2018 global iot solutions customer value leadership awardsierra wireless is a leading global...

2018 Global IoT Solutions Customer Value Leadership Award

2018

BEST PRACTICES RESEARCH

© Frost & Sullivan 2018 2 “We Accelerate Growth”

Contents

Background and Company Performance ...................................................................................... 3

Industry Challenges ........................................................................................................... 3

Customer Impact and Business Impact ................................................................................ 3

Conclusion ........................................................................................................................ 8

Significance of Customer Value Leadership .................................................................................. 9

Understanding Customer Value Leadership .................................................................................. 9

Key Benchmarking Criteria ................................................................................................10

Customer Impact .............................................................................................................10

Business Impact ...............................................................................................................10

Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices .....11

The Intersection between 360-Degree Research and Best Practices Awards ....................................12

Research Methodology ......................................................................................................12

About Frost & Sullivan .............................................................................................................12



Background and Company Performance

Industry Challenges

The Internet of Things (IoT) is increasingly permeating every aspect of consumer and

enterprise activities. With the growth of microelectronics, ubiquitous connectivity, and

predictive computing, IoT is poised for rapid growth. Frost & Sullivan expects the total

number of IoT devices to grow from approximately 12.44 billion devices in 2016 to over

45.41 billion devices in 2023, at a global compound annual growth rate (CAGR) of 20.3%.

The IoT revolution is transforming the way organizations operate. By providing real-time

access to critical data from a variety of operational areas, IoT is bringing a new era of

operational efficiency and effectiveness across a range of enterprise vertical markets.

Building effective and cost-efficient IoT systems, however, is a daunting task given the

plethora of solutions and vendors active in the marketplace. For many enterprise

customers, the hardware and software costs associated with such solutions can limit their

deployment scope, making it difficult for them to fully capitalize on the technology’s

potential.

By embracing the IoT, organizations can derive benefits in numerous areas of their

business. Frost & Sullivan research indicates that IT decision makers expect IoT to help

them to automate manual processes, optimize field operations, and collect data that can

be used to transform operations. Notably, many respondents to a recent Frost & Sullivan

survey anticipate that the additional insight gained by IoT investment can help to boost

customer service and marketing activities – organizations expect a tangible impact from

the Internet of Things.

Deploying an IoT solution is complicated, requiring the combination of devices, modules,

connectivity and platform management – plus, of course, the need for strong security. For

many end-user organizations, rolling our IoT on a global basis is challenging – not least

because it requires a new range of skills to be developed or acquired internally to ensure

smooth deployment and deliver ongoing monitoring/management of solutions once in the

field. IoT solutions that pre-integrate the various required hardware and software

components can help lower the cost and complexity of IoT solution development.

Embedded trust and data security, zero-touch device-cloud integration, and ability to

upgrade endpoints with minimal operational impact are important to help support faster

time to commercialization for IoT.

Customer Impact and Business Impact

Building on a rich heritage in the IoT market

Sierra Wireless is a leading global wireless provider, delivering cellular device-to-cloud IoT

solutions that include embedded modules and gateways, seamlessly integrated with Sierra

connectivity and cloud services. In addition to its strong product portfolio, the company –

which has more than 1,100 employees globally – offers an IoT platform (AirVantage) that



enables its clients to manage and monitor their IoT ecosystems.

The concept and strategy behind Ready-to-Connect – Sierra Wireless’ fully integrated IoT

offering – was launched in February 2017 at Mobile World Congress,. Since then, the

solution has been productized, with commercial bundles now being released. Ready-to-

Connect modules have been trialed with select companies across multiple geographic

regions. While Sierra Wireless’ strategy is to move towards more integrated services

throughout its portfolio, Ready-to-Connect does not replace its standalone offerings – it

always expects to have customers that only opt for its module or gateway products.

From a financial performance perspective, Sierra Wireless recorded continued growth in

2017; full year revenues increased by 12.4% to reach $692 million, while Q4 year-on-year

growth was of a similar magnitude. IoT Services revenue increased by 25.5% in 2017 to

$34.7 million – this figure included $3.1 million from Numerex, which Sierra Wireless

acquired in December 2017. The acquisition of Numerex will help the company to fast-

track its IoT device-to-cloud strategy.

Ready-to-Connect removes some of the most pressing barriers to IoT adoption

Sierra Wireless’ Ready-to-Connect offering helps to remove the principal barriers to IoT

deployment. It integrates a Sierra Wireless global SIM into the company’s embedded

modules to deliver a single physical product that combines both the required hardware

and connectivity aspects of IoT. This integrated solution is supported via its AirVantage®

IoT platform, which enables clients to manage all of their devices, SIMs, data and

subscriptions via a single solution – all new devices/SIMs are pre-declared into the

platform when shipped, making integration hassle free for the end customer. Furthermore,

security is embedded into Ready-to-Connect, with Sierra Wireless protecting the IoT

solution at every step.

