magic quadrant for managed m2m services, worldwide · by the end of 2022, 25% of wireless wan-based...

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Magic Quadrant for Managed M2M Services, Worldwide Published: 23 October 2017 ID: G00318731 Analyst(s): Eric Goodness, Leif-Olof Wallin, Aapo Markkanen, Godfrey Chua Most providers of managed M2M services focus on connectivity and basic management portals. Few offer broad IoT platforms. CIOs building IoT- enabled businesses can use this study to assess vendors for multiregional connectivity, sector experience and value-added services to support IoT outcomes. Strategic Planning Assumptions By 2023, 80% of manufacturers that embed 3GPP services will use a partner revenue share model, up from 15% in 2017. By the end of 2022, 25% of wireless WAN-based IoT solutions will use private, managed network services, up from less than 5% in 2017. Market Definition/Description The managed machine-to-machine (M2M) service market enables connectivity, compute and decision services that are necessary for connected solutions. Managed M2M services are a solution element within the broader solution sets of IoT, digital business and operational technology (OT) systems in industrial environments. Managed M2M services enable businesses to collect, analyze and interact with data streams, thus providing businesses the ability to monitor, manage and control (manually and through automation) assets associated with business processes. Managed M2M services may encompass integrated and managed IT infrastructure and systems, OT infrastructure and systems, software, network services (connectivity), and IT services. This Magic Quadrant focuses primarily on connectivity and a continuum of related value-added services, such as consulting, M2M device engineering, M2M application development and integration, related middleware aggregation, application hosting, and related system management. Gartner's coverage of managed M2M services focuses on providers that bundle connectivity, technology and technology services that facilitate key business processes and related outcomes.

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Page 1: Magic Quadrant for Managed M2M Services, Worldwide · By the end of 2022, 25% of wireless WAN-based IoT solutions will use private, managed network services, up from less than 5%

Magic Quadrant for Managed M2M Services,WorldwidePublished: 23 October 2017 ID: G00318731

Analyst(s): Eric Goodness, Leif-Olof Wallin, Aapo Markkanen, Godfrey Chua

Most providers of managed M2M services focus on connectivity and basicmanagement portals. Few offer broad IoT platforms. CIOs building IoT-enabled businesses can use this study to assess vendors for multiregionalconnectivity, sector experience and value-added services to support IoToutcomes.

Strategic Planning AssumptionsBy 2023, 80% of manufacturers that embed 3GPP services will use a partner revenue share model,up from 15% in 2017.

By the end of 2022, 25% of wireless WAN-based IoT solutions will use private, managed networkservices, up from less than 5% in 2017.

Market Definition/DescriptionThe managed machine-to-machine (M2M) service market enables connectivity, compute anddecision services that are necessary for connected solutions. Managed M2M services are a solutionelement within the broader solution sets of IoT, digital business and operational technology (OT)systems in industrial environments. Managed M2M services enable businesses to collect, analyzeand interact with data streams, thus providing businesses the ability to monitor, manage and control(manually and through automation) assets associated with business processes.

Managed M2M services may encompass integrated and managed IT infrastructure and systems, OTinfrastructure and systems, software, network services (connectivity), and IT services.

This Magic Quadrant focuses primarily on connectivity and a continuum of related value-addedservices, such as consulting, M2M device engineering, M2M application development andintegration, related middleware aggregation, application hosting, and related system management.

Gartner's coverage of managed M2M services focuses on providers that bundle connectivity,technology and technology services that facilitate key business processes and related outcomes.

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M2M services are segregated into the following solution elements.

Sourcing and Logistics Management

This capability includes the systems and services for enterprises to purchase and provision networkservices (connectivity), network hardware, systems, application functionality, and related IoT edgedevices. Included in this capability is the use of portal-based service catalogs with self-servicecapabilities (for example, device acquisition, provisioning and activation). Reverse logistics supportincludes engineering, kitting, depot repair and advanced replacement of IoT edge devices and SIMcards. The services and resale of IoT endpoints and devices are included in the scope of managedM2M services, but devices with a general user interface, such as smartphones and tablets, are notincluded unless those devices enable solution functionality when acting as a "gateway" and/or asolution control interface (such as a human-machine interface [HMI] within an industrialenvironment).

Service Management

This capability includes the systems and services to track and manage network contracts, networkusage patterns, related assets and service elements. Service management may also audit and lognetwork service performance and availability, as well as assign qualitative and quantitative ratings— which relate to negotiated SLAs — to communications service providers (CSPs). Servicemanagement also offers the ability to audit and optimize subscription plans (telecom expensemanagement) for connectivity services based on ongoing audits of contracts, standing inventoriesand usage details. Service management may allow billing and usage management based on thetype of service as defined by URLs, Internet Protocol (IP) addresses, device types, access types,time of day/day of week, and location. The systems and services usually support rule-basedbusiness process automation, such as actions relating to excessive usage, usage nearing a user-defined threshold, SIM activations or related geolocation faults.

Device and System Management

This capability includes the systems and services that make IoT edge devices and managed assetinformation visible. It also applies health diagnostics to measure IoT edge device performance;manages connection options (for example, switching between cellular, satellite, hot spot/Wi-Fi orpersonal-area network [PAN] modalities); and establishes process controls for consistent changeand release management (related to OSes, non-OS applications and support systems). Thisdiscipline also includes service desk capabilities to address technical requests (Levels 1, 2 and 3).Some systems and services support the aggregation of rule-based event processing and anomalydetection from managed asset platforms (for example, data channel normalization, alarm filteringand event correlation). This includes some possible business process automation relating to serviceimpacting incidents relating to IoT edge device incidents and problems. Full IoT edge devicemanagement is not typically an organic capability of most vendors in this Magic Quadrant. Instead,many have partnered with third-party software companies to resell or private-label the software. Themanagement platforms of most vendors is relegated to over-the-air (OTA) SIM managementcapabilities.

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Application Management

This capability includes the systems and services to enable custom and proprietary M2Mapplication development and distribution across software, devices, OSes, gateway agents andprotocols. This service offering often includes release and change management, incidentmanagement, and problem management of M2M enablement platforms (as well as mobile back-end-as-a-service associated with IoT solutions). Application development relating to the collectionand analysis of M2M-connected data is in the scope of this Magic Quadrant, as is the value-addeddevelopment of front-end applications relating to B2B or business-to-consumer (B2C) or B2B-to-consumer (B2B2C) functions.

Security Management

This capability includes the systems and services to administer and enforce policies relating to theidentity and data access, the transmission and encryption of data, and the secure consumption ofbusiness services linked to IoT-endpoint-connected assets. Requests for release and changemanagement related to security management are generally controlled by the provider, unless theuser requests administrator rights. The systems and services within this service segment allowauthorized providers and customer administrators to establish and enforce the privacy policy fortheir devices, machines and assets. Included in the scope of this service segment are privateAccess Point Name (APN) and managed VPN services and other services relating to identity,credentialing, authentication and establishment of trust between in-scope edge devices and thecloud.

Data Presentment, Visualization and Analytics

This capability includes the systems and services to enable data presentment, business intelligencereporting and analytics resulting from monitoring related systems and any underlying eventprocessing. Basic reporting provides visibility into alarms by asset group, auditing reports, alarmfrequency reports, and device event and status reports. Dashboards and data visualization mayoffer an ability to analyze trends on performance, SLAs, compliance and operational metrics. Moreadvanced reporting and analytics would offer actionable intelligence relating to asset utilization,contextualized data from customer engagement, more efficient system architectures, improvementsto products and rationale for monetization of connected solutions. The participants in this MagicQuadrant are not considered leading providers of analytics without the use of third-party softwareand partners.

Multisourcing Service Integration

This capability includes the ability to act as an agent on behalf of a customer with third-partyproviders, such as third-party network operators, IoT application independent software vendors(ISVs), M2M device manufacturers, and related alliance partners and device resellers of themanaged M2M service provider. This category also relates to ongoing and project-based services(for example, service outages, network performance and coverage issues; warranty management;and management of device maintenance). Financial management may be a component of someproviders, and these services relate to audits, payments, disputes and allocation of expenses of

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network service contracts. Included with this service offering may be service contract novation (tobecome customer of record for the customer), along with the assumption of ownership of devices,and device management software. Solution financing is also considered within multisourcing serviceintegration (MSI).

Distinguishing Managed M2M Services and IoT

The technology and service functions defined above fulfill large parts of typical IoT solutions with aparticular focus on the "IoT edge," which encompasses IoT endpoints, gateways, edge computingand connectivity services. Many providers in this Magic Quadrant have moved away fromreferences to "M2M" in their messaging and catalog descriptions to create the perception that theirsolutions are more "IoT-aligned," labeling their solutions as "IoT solutions." In fact, most havechanged their business unit names to include IoT in the title. The market for managed M2M servicesis very mature and doesn't present the attention and buzz of IoT. These rebranding efforts are meantto convey broader solution value to the market.

However, relabeling their offers and business units to "IoT" does not make their solutions IoTsolutions.

While not codified explicitly, what distinguishes typical managed M2M solutions from IoT solutionsis the existence of broader platform capabilities. An example includes the capability for IoT endpointand device management (where most vendors in this Magic Quadrant manage the SIM card andrelated data, rather than IoT edge device OSes and agents and other management capabilities).Also, offerings and definitions for IoT solutions include an application enablement and managementcapability within the IoT platform. A key offering of competitive IoT solutions and platforms in themarket also focuses on integration capabilities. Examples include integration platform as a service(iPaaS), API management, various software development kits (SDKs), and software connectors andextensions to facilitate integration and interoperability with third-party software and applications.Increasingly, we see CSPs and mobile virtual network operators (MVNOs) choosing to ignore thebuild-out of broader and higher-value IoT platforms. Rather, they favor creating and acquiring IoTvertical applications (such as fleet management, smart meters and energy demand management),which can be integrated into enterprise applications. Without a broader, true IoT platform, CSPs andMVNOs are forced to sell these vertical applications as point services that require the user toexplore, validate and acquire IoT platform elements, such as device management and datamanagement.

