2016 european iot mvno product line strategy leadership award › files › 4014 › 6783 › 1267...

2016 European IoT MVNO

Product Line Strategy Leadership Award

2016

EUROPEAN IOT MVNOPRODUCT LINE STRATEGY LEADERSHIP AWARD

2016

BEST PRACTICES RESEARCH

© Frost & Sullivan 2016 1 “We Accelerate Growth”

Contents

Background and Company Performance ........................................................................ 2

Industry Challenges .............................................................................................. 2

Product Line Strength and Customer Impact of Stream Technologies .......................... 3

Conclusion........................................................................................................... 6

Significance of Product Line Strategy ............................................................................ 7

Understanding Product Line Strategy Leadership ............................................................ 7

Key Benchmarking Criteria .................................................................................... 8

Best Practice Award Analysis for Stream Technologies .................................................... 8

Decision Support Scorecard ................................................................................... 8

Product Line Strength ........................................................................................... 9

Customer Impact ................................................................................................. 9

Decision Support Matrix ...................................................................................... 10

The Intersection between 360-Degree Research and Best Practices Awards ..................... 11

Research Methodology ........................................................................................ 11

Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ................................................................................................................. 12

About Frost & Sullivan .............................................................................................. 13



Background and Company Performance

Industry Challenges

Connectivity and device management in IoT has matured in the last 2-3 years and the

core functions of service delivery platforms (SDPs) are no longer a strong basis for

differentiation between suppliers. IoT Mobile Virtual Network Operators (MVNOs) are the

specialists in this area and so must consider their strategic options. Enterprise spending

today and in the future is focused more broadly on the transformational potential of IoT-

particularly data analytics – so connectivity Platform as a Service (PaaS) providers must

ensure they are aligned with their customers’ changing needs.

Some have consolidated, such as Raco Wireless, Wyless and Kore Telematics which have

merged in the past 18 months. Others have become part of a broader proposition from

hardware to cloud, as with Sierra Wireless’ acquisition of Maingate and MobiquiThings in

2015. Cisco’s $1.4 billion acquisition of Jasper Technologies in February 2016 shows how

essential its connectivity platform will be to Cisco’s end-to-end proposition for IoT.

Others have chosen to maintain their independence. These MVNOs continue to develop

their connectivity offer organically, based on deep knowledge of networks and the specific

needs of vertical industries. The ability to integrate multiple access technologies is also an

important differentiator, as cellular is no longer the leading solution for an increasing

diversity of IoT use cases.

Enterprises and MNOs are looking to vendors to reduce the perceived risk of introducing

IoT solutions. They also want scalable platforms that can accommodate growth in their

deployments over time, from proof of concept to global roll outs. An MVNO is focused on

just one component of the IoT value chain. It must therefore assemble the right

partnerships around its connectivity platform in order to simplify deployment for

customers. A pre-integrated range of partners adds further value by addressing a range of

higher-level functions such as application enablement and data management.

Frost & Sullivan commends Stream Technologies for its commitment to evolve with the

changing IoT market and its dedication to deepen the capabilities of its IoT-X.

Stream has served the IoT sector for over 15 years and has remained tightly focused on

connectivity, network management and platform/software development throughout that

time. The company continues to stake its claim based on technical quality, vertical depth

and price competitiveness, as well as an increasing roster of partnerships with third-party

solutions providers. It has now positioned itself for geographic expansion beyond its core

markets of Western Europe, and as a software solutions and platform development

company is able to address a broad set of customer requirements.



Product Line Strength and Customer Impact of Stream Technologies

Technology Leverage

Stream Technologies’ legacy MVNO business is still growing rapidly and delivers a ready

flow of cash to fund the R&D needed for longer-term growth. Following the model of an

agile software development firm, Stream has consistently committed resources to ensure

its platform addresses the evolving connectivity needs of enterprises. This includes being

somewhat ahead of the market at times. For example, it has integrated both satellite IoT

and Low Power Wide Area Networks (LPWAN) into its IoT-X connectivity management

platform in anticipation that these will become significant alternatives for IoT connectivity

in the next 2-3 years.

