Episode 5

Speaker 1: Accelerators from Beyond Now. Hello and welcome to Accelerators by Beyond Now. Join us as we speak with industry leaders and explore the big opportunities ahead in 5G, IoT, AI in cloud, and the role of the ecosystem. We discuss how to stay ahead and what technologies innovation and business models are driving the industry to accelerate.

Michal Harris: Today our host Jeremy Cowan co-founder of IoT Now, and VanillaPlus is meeting with Paul Craig head of Manx Telecom IoT to discuss partner ecosystem in IoT businesses. So tell me, Jeremy, Paul, how have partnerships in the IoT industry shaped your business.

Jeremy Cowan: Michal, I think it's fair to say that no one in the Internet of Things could function without these partnerships, but we've really got the right person here to tell us, as you say, we're delighted to have Paul Craig with us to share how he and Manx Telecom are developing a successful IoT offering. Paul, welcome to the Accelerators podcast.

Paul Craig: Morning gentlemen, how are you doing?

Jeremy Cowan: Really well, thank you and you?

Paul Craig: Yeah, really good. Thank you.

Jeremy Cowan: Paul Manx Telecom is a relatively small company in the world of telecoms where the population in the Isle of Man of about a hundred thousand, but you are taking on a really big market in the global IoT, Internet of Things. What's your secret sauce Paul and how have you managed to build this global scale?

Paul Craig: I think it's, there's a number of factors that come into play, if you look at the way the business has developed over the years, there's over a hundred years of experience within the business in terms of delivering telecom services, so a really rich history and a really great deal of experience within the business, within that history, we've kind of been in various ownerships, but we've come through companies like BT and Telefonica, so there's also a tradition of engineering excellence and that type of thing so you've got the capability that goes along with that experience. And I think there's a couple of factors that are specific to the Isle of Man. One is that just the position and the size of the Isle of Man, make it a perfect test bed for testing and assessing new products, new services because it's one of those things where it's small enough to manage, but big enough to prove the concept as it were.

So there's been a number of things over the years that we've been involved in that at first, whether it's international, the communication links or 3G networks and everything in between and I think the last bit is the fact that we're an island as well, it kind of limits our opportunity as a business, so there's only a finite number of people who live there, there's only a finite number of businesses that are located there, so we've always had to kind of innovate and think outside the box in order to grow and develop our business and you put all those things together, the experience, the capability, that innovation piece and the drive to grow your business and that's the kind of, you call it the secret sauce, but it's, I think it's just kind of hard work and application as it were.

Jeremy Cowan: Yeah, it's a 99% sweat and 1% inspiration is it?

Paul Craig: Exactly.

Jeremy Cowan: You've, talked in the past Paul about Manx providing the plumbing, in other words, the connectivity between the IoT service provider and the end consumer, I really like that description, could you expand on this and the importance of partner ecosystems in developing those right industry solutions?

Paul Craig: Yeah. The whole industry depends on getting the data from A to B, right? And there's everybody concentrates massively on the customer facing end and the intelligent bit in the middle that's processing and managing that data. But actually it's all dependent on, I call it the plumbing, so the pipes that get the information from the source to the intelligence and it all falls down if those pipes are leaky, shall we say so, it's the bit of the puzzle that most IoT companies that they're all mad about the technology, and they kind of tend to ignore the plumbing bit and take it as a given that that's going to be there and it's going to work in the way that they needed to work, so the first job for us is to make sure that that plumbing is fit for purpose, but it's also about making sure that we are able to move the traffic through that plumbing in the most efficient and most effective way and there's masses of difference in the market, whether you want a mass deployment of devices to all come at the same time and transfer information, to a single emergency alert that you want to get through at all costs, there's clearly massive difference between those two things and we have to make sure that the plumbing caters for all those types of scenarios.

Jeremy Cowan: Just as a spin off from that, does that kind of differential also apply if you're talking about high value, small amounts of data that may be sent versus the constant throughput of low value data, do they set different requirements for you?

Paul Craig: There is and we don't at the moment kind of look at classist services is what we're talking about, where one piece of data is far more valuable than another piece of data, we don't tend to apply it, but we can in certain circumstances, allow our customers to apply that sort of logic, but clearly it's just different kinds of requirements and different transit of that data through the infrastructure to speed it up, or make sure it gets to where it needs to get to as quickly as possible.

Jeremy Cowan: So what other lessons can you share with our listeners who want to get their IoT business or their ecosystem strategy right, Paul? I'd like to ask Michal as well about this in a minute, but Paul, what are your thoughts on this first?