Key to most IoT solutions is the creation of mobile apps as a companion to the solution to extendcustomer engagement. These mobile apps present captured machine data to the end user(consumer or enterprise) for asset control or decision making (such as HMI in industrialenvironments). Integration of machine data into legacy enterprise applications is also characteristicof an IoT solution.

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Provider Models

Communications Service Providers

CSPs typically bundle connectivity services (such as cellular and Long Term Evolution [LTE] andconnectivity management). However, some providers offer cloud-based IoT platforms that arecomposed of messaging, device management, and storage and base-level analytics (utilizationreporting and asset tracking). The enterprise service organization of some CSPs amortize devicecharges across the term of an agreement as a recurring add-on charge. Additionally, some providersoffer application enablement platforms and a modest catalog of vertical applications (morecommonly, fleet management and asset monitoring). For noncellular use cases, most CSPs providemanaged services for WLAN, some LPWAN, limited satellite and managed security services for IoTgateways. Most CSPs have created access partnerships to augment their global M2M capabilities.

Mobile Virtual Network Operators

The immediate value that MVNOs bring to customers is the aggregation and management ofmultiple CSP networks to provide regional and global connectivity coverage. Additionally, as withthe CSPs, hosted and cloud-based connectivity management applications provide users withdevice metadata and status information and diagnostics information. The management platformalso extends to users the self-management capabilities, such as SIM management actions for bulkoperations on many devices.

IT Outsourcers and Integrators

These providers offer traditional IT outsourcing and managed IT services, but they now havepractices that focus on delivering managed and professional services for IoT technologymanagement. Many of these providers enter the IoT solution market with the advantage of legacyvertical-centric GTM structures that provide subject matter expertise presale and postsale. Many ofthese providers also own vertical-centric back-office applications (such as manufacturing executionsystems and insurance industry applications) that will leverage IoT data. The number of IToutsourcers and integrators that maintain and manage MVNO operations is still small butincreasing. As managed IoT service adoption increases in the market, and the price to build andmanage MVNO capabilities decreases because of cloud and virtualized technologies, the number isexpected to increase rapidly over the next three to five years.

OT and IT Vendors

These providers bring a unique body of knowledge to CIOs planning and building IoT solutions.Their core business, in terms of revenue, is the manufacturing of non-IT products and systems, withsome also manufacturing and developing OT and IT technologies. This broad — vertical andhorizontal — perspective is a solid platform on which to build robust and expansive IoT businesses.To date, most focus on extending managed IoT platforms in conjunction with vertical-centric IoTapplications, such as enterprise asset management (EAM) or asset performance management(APM). However, many of these companies recognize that leveraging partner-based IT and OT

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service delivery is not sufficient for customer demand and preference. Consequently, they arerapidly building IoT service life cycle service organizations with relevant IT service catalogs thatspan consulting and advisory services to business process outsourcing. These providers are goingto market with an IoT platform (or elements of an IoT platform) and managed connectivity services.Thus, they are able to change their business model away from selling products as nonrecurringcapital events to products as an operational expense (IoT product as a service).

Dedicated IoT Network Providers

This segment represents a growing group of providers based on public and private networks inunlicensed spectrum. These providers sometimes manufacture their own IoT edge equipment, anddevelop their own IoT platforms and IoT vertical applications. These providers present focusedofferings, usually predicated on a few use cases, such as fleet management, smart parking, smartlighting or automated meter infrastructure.

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Magic QuadrantFigure 1. Magic Quadrant for Managed M2M Services, Worldwide

Source: Gartner (October 2017)

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Vendor Strengths and Cautions

Aeris

Aeris is an MVNO headquartered in the U.S. Aeris developed and manages its own core mobilenetwork built specifically for M2M. The company also has developed its own applicationenablement and data analytics platforms, and it will act as a mobile virtual network enabler (MVNE)for other service providers and enterprises wishing to create an MVNO capability. Systemintegration, value-added application development and support are provided through partners,although Aeris is increasing its own system integration capabilities.

Aeris goes to market with a direct sales force, with the majority in North America, along with someresources in Asia/Pacific, Europe and Japan (through a joint venture with SoftBank). The company'sdirect sales are also focused on a self-service portal designed particularly for easy adoption forsmall and midsize businesses (SMBs). The company also uses resellers.

Aeris' successes in managed M2M solutions are mainly in the automotive, fleet management andhealthcare sectors. Aeris reported more than 10 million managed connections currently deployed,making it the largest MVNO focused on M2M.

Based on the evaluation, Gartner recommends Aeris' solutions for connected vehicles, and assettracking and asset management for large North America-based multinational corporations (MNCs).Through multiple carrier partners, Aeris has operational reach in more than 180 countries and cansupport deployments globally. Enterprises and service providers considering Aeris are encouragedto review the company for its end-to-end M2M platform. Its self-service portal also offers a suitablesolution for organizations with smaller deployments.

Strengths

■ Aeris continues to see strong growth in connected SIMs under management and had anotherrecord year. Among MVNOs focused on M2M, its connection scale is unrivaled.

■ Aeris' IoT platform stack is strong, offering service management, some device management,data management, a software development environment, integration and API management,complex-event processing, analytics, and reporting and visualization.

■ Many customers cite strong postsales account management by Aeris.

Cautions

■ Aeris has relatively less experience in managing global deployments.

■ Aeris must invest in more high-touch customer service capabilities to appeal to global MNCs.

■ Aeris has no embedded SIM (eSIM)-based connections in its installed base.

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Arkessa

Arkessa is an MVNO based in the U.K. The company was founded in 2009. Arkessa serves itsmanaged M2M service customers through Emport, a connectivity management platform. In additionto cellular, the firm is able to provide service over satellite and LoRa.

At the end of 2016, Arkessa reported 800,000 managed connections, which came predominantlyfrom accounts based in Europe. In comparison with most other vendors, the company is focusedmore strictly on the provision of connectivity, without notable involvement in other parts of theservice stack. It has approximately 40 full-time employees, all based out of Europe.

Based on the evaluation, Gartner recommends Arkessa's solutions for utility metering andconnected vehicles, as well as deployments involving gateway-style edge devices in retail, logisticsand manufacturing. The company appears to be well-positioned to serve use cases that requirelarge volumes of data traffic and high throughput.

Strengths

■ Arkessa consistently receives high satisfaction ratings for M2M life cycle services, such asnetwork implementation, service aggregation, network activation and related help deskservices.

■ Arkessa's customers cite the company's ability to optimize the tariffs of higher data rates (3Gand 4G) and provide predictable invoicing as a competitive advantage.

■ Arkessa has built out a comparatively robust network of indirect channel partners, whichreflects favorably on the vendor's future outlook.

Cautions

■ Arkessa's growth rate in terms of managed connections in 2016 was modest, with only about100,000 net additions over the year.

■ Some customers indicated Arkessa needs to strengthen the relationship with its mobile networkoperator (MNO) suppliers' technical teams, as a way to speed up fault resolution.

■ Although the company is actively pursuing an eSIM-based market offering, less than 5% of theArkessa installed base is eSIM-based connections today.

AT&T

AT&T is a CSP with headquarters in the U.S. The company focuses on core managed M2Mconnected solutions, which are generally predicated on cellular/LTE connectivity that leveragesAT&T's various service delivery platforms (SDPs), including data storage and management, anopen-source application and deployment environment, and related professional services. AT&Tmarkets and sells — directly and via partner pass-through — some vertical solutions, such as fleetmanagement, track and trace, and tank monitoring.

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At the end of 2016, AT&T managed more than 30 million connections globally based on 2G (outsidethe U.S.), 3G, 4G LTE and satellite. AT&T's global connectivity is based on support for global SIMsbased on pre-GSMA and GSMA standard embedded Universal Integrated Circuit Card (eUICC) SIMversions in collaboration with leading SIM vendors. AT&T has completed its LTE-M nationwidenetwork and has multiple field trials for the LPWAN services, but it reports no managed connectionsin production at this time.

The company goes to market with a balanced direct and indirect channel model with partnerMVNOs, vertical business solution partners, and some system integrators (SIs) and outsourcers.Noteworthy GTM partnerships include IBM and GE. Noteworthy technology alliances include IBM,GE Digital, Amazon and Microsoft. AT&T's successes in key market sectors include automotive,energy and utilities.

Based on the evaluation, Gartner recommends AT&T's solutions for traditional managed M2Mservices for MNCs requiring large fleets of connected devices in the U.S., moderate fleets ofconnected devices across Europe, and small fleets of devices in Asia/Pacific, the Middle East andAfrica, and Latin America.

Strengths

■ Large customers are happy with AT&T's account management, including a single point ofcontact, its approach to business issues with a "global mindset," and flexible and proactiveprice control relating to discounts and contract renewal.

■ AT&T provides a complete M2M platform stack: devices, SIM management, storage as aservice and data management, as well as an open-source development and deploymentenvironment for M2M-specific applications.

■ AT&T continues to foster a large and growing network of developers, including traditional SIs,outsourcers and citizen developers, trained on AT&T's M2X, Flow Designer, and the CiscoJasper-based Control Center portal and SIM management service.