LPWAN will deliver an increasing proportion of connections in telemetry, asset tracking,

smart city applications, and agriculture that involve ultra-low throughput and high

volumes of low-cost devices. Stream has moved quickly, announcing LoRaWAN Network

Server capability on the platform in November 2015 and inviting customers to try out its

LoRa demonstrator network at its R&D base in Glasgow, UK. The company is therefore

already in position to capture growth now that Semtech, the IPR holder for LoRa radio

chipset, has opened up licensing to other manufacturers. Stream is also working with

Glasgow Caledonian University on energy harvesting for low cost LPWAN, and with

Strathclyde University & Censis (Centre of Excellence for Sensor and Imaging Systems

Technologies) on a UK government-sponsored smart cites project.

Combining the benefits of both LPWAN and satellite, Stream ran a successful demo in

November 2015 with LoRa backhauled over the Iridium Low Earth Orbit constellation.

Working with Global Satellite Engineering, it showed the technical feasibility of extending

IoT connectivity beyond the cellular footprint to ‘pop-up’ LoRa networks in rural areas. The

approach could bring the benefits of IoT to emerging economies such as India where the

vast majority of the landmass is off-net and to remote infrastructure worldwide, such as

roads, pipelines and oil and gas fields.

Price/Performance Value

Frost & Sullivan calculates that monthly revenue per connection averaged across IoT

services in Europe was no more than 0.30 Euros in 2015. However, as connectivity

services and device management continue to commoditize, opportunities open up for

lower cost competitors to attack the margins of platform providers that depend on

customized integration. Stream Technologies considers itself a more cost-effective

competitor to these much larger platform providers and is attacking their market

leadership by continually extending enterprise orientated self-service features and APIs on

IoT-X.



Features

IoT-X is built on 15 years of experience in meeting enterprises’ requirements for cellular

network management and on understanding of the foibles of individual MNOs’ processes

and infrastructure. Cellular options span 2G, 3G, CDMA and 4G LTE, including all four MNO

networks in the UK (which allows Stream to attack the fixed internet market segment for

the first time). LP-WAN options include LoRa and ultra-narrowband, 6LoWPAN, ZigBee,

WiFi and more are also supported.

Being early to introduce new managed connectivity options is important, but this kind of

head start will quickly diminish with market demand. So Stream positions IoT-X in several

additional ways. Firstly, it is designed to be less complex and expensive than platforms

from its larger competitors and more tightly integrated than those of MNOs in terms of its

supporting processes. IoT-X is also agnostic to carrier network, device or data format.

Furthermore, MNO customers can use the platform to manage their mass-market IoT

customers without cannibalizing their higher-value customized services provided on in-

house platforms.

Stream has also invested in network backhaul resilience, self-service tools and unified

billing. Single billing across cellular and non-cellular options as a bundled service will be

welcomed by enterprise customers as a way to minimize overheads. IoT-X also offers

flexibility in handling IP and non-IP traffic and in its aggregation of subscribers and data.

IoT-X’s self-service options attract cost-aware customers who would not typically consider

the systems integrations services of larger platform providers. Roaming profiles are

another means to control spending, as is the ability to route data in accordance with local

regulation. However, differentiation is less sustainable in these areas. Stream is therefore

developing capabilities in predictive analytics relating to network-device performance,

using network traffic related data to derive deeper insight into fault management and

security, for example. The company believes these are aspects that will prove increasingly

valuable to enterprise clients with global scale ambition.

Source: Stream Technologies



From Q2 2016, IoT-X will be integrated with the Embedded SIM platform of SIM

manufacturer Morpho. The combination will give customers additional flexibility to select

local mobile operators over the air, without having to change the SIM card. Industry

adoption of the embedded SIM standard will radically change the commercial dynamics for

MNOs. Enterprise customers will expect this functionality as standard in connectivity

platforms.