Paul Craig: Well, I kind of alluded to it in what I was saying there that they need to understand that the mobile and network infrastructure more, our customers and partners tend to understand their own technology and their own infrastructure but as far as the mobile network is concerned, it's a dark art, it just, it happens somewhere in that ecosystem, it just delivers, but there's so many elements of the mobile network that can kind of be unbundled to allow people to develop the propositions and to do things smarter and quicker and more intelligently that if they don't have an understanding of what's available within that core infrastructure, then they're never going to get to, we want to collaborate closely with our customers and the size of our business and the expertise in our business means that we can do that, it's a lot easier to engage and have those conversations than potentially is with some of the bigger mobile networks, but the biggest tip I could give the people who work in this industry is understand the core delivery mechanism better and how can you use that to your advantage.

Jeremy Cowan: Thank you. Michal, do you have any thoughts to add on the best strategies for building an IoT ecosystem?

Michal Harris: Yeah. I mean, thank you very much, Paul, it's a very insightful, and I think what Paul just mentioned about working closely with our customers is one fundamental piece of building this ecosystem to provide IoT solution, it's basically sitting and understanding customer's problem and trying to address them through the network. What is also interesting and Paul, if you don't mind sharing a little bit more, is about this, I mean, small company getting a global scale, how do you do that? You must build a massive ecosystem around you.

Paul Craig: Although we've got a kind of relatively small population, they have exactly the same needs and requirements as bigger countries if you like, where we've got people who are traveling around the world, they want to make and take calls, they want to use data all over the world, so we had to initially have exactly the same infrastructure as all the main MNOs in order to support our core home business if you like, all we've done over the years is because of that drive to grow the business, we've created different use cases for that core capability and supported it by beefing up the network and beefing up the agreements that support it, so it's happened organically as our business has grown and developed than our capability. So for example, we mentioned that there's less than a hundred thousand people on the Isle of Man, we've got somewhere in the region of 5 million devices, somewhere in the world connected to our core infrastructure so clearly you have to kind of beef up your capability as you go, but that hasn't happened overnight, it's happened over the last five to seven years.

Jeremy Cowan: Paul we've looked at the key role of partnerships, what are the other ingredients of a successful IoT business? I’m thinking of areas that sometimes get downplayed, like having the right commercial model or IoT agreement and the right infrastructure or device management?

Paul Craig: Well, there's a little bit about the way we provide business in the first place that's worth touching on, we tend to have a wholesale pay as you go type of model, so we're wholly dependent on our customers to be successful for us to actually generate the revenue and growth that we need, so that's the first thing. So when we're working with customers, we're looking for a number of different aspect. First bit is that drive and passion bit, they have to be kind of passionate, as we said before, the 99% dedication and 1%, 99% perspiration, if you like and 1% inspiration, you've got to have that in order to work with us. It's got to be a true collaboration as well, there's a lot of cloak and dagger type stuff goes on in this market.

And the reason behind that is if you look at some of the customers, they have multiple suppliers of connectivity, so the MNOs are a bit reticent about opening up because will it get to your competitors? And the MNOs manage lots of different IoT businesses. So there's a reticence coming the other way that says, "Do I really want to share my pipeline or my aspirations of a business cause will it get through to my competitors?" And because we wholly rely on each other, you need to kind of get over that bit and its true collaboration is one of the keys to success, we're dependent on each other, if we both do the things that we're good at, then we will both be successful.

And then there's undoubtedly a technical competence that you have to have in order to make sense out of all the different elements in terms of delivering the service and make sure you've got people or partners who understand that technically. And the last bit is different from traditional telco type activity, there has to be a flexibility and fleetness of fault that isn't always the way we as MNOs operate, you have to be able to react. So the opportunities, develop services quickly and deploy services quickly in order to kind of take advantage of the market and enable your customers, so that drive, that collaboration, technical competence and that flexibility, and fleetness of foot is the kind of key component.

Jeremy Cowan: Paul, some people point to conductivity as only making up about 5% of revenues in the Internet of Things, which is probably true, but how do you view Manx's position in the IoT stack and your relationship to that 5% is that important?