Essentially, Ready-to-Connect integrates hardware and connectivity into a single solution,

simplifying IoT deployment for Sierra Wireless’ customers. It provides tangible benefits to

customers in a number of key areas:

Easier development reduces time-to-market

Getting IoT projects up and running as quickly and efficiently as possible is essential.

Many businesses want to demonstrate the return on investment and impact from one

project before expanding the scope of their IoT strategy. Hence, if one deployment is

delayed or too slow, the knock-on effect on the company as a whole can be considerable.

A major advantage of Ready-to-Connect is that it includes all of the core elements needed

for an IoT deployment. Being delivered by a single provider, the deployment process is

accelerated and simplified – essentially, Sierra Wireless’ customers do not need to spend

time and energy integrating products and services from multiple providers, while security

and management is also included.



By simplifying IoT through the integration of the various building blocks of a deployment,

Sierra Wireless expects to substantially reduce time-to-market for many of its customers.

Frost & Sullivan research suggests that many IoT deployments can take in excess of 18

months to move from concept to commercial launch. Sierra Wireless asserts that its

Ready-to-Connect offering can help reduce this considerably, to as low as 6 months in

some instances. The pre-integrated and pre-tested nature of Ready-to-Connect reduces

the need for time and resources to be dedicated to dealing with integration and

interoperability issues. Rather than solely delivering easier (and faster) IoT deployment,

the solution also focuses on making operation and management more straightforward.

Future-proofed global connectivity

Increasingly, organizations demand a single solution that can be deployed anywhere in the

world, with a degree of future proofing to ensure that they can embrace new technologies

(for example, LPWA) as they become more commonplace. Historically, many enterprises

have taken a rather fragmented approach to IoT deployments. This can result in regional

differences: for example, different modules and connectivity options being used for

different commercial and trial deployments. Although IoT is still in its relative infancy,

many organizations already have considerable sunk investment, and want to be able to

both harness existing solutions and future proof any further deployment.

Sierra Wireless helps its customers to ensure easy migration to new IoT technology. All of

its radio modules use the same form factor, meaning that clients can easily switch out as

requirements and technologies evolve. For example, the current focus on 2/3/4G cellular

connectivity will be augmented by LPWA options over the course of the next 12-18 months

– Sierra Wireless’ consistent approach with regards to the physical form factor of its

devices will make the transition to LTE-M and NB-IoT relatively straightforward. The

company already offers an LPWA module that can be used with its mobile network

operator partners’ LPWA networks – the WP7700. A Ready-to-Connect version – one that

combines the LPWA module with Sierra Wireless’ own LPWA connectivity service – is

expected to be available in 2019.

Sierra Wireless operates its own core network across Europe and the US. It has roaming

agreements with operators around the globe, with its global Smart SIM able to determine

which partner network to use for optimum connectivity quality. Importantly, the Smart

SIM also supports the GSMA’s eSIM/eUICC specification, enabling remote operator

provisioning – this means that customers can switch connectivity providers over-the-air,

providing increased levels of flexibility. Hence, while a Sierra Wireless connectivity profile

is loaded into the SIM by default (and the company’s connectivity is used for first

exchanges when setting up a new device), customers can choose to work with a 3rd party

for connectivity should they so wish. It is this kind of flexibility that clients demand in an

emerging IoT market.



Simplified IoT management and operations

Many end-user organizations operate heterogeneous IoT networks that feature hardware

from multiple vendors and SIMs connecting to a range of network operators. Most want to

have a complete view of all of their IoT assets. Sierra Wireless has embraced this

customer requirement, with its AirVantage platform enabling the integration of 3rd party

devices. As a result, customers can connect all devices in the field – whether they are

Sierra Wireless products or not – and can also harness APIs to provide a link to any cloud

platforms that they may wish to incorporate into their IoT environment.

The AirVantage platform allows customers to handle both logistical and monitoring

requirements. New products can be ordered through the platform (for example, SIMs and

pre-connected modules) without the need for additional contracts or purchase orders to be

drawn up; this removes a considerable admin headache for customers. All ordered

products are pre-provisioned in the factory, with devices appearing in the AirVantage

platform as soon as they are shipped.

From a management and monitoring perspective, the platform’s dashboard can be

customized to show all required information for a given SIM or module; for example,

device status and a view of which applications are running. Rules and alerts can also be

configured through the platform – as well as limiting the potential for bill shock (for

example, when a device transmits more data than expected), this functionality can also be

used to proactively monitor the performance of the IoT network. Delivering both device

and connectivity management is an important feature, allowing customers to extract

maximum value from collected data to create new opportunities – both in terms of internal

efficiencies, and the potential to develop new customer-facing solutions.