Scalability

The modular design of the IoT-X architecture anticipates the customer’s need to scale

from proof of concept to deployment of potentially millions of devices. The key to this

business model is exceptionally low management overheads and minimal integration time

for onboarding to IoT-X, coupled with support from an experienced team. Functionality

can be rapidly customized as software development is retained in-house. The PaaS model

accommodates multiple options and data backhaul infrastructure designs. Finally,

Stream’s self-service portal is under continuous development and available for evaluation

by enterprise clients, MNOs and others.

Brand equity

Stream first entered the UK M2M market back in 2000 on the Orange UK network, and

founder and CEO Nigel Chadwick is first to admit that the launch was probably 3 or 4

years too early. Persistence has paid off, however, and now it counts more than 500

enterprise customers and has access to more than 15 MNO networks. Today it derives

most of its MVNO revenue from smart metering, insurance telematics, digital signage, and

CCTV. Direct enterprise currently accounts for about 60% of revenues, with most of the

rest coming from telcos.

The company is profitable and though it remains relatively small with fewer than 35

employees today, has begun to experience accelerated growth over the past 18 months.

The steady approach has sometimes frustrated potential external investors but has also

lowered risk and permitted a focus on software development and technical innovation.

Chadwick has built a team that combines expertise in platforms and backhaul

infrastructure with a deep appreciation of networks, having recruited from Orange,

Vodafone, and Verizon Wireless, among others. Stream has also taken the time to

understand the specific needs of vertical industries, a level of detail that MNOs would not

typically address.

Having rejected the private equity route, Stream has maintained a steady course over the

years and now looks poised to expand beyond its core territories in Western Europe. In

April 2015 it won Digicel as an MNO customer in the Caribbean and Central. It is also

targeting LTE services in the United States from its Dallas office, and sees potential in

India, Africa and Japan. A number of organisations are currently testing Stream’s LoRa

WAN network server solution which is integral to its IoT-X platform.



Over the years, Stream has taken a proactive role in bringing together IoT participants in

the UK, through previous leadership role at the Mobile Data Association, among other

initiatives. In 2015 the company joined as a contributor member of the LoRa Alliance and

holds a seat on its technical committee. It is also a member of the Industrial Internet

Consortium.

Breadth

It is rightly said that no single company can provide a complete end-to-end solution for

IoT. Even a relatively small supplier is therefore in a strong position if it can build a

vertically-oriented proposition through partnerships based on its expertise in one

component of the value chain.

Stream Technologies has formed several technology and distribution partnerships in the

last 12 months. Foremost among these are the integration of IoT-X with Thingworx’ and

Solair’s application development platforms, IBM’s Partner Program (Bluemix & Watson IoT

Unit), WIPRO, scriptr.io and ARM’s mbed IoT Device Platform. Best-of-breed deals of this

kind create new channels to market and revenue share. They also reflect the need to

minimize end-customers’ challenges when navigating a highly fragmented market for

solutions.

As connectivity-centric IOT evolves into the much more dynamic context of IoT, attention

has shifted to higher levels of the stack. Nonetheless, the connectivity platform remains

an essential enabler, as Cisco acknowledged when it acquired Jasper Technologies at

nearly 20 times annual revenue. Stream is among a select breed of companies that have

been able to address the need for quality and reliability at scale. As enterprises deploy

higher volumes of devices, the ability to scale with minimal marginal increase in cost will

deliver the kinds of profits that they have long expected from IoT.