Cautions

■ AT&T's limited installed base of M2M customers outside of the U.S., as a percentage of itsoverall M2M business, remains a concern for large MNCs.

■ AT&T lags its major competitors in terms of a portfolio of value-added, off-the-shelf IoTapplications.

■ Although AT&T has completed its LTE-M network in the U.S., there are no productioncustomers at this time outside of extended field trials.

Deutsche Telekom

Deutsche Telekom is a telecommunications and IT provider based in Germany. Deutsche Telekombrings to market a horizontal IoT platform (Cloud of Things) approach to address key businessrequirements for security, and IoT and enterprise application integration and management.

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Deutsche Telekom also provides management consulting and innovation services for businessdigitization that incorporate managed M2M services and broader IoT capabilities. Deutsche Telekomserves Europe directly and the U.S. through its T-Mobile operating company, and it leveragespartner networks for rest-of-world connectivity. Deutsche Telekom's vertical focus includeshealthcare, automotive, transportation and logistics, industrial automation, energy, and publicsector. Gartner estimates that Deutsche Telekom managed nearly 19 million connections at the endof 2016.

Based on the evaluation, Gartner recommends Deutsche Telekom's solutions for M2M and IoT usecases for MNCs based in Europe with large fleets of connected devices across Europe and forenterprises based in North America with smaller fleets of connected assets.

Strengths

■ Based on an ecosystem of partners, and its own intellectual property, Deutsche Telekom canoffer customers a complete managed IoT platform stack with available starter kits: deviceresale, SIM management, device management, security, integration, data management andanalytics, and an open-source M2M-IoT application enablement environment.

■ Customer feedback relating to Deutsche Telekom's M2M and IoT software integration servicesand related help desk services is positive.

■ Deutsche Telekom offers connectivity services with its own national networks in 14 countries,including the U.S., multidomestic services offered by the Global M2M Association and theBridge Alliance in 77 countries, and services in cooperation with China Unicom. DeutscheTelekom also maintains 550 roaming partners in more than 220 countries.

Cautions

■ Some customers point to challenges relating to account management issues, such as thereliability of deliverables, and keeping projects to budget and projects within agreed timelines.

■ Deutsche Telekom supports a modest base of eSIM-based connections in its installed base. Forglobal providers, supporting eSIM capabilities offers users more control for mobile solutions interms of use cases, holistic SIM fleet control and access provider lock-in.

■ Deutsche Telekom continues to be focused primarily on European customers for most of itsmanaged M2M/IoT service business. Companies domiciled in the U.S. and outside of Europeare likely better served by providers with a broader global focus.

Eseye

Eseye is an MVNO based in the United Kingdom. The company provides cellular connectivity underits AnyNet Multi-IMSI, multioperator proposition. It also has its own hardware portfolio, comprisingoff-the-shelf devices as well as custom-made integrations.

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As of the end of 2016, Eseye reported an installed base of 1.3 million connections, the majority ofwhich were contracted out of Europe and the MEA region. All are deployed under direct end-usercontracts. In comparison with other vendors in the market, Eseye's connection footprint isremarkably global. The firm employs approximately 80 people, and it is able to provide connectivityin 190 countries.

Based on the evaluation, Gartner recommends Eseye primarily for utility metering and retail vending,as well as deployments involving gateway-style edge devices. Recently, the company has focusedparticularly on the enablement of pay-as-you-go asset financing and prepaid models in emergingmarkets. Its other strategic priority is a major partnership with Amazon Web Services (AWS), underwhich customers can provision their devices automatically to AWS cloud services via Eseye's SIMcards.

Strengths

■ Eseye's continued international expansion is a positive for customers requiring globalconnectivity from a single vendor. Eseye's connection count increased by about one-third in2016.

■ Eseye has developed a specialized but still cross-vertically applicable solution with its pay-as-you-go models, allowing the vendor to differentiate itself in the connectivity market.

■ Customers cite AnyNet's ease of use and the quality of Eseye's technical support as thevendor's strong points.

Cautions

■ According to customer feedback, Eseye could improve its project management practices,specifically in terms of defining parameters and costs more clearly.

■ Eseye has not invested in the enablement of LPWAN services through its platform so far, whichmay put the company at a technical disadvantage in 2018.

■ Eseye does not count any eSIM-based connections in its installed base. Supporting eSIMcapabilities offers users more control for mobile solutions in terms of use cases, holistic SIMfleet control and access provider lock-in.

Fujitsu

Fujitsu is an IT services provider based in Japan. Given the breadth of the Fujitsu portfolio, thecompany is the provider in this study that can build and manage an end-to-end IoT solution. Thissolution spans sensors, gateways, multimodal connectivity, an IoT platform, public and privatecloud services, and vertical applications — all under the Fujitsu brand and management purview.However, despite managing its own core network operations, the company does rely on third-partycapabilities and leverages third-party MVNOs for much of its connected solutions outside of Japan.

Gartner estimates that, in 2016, Fujitsu maintained approximately 7 million M2M connectionscomprising multiple access technologies, including LPWANs.

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Based on the evaluation, Gartner recommends Fujitsu's solutions for asset-intensive industries,such as manufacturing, transportation and utilities. Fujitsu also has demonstrated capabilities andexperience in the retail sector for MNCs that require large fleets of connected devices in Japan andrequire only modest fleets of connected devices in Europe. Enterprises considering Fujitsu areencouraged to review the company for end-to-end M2M and IoT solutions — inclusive of IoT edgedevices, edge analytics and IoT platforms for the identified solution targets. Fujitsu should also beconsidered for custom M2M and IoT application development and the integration of M2M data intoenterprise applications.

Strengths

■ Customers praise the reliability of the outsourced and managed global connectivity for Fujitsu'sconnected solutions.

■ Fujitsu is well-positioned to not only draw from its legacy businesses focused on networks(optical and radio access networks), embedded technologies, RFID and sensors, and networkmanagement, but also align them with its core enterprise IT solutions to become a broad anddeep player to build and manage end-to-end IoT solutions.

■ Fujitsu has a strong portfolio of hardware and software intellectual property — specific to theIoT and connected solutions — to leverage in its offerings.

Cautions

■ Fujitsu approaches manage M2M services as a function of broader M2M and IoT solutions, andit is not likely to pursue stand-alone M2M connectivity opportunities.

■ Fujitsu leverages partners to fulfill global connectivity requirements, and pricing for managedM2M services tends to be higher than other competitors' pricing, with no correspondingimprovement in service management quality.

■ According to feedback from some Fujitsu customers, account management continued to beviewed as problematic and difficult to work with, making business issues and escalationsdifficult to manage.

Globetouch

A new entrant in this Magic Quadrant, Globetouch is an MVNO headquartered in the U.S. Thecompany goes to market directly for MNCs and also partners with many CSPs, SIs and IoT ISVs.Globetouch is a unique entity in the market because its current strength is the result of investmentsfrom a number of operators, or operator-affiliated holding companies, including: Verizon Ventures,CK Hutchison, Digicel, NTT Docomo, 263 China and Qihoo 360 Technology. During this study,Globetouch announced winning a deal with OnStar (subsidiary of General Motors [GM]) for theexpansion of the connected car service outside of the U.S. Globetouch also acquired TeramatrixTechnologies, which develops an IoT sensor data analytics platform.

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Globetouch's installed base serves multiple vertical markets, including automotive, heavy industryand IT manufacturers. Globetouch reported just under 7 million managed connections at the end of2016.

Based on the evaluation, Gartner recommends Globetouch for connectivity services for telematics,cross-industry asset monitoring and fleet management for large MNCs requiring large fleets ofdevices in North America, Europe and across Asia/Pacific, as well as small fleets of devices acrossthe rest of the world.

Strengths

■ Globetouch is a leading eSIM provider offering GSMA eSIM 2.0/3.1, and it is working to haveGSMA eSIM 4.0 available by the end of 2017.

■ Globetouch's operator investors and access partnerships provide operational scale to competeand beat many Tier 1 CSPs in terms of operational scale.

■ Globetouch provides connectivity services in more than 180 countries, including local networkservices in 11 countries.

Cautions

■ Globetouch was not profitable in 2016.

■ The company is focused on the sales and services for cellular connectivity, and it lags manycompetitors in terms of value-added services.

■ Globetouch does not have an installed base of managed M2M services in Latin America or theMEA region.

Itron

A new entrant in this Magic Quadrant, Itron is a world-leading technology manufacturer of OT andservice company based in the U.S. Itron is focused on energy, gas and water usage for businessesand governments, and it also has an emerging focus on broader smart city solutions. The ItronOpenWay Riva solutions provide software applications, SaaS and managed services for monitoring,exception management and field maintenance of Itron RF and cellular network solutions. Togetherwith IoT partners such as Microsoft and Bsquare, Itron is able to provide a competitive end-to-endIoT platform solution.

Gartner estimates that, in 2016, Itron maintained more than 26 million M2M connections spanningcellular, fixed and field-area networks (FANs).

Based on the evaluation, Gartner recommends Itron's solutions for asset-intensive industries, suchas utilities, mining, and oil and gas. Enterprises considering Itron are encouraged to review thecompany for end-to-end M2M and IoT solutions — inclusive of IoT edge devices, edge analyticsand IoT platforms for the identified solution targets.

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During the creation of this Magic Quadrant, Itron announced its intention to acquire Silver SpringNetworks. The acquisition is expected to close in late 2017 or early 2018. As the transaction ispending and is subject to customary closing conditions, including regulatory approval and theapproval of Silver Spring Networks' stockholders, no impact has been assessed to the position ofSilver Spring Networks or to Itron in the Magic Quadrant.

