AT&T IoT Exec: Partners See 'Attractive' Revenue Opportunities For Managed Services

As the world's largest telecommunications company, AT&T has been in the Internet of Things game for a while, but in more ways than you may have known. The Dallas-based company provides connectivity for more than 40 million connected devices, but its AT&T Business Solutions unit also provides platform- and application level-solutions.

CRN recently spoke to Mobeen Khan, associate vice president of product marketing management for IoT solutions at AT&T, at the IoT World conference in Santa Clara, Calif., about which areas are driving the company's IoT businesses, what opportunities there are for channel partners, and where he sees the next big opportunities in IoT. The company works with channel partners, including systems integrators and managed services providers, through the AT&T Partner Exchange and the AT&T Alliance Channel programs.

"For a lot of the channel partners, it's managed services that provide a really interesting and attractive revenue stream, because they're not only helping you select the right solution and one-time deploying it — and yeah, there's some one-time revenue in that — but it's really around the management of these services," Khan said.

What follows is a lightly edited interview with Khan.

Where does AT&T fit within the IoT ecosystem?

AT&T has been connecting non-phone and tablet devices for over a decade. So [for] 10 to 12 years we've been doing this. These are all different kinds of things like tractors and trailers and packages and healthcare devices and cars and alarm panels. As of last quarter, we made the announcement about how many devices we connected on a network: We have over 40 million devices available. These are all what you would call IoT devices. So it's a big business for us. It is a separate business unit within AT&T Business Solutions.

If you look at what we provide, divide that into three layers. The first layer is connectivity and connectivity solutions. The second layer is platforms. And the third layer is applications. So at the connectivity layer of this data, it's our bread and butter as a network provider: We securely provide connectivity to these 40 million devices, and we go to market with a SIM module called a global SIM. And what it allows our customers do is to have a single interface with us and our service management platforms and be able to have assets that can be everywhere in the world. So you can ship a container anywhere in the world. It can be on 500 different networks and [you] get a single bill from AT&T. So we have made that really, really easy for our customers.

We are also investing from a network perspective by having not just the LTE connectivity, but also what we call LTE-M connectivity, which is designed for low-power devices that need a 10-year battery life or need connectivity in the basement or elevator shaft. So this network technology is primarily designed for IoT and then for some of our customers, they need connectivity that is non-cellular to augment, so satellite. Think about when you're in an offshore oil rig or you're on a ship at sea and you need to track assets and there's no cellular coverage. We can offer a multi-network solution again with a single service management layer. Best in class. Very strong platform and APIs for you to manage them.

What about the two other areas?

At the platform layer, we do what we call data management and device management. So let's say you need to update firmware on a device [and] you need to be able to collect data, orchestrate it between different devices and then send it to the cloud to the applications. We have tools and capabilities that we offer our customers that they can use to build solutions and manage their solutions, so we have a product called Data Flow that allows customers to go do that.

The third layer is the applications layer. That's where, selectively, we have decided there are certain areas where we can offer end-to-end solutions, so we bundle the connectivity, the device and the hardware, the platforms and the set of applications for a single price and a single contract. An example of that is our asset management solution called AMOC (Asset Management Operation Center). Or Fleet Solutions, which allows you to connect a device into the vehicle and collect statistics around engine diagnostics, driver behavior, location, so on. In those cases, we offer an end-to-end solution for our customers. That, at a very high level, is our portfolio that we offer to small businesses, governments and the enterprise.

Are there any particular areas that are driving adoption for IoT solutions?

These 40 million devices cover the gamut. Any use case you can think of has probably been deployed, but some of the big growth areas for us are in the area of vehicle solutions. So think about connected cars. We have top brands now being connected through AT&T's network and capabilities, so any car that rolls out, chances are, it's on an AT&T network. And it's used in two ways: it's used by the OEMs, the manufacturers, to collect data on their product as the product is out on the road and then they can use that data either for predictive maintenance, or marketing to their customers and maintenance schedules and so on. But it also allows us to offer consumer Wi-Fi services in car, and that is a relationship between AT&T and the customer directly. So you can purchase that and add it to your mobile share plan with AT&T. On the commercial side of the vehicles, fleet management is a huge area of growth for us, both on the small business side and large government and enterprise customers. [On the] small business side, if you're a small plumbing company, you have 10 vans [and] you need to make sure they're driving appropriately, you need to make sure the engine diagnostics are working — you can get an out-of-the-box solution sold to a retail location, self-install it, get it up and running [and] get a single bill, very easy. And then we have another product in the vehicle solutions, Fleet Solutions, which is high-end, platform-based. You're an enterprise, you need customized dashboards, customized analytics coming out of that, pipe that maybe into your systems, add asset management to it, so for enterprise-class, we have another fleet platform that we offer in the marketplace.