Integrated security across the full breadth of the IoT network

Security is essential for reliable operations of IoT. Whether malicious or accidental,

malfunctioning or ‘compromised’ IoT devices can pose a significant risk to consumers,

businesses, and societies. In fact, Frost & Sullivan research indicates that more than 70%

of organizations today believe security is a top consideration in IoT purchase decisions;

indeed, security is expected to emerge as the top consideration for more than 90% of

customers by 2020. IoT devices typically have limited processing capacity and memory.

Therefore, IoT must be secured by using efficient technologies that are purpose-built for

the machine environment.

Ready-to-Connect delivers a secure communication that links devices to the cloud

platform. As a result, devices can be securely managed remotely, with ongoing monitoring

of the data exchanged between the device and the cloud. As well as using pre-shared keys

that are installed on each device during the production process, Sierra Wireless supports

Private Key Infrastructure (PKI) for instances where customers want to use their own

Certificate Authority to augment the base level of security. Security is also applied at the

transport level, with communication between cell tower and device protected by



authentication and encryption standards supported by the 3GPP. Essentially, the solution

spans the entire ecosystem, from device to cloud. This enables it to deliver security at

each element of the chain, across module, integrated SIM, connectivity and the cloud

platform; its integrated approach enables it to have a holistic view of IoT security.

Flexible pricing structures to meet variable customer needs

Sierra Wireless has developed a highly flexible approach to pricing models with its Ready-

to-Connect offering – it offers both CAPEX- and OPEX-centric models, extending appeal to

a broad range of budgetary requirements and preferences. Its CAPEX-focused pricing

option enables Sierra Wireless to capture available budget from customers that want to

pay an up-front fee for hardware, connectivity and services. The OPEX-based model

means that customers can deploy an IoT solution without the need for high initial costs –

with the benefit of subsidized hardware costs in return for a commitment to retain

connectivity services from Sierra for a pre-determined period. In terms of adoption of

these 2 models, Sierra Wireless’ customers are relatively polarized; smaller customers

typically prefer the OPEX-friendly option, while the CAPEX-intensive alternative has been

notably embraced by tier 1 Utilities firms to support their smart grid strategies.

Opportunities to extend to customers across multiple verticals and sizebands

By taking away some of the pressure on handling complex IoT integration and

deployment, Sierra Wireless enables its customers to focus on their core business – and to

extract maximum value from the transformational impact of IoT.

Initially, Sierra Wireless is focusing on two key targets groups with Ready-to-Connect:

entirely new customers, and existing customers that are seeking to roll out the next wave

of their IoT strategies. The next target group will be existing embedded module

customers, where Sierra Wireless can activate the connectivity service if required by the

client and leverage the full power of Ready-to-Connect. Ready-to-Connect is expected to

find initial traction in the transportation sector – for example, to support fleet

management and container tracking. It is also expected to appeal to the industrial sector,

supporting capital asset management tracking, for example.

Initially, Ready-to-Connect will only be sold direct to customers, which means the key

focus will be on medium- to large-sized clients – an indirect approach is being developed,

which would harness Sierra Wireless’ existing channel relationships in the hardware and

connectivity spaces. By extending Ready-to-Connect sales to the indirect channel, Sierra

Wireless will be able to increase traction with a large pool of smaller prospects.



Conclusion

By providing all core elements of an IoT solution – including hardware, connectivity,

security and platform management – Sierra Wireless’ Ready-to-Connect solution handles

its customers’ IoT requirements end-to-end. Enabling customers to manage third party

devices/SIMs via AirVantage provides an additional layer of functionality and simplifies IoT

operations. Furthermore, the flexibility it offers in terms of pricing models makes it easier

for organizations to fund IoT projects, while embedded security delivers the protection

that clients expect from their implementations.

For its strong overall performance, Sierra Wireless is recognized with Frost & Sullivan’s

2018 Customer Value Leadership Award in the global IoT solutions market.



Significance of Customer Value Leadership

Ultimately, growth in any organization depends upon customers purchasing from a

company and then making the decision to return time and again. Delighting customers is,

therefore, the cornerstone of any successful growth strategy. To achieve these dual goals

(growth and customer delight), an organization must be best-in-class in three key areas:

understanding demand, nurturing the brand, and differentiating from the competition.

Understanding Customer Value Leadership

Customer Value Leadership is defined and measured by two macro-level categories:

Customer Impact and Business Impact. These two sides work together to make customers

feel valued and confident in their products’ quality and long shelf life. This dual

satisfaction translates into repeat purchases and a high lifetime of customer value.



