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Verizon pitches lower cost with IoT network, app dev tools

Verizon plans to combine an IoT network with an application development platform to make IoT more affordable to businesses.

Verizon plans to launch early next year a 4G LTE network core that will operate in conjunction with an online application development platform to lower the cost of deploying Internet of Things (IoT) devices.

The telecommunications company introduced last week the ThingSpace platform and the specially designed IoT network. Verizon will launch the latter in the first quarter of next year while ThingSpace is available today.

The technology industry has hyped IoT as a phenomenon sure to bring transformational efficiencies to businesses. Using an IP network to gather and analyze performance data from sensors attached to truck fleets, manufacturing robots, oil and gas pipelines, and countless other objects will reveal ways to lower costs, according to proponents.

For now, however, IoT's potential is theoretical, since lots of technology and standards need to be developed to connect the 29.5 billion devices research firm IDC predicts will be on the Internet in 2020. Last year, the number of connected devices was 10.3 billion.

Verizon understands the difficulties businesses face with IoT and is pitching its global network and other technologies as the answer. If companies buy into the carrier's vision, then it stands to grab a healthy slice of the IoT market, which IDC predicts will grow from $655.8 billion last year to $1.7 trillion by 2020.

New core to underpin Verizon initiative

Verizon's grand plan starts with the new LTE network core. Connecting to the carrier's regular network that supports smartphones and tablets is too expensive for IoT devices, which individually transmit and receive less data with far less frequency. Therefore, Verizon has built an IoT-only network that will cost much less to use, said Michael Lanman, senior vice president of enterprise and IoT products at Verizon.

Cellular is just one of many [technologies], but cellular is an important one, because many of these devices are going to be in motion and mobile.
Carrie MacGillivrayanalyst, IDC

Also, the company is releasing a module for connecting devices to the Verizon IoT network and is selling it at half the price of similar technology used for its regular LTE network, Lanman said. The price for the module is expected to drop further over time. Verizon did not disclose exact pricing.

Verizon's latest IoT product would compete with other networking technologies that include Wi-Fi, Bluetooth and ZigBee. An advantage Verizon and rival AT&T have over those technologies is cellular networks built for devices that are constantly moving, said Carrie MacGillivray, an analyst at IDC, based in Framingham, Mass.

"Cellular is just one of many [technologies], but cellular is an important one because many of these devices are going to be in motion and mobile," MacGillivray said.

ThingSpace on top of Verizon IoT network

ThingSpace, which is available in 92 countries at launch, is where developers would start accessing Verizon's IoT network. The site provides the tools for building and testing software, and the APIs needed to connect to Verizon services. The number of APIs is expected to grow to more than 1,000 in the first half of next year.

Along with network access and software development tools, ThingSpace lets developers use Verizon's in-house data analytics engine, which currently processes 1.5 trillion transactions a month. Developers will be able to use the technology for analyzing data in their applications, or sell it as a service to their customers, Lanman said.

ThingSpace makes Verizon more than just a network provider. It takes the company up the IoT technology stack, where it will compete with established platforms, MacGillivray said. "That space is already pretty crowded."

Verizon's success will depend on how well it markets and differentiates ThingSpace over the next six to 12 months, MacGillivray said.

Verizon IoT partners

Verizon already has an IoT business using its current LTE network. The latest announcements reflect its strategy for growing revenue much faster. So far this year, the company has generated $585 million from IoT, up from $495 million last year.

The carrier's IoT customers include the three largest U.S. carmakers, Ford Motor Co., General Motors Corp. and Fiat Chrysler Automobiles (FCA) US LLC. Hyundai Motor Co. and Mercedes-Benz USA LLC also use the carrier's technology.

In announcing its latest product, Verizon showcased IoT work it is doing with Hahn Family Wines, based in Monterey County, Calif. Verizon, along with chipmaker Intel Corp., is providing the technology for collecting and analyzing data from moisture sensors spread across 1,000 acres of vineyards. Hahn uses the analytics to water its vineyards more efficiently.

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