The other area of growth is asset management. So there's two type of asset management solutions or use cases we're seeing. One is around supply chain monitoring: "Where is my package, where is what I just shipped, when is it going to arrive?" But [customers are] starting to ask more around not just where is it arriving and when, but what is the condition? So, "are the groceries shipped at the right temperature, did somebody drop those electronic parts?" [That covers] supply chain location monitoring and supply chain condition monitoring.

[Then there is supply chain diagnostics, which covers issues like,] "hey, I've deployed generators in the convention center, what is the fuel level of those generators? Can I remotely start them and so on?" It's around control and monitoring of deployed assets. So those are a couple of areas. Other than that, I think healthcare is a good area that's growing: healthcare devices, alarm panels in smart homes, smart buildings — that's growing. Smart cities is another area where we are starting to see some traction for different applications, like smart lighting controls. And smart parking. Those are the areas that we find a lot of deployments going in.

Can you speak to the opportunities there are for channel partners in IoT?

On the connectivity and connectivity management side, we work with several channel partners that customers don't want to manage the solutions themselves, because they say, "I don't want to hire any more IT staff, I don't want to hire and build competency in IoT — I want an out-of-the-box solution and I want somebody to manage it for me." Simple things like changing the devices, getting the devices, turning on and off SIMs during Christmas season when you need more deliveries versus less after January, so the whole entire management can be serviced through third parties. That's an opportunity for channel partners that we work with. Then we have solution integrator partners, and these are partners who are more on the technology side, more tech savvy, and they would take a solution and platforms that we offer and customize [them] for specific verticals, specific sectors, specific customer needs, and manage it on a day-to-day basis for them. There's a lot of opportunities in the space for channel partners, and we work with them on a daily basis.

Can you break down the different revenue streams first for managed services providers and then systems integrators?

The systems integrators are pretty simple. They make money typically on the value-add they provide from the development perspective. Many times for a systems integrator, the revenue is more upfront at the time of deployment. Now many of them support it, and charge a support fee, so there's an ongoing revenue stream as well. But for a lot of the channel partners, it's managed services that provide a really interesting and attractive revenue stream, because they're not only helping you select the right solution and one-time deploying it — and yeah, there's some one-time revenue in that — but it's really around the management of these services. From the revenue perspective, it's important but also if you do this in the right way, you can develop competencies in certain verticals. [In healthcare, for example,] you know what the compliance requirements are, you know that these pharmaceuticals need to be shipped during these times and so on, and at what temperature conditions, so you can tell [these customers], "hey, this batch, don't use it because it was out of compliance, it may not be the right drugs to use so return them." They can also alert you around shortages and so on. So you start to become more competent in certain verticals and then you start to get branded and known not just for the service you provide, but the expertise you provide, so I think there's a lot of opportunities for channel partners.

What do you think are the next big opportunities in IoT?

Let's go back to the layers we were talking about in the beginning. On the connectivity side, I think we continue to make sure that the network needs of our customers are met. What I mean by that is, not every IoT solution that we deploy requires cellular connectivity. We would like it to, but that's not the case, so you have to provide a set of platforms and capabilities that allow for all these different kinds of connectivities to be well integrated and managed through the platforms that we offer, and that's an area we're investing in where there's satellite, Wi-Fi, cellular. At the platform layer, we continue to make sure that we can cover as many devices and device ecosystems as possible, so when you think of the next new thing you want to connect, you have the right set of modules and devices available. So we work very closely with the device ecosystem, make sure they are certified on our network, but also are platform-ready so that the data can continue to be consumed really quickly. At the application layer, that's where we have somewhat of a two-prong strategy, where there are certain areas we will go after, having our own application, but then we need to enable third-party applications. And so we have, for example, a marketplace now where third-party devices, data plans and some applications are available and we're looking to expand that.

A good example is our announcement [earlier this month] with Amazon, the Amazon button. It's an LTE-M device with a button, and it's targeted towards the services industry, so it can be next to a commercial printer, and you press the button for more supplies. Think of it as a commercial version [of the Amazon Dash button] for commercial service. It combines the device that we have, our network capabilities and Amazon's one-click service, so you can set that up for whatever your needs are very, very quickly, so that's where we are combining the whole thing and offering this as a service to our customers. I think there's a lot of innovation to happen in those areas where we make it really easy to incorporate IoT as part of their operations.