Strengths

■ Itron is well-positioned to draw upon its legacy business focused on meters and processapplications to become a broad and deep player to build and manage IoT solutions.

■ Itron has created and fostered a programmatic structure for a growing developer community tocreate value-added applications to its portfolio of software, SaaS platform and processsolutions.

■ Itron has demonstrated experience serving its target market of energy, gas and water usage inasset-intensive industries in North America, Europe, Asia/Pacific and Latin America.

Cautions

■ Some Itron customers voiced concerns relating to the help desk's capabilities to resolve issueswithout repeated calls and escalations.

■ Itron's self-service portal functionality lacks some core analytics and reporting functionscompared with competitors.

■ Some Itron customers expressed dissatisfaction with Itron's management of satellite and 3Gconnectivity services.

Kore

Kore is an MVNO headquartered in the U.S. The company goes to market directly for MNCs andSMB customers. Kore is one of the largest IoT MVNOs in the industry, and it has developedpartnerships with device OEMs, CSPs, system integrators and IoT platform and vertical applicationscompanies. The company, through organic growth and a series of acquisitions, has built a strongglobal presence, with notable operations particularly in North America, Europe, Latin America andAsia/Pacific.

Kore maintains an installed base serving multiple vertical markets, including automotive, healthcare,energy and utilities, insurance, transportation, and retail. Kore's major areas of focus for value-added IT services are technology consulting, device engineering and certification, and M2Mapplication integration. Kore reported just over 6 million managed connections at the end of 2016.

Based on the evaluation, Gartner recommends Kore's solutions primarily for connectivity services intelematics, cross-industry asset monitoring and fleet management for large MNCs requiring largefleets of devices in North America, Europe and Australia, as well as small fleets of devices in the restof the world.

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Strengths

■ Kore maintains an installed base across all five geographies, with North America, Europe andLatin America seeing especially good scale. The company has the flexibility to support MNCs ofany size and is responsive to smaller engagements.

■ Kore's partnerships and operational scale allow the company to surpass many CSPs in areassuch as operational efficiencies and cost savings.

■ Kore's technical support staff continues to garner high marks for technology expertise,responsiveness to customer requirements and the company's ability to provision technicalresources to remediate service-impacting incidents.

Cautions

■ The challenge of unifying systems accumulated from acquisitions persists with Kore wheremultiple systems continue to run in parallel.

■ Kore's competencies remain centered on bundled hardware, connectivity, connectivitymanagement, and related support and professional services.

■ Kore does not count any eSIM-based connections in its installed base. Supporting eSIMcapabilities offers users more control for mobile solutions in terms of use cases, holistic SIMfleet control and access provider lock-in.

KPN

KPN is a CSP based in the Netherlands. The company has proven an ability to engage itscustomers in collaborative innovation to leverage connectivity as a platform for digital business andto add value to that journey through its own and partnered resources.

KPN serves manufacturing, transport and logistics, healthcare, utilities, retail, and government(smart cities, public transport and critical communications). The utility vertical is responsible for alarge part of KPN's current M2M business. KPN wraps extended value around its IoT customers inthe Benelux region, often spanning end-to-end IoT solutions that include vertical applications.Additionally, the company offers to customers in Europe a broad portfolio of IT services that spanconsulting to integration services. KPN does not actively market its service catalog portfolio outsideof Europe. KPN reported approximately 2.5 million managed cellular connections at the end of2016.

Based on the evaluation, Gartner recommends KPN's solutions primarily for telematics, assetmonitoring and fleet management for large MNCs that require large fleets of devices across Europe.Enterprises considering KPN are encouraged to review the company for its experience, expertiseand ability to aggregate LPWAN solutions within target markets.

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Strengths

■ KPN's M2M business has built an independent big data platform for all three energy networks inthe Netherlands.

■ The features and functions of KPN's SIM and connectivity management portal are good. Datavisualization is a strong feature of the portal.

■ KPN introduced a national LoRa network in the Netherlands in 2016. It is leveraging thatnetwork as a platform to create value-added services and applications.

Cautions

■ KPN is Europe-centric and is not considered an appropriate provider of managed M2M servicesfor large fleets of connected assets outside of Europe.

■ Some customers view KPN's multisourcing service integration capabilities to manageinternational partner fulfillment as needing improvement.

■ Some customers view KPN's standard deliverables and SLAs as somewhat inflexible fornegotiation.

Numerex

Numerex is an IoT solution provider headquartered in the U.S. Numerex develops an IoT platform,and it manufactures IoT modules and edge devices. The company is focused on providing IoTvalue-added applications and delivering full managed IoT solutions. Numerex services are focusedon the U.S. market. While the company does have international agreements enabling cross-borderservices, the majority of its agreements are confined to the country level. Its managed IoT solutionsinclude primarily use cases in asset monitoring and optimization, safety and security, and assettracking. Unlike most of its peers, Numerex posted a decline in connections, reporting less than 2million managed connections at the end of 2016.

Based on the evaluation, Gartner recommends Numerex's solution-oriented services aroundpersonnel safety, telematics and asset monitoring use cases, as well as IoT gateway managementfor MNCs based in North America that require only very small fleets of devices across the rest of theworld.

During the creation of this Magic Quadrant, Sierra Wireless announced its intention to acquireNumerex. The acquisition is expected to close in January 2018. As the transaction is pending and issubject to customary closing conditions, including regulatory approval and the approval ofNumerex's stockholders, no impact has been assessed to the position of Numerex or to SierraWireless in the Magic Quadrant.

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Strengths

■ Numerex's portfolio of people-centric solutions (monitoring for worker safety, senior care,prisoners and offenders) is differentiated among CSPs and MVNOs, which tend to overlook thismarket segment.

■ The Numerex support organization is continually cited as knowledgeable and responsive insupport of Numerex's manufactured M2M modules.

■ As an OEM, Numerex has strong device engineering capabilities, and users are highly satisfiedwith device engineering services and relevant logistics capabilities, such as device staging andkitting services.

Cautions

■ Many customers continue to cite Numerex's lack of innovation and new offerings to keep pacewith competitors.

■ Gartner has concerns relating to Numerex's long-term viability, given Numerex's ongoingunprofitability and inability to find a permanent replacement for the CEO position.

■ Numerex experienced a decline in the number of connections in 2016, largely due to the resultof a portion of the legacy customers sunsetting their 2G devices.

Orange Business Services

Orange Business Services is the enterprise service unit of Orange, a global CSP headquartered inFrance. Orange Business Services' M2M business focuses on end-to-end M2M serviceimplementations, analytics, and custom-made IoT solutions built on cellular and LPWAN.

Orange Business Services' major focus for value-added IT services are technology and businessprocess consulting, device engineering, analytics, and application development and integration. Ineach of the targeted verticals, Orange Business Services provides a combination of customized andoff-the-shelf M2M services. Orange Business Services reported 12.4 million connected objects atthe end of 2016, including 9.8 million active SIMs and 2.6 million connections using LPWAN andother connectivity networks.

Based on the evaluation, Gartner recommends Orange Business Services' solutions for theautomotive and transportation, industry and manufacturing, healthcare and daily life, and smartcities and territories for MNCs and governments that require large fleets of connected devicesacross Europe, MEA and North America. Orange Business Services is able to manage smaller fleetsof connected devices in the rest of the world. Orange Business Services has a strategic partnershipin place with China Telecom to cover the increasingly important Chinese market.

Strengths

■ Orange Business Services has a valuable ecosystem of multicountry partnerships to supportthe life cycle of device engineering and onboarding.

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■ Orange Business Services is an end-to-end integrator and operator that can deliver all thenecessary technical and service components of an end-to-end IoT-M2M and analytics solution.

■ Orange Business Services is a leading advocate for LoRaWANs, and it has deployed a LoRanetwork with indoor coverage in 20 cities and nearly 4,000 towns in France.

Cautions

■ Orange Business Services' installed base is Europe-centric, with only modest connectivity in therest of the world.

■ Some of Orange Business Services' customers point to inconsistent communications andexecution in the planning and transition stages for project implementation.

■ Some customers have voiced concern over the lack of attention relating to Orange BusinessServices proactively presenting innovation and continuous improvement to achieve ongoingefficiencies once the solution is implemented.

Orbcomm

Orbcomm is a satellite network provider and a cellular/LTE MVNO based in the U.S. Orbcommcurrently operates the only commercial satellite network dedicated to M2M. Orbcomm's portfolioincludes global satellite, cellular and dual-mode network connectivity, as well as hardware,connectivity management and vertical IoT applications. The Orbcomm vertical applications arefocused on transportation and third-party logistics, heavy equipment fleet management, industrialfixed assets, oil and gas, maritime, and government. Orbcomm reported nearly 8 million managedconnections at the end of 2016.

Based on the evaluation, Gartner recommends Orbcomm for heavy industry manufacturing,transportation and IoT edge devices (network access) for MNCs that require large fleets of devicesin North America and Europe, and small fleets of devices in the rest of the world. Enterprisesconsidering Orbcomm are encouraged to leverage the breadth of the M2M platforms and considerOrbcomm's capability to offer both cellular and satellite connectivity.

Strengths

■ Customers regularly point to Orbcomm exceeding expectations in terms of account-specificcommunications, engagement and knowledge transfer in presales and postsales scenarios.

■ Orbcomm's portfolio of diverse connectivity services spanning cellular and LTE, satellite,LPWAN, and managed access points is differentiating in the market.

