Operating

China's Operators: How to Strike Back Against Ambitious Alibaba in IoT

Updated:2017/10/18 12:04

Nowadays, ofo, remote meter reading, smart watches and many other Internet of Things (IoT) devices and services become a part of daily life in China where trillion connections happen. Alibaba, showing the ambition in the IoT market, aims at 1 million developers, 1 million IoT application solutions and 10 billion-IoT device connection within five years, according to general manager of Aliyun IoT Department Ku Wei at the Computing Conference 2017.

"IoT will drive the world into a data era, and data will become important means of production, of which processing, storage and computing need to be combined with IoT, artificial intelligence and cloud computing and will become the technology innovation driving force of the human society in the next 30 years." Hu Xiaoming, senior Vice President of Alibaba Group and President of Aliyun said.

To achieve this, Alibaba will start in platform, market and standard, defining itself as "builder of IoT infrastructure" and launch the IoT platform Link.

Specifically, Aliyun will build a cloud-integrated intelligent platform, and integrate secure, low-power embedded platform, edge computing platform and other capabilities in order to tremendously minimize the innovation cost of developers.

Alibaba will co-establish world's most open IoT standards with its partners, for instance, the ICA Internet of Things Partner Alliance led by Alibaba has 111 firm members by far.

Judging from value distribution of the IoT industry chain, devices and sensors will account for about 25 percent, network connections 10 percent, connection platforms 5 percent, application enablement platforms 15 percent, and applications & services 45 percent. Alibaba seizes two most valuable parts of the IoT industry - application enablement platform and applications and services.

Industry insiders said that application enablement platform is an IoT market blank and also the most potential part which can bring a lot benefit, and that's why Alibaba makes it a step into the IoT market; on the other hand, Alibaba's advantages lie in fathering and serving developers, which helps the prosperity of IoT ecosystem.

So, is there any bread for operators who are good at network connections?

From the point of technology development, NB-IoT, an important technology in the low power consumption, wide coverage (LPWA) IoT industry, has been a great attraction. Globe-leading operators including AT&T, Verizon, Orange and Vodafone have shown strong interest and planned to launch NB-IoT services in 2017.

China's three major operators take NB-IoT featured Internet of Things as major basic business for the strategic transformation. For example, China Telecom's several leaders said in public that the company would realize commercial deployment of all-network NB-IoT from June 2017.

Besides, the rapid development of IoT also brings many challenges. Over 70 percent of the current connections are not mobile network connections, from which the operators can hardly profit; the rapid development of technologies such as Sigfox and LoRa adopted on unauthorized bands also causes pressure in operators' IoT business.

Achievements in the NB-IoT field can been considered as the feedback for operators playing a channel role, and they must seize "application enablement platform" which is most valuable.

"Network connection is operator's strength, but cellular IoT doesn't remain a large proportion in IoT connections; the connection management platforms have basically been controlled by Ericsson, Jasper and Vodafone while the operators behave poorly in devices and application services, making application enablement platform become the competition focus.", director of China Telecom Technology Commission Wei Leping said.

Mr. Wei believes that the application enablement platform is of great value - common API and function can reduce development cost and achieve trans-industry, trans-filed resource sharing, promote industry value migration from hardware to software and data-based service and build an industrial ecological chain. In the aspect of application enablement platform, he strongly agrees with operators' independent development, but stresses that operators must cooperate with partners rather than on their own.

Both network giant Alibaba and operators hope to explore the huge market through application enablement platform. China will see prosperity in IoT sooner if the two sides work together.

 Source:C114
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