Paul Craig: It is. If you think about whichever kind of forecast you use, that the IoT market is already massive and predicted to grow, I saw something recently about within the next couple of years, 75 billion connected devices, something like nine SIMs for every person on the planet is, so it's huge. So narrowing yourself down to 5% of a market of that size is still a significant opportunity for Manx Telecom, but I think the key to it is, we can only get that true collaboration with our customers if we're not stepping into their territory, if they don't see us as a competitor, but see us as an enabler of service, then we're going to get to that point a collaboration. If they think we're going to compete for the same bits of business, they're not going to be open and share with us and so our view is we become experts at that connectivity piece and don't waste effort and energy in the other areas, which we expect our partners and our customers to be competent in.

Jeremy Cowan: Michal does that resonate with you? Are you specializing really in those areas, you know best and whether it's 5% of a huge amount or not is almost immaterial, if it's that big?

Michal Harris: Yeah, I think what is so great about the Manx story is this concept of thinking about the globe as their playground, why limit themselves by geography? They can be everywhere and to be specialized and think about, "We can do connectivity better than anyone else." it's brilliant and I think it's very clever.

We do see, however, some of our other customers are trying to expand to other domains and one of the best way and Paul also mentioned it, is to think of the people you want to partner with and people you want to go and develop together your offering to the customers, so how you start, co-create this solution with these guys and how you start sitting with your customers and developing this together and Paul, maybe you can share a little bit more about enterprises, what type of enterprises you're trying to serve, and who are these partners that you are working with together to get to this enterprises?

Paul Craig: Well, it depends, in the main it's a channel to market, we're not trying to target the OEMs or the kind of deployers or managers of the end customers, it tends to be the service providers in the middle who are taking the connectivity and are wrapping value around it, so the vast majority of our customers are IoT specialists businesses that provide connectivity to the people who are deploying the service of far-end, whether it's the vending companies or the vehicle manufacturers, we work with the kind of people who enable them and they take the complexity of the connectivity and kind of do a service wrap to make it easier to manage and easier for customers to control, so that tends to be where our audience is.

And we did, in the early days, we kind of, we kissed a lot of frogs as they say in the trade, the market was kind of working out where it was, where was the position for Manx Telecom, so we did deal with a number of end suppliers of service, but we've very quickly come to realize we didn't have the skillsets that they needed in terms of the way they manage their devices, the way they control things, so we kind of stepped back and at the same time, lots of our partners who were in that service provision space, they were all going out, trying to create themselves as virtual mobile networks, if you like, and create the agreements and the capabilities that we were supplying and they quickly found that that's a massive overhead, and they don't necessarily have the right skills, so we've kind of found a level that we enable them and they go manage the customers, so it's definitely in that IoT service provider space that's our sweet spot.

Jeremy Cowan: Talking about those service providers, can you tell us a bit more about the IoT services that have been successful for you?

Paul Craig: Yeah, if we look at the background, bearing in mind, we started the original core infrastructure was about our customers traveling around the globe and being able to get mobile connectivity and mainly around voice calls, so our initial competence was around providing voice coverage all the way around the world, but also there was a kind of multi-network, critical connection element of what we did because as well as the SIM cards being connected, they were connected to multi-networks in each country so there was this resilience that said, if I can access two or three networks, then it lends itself to mission critical type communication. So you take that voice bit, you take that mission critical bit, and it wasn't surprising that we kind of found ourselves in that long working space, in that medical monitoring space and health and wellbeing, where you're monitoring people and you want to be able to speak to that person if there is a problem.

So we definitely, we call it talking IoT, but there's definitely a sweet spot for a voice specialist in the IoT business, so that's where the kind of history was. But over recent times, that same thing about multi-network and mission critical if it's not people on the end of it and wellbeing on the end of it, it's machinery on the end of it or mission-critical stuff, so we obviously started working in things like security, home automation, industrial IoT, anywhere where you wanting to control remotely processes and automation.

Jeremy Cowan: The IoT sector is always buzzing with talk of the latest technology, but do you see a role yet for some of the technologies that are being touted, things that are sort of slowly rolling out or even actually in application now in other sectors, I'm thinking of things like 5G, edge computing or low power wide area networks.

Paul Craig: If you look at the kind of what the potential and the future of IoT is, it's almost limitless, so you kind of drive yourself mad, trying to predict what that would look like. And everybody loves that kind of, to talk about the futures because it makes you sound really intelligent and an expert in the field because we can talk about what's happening tomorrow, but there is a massive need to concentrate on the here and now just in terms of sort of things like, for example, we talking about 5G and undoubtedly 5G is going to be necessary in what we do as a business, if you're going to want to manage and quickly deploy mass services, then 5G is the key. But if you look at what's happening in the market, people are only just getting to grips with 4G and there's things like 2G some setting and that's the problem for right now, you have to, yes, you have to look at 5G and say, "What's our play going to be in that space?"