Conclusion

Stream Technologies has earned Frost & Sullivan’s 2016 Product Line Strategy Award for

its commitment to develop the IoT-X platform to meet the needs of customers. The

positioning of IoT-X as network and device agnostic is well aligned with the dynamic

environment of IoT, as connectivity requirements are diversifying with innovation in

vertical sectors. Building on its core MVNO revenue stream, Stream has maintained its

independence over its long history and has reinvested in R&D as a source of competitive

advantage. It is one of the first platform providers to integrate LPWAN and satellite and to

integrate the two to create innovative IoT coverage beyond the cellular footprint.

Furthermore, its strategy recognizes the importance of best-in-breed partners and to

package solutions for vertical sectors.



Significance of Product Line Strategy Ultimately, growth in any organization depends upon customers purchasing from your

company, and then making the decision to return time and again. A full, comprehensive

product line that addresses numerous customer needs and preferences is therefore a

critical ingredient to any company’s long-term retention efforts. To achieve these dual

goals (customer value and product line strength), an organization must be best-in-class in

three key areas: understanding demand, nurturing the brand, and differentiating from the

competition. This three-fold approach to delivering Product Line Strategy Leadership is

explored further below.

Understanding Product Line Strategy Leadership

As discussed above, driving demand, brand strength, and competitive differentiation all

play a critical role in delivering unique value to customers. This three-fold focus, however,

must ideally be complemented by an equally rigorous focus on building a superior and

comprehensive product line.



Key Benchmarking Criteria

For the Product Line Strategy Leadership Award, we evaluated two key factors—Product

Line Strength and Customer Impact—according to the criteria identified below.

Product Line Strength

Criterion 1: Technology Leverage

Criterion 2: Features

Criterion 3: Scalability

Criterion 4: Breadth

Customer Impact

Criterion 1: Price/Performance Value

Criterion 2: Brand Equity

Best Practice Award Analysis for Stream Technologies

Decision Support Scorecard

To support its evaluation of best practices across multiple business performance

categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool

allows our research and consulting teams to objectively analyze performance, according to

the key benchmarking criteria listed in the previous section, and to assign ratings on that

basis. The tool follows a 10-point scale that allows for nuances in performance evaluation;

ratings guidelines are illustrated below.

RATINGS GUIDELINES

The Decision Support Scorecard is organized by Product Line Strength and Customer

Impact (i.e., the overarching categories for all 10 benchmarking criteria; the definitions

for each criteria are provided beneath the scorecard). The research team confirms the

veracity of this weighted scorecard through sensitivity analysis, which confirms that small

changes to the ratings for a specific criterion do not lead to a significant change in the

overall relative rankings of the companies.

The results of this analysis are shown below. To remain unbiased and to protect the

interests of all organizations reviewed, we have chosen to refer to the other key players in

as Company 2 and Company 3.



DECISION SUPPORT SCORECARD FOR PRODUCT LINE STRATEGY LEADERSHIP AWARD

(ILLUSTRATIVE)

Measurement of 1–10 (1 = poor; 10 = excellent)

Product Line Strategy

Product Line

Strength

Customer

Impact Average Rating

Stream Technologies 9 8 8.5

Competitor 1 8 5 6.5

Competitor 2 7 6 6.5


Criterion 1: Technology Leverage

Requirement: Demonstrated commitment to incorporating leading edge technologies into

product offerings, for greater product performance and value

Criterion 2: Features

Requirement: Products offer a comprehensive suite of features to serve customers at

multiple levels of functionality, ease of use and applications

Criterion 3: Scalability

Requirement: Product line offers products at a variety of price points and functionality

levels

Criterion 4: Breadth

Requirement: Product line addresses the full range of customer needs and applications

Customer Impact

Criterion 1: Price/Performance Value

Requirement: Products or services offer the best value for the price, compared to similar

offerings in the market

Criterion 2: Brand Equity

Requirement: Customers have a positive view of the brand and exhibit high brand loyalty



Decision Support Matrix

Once all companies have been evaluated according to the Decision Support Scorecard,

analysts can then position the candidates on the matrix shown below, enabling them to

visualize which companies are truly breakthrough and which ones are not yet operating at

best-in-class levels.