■ Orbcomm provides managed connectivity services to nearly 200 countries. In addition to thediverse portfolio of connectivity services, customers value the extensive geographic coverage ofOrbcomm's M2M network services.

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Cautions

■ Although Orbcomm has experience in a number of different market sectors, its experience isheavily concentrated on the monitoring of connected vehicles. Thus, the industrial andenterprise use cases require some due diligence to determine the depth of experience foropportunities outside traditional fleet management capabilities.

■ Gartner continues to field concerns related to the customer support organization. These includeslowness to provide feedback on open matters related to connectivity and devices, and the lackof proactive communication regarding known software and hardware issues.

■ Orbcomm's subscriber management portal is considered a weakness in its offering. Issuesrange from inconsistent web interfaces, as well as reporting and data presentment features thatlag the broader market.

Sierra Wireless

Sierra Wireless, headquartered in Canada, is a manufacturer of cellular modules and otherhardware. The company also operates as an MVNO, having originally entered the market throughthe acquisitions of Accel Networks, MobiquiThings and Wireless Maingate. The MVNO services areavailable both on a stand-alone basis and as a complementary play bundled together with thevendor's hardware products. Another key element in Sierra Wireless' strategy is AirVantage, itscloud platform for device management and application enablement.

At the end of 2016, Sierra Wireless reported an installed base of 2.6 million managed connections.Notably, a relatively high share of these — more than one-fifth of the total — are 4G connections.The vendor has approximately 60 full-time employees dedicated to managed M2M services inEurope and North America.

Based on the evaluation, Gartner recommends Sierra Wireless particularly for telematics, connectedvehicles, utility metering and point-of-sale connectivity, as well as deployment of certain consumer-facing devices, such as home alarms.

During the creation of this Magic Quadrant, Sierra Wireless announced its intention to acquireNumerex. The acquisition is expected to close in January 2018. As the transaction is pending and issubject to customary closing conditions, including regulatory approval and the approval ofNumerex's stockholders, no impact has been assessed to the position of Numerex or to SierraWireless in the Magic Quadrant.

Strengths

■ Sierra Wireless has been successful at integrating its assets into a coherent device-to-cloudproposition, simplifying customers' IoT deployments and reducing their time to market.

■ Customers laud the level of support they receive from the vendor throughout the deployment ofthe solution and the onboarding process.

■ Sierra Wireless has managed to nurture a developer program with growing participation, byengaging developers with tools, open-source platforms and knowledge transfer.

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Cautions

■ Sierra Wireless is now just beginning to deploy eSIM-based connections in its installed base.Moving forward, supporting eSIM capabilities is crucial to the company to become a disruptiveend-to-end platform-as-a-service player for MNCs looking to divest from CSP solutions.

■ The company's installed base of cellular connections is focused on Europe (based on twoMVNO acquisitions in Europe). The company has very small fleets of connections in NorthAmerica, Latin America, MEA and Asia/Pacific.

■ Sierra Wireless lacks a sufficient ecosystem of leading system integrators knowledgeable of itshardware, software and middleware to help users plan-build-run global, end-to-end IoTsolutions.

Silver Spring Networks

Silver Spring Networks is a network and IoT solution provider based in the U.S. Silver SpringNetworks provides infrastructure management solutions that are focused on smart utilities andsmart city, and FAN private and public network services. Specifically, Silver Spring Networksprovides hardware, software and services for the deployment and operation of mesh networkingtechnology for IoT solutions. Silver Spring Networks' Starfish Platform-as-a-Service is aninternational wireless Internet Protocol version 6 (IPv6) public cloud network service for M2M andIoT solutions based on IEEE standards promoted by the Wi-SUN Alliance. Silver Spring Networksreported more than 25.5 million enabled devices delivered at the end of 2016.

Based on the evaluation, Gartner recommends Silver Spring Networks for utility-focused solutionsand solutions for municipalities in North America, Latin America, Europe and Asia/Pacific. Utility-focused solutions include smart grid; advanced metering infrastructure for electric, gas and water;distribution automation and demand management. Solutions for municipalities include smartstreetlight controls, digital signage and traffic management. Enterprises considering Silver SpringNetworks must review the company's solutions for holistic, end-to-end services and capabilities.

During the creation of this Magic Quadrant, Itron announced its intention to acquire Silver SpringNetworks. The acquisition is expected to close in late 2017 or early 2018. As the transaction ispending and is subject to customary closing conditions, including regulatory approval and theapproval of Silver Spring Networks' stockholders, no impact has been assessed to the position ofSilver Spring Networks or to Itron in the Magic Quadrant.

Strengths

■ Silver Spring Networks' customers continue to praise the account management organization asresponsive and dedicated to the customer relationship.

■ Gartner consistently receives feedback from customers that Silver Spring Networksaggressively pursues continual service improvement relating to technology issues and costcontainment.

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■ Silver Spring Networks' ability to manufacture its own network equipment and develop its ownmanagement platform and IoT vertical applications offers customers a unique value propositionin terms of expertise and price control.

Cautions

■ Silver Spring Networks lacks a broader proven set of IoT capabilities and solutions beyond itscore smart utility and smart city capabilities; consequently, organizations may look to otherproviders with broader portfolios and expertise.

■ Silver Spring Networks' installed base is focused on the U.S. market first, with a sizableinstalled base in Asia/Pacific. Silver Spring Networks has little experience and exposure toEurope, Latin America or the Middle East and Africa.

■ Inconsistent communications after the sale relating to project management issues includelapses in project handoff and timeliness of deliverables.

Stream Technologies

A new entrant in this Magic Quadrant, Stream Technologies is an MVNO based in the U.K. Besidesaggregating connectivity from its MNO partners, the vendor complements the cellular proposition bysupporting satellite, LoRa and Wi-Fi as additional network technologies. Stream's customersmonitor and manage their installed base on a single-pane-of-glass basis, regardless of the usedcommunications protocol, through IoT-X, the company's connectivity management platform.

For the end of 2016, Stream reported just over 1 million managed connections, enabled directly inmore than 70 countries. The customers are based predominantly in Europe. The company has a full-time staff of 44, focused on the managed M2M service proposition, as well as adjacent softwarecapabilities, such as LoRaWAN network management and eUICC enablement.

Based on the evaluation, Gartner recommends Stream Technologies for primarily energy andutilities, as well as building management.

Strengths

■ Stream's customers rate highly the vendor's consultative approach to sales and after-salessupport, lauding the staff's technical knowledge and understanding of IoT.

■ The IoT-X connectivity management platform is technically robust, with customers particularlyappreciating its ease of implementation and reliability of service.

■ Stream's positioning of IoT-X as a platform to enable connectivity on a multitechnology basis —with support for LoRa, satellite and cellular — is differentiated and offers users a "single pane ofglass," even when using multiple CSPs and MVNOs..

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Cautions

■ Stream's customer footprint is almost exclusively concentrated in Europe, and despite its globalproposition, the firm's ability to support accounts in other regions remains unproven.

■ Some Stream customers highlight the complexity of the company's product invoicing as anarea that would require improvement.

■ As a startup-level vendor of relatively small scale, Stream represents a higher counterparty riskthan larger and more established vendors.

Tele2 IoT

Tele2 IoT, part of Tele2 Group, is a CSP based in Sweden. Tele2 IoT has evolved from a pureconnectivity provider to a horizontal IoT-enabling service provider delivering agnostic connectivityon a global basis. The software-defined WAN (SD-WAN) implementation dubbed "2Secure"connects IP-based endpoints, regardless of networking technology and operator, into a truly privatenetwork. Tele2 IoT also has MVNE capabilities to enable its customers to become an MVNO.

Tele2 IoT reported 1.6 million managed connections across more than 165 countries across allmajor geographies at the end of 2016, and it has staff based in 11 European countries.

Based on the evaluation, Gartner recommends Tele2 IoT across multiple vertical use cases inmanufacturing, transportation and logistics, retail, and energy and utilities for MNCs requiringconnectivity in a large number of countries in Europe and the Middle East. Tele2 IoT is able toprovide managed services in North America, Latin America and Asia/Pacific for small fleets ofdevices.

Strengths

■ Tele2 IoT has a strong management team with long C-level experience from the M2M industry.Customers praise the knowledgeable staff, agile way of work and competitive pricing.

■ The Tele2 IoT solution is network- and technology-agnostic, which means it can provide a singlesolution with a single monitoring dashboard, even if different networking technologies (forexample, Sigfox, LoRa and LTE) are used in different countries.

■ Tele2 IoT is considered a good provider of panregional connectivity and SIM managementservices.

Cautions

■ Some customers point to slow decision-making processes relating to contract and accountmanagement.

■ Tele2 IoT does not manage a sizable installed base in the Asia/Pacific or the Americas.

■ Tele2 IoT's pricing is higher than that of most market competitors.

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Telefónica

Telefónica is a global CSP headquartered in Spain. The company leverages its strong directpresence in Europe and Latin America to build its managed M2M service business. Telefónicadistinguishes itself in the market as aggressively marketing and selling managed M2M solutions. Ofall the global CSPs in this Magic Quadrant study, Telefónica maintains the largest percentage ofmanaged service customers.

Telefónica's strategy is to focus on building M2M and IoT solutions on their networks, leveraging anecosystem of hardware manufacturers and value-added software and middleware vendors toaddress vertical markets. Telefónica has invested in deep expertise to offer a compelling portfolio toits clients that is differentiated with its account management and multisourcing service integrationservices.

Telefónica continues to show success in energy and utilities, automotive and transportation sectors,and smart city initiatives. Gartner estimates that Telefónica had more than 20 million M2Mconnections under management at year-end 2016.