But it's the today's problems that need resolving first and it's things like the rollout of 4G and what are we going to do when 2G networks turn off in 18 months, two years time wherever it may be. So there's the bit about the connectivity. We're trying to find a home for the low power stuff, actually, if you look at Narrowband-IoT, yes, there's going to be a place for that, but it's early doors and networks are still trying to work out what they do, if you look in the UK, one half of the country is served by one network, one half of the country is served by another network, there's no interwork in between anyone and no roaming agreements between anyone, so it's a service that, yes, is undoubtedly going to have its day, but it's just not right now.

So we tend to concentrate our efforts right now on the problems, the real problems that people have got today, but obviously we have to have an eye to the future, so things like, kind of security and management of devices and things like edge computing that's about simplifying the supply chain of that plumbing, the data coming back, do we make it easier if the intelligence is nearer the source type of thing? So all things come in, but they are just on the roadmap as the next phase, if you like, and should be for most organizations, because there's no real value in it today other than saying that you've got a plan to do that in the future. And if you actually peel back most network's plans in that space, they are just, yes, we've got something coming that's a lot further down the line, anything that they're doing now tends to be just to prove the concept rather than it's customer demand.

Jeremy Cowan: There's some great teasers in there for future podcasts, Paul, I need to get you back, I'm thinking of security and sunsetting 2G and 3G, but we're almost out of time. Finally, how will you be developing Manx's IoT offering in the next phase? As you expand is it going to be in new services? Is it geographic expansion? I mean, you've already talked about new technologies or is it going to be all of the above?

Paul Craig: There's a number of things, what is key at the moment to the industry is that the market's grown up on infrastructure and agreements that kind of don't support the business that's there now in most cases so we have to make sure that the infrastructure and that this isn't just Manx Telecom, this is the kind of industry as a whole. So the infrastructure supports the services that it's delivering now, there has to be an increase in the global reach of those IoT and MTM specific agreements that supports it, we don't want people deploying masses of service, and then the rug getting pulled because it's not quite the right agreement. And linked to that, there is the commercial footprint that supports it, so the knee-jerk reaction from the market is IoT devices are angry and they take a lot of resource, but don't make much money, so the knee knee-jerk reaction is we just charge a lot more for IoT devices, that's kind of calming down, so we've got to make sure that the commercial footprint, it supports our customers, but also that everybody's getting value in the chain and the roaming partner is they need to get value out of those IoT connections, otherwise there's no point in them doing it, so that's all finding its feet, so there's a lot of work to do on that.

We’re concentrating on a lot more of the monitoring of devices out in the field, so how are networks performing? What SIMs are out there? If there's a problem, which customers, which SIMs are affected, and can we react quicker? All that proactive monitoring of roaming services is high on the agenda for us, there's obviously eSIM, that we're rolling out this year, which is this localization of services for commercial regulation type purposes and gives the resilience and flexibility to customers.

There's a shedload of work on the flexibility of billing as well, customers are finding different ways to monetize IoT solutions, and they're not always supported by the network to do things in a particular way, so an example might be in that long worker space rather than charge for minutes and data and SMSs, why don't we start charge per event? You know what I mean? So every press of the panic button costs you X instead of, "Here's a bundle of five minutes and 10 SMS." and all that business, so flexibility around the billing, but the main thing is continuing to invest in our core infrastructure and there's a double digit millions of investment into the Manx Telecom infrastructure this year, our core infrastructure to make sure that everything with the services we provide are all fit for purpose. So we've got quite a lot of work on, Jeremy, so-

Jeremy Cowan: Clearly.

Paul Craig: I bet you're glad you asked that question, aren't you?

Jeremy Cowan: There’s a lot for our listeners to think over there. Paul, thank you so much for sharing your expertise, it's been a revelation.

Paul Craig: All right, thank you.

Jeremy Cowan: And a big thank you to meet Michal anchoring the show, that's quite enough from me. Michal, back to you.

Michal Harris: Thank you, Jeremy. A special thanks to you Paul, your insight into Manx Telecoms IoT play was really great, and we are so glad you could join us on Accelerators. Accelerators is a podcast by Beyond Now hosted by Jeremy Cowan and joined by me, Michal Harris. We hope today's topic has inspired you to accelerate further, faster, and beyond. Be sure to subscribe to this podcast, it can be found on iTunes, Spotify, or Apple. This podcast is published by weekly and produced by Fox agency.

Speaker 1: Accelerators from Beyond Now.