Waking Up to the Connected World

Imagine being woken up every morning, not just by your alarm clock or whining dog, but by the smell of fresh coffee brewing in the kitchen and the sound of hot toast popping out of the toaster, ready to be buttered.

We’re not talking about hiring domestic help here, but rather the new connected world in which your alarm clock is connected to your mobile device, your calendar, your address book — in fact, to everything. Your alarm clock has access to real-time traffic data and sets your wake-up time according to your calendar and traffic conditions that morning, calculating the time you need to prepare and drive to get to the meeting on time.

Not only is your alarm clock connected, but so are all the household devices, hence the coffee machine and toaster switching on in sync with your wake-up call. What I’m describing here is a revolutionary connected world, going beyond “everywhere-anywhere” connectivity to a transition from devices operated by people to devices assisting people.

We’re not quite there yet, but by 2017 experts predict that there will be 7 trillion networked devices in the world — most of them not phones — and these networked devices and applications (including M2M) will have become consumers’ real-time personal assistants.

Now this new connected world is emerging at a time when service providers see a frightening prospect when they look into the future. ARPU is in decline and new data revenues aren’t generating enough growth. Meanwhile both opex and capex are on the rise due to new and blended services on the one hand, and network investment to address data demand on the other.

And if this wasn’t enough, new competitors are coming in over the top, taking a large portion of both mind share and wallet share while the current revenue share models are relegating the service providers into the dreaded “dumb pipe” role.

And so, in order to capture new growth opportunities, service providers have to rethink their business models to match this evolving connected world and shift their focus to the end customer (across different industries) and the end-to-end ecosystem to provide value.

One model service providers can adopt is the experience model, which remains in the communication, media and entertainment ecosystem, and concentrates on doing more with what we have at present, with the service provider enabling a seamless experience across all devices.

For example, a family orders a film by video on demand and is able to watch it at different times, on different devices, such TV, mobile, PC or in the car. By providing this, the service provider is offering the end consumer personal content locker services, bandwidth on demand, quality of service assurance services, remote device support and a car connectivity service.

Another model, the vertical model, sees service providers entering new industries, such as health care. For example, a diabetic patient goes on vacation and when checking his glucose levels finds that they have dropped to a dangerous level. Through remote testing and transmission, enabled by the service provider, the patient’s clinic is automatically notified and sends an SMS alert to the patient. Noticing the alert and the fact that the patient is out of town, a nurse at the clinic then phones the patient with information on where they can find the nearest medical facility if necessary. The services provided to the medical center by the service provider in this example are network-based health care services, personal content locker services, remote customer care services, M2M smart services and billing and payments.

In a third model, the partner enabler model, the service provider becomes a smart pipe and distribution platform for content providers. For example: Disney wants to be able to offer its films in HD to home users. The service provider will guarantee delivery of the film in HD and in return Disney will pay the service provider for quality of service and/or bandwidth on demand.

This connected world is definitely a new world, bringing new opportunities. Now’s the time for service providers to wake up and smell the coffee — before it’s too late.

Mike Couture is vice president of Amdocs, where he leads the company’s global team of marketing professionals in the areas of market research and insight, product marketing, marketing communications, corporate marketing, regional marketing and account-based marketing.