Based on the evaluation, Gartner recommends Telefónica for general asset monitoring, connectedvehicles and utility meter monitoring solutions for MNCs with large fleets of connected devicesacross Europe and Latin America.

Strengths

■ Telefónica provides managed M2M connectivity services that span public and private LPWANs,FANs, 2G, 3G, LTE, and satellite to a highly satisfied customer base.

■ Telefónica enjoys strong levels of satisfaction for both account management and customerservice capabilities across Europe and Latin America. Its strength is based on strong localpresence and resources in all geographies it serves.

■ Telefónica's investment in personnel and processes relating to multisourcing service integrationprovides a solid capability to aggregate and integrate technology and service deliverypartnerships to both ensure project success and recognize planned outcomes.

Cautions

■ Telefónica has little direct presence and a small installed base outside of Europe and LatinAmerica. Global execution outside those geographies remains unproven.

■ Some customers continue to cite weakness in Telefónica's network partners, citing poorresponsiveness for network incident and problem management.

■ Some customers cite dissatisfaction with the breadth of reporting and data presentment in theTelefónica portal, which they cite as lacking in features and capabilities compared with thebroader market.

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Telenor Connexion

Telenor Connexion, part of Telenor Group, is a CSP based in Sweden. Telenor Connexion brings tomarket a value chain composed of managed connectivity, analytics and cloud IoT platform. TelenorConnexion regularly assists clients in putting innovative M2M solutions in place through a networkof partners. Telenor Connexion has strong experience as a provider to the automotive industry.Telenor Connexion reported more than 7 million managed connections across more than 200countries across all major geographies at the end of 2016, and it has staff based in five majorlocations on three continents. The primary geographic focus areas of Telenor Connexion are Europeand Asia/Pacific.

Based on the evaluation, Gartner recommends Telenor Connexion for utility solutions, connectedvehicles, fleet management and third-party logistics solutions for MNCs requiring large fleets ofconnected devices across Europe and Asia/Pacific. Telenor Connexion is able to provide managedservices in the Middle East and Africa, and North America for small fleets of devices.

Strengths

■ Telenor Connexion, being part of Telenor Group, has access to attractive wholesale and roamingrates due to its size.

■ Customers continue to praise Telenor Connexion for the ability to solve business requirementsand challenges through technical solutions.

■ Customer service is praised for proactivity, responsiveness and the ability to "go the extra mile."

Cautions

■ Some customers with panregional and global requirements cite slow response to the creation ofcommercial agreements when dealing with business units in different countries.

■ Telenor Connexion does not manage a sizable installed base outside of Europe and Asia/Pacific.

■ Some clients find Telenor Connexion's pricing higher as opposed to comparable competitors.

Verizon

Verizon is a CSP based in the U.S. Verizon is primarily a provider of M2M services in the U.S. anduses international MNO and MVNO partners for a small installed base outside of North America. Thecompany has established a leadership position among CSPs for its acquisitions of IoT verticalapplications spanning fleet management software, precision agriculture, connected commerce, andsmart city and smart venue capabilities.

Verizon's stated approach to IoT is founded on managed and professional services. While Verizonmaintains a strong Enterprise sales and service organization, Verizon's delivery experts tend tocome from the acquired companies that Verizon is working to integrate into a holistic M2Morganization. Verizon does differentiate the company based on its focus on IoT security solutions,

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such as IoT credentialing and software-defined perimeter (SDP). Verizon reported more than 29million managed connections at the end of 2016.

Based on the evaluation, Gartner recommends Verizon for primarily connected vehicles, precisionagriculture, and smart city and smart venue solutions for governments and MNCs requiring largefleets of connected devices in the U.S. Verizon is also recommended for small fleets of devices inEurope.

Strengths

■ Through public-private partnerships and innovative solutions driven by recent acquisitions,Verizon continues to be a leader in smart city solutions.

■ Through a series of acquisitions, Verizon is a global leader in fleet management applications.

■ Verizon offers a complete M2M platform for connected solutions. Verizon's solutions are basedon the company's own cloud assets, security services, management portal, connectivitymanagement platform, and an M2M application enablement offering that Verizon's users andpartners can use to build horizontal and sector-specific solutions.

Cautions

■ Verizon's efforts to integrate legacy M2M units, M2M platform development teams, IoT verticalapplication acquisitions and Verizon Enterprise require improvement for both providing internalalignment and presenting compelling value to the market to optimize customer experience andoutcomes.

■ Verizon has demonstrable and observable experience for managed M2M services in the SMBsegment; however, serving the plan-build-operate M2M solutions for large MNCs of connectedassets is still evolving.

■ Verizon's managed M2M services' installed base is the least geographically diverse customerbase of all the Leaders in this Magic Quadrant.

Vodafone

Vodafone is a global CSP headquartered in the U.K. Vodafone provides a wide range of value-added services to its customers beyond its core connectivity services. These include end-to-endservices — from help desk services and design of hardware through to a growing portfolio ofoperational services, such as provisioning and active administration of IoT edge device incidents —via secure operating centers located in over 50 countries.

The company goes to market directly to MNCs and small to midsize companies via its operatingcompanies. Vodafone successfully services multiple vertical markets, including automotive, energyand utilities, health, insurance, industry, public sector, transportation, and retail. Vodafone's majorareas of focus for value-added IT services are technology consulting, device engineering and high-value program management of third-party access services. Vodafone reported nearly 54 millionmanaged connections at the financial year-end 2016 and 2017.

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Based on the evaluation, Gartner recommends Vodafone for M2M solutions for large MNCsrequiring fleets of connected devices across all geographies. A large percentage of Vodafone'sinstalled base centers on connected vehicles; however, the company has expertise across a broadset of use cases.

Strengths

■ Vodafone manages the largest pool of cellular connections for M2M and IoT solutions across abroad geographic distribution that reflects its global footprint.

■ Vodafone can, through organic and partnered technology and service capabilities, create end-to-end managed M2M solutions, leveraging its own manufactured IoT edge devices, devicemanagement software, cloud services, analytics and application enablement.

■ Vodafone has improved its approach to market engagement. Customer feedback indicates amore aggressive and flexible approach to creating global pricing structures for M2M solutionsbased on customer needs.

Cautions

■ Some customers have identified lapses in Vodafone's ability to provide effective multisourcingservice integration across large numbers of network and service delivery partners.

■ The new self-service portal for connectivity management lacks features and capabilitiescompared with competitors' portals. Issues observed are inventory management, usagereporting, and some SIM testing and activation capabilities.

■ Vodafone does not provide any managed M2M services to the Latin America region.

Vendors Added and Dropped

We review and adjust our inclusion criteria for Magic Quadrants as markets change. As a result ofthese adjustments, the mix of vendors in any Magic Quadrant may change over time. A vendor'sappearance in a Magic Quadrant one year and not the next does not necessarily indicate that wehave changed our opinion of that vendor. It may be a reflection of a change in the market and,therefore, changed evaluation criteria, or of a change of focus by that vendor.

Added

The following vendors were added to this Magic Quadrant:

■ Itron

■ Stream Technologies

■ Tele2 IoT

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Dropped

No vendors were dropped.

Inclusion and Exclusion CriteriaAll of the following criteria must be met:

■ Providers must have at least 1 million cellular and/or LTE connected devices undermanagement (direct contract). Alternative connectivity modalities — satellite, LPWAN andmanaged FANs — are acceptable. Public hot spots are not acceptable.

■ Providers must solicit and deliver panregional or global services. Panregional services requiredelivery of services to at least two geographies from the following five covered geographies:

■ Asia/Pacific and Japan

■ Latin America

■ Europe

■ Middle East and Africa

■ North America

■ Providers must have at least $10 million in managed-M2M-related revenue in 2016. Revenuemay include bundled connectivity, IT (hardware and software) and IT services for M2M and IoTsolutions.

■ Providers must offer life cycle services, including professional and support services (inclusive ofreverse logistics), as a component of their managed M2M solution. Examples include deviceengineering, consulting and advisory services, service contract management, device warrantymanagement, management software/middleware integration, device disposal and recycling,depot repair, kitting, on-site support, help desk, and service desk. These services may bedelivered via partners, but the rated vendor must act as the prime contractor.

■ Providers must extend to enterprises a portal for accessing data related to monitored assets/processes. Providers must also offer the ability to administer and control network servicesrelated to the monitored assets, as well as the ability to provide change and releasemanagement relating to connectivity, connectivity modules, gateways and other supportsystems.

■ Providers must maintain infrastructure and network systems that add value to the resale ofnetwork services and SIMs (often referred to as "heavy or full MVNOs"). Providers that resellnetwork services will be considered for this Magic Quadrant; however, resellers of connectivityservices must provide life cycle management of the relevant contracts. Gartner prefers resellersthat bundle connectivity into the M2M and IoT solutions and own the service contracts (servicenovation). Such reseller providers are often referred to as "light MVNOs."

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Evaluation Criteria

Ability to Execute

Gartner evaluates vendors on the quality and efficacy of the processes, systems, methods orprocedures that enable IT provider performance to be competitive, efficient and effective, and topositively impact revenue, retention and reputation within Gartner's view of the market.

Ability to Execute is judged by seven main criteria. Each criterion is described below, and itsrespective weighting is shown in Table 1.

Product or Service

For this criterion, we review and evaluate each provider's network and IT services deliverycapabilities and the related portfolio offered. We scrutinize service capabilities from the perspectiveof companies with global requirements: service definitions that meet predominant use cases,diverse connectivity offerings, effective resourcing capabilities (organically and partnered), andaccount management.

