The Internet of Things (IoT) promises to create a multi-trillion rand industry in the near future and if it is the next big thing, then it make sense getting in soon.
To embrace IoT – linking your gadgets to the Internet – or not to do so may be critical for business success?
This is the familiar question facing local companies.
But nobody knows if the IoT industry is a passing fad or really likely to change the way consumers achieve their objectives by improving their decision-making capacity through augmented intelligence, and companies attaining enhanced process optimisation and efficiency by gathering and analysing data collected from their business.
Estimates are that by 2020, there will be 50 billion things or IoT devices – smart cars, fridges, toasters, streetlights, heart monitors, chairs, door locks, etc. – connected to the Internet. But some of this is not hot air, some companies are already deploying IoT solutions that saves lives and empowering farmers to make money across the African continent.
Vodacom has identified IoT as a key strategic growth and the mobile phone operator wants to be at the centre of the ecosystem to spur it.
The South African-based mobile phone giant has established a dedicated IoT business.
For the IoT industry to thrive and for players to be able to optimise it, Vodacom’s managing executive for IoT, Deon Liebenberg, believes that it is quite important that the price of sensors come down drastically.
The Internet of Things, or making everyday objects smart and connected, has seen prices of simple objects like light bulbs and CCTV cameras go through the roof.
The demand for smart devices connected to the Internet is making IoT a costly exercise.
“To optimise IoT is quite important that sensors must become cost effective – less than $2. We have seen significant change and drop in sensor prices and the devices need to have a long battery life,” argues Liebenberg.
But the high prices of sensors to enable IoT hasn’t deterred Vodacom from investing in the IoT space.
“We are committed to building our IoT ecosystem,” Liebenberg points out, adding that the company needs to find and build various ecosystems.
The telco, which is owned by British mobile phone giant Vodafone, is planning to continue to drive investment in IoT, both in South Africa and across the African continent.
Vodacom’s IoT strategic investment
To build its IoT capability in the African market Vodacom has made strategic investment in local firms with footprints across the continent.
The telco is already digitising the healthcare ecosystem across Africa.
Vodacom has set up Mezzanine Ware to focus on mHealth.
Mezzanine has created an mHealth platform that enables collaboration, the collection of insights and stock monitoring. The company’s solution has attracted interest across the African continent.
Recently, Vodacom also increase its shareholding in IoT player XLink Communications.
In 2007, Vodacom acquired a 35% shareholding in XLink and later upped its stake to 50.1% as a means of benefitting from opportunities in the M2M value chain. Pan African Equity Fund 1, which is a BEE partner of XLink, holds 25.1% of the business. The remaining 24.8% is owned by XLink management led by CEO Anton Leal.
In June 2016, Vodacom upped its stake in XLink to 100%.
The mobile phone operator believes this buy will enable it to execute across the full IoT value chain by developing new IoT verticals, whilst using X-link as managed services provider. XLink has operations across the continent.
“We have made key acquisitions (in the IoT space). We thought because of the potential IoT has in terms of transforming how business is run, how economy grows, plus the impact to broader market and citizenry. It’s an important opportunity for us and are investing significantly to focus on the next frontier of growth,” says Vodacom Enterprise unit boss Vuyani Jarana.
He adds that this is part of Vodacom’s strategy to transform itself from being a pure telco to a total communications provider.
“It’s a portfolio, we will lead and continue to be a leader in South Africa. Of course, we have to bring ecosystem partners to make sure we do things together,” says Jarana.
But one wonders whether IoT is just a hype?
It’s not, according to Vodacom’s IoT executive head Tony Smallwood, adding that South Africa is a trends setter and a leader in the telematics industry for tracking vehicles.
He believes that the telematics industry is opening up new markets for carmakers as they target new business models.
The tracking (IoT) devices were initially set up to detect if a car was stolen and now they are used to track traffic patterns – helping with traffic congestion or accidents alerts.
Clearly, South Africa is a leader in the adoption of IoT by car manufacturers.
Firms such as Discovery Insure are also tapping on the tracking devices spearheaded by cellphone operators and insurance firms in South Africa. Discovery Insure uses telematics to measure the driving behaviour of its insurance customers.
On the other hand, Vodacom’s Mezzanine’s stock visibility solution is currently being used to track the availability of vaccines in Mozambique and malaria medicine in Tanzania.
The technology makes stock monitoring paperless and enables instant visibility of stock levels.
The mHealth platform also that facilitates clinical insights.
Vodacom and Mezzanine Ware use the platform to allow private healthcare practitioners to remotely monitor the health status of their patients.
The platform also enables community health workers to collect vital signs and essential information from patients using a mobile device.
This means there’s a direct conversion of information through a digital platform, allowing clinical professionals to view aggregated data and look at trends in specific regions.
Liebenberg attributes the development of this solution to the socio-economic and business challenges in the African market.
“Our unique socio-economic challenges are a key driver of the innovation and creativity which we see in many of the IoT solutions which have been deployed in this country.
“This is a reason why IT leaders see the adoption of IoT as being more critical for their future success. The South African vehicle tracking market is a prime example, and one which has developed into one of the most sophisticated industries in the world,” says Liebenberg.
“M-Health is another area where we are seeing unique technologies being used such as the Vodacom Stock Visibility Solution.
“This is a mobile application solution which monitors drug stock-outs in clinics. M-Health in South Africa has a very different context to m-Health in developed economies due to the societal challenges faced here.”
Furthermore, Vodacom’s parent company Vodafone – British mobile phone giant – wants to connect IoT devices by taking aim at IoT in far-flung rural areas of the globe.
Vodafone is aiming to provide backhaul for IoT devices in far-flung corners of the globe.
The British-based mobile phone giant and satellite phone firm Inmarsat have inked a deal to provide backhaul for IoT.
According to the Financial Times report, Vodafone is seeking to expand into providing IoT connectivity<https://www.ft.com/content/b0765838-947b-11e6-a80e-bcd69f323a8b> for driverless cars, smart cities, smart farms and other IoT/M2M users.
That said, Vodafone has been named by Gartner as a worldwide Leader in the Magic Quadrant for Managed Machine-to-Machine (M2M) Services, Worldwide* for the third consecutive year.
Businesses around the world are rapidly exploring the opportunities of IoT technology with 76% saying that IoT will be critical for future success and 48% using IoT to support large-scale business transformation according to the latest Vodafone IoT Barometer.
Vodafone said it will continue to invest in its IoT capabilities to ensure its customers get the maximum benefit from IoT simply and easily.
“Vodafone’s accolade by Gartner holds significant relevance for the local markets. Vodacom has a dedicated IoT team. The Vodafone IoT platform allows us to leverage our global footprint to the benefit of our customers,” says Liebenberg.
South African IT workers have IoT skills
South Africa has a skills shortage when it comes to Information Technology workers, but fortunately Vodafone IoT Barometer revealed that South African employees have the requisite skills to manage IoT security and that technology is sufficiently robust to safely process data.
“This confidence that South African employees have the skills to manage IoT security goes back to the maturity of some of the verticals where IoT dominates in the local industry, such as the 20 year-old vehicle tracking industry,” Liebenberg says.
“As these companies have evolved, they have invested in building capability and capacity in the components which make up the IoT value chain and have also developed a certain maturity.
“This has resulted in a specialist skills evolution in South Africa. This is evident in the number of new M2M (Machine-to-Machine) connections in our market, which has a compounded annual growth rate of more than 20%.”