile devices with the enterprise’s server. Another supporting feature might be seamless transition to utilization of short message capabilities over 2G networks for data communications in rural areas where there is no broadband coverage.

For network operators, the opportunities presented by such device-specific enterprise solutions are significant. For one thing, the enterprise customer is effectively captured for a long period, since the cost of changing carriers (and replacing large numbers of specialized mobile devices) would be high. Also, the network loading associated with these specialized services is often minimal and at the very least can generally be controlled by the network operator. Thus, the revenue-to-cost ratio is very attractive. On the downside, there is often a large front-end cost in development and implementation of special technical features that may be required in the serving networks. 

Another constraint on specialized enterprise services comes from the growing capabilities of general-purpose mobile computers. With integral or plug-in bar-code readers, video cameras, touch and stylus-sensitive screens and so forth, their catalogs of “Swiss army knife” features have expanded to the point that many heretofore specialized services can now be supported by OS-based applications running on off-the-shelf devices. This trend is a boon to enterprise wireless users because if greatly reduces equipment costs, but even more importantly it frees them of the need for exclusive relationships with network providers.

Of course, the operators may not be quite as thrilled, and there are some steps that they can take to maintain exclusive relationships with their enterprise customers. Most importantly, they can partner at a strategic level so that as the technology needs of the enterprise change the carrier is prepared to offer the best and most cost-effective solutions. Some examples are the aforementioned VPNs, integrated picocell and femtocell systems for customer premises, network based assisted GPS (A-GPS), and customized usage tracking. And, of course, customer technical support is of particular importance. An enterprise that relies on wireless for critical operations can be in a world of pain if things stop working. Knowing that their network operator “has their back” with resources and dedication to quickly resolve urgent problems is worth a lot in the value equation.

At the bottom stratification level (that is, the maximum technical integration between enterprise user and network operator) we find embedded systems, usually providing machine-to-machine (M2M) communications. This is an area that has really taken off in the past few years as the cost of wireless “modules” has come way down. These modules, essentially mobile user devices with everything stripped off except for the wireless air interface and, in some cases, GPS receiver capability, may be optimized for a particular application such as asset tracking. These days anything from cargo containers to dog collars can be equipped with such tracking devices so that they (or the dogs wearing them) can be located anywhere.

The list of potential uses for embedded wireless devices is vast, and is not limited to mobile applications. Wireless can be very cost effective for fixed M2M communications involving large numbers of distributed locations with low per-location throughput requirements. One obvious example is utility meter reading.

Efficient operation of embedded systems in a wireless network may require a high level of special accommodation. For example, some systems may have to operate reliably in rural areas beyond the reach of broadband networks. To keep module costs low, it may be impractical to configure them to operate on multiple air interfaces. In such cases the best solution, particularly if per-device throughput is very modest, might be to use SMS as the platform for communication. Other accommodations may be required in device identification within the network, mobility management, and roaming support.

While embedded systems can often provide a lucrative revenue stream for network operators, development and implementation of specialized features required for a particular application may only be justifiable when very large numbers are involved. Because of this, we are beginning to see emerging standards for specialized air interface and network support of M2M communications that will open the door to many more applications. As these standards evolve the requirement for specialized technical integration between networks and embedded device service providers will diminish just like evolution of general purpose mobile computers has reduced the need for specialized devices and supporting network features. To maintain their hold on these enterprise customers, the best response from network operators is also the same: focus on strategic partnership and technical customer support. No big deal for operators that have been successful in the enterprise marketplace – that’s what they’ve been doing all along.

 

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