Overall Viability

This criterion includes the following:

■ A best-effort assessment of the overall financial health of the provider's organization

■ The success of its M2M connectivity service business

■ The likelihood that the M2M connectivity service business unit (if distinct and separate) willcontinue investing to support innovation and delivery of the organization's portfolio of services

Focused consideration within this analysis included the organization of the relevant business units,the rate of investment and innovation, and multiyear revenue growth rates. Additionally, Gartnerworked to understand divergent, and possibly dilutive, strategies within many MVNOs, which arepursuing parallel strategies to become enabling software providers for competing CSPs and MNOs.

Sales Execution/Pricing

For this criterion, we assess each provider's capabilities in presales activities and the organizationthat supports them. We consider teams in charge of deal management, street pricing (based on aMagic Quadrant survey and user feedback), and clarity of scope.

Focused consideration within this analysis included users' perception of affordability, the salesorganization to sell value and future-proofed solutions predicated on diverse connectivity beyond2G.

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Market Responsiveness/Record

For this criterion, we assess each provider's ability to respond, change direction, be flexible andachieve competitive success as opportunities develop, competitors act, customers' needs evolveand the market dynamics change. Focused consideration within this analysis included users'feedback on the provider's flexibility, continuous improvement and innovation.

Marketing Execution

For this criterion, we assess the clarity, quality, creativity and efficacy of programs that are designedto:

■ Deliver an organization's message to influence the market

■ Promote its brand and business

■ Increase awareness of its services

■ Establish a positive association in the minds of buyers between the company and its servicesand brands

Focused consideration within this analysis included users' feedback on the provider's reinforcementof value to its users and Gartner analysts' perceptions of the provider's marketing execution.

Customer Experience

For this category, we evaluate reference customers' overall satisfaction with the services and theprovider relationship, taking into account additional Gartner-client interactions (for example,customer inquiries and one-on-one conversations at events). We obtained access to referencecustomers by asking each provider to identify five reference customers for its managed M2Mconnectivity services. We required their selection of reference customers to observe the geographicdistribution needed to participate in the study and the different industries addressed.

In particular, we consider the important elements of a successful M2M connectivity servicecustomer experience. These include overall client satisfaction, value-added management platformsand services, and continuous improvement processes in place — both centrally and within theaccount management team.

Operations

For this category, we assess each provider's ability to meet its goals and commitments, includingcontractual service delivery obligations to clients. Factors include the quality of the organizationalstructure, skills, experiences, programs, systems and other vehicles that enable the service providerto operate effectively and efficiently on an ongoing basis.

We speak to the service providers about their main procedures (operational, transitional and relatingto program management, relationship management and change management) and ask theirreference customers for feedback about those procedures. We also ask the providers to supplyinformation about the platforms and services they provide, the networks they manage, and their

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partnered access capabilities and resources. Focused consideration within this analysis includedinvestments in resources and the efficiency of the delivery organization.

Table 1. Ability to Execute Evaluation Criteria

Evaluation Criteria Weighting

Product or Service High

Overall Viability Medium

Sales Execution/Pricing High

Market Responsiveness/Record Medium

Marketing Execution Low

Customer Experience High

Operations High

Source: Gartner (October 2017)

Completeness of Vision

Gartner evaluates service providers on their ability to articulate logical statements convincinglyabout the market's current and future direction, innovations, and customer needs and competitiveforces, and on how well these correspond to Gartner's position. Ultimately, we rate providers ontheir understanding of how they can exploit market forces to create opportunities for theirorganizations.

Completeness of Vision is judged using eight main criteria. Each criterion is described below, andits respective weighting is shown in Table 2.

Market Understanding

For this criterion, we assess each provider's global view of the managed M2M connectivity servicemarket. We evaluate how each provider is working to serve the main requirements of MNCs. Wealso look at the main effect that new connectivity requirements, delivery platforms and protocolsupport requirements are likely to have on each provider's business and offerings in the short termand medium term. Focused consideration within this analysis included a review of existing andplanned value-added services, ranging from service management, device management, applicationdevelopment and management to data management and analytics.

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Marketing Strategy

For this criterion, we assess each provider's main marketing messages relating to managed M2Mconnectivity services. In particular, we consider:

■ Current and future value propositions for managed M2M connectivity services

■ The importance of M2M connectivity services within the providers' broader portfolio of businessand capabilities

■ Channels for internal and external communications

■ The differentiation of a provider's message from its competitors' messages

Sales Strategy

For this category, we require each provider to illustrate its overall sales strategy for M2M, its reactiveanswers to RFPs as compared with its proactive activities, its stand-alone offerings as comparedwith offerings bundled with other services, and its dedicated sales force as compared with itsgeneral sales force. In particular, we consider:

■ The number of dedicated M2M sales personnel globally

■ Countries covered by direct local teams, as opposed to centralized teams

■ Client retention rate

Offering (Product) Strategy

For this criterion, we assess the offering based on the most important aspects of the serviceoffering that differentiates it in the market and delivers value to its clients. In particular, we considereach provider's:

■ Ability to both integrate client requirements and support global business process flows

■ Ability to extend value-added IT services to support its clients' global connected solutions

■ Approach to combining standard service elements into customized service delivery, includingpartnered capabilities, to provide flexible, low-cost and cloud-enabled service offerings

Business Model

For this criterion, we assess each provider's high-level description of its business model for M2Mservices and an explanation in terms of how this fits within its overall business model. To evaluatehow well each provider's business model addresses account management, we asked forinformation about:

■ The structure of the management teams used to support and manage customers

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■ Processes to address customer issues locally, as compared with centrally, including customers'access both to an appropriate level of management within the service provider and toescalation procedures

■ We asked each provider's reference customers for their judgment about their provider'sbusiness model, including account management and service delivery, and we factored theiranswers into our evaluation. Additionally, we considered feedback received in Gartner customerinquiry calls.

Vertical/Industry Strategy

For this criterion, we assess each provider's strategy to direct resources, skills and offerings to meetthe specific needs of individual market sectors. In particular, we consider each service provider's:

■ Penetration of different industries for managed M2M connectivity services

■ Past performance evidence relating to the breadth and depth of sector-specific use casesbased on managed M2M connectivity services

Innovation

For this criterion, we assess each provider's position in the market as a thought leader and aninnovator. We also evaluate how each provider establishes leadership, including the investmentactivities to achieve its vision, and how the providers develop innovative strategies in the M2Mmarket. In particular, we asked providers to answer the following questions:

■ What investments are your company making to sustain and enhance its vision for innovativeM2M services?

■ What global alliances do you have with other leading suppliers, and what investments supportthese alliances?

We also asked reference customers for their judgment of their provider's ability to innovate(including the technical aspects of innovation), ability to lower costs and to improve service bydelivering innovative utility-based services, and degrees of responsiveness and proactivity,adaptability, and service flexibility.

Geographic Strategy

For this criterion, we assess each vendor's regional and global capabilities, as well as local alliancesand partnerships, including:

■ Relationships with product and service providers to add value, provide full-service solutions orbring innovation closer to clients

■ How each provider takes responsibility for managing the service delivered, even when usingsubcontractors or partners

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■ We also asked reference customers for their feedback about local capabilities and the current orpotential effects of consolidation and global delivery processes.

Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria Weighting

Market Understanding High

Marketing Strategy Medium

Sales Strategy High

Offering (Product) Strategy High

Business Model Medium

Vertical/Industry Strategy High

Innovation High

Geographic Strategy High

Source: Gartner (October 2017)

Quadrant Descriptions

Leaders

Leaders invest in the future of IoT that includes a continuum of value from IoT edge devices to IoTplatforms and related analytics. Leaders perform skillfully and often exceed expectations. Leadershave a clear vision of the market's direction and develop competencies to maintain their leadership.Leaders engage customers and provide value across multiple geographies. They shape the market,rather than follow it, and they often set the benchmark for market growth. Leaders have the size andscale (for example, operations, sales and marketing, formal bid, and product management) topursue large panregional and multinational opportunities for M2M-IoT connectivity. They haveestablished a robust and diverse ecosystem of technology alliances and service deliverypartnerships spanning IT, OT and IoT to meet broad market requirements.

Challengers

Challengers execute well today and maintain a sizable, geographically diverse installed base.However, they have a view of the market's direction that is not aligned with the biggest and mostdemanding customers — in terms of the breadth of value, service delivery operations or thecontinuum of investment for resources and value that a broader IoT platform and portfolio offer.Challengers in the market for managed M2M services need to be more aggressive in outlining andcommunicating their strategy for the future outside of their core focus on connectivity services andassociated customer support. They must also be more aggressive in how they invest in innovative

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offerings, such as end-to-end IoT solutions predicated on the capabilities to offer a completeservice-based IoT platform, or the market partnerships to resell and manage on the customer'sbehalf. Challengers must also work to extend into adjacent market capabilities, leveraging theexperience gained to offer more value, and reduce the friction of adoption for their customers andprospects.

Visionaries

Visionaries have a clear view of the market's requirements and direction. Visionaries focus onproviding a broader continuum of value to meet future market needs and to effectively upsell andcross-sell within their installed base through trust and the extension of recognizable, iterative value.Visionaries expand their capabilities through acquisition, through internal development and,increasingly, robust partnering. Visionaries need to improve their ability to meet customerexpectations through process improvement and service center investment. Visionaries also shouldonboard executives and personnel with valuable market experience. Where investment resourcesdo not exist, Visionaries must work to extend through service delivery partnerships and technologyalliances (for example, resell and OEM agreements). Additionally, Visionaries must work to expandtheir market focus through catalog expansion, sales force growth in key geographies, and/orindustry-specific expansion to penetrate the market for global managed M2M services.