DECISION SUPPORT MATRIX FOR PRODUCT LINE STRATEGY LEADERSHIP AWARD

(ILLUSTRATIVE)

High

Low

Low High

Cu

sto

mer I

mp

act


Competitor 2

Competitor 1

Stream Technologies



The Intersection between 360-Degree Research and Best

Practices Awards

Research Methodology

Frost & Sullivan’s 360-degree research

methodology represents the analytical

rigor of our research process. It offers a

360-degree-view of industry challenges,

trends, and issues by integrating all 7 of

Frost & Sullivan's research methodologies.

Too often, companies make important

growth decisions based on a narrow

understanding of their environment,

leading to errors of both omission and

commission. Successful growth strategies

are founded on a thorough understanding

of market, technical, economic, financial,

customer, best practices, and demographic

analyses. The integration of these research

disciplines into the 360-degree research

methodology provides an evaluation

platform for benchmarking industry

players and for identifying those performing at best-in-class levels.

360-DEGREE RESEARCH: SEEING ORDER IN

THE CHAOS



Best Practices Recognition: 10 Steps to Researching,

Identifying, and Recognizing Best Practices

Our awards team follows a 10-step process (illustrated below) to evaluate award

candidates and assess their fit with our best practice criteria. The reputation and integrity

of our awards process are based on close adherence to this process.

STEP OBJECTIVE KEY ACTIVITIES OUTPUT

1 Monitor, target, and screen

Identify award recipient candidates from around the globe

Conduct in-depth industry research

Identify emerging sectors Scan multiple geographies

Pipeline of candidates who potentially meet all best-practice criteria

2 Perform 360-degree research

Perform comprehensive, 360-degree research on all candidates in the pipeline

Interview thought leaders and industry practitioners

Assess candidates’ fit with best-practice criteria

Rank all candidates

Matrix positioning all candidates’ performance relative to one another

3

Invite thought leadership in best practices

Perform in-depth examination of all candidates

Confirm best-practice criteria Examine eligibility of all

candidates Identify any information gaps

Detailed profiles of all ranked candidates

4

Initiate research director review

Conduct an unbiased evaluation of all candidate profiles

Brainstorm ranking options Invite multiple perspectives

on candidates’ performance Update candidate profiles

Final prioritization of all eligible candidates and companion best-practice positioning paper

5

Assemble panel of industry experts

Present findings to an expert panel of industry thought leaders

Share findings Strengthen cases for

candidate eligibility Prioritize candidates

Refined list of prioritized award candidates

6

Conduct global industry review

Build consensus on award candidates’ eligibility

Hold global team meeting to review all candidates

Pressure-test fit with criteria Confirm inclusion of all

eligible candidates

Final list of eligible award candidates, representing success stories worldwide

7 Perform quality check

Develop official award consideration materials

Perform final performance benchmarking activities

Write nominations Perform quality review

High-quality, accurate, and creative presentation of nominees’ successes

8

Reconnect with panel of industry experts

Finalize the selection of the best-practice award recipient

Review analysis with panel Build consensus Select winner

Decision on which company performs best against all best-practice criteria

9 Communicate recognition

Inform award recipient of award recognition

Present award to the CEO Inspire the organization for

continued success Celebrate the recipient’s

performance

Announcement of award and plan for how recipient can use the award to enhance the brand

10 Take strategic action

Share award news with stakeholders and customers

Coordinate media outreach Design a marketing plan Assess award’s role in future

strategic planning

Widespread awareness of recipient’s award status among investors, media personnel, and employees



About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth

and achieve best in class positions in growth, innovation and leadership. The company's

Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined

research and best practice models to drive the generation, evaluation and implementation

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partnering with Global 1000 companies, emerging businesses and the investment

community from 31 offices on six continents. To join our Growth Partnership, please visit

http://www.frost.com.

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