Niche Players

Niche Players focus successfully on a constricted channel to market, a particular service, aparticular set of industry markets, a limited number of regional markets, or a combination of all ofthese strategies. The narrower focus of Niche Players may affect their ability to outperform orinnovate. Often, their revenue and installed base growth rates lag behind the market average, orthey may be unprofitable or exhibit extremely low operating profits in a market that is enjoyingrelatively high margins. While a provider can be successful in a single capability focused on a singlemarket industry or segment, or a single geography, or selling through partners only, Niche Playershave difficulty expanding into alternative geographies or upselling broader value to their installedbase. Niche Players are still very much viable providers of managed connectivity services for M2Mand IoT use cases; however, users must be aware that broader IoT expansion may not be possiblewith these providers.

ContextAs enterprises become more familiar and comfortable with the value and capabilities associatedwith digital business, and M2M and IoT interoperating with OT, their approaches to deploying thesesolutions are maturing. Today, many connected solutions are planned, deployed and maintainedwithin invisible silos within business units, such as product marketing, or regional business units oroperations and engineering.

CIOs must insert themselves in the process of solution and vendor selection to determine ifproviders of managed M2M services can also provide a broader, preintegrated IoT solution. This

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strategy will ensure the cost-effectiveness and security of these solutions, as well as potentiallyreduce the opportunity costs of due diligence.

This Magic Quadrant assesses the Ability to Execute and Completeness of Vision of 21 managedM2M service providers. CIOs can use this information and analysis to help them select providercontracts that support critical functions and business objectives, as well as assess the provider forfuture capabilities as the enterprises work toward broader IoT solutions.

Market Overview

Security Will Become the No. 1 Inhibitor to M2M and IoT Adoption

Based on Gartner surveys, cost reduction continues to be the most cited outcome driving theadoption of M2M and IoT services, as companies look to lower the cost to service and controlassets. As more companies connect more assets and business processes, security will become theNo. 1 consideration in the acquisition process. This scrutiny will cascade into reviews of underlyingSDPs, applications and management platforms. For example, Gartner expects there will besignificant investments in the management of private APNs and VPNs relating to M2M services.

MNCs Beginning to Show Favor on MVNOs Over CSPs

Some larger enterprises have gained experience with CSPs and MVNOs to build and manage theirIoT solutions, and broader digital business platforms. However, there is a segment of the marketthat is increasingly moving away from traditional CSPs and looking to MVNOs to take over the dailymanagement of global connectivity for their digital business. Increasingly, MVNOs with globalcapabilities are able to offer connectivity across geographies, thus releasing the enterprise fromnegotiating and managing scores of operator contracts.

The emergence of IoT-focused MVNOs is a convergence of the generic MVNO business model andthe technological evolution triggered by key technologies in the IoT space. Examples include cloud,virtual Evolved Packet Core (vEPC), network function virtualization (NFV), software-defined networks(SDNs), eSIM and LPWA.

This technology convergence has created an emerging market of IoT capabilities, with someimportant, already established global players — for example, Aeris, Arkessa, Eseye, Globetouch,Kore, Orbcomm and Sierra Wireless, to name a few — competing with different IoT capabilities.

Investing in less expensive and more agile infrastructure, and aggregating across a range ofproviders and connectivity modalities, the MVNOs are presenting an attractive alternative toinflexible CSPs. The MVNOs offer enterprises with large fleets of connections a level of control and,increasingly, pricing flexibility, which the CSPs have refused to engage.

Enterprise and Private MVNOs

The same issues pushing MNCs to MVNOs — such as the need for flexible pricing, more control oftheir data and networks, and the emergence of lower-cost enabling technologies (that offer

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expanded capabilities) — are leading some enterprises to invest in their own MVNO capabilities.The emergence of the IoT enterprise MVNO is becoming a reality with companies, such as aninvestment by the venture arm of Audi in Cubic Telecom or the acquisition of an MVNO by PortoSeguro (insurance company in Brazil).

Gartner refers to the investments by Audi and Porto Seguro as enterprise MVNOs. EnterpriseMVNOs can be historically non-technology-oriented organizations, such as utilities, manufacturersor insurance companies. Gartner also sees technology and service providers (such as systemintegrators, ISVs and hardware OEMs) planning to develop some form of MVNO capability to extendand expand their market opportunities associated with IoT and digital business.

Private MVNOs are MVNOs that use cellular connectivity services only for internal usage, avoidingstronger regulation requests (such as, lawful interception). This type of MVNO requires specificregulation changes. An example is Enexis a Dutch utility that became a private MVNO, thanks tochanges in regulation in the Netherlands.

Pricing Stability

During the past 12 months, Gartner has observed a stabilization in pricing from the perspective of"provider aggressiveness." Over the previous 24 months, it was typical to see CSPs aggressivelypresent drastic price reductions ahead of the end of contract terms to maintain its installed base.Oftentimes, these proactive price renegotiations offered 20% to 50% discounts over the previouscontracts, depending on the size of the installed base and the density of connections ininternational zones outside of the CSP's home territory. That practice seems to have dried up.Gartner sees repetitive standard pricing from the CSPs. Gartner expects there will be less than a10% reduction in per-line pricing in 2017.

CSPs' Embrace of Broader IoT Platforms Is Tentative

In the previous year's Magic Quadrant, Gartner identified R&D focused on broader IoT capabilitiesand investments in growing global presence as bright spots in the study. Among the CSPs, Verizonwas the market aggressor — with acquisitions of IoT applications and technologies — toconsolidate the markets for connected vehicles and smart cities. Other than that, there has not beenmuch movement in the broader IoT market, and the percentage of IoT hardware and software as afunction of the CSPs' and MVNOs' IoT revenue declined in 2016. This was the first time this revenuehas declined since the Magic Quadrant was created in 2014. If CSPs and MVNOs do not want tolose another growth market by being perceived as "commodity network providers," they will need toincrease their rates of innovation, as well as grow the sales and support organizations around them.

Gartner Recommended ReadingSome documents may not be available as part of your current Gartner subscription.

"2017 Strategic Roadmap for IoT Network Technology"

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"Market Insight: Implications of 2G and 3G Switch-Off on IoT Project Planning"

"Best Practices for Secure IoT Communications"

"Critical Capabilities for Wireless Telecom Providers, U.S."

"How Markets and Vendors Are Evaluated in Gartner Magic Quadrants"

Evidence

■ More than 600 Gartner client inquiries in 2016 and 2017

■ Service provider interviews and vendor presentations and demonstrations of capabilities in2016 and 2017

■ Customer references from the service providers in 2016 and 2017

■ Public information from sources such as U.S. Securities and Exchange Commission filings,press releases, vendor websites and secondary research

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor for the definedmarket. This includes current product/service capabilities, quality, feature sets, skillsand so on, whether offered natively or through OEM agreements/partnerships asdefined in the market definition and detailed in the subcriteria.

Overall Viability: Viability includes an assessment of the overall organization's financialhealth, the financial and practical success of the business unit, and the likelihood thatthe individual business unit will continue investing in the product, will continue offeringthe product and will advance the state of the art within the organization's portfolio ofproducts.

Sales Execution/Pricing: The vendor's capabilities in all presales activities and thestructure that supports them. This includes deal management, pricing and negotiation,presales support, and the overall effectiveness of the sales channel.

Market Responsiveness/Record: Ability to respond, change direction, be flexible andachieve competitive success as opportunities develop, competitors act, customerneeds evolve and market dynamics change. This criterion also considers the vendor'shistory of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designedto deliver the organization's message to influence the market, promote the brand andbusiness, increase awareness of the products, and establish a positive identificationwith the product/brand and organization in the minds of buyers. This "mind share" can

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be driven by a combination of publicity, promotional initiatives, thought leadership,word of mouth and sales activities.

Customer Experience: Relationships, products and services/programs that enableclients to be successful with the products evaluated. Specifically, this includes the wayscustomers receive technical support or account support. This can also include ancillarytools, customer support programs (and the quality thereof), availability of user groups,service-level agreements and so on.

Operations: The ability of the organization to meet its goals and commitments. Factorsinclude the quality of the organizational structure, including skills, experiences,programs, systems and other vehicles that enable the organization to operateeffectively and efficiently on an ongoing basis.

Completeness of Vision

Market Understanding: Ability of the vendor to understand buyers' wants and needsand to translate those into products and services. Vendors that show the highestdegree of vision listen to and understand buyers' wants and needs, and can shape orenhance those with their added vision.

Marketing Strategy: A clear, differentiated set of messages consistently communicatedthroughout the organization and externalized through the website, advertising,customer programs and positioning statements.

Sales Strategy: The strategy for selling products that uses the appropriate network ofdirect and indirect sales, marketing, service, and communication affiliates that extendthe scope and depth of market reach, skills, expertise, technologies, services and thecustomer base.

Offering (Product) Strategy: The vendor's approach to product development anddelivery that emphasizes differentiation, functionality, methodology and feature sets asthey map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying businessproposition.

Vertical/Industry Strategy: The vendor's strategy to direct resources, skills andofferings to meet the specific needs of individual market segments, including verticalmarkets.

Innovation: Direct, related, complementary and synergistic layouts of resources,expertise or capital for investment, consolidation, defensive or pre-emptive purposes.

Geographic Strategy: The vendor's strategy to direct resources, skills and offerings tomeet the specific needs of geographies outside the "home" or native geography, either

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directly or through partners, channels and subsidiaries as appropriate for thatgeography and market.

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