Key Benchmarking Criteria

For the Customer Value Leadership Award, Frost & Sullivan analysts independently

evaluated two key factors—Customer Impact and Business Impact—according to the

criteria identified below.

Customer Impact

Criterion 1: Price/Performance Value

Requirement: Products or services offer the best value for the price, compared to similar

offerings in the market.

Criterion 2: Customer Purchase Experience

Requirement: Customers feel they are buying the most optimal solution that addresses

both their unique needs and their unique constraints.

Criterion 3: Customer Ownership Experience

Requirement: Customers are proud to own the company’s product or service and have a

positive experience throughout the life of the product or service.

Criterion 4: Customer Service Experience

Requirement: Customer service is accessible, fast, stress-free, and of high quality.

Criterion 5: Brand Equity

Requirement: Customers have a positive view of the brand and exhibit high brand loyalty.

Business Impact

Criterion 1: Financial Performance

Requirement: Overall financial performance is strong in terms of revenues, revenue

growth, operating margin, and other key financial metrics.

Criterion 2: Customer Acquisition

Requirement: Customer-facing processes support the efficient and consistent acquisition

of new customers, even as it enhances retention of current customers.

Criterion 3: Operational Efficiency

Requirement: Staff is able to perform assigned tasks productively, quickly, and to a high

quality standard.

Criterion 4: Growth Potential

Requirements: Customer focus strengthens brand, reinforces customer loyalty, and

enhances growth potential.

Criterion 5: Human Capital

Requirement: Company culture is characterized by a strong commitment to quality and

customers, which in turn enhances employee morale and retention.



Best Practices Recognition: 10 Steps to Researching,

Identifying, and Recognizing Best Practices

Frost & Sullivan analysts follow a 10-step process to evaluate Award candidates and

assess their fit with select best practice criteria. The reputation and integrity of the

Awards are based on close adherence to this process.

STEP OBJECTIVE KEY ACTIVITIES OUTPUT

1 Monitor, target, and screen

Identify Award recipient candidates from around the globe

• Conduct in-depth industry research

• Identify emerging sectors

• Scan multiple geographies

Pipeline of candidates who potentially meet all best-practice criteria

2 Perform 360-degree research

Perform comprehensive, 360-degree research on all candidates in the pipeline

• Interview thought leaders and industry practitioners

• Assess candidates’ fit with best-practice criteria

• Rank all candidates

Matrix positioning of all candidates’ performance relative to one another

3

Invite thought leadership in best practices

Perform in-depth examination of all candidates

• Confirm best-practice criteria • Examine eligibility of all candidates

• Identify any information gaps

Detailed profiles of all ranked candidates

4

Initiate research director review

Conduct an unbiased evaluation of all candidate profiles

• Brainstorm ranking options • Invite multiple perspectives on candidates’ performance

• Update candidate profiles

Final prioritization of all eligible candidates and companion best-practice positioning paper

5

Assemble panel of industry experts

Present findings to an expert panel of industry thought leaders

• Share findings • Strengthen cases for candidate eligibility

• Prioritize candidates

Refined list of prioritized Award candidates

6

Conduct global industry review

Build consensus on Award candidates’ eligibility

• Hold global team meeting to review all candidates

• Pressure-test fit with criteria • Confirm inclusion of all eligible candidates

Final list of eligible Award candidates, representing success stories worldwide

7 Perform quality check

Develop official Award consideration materials

• Perform final performance benchmarking activities

• Write nominations • Perform quality review

High-quality, accurate, and creative presentation of nominees’ successes

8

Reconnect with panel of industry experts

Finalize the selection of the best-practice Award recipient

• Review analysis with panel • Build consensus • Select recipient

Decision on which company performs best against all best-practice criteria

9 Communicate recognition

Inform Award recipient of Award recognition

• Present Award to the CEO • Inspire the organization for continued success

• Celebrate the recipient’s performance

Announcement of Award and plan for how recipient can use the Award to enhance the brand

10 Take strategic action

Upon licensing, company is able to share Award news with stakeholders and customers

• Coordinate media outreach • Design a marketing plan • Assess Award’s role in future strategic planning

Widespread awareness of recipient’s Award status among investors, media personnel, and employees



The Intersection between 360-Degree Research and Best

Practices Awards

Research Methodology

Frost & Sullivan’s 360-degree research

methodology represents the analytical

rigor of our research process. It offers a

360-degree-view of industry challenges,

trends, and issues by integrating all 7 of

Frost & Sullivan's research methodologies.

Too often companies make important

growth decisions based on a narrow

understanding of their environment,

leading to errors of both omission and

commission. Successful growth strategies

are founded on a thorough understanding

of market, technical, economic, financial,

customer, best practices, and

demographic analyses. The integration of

these research disciplines into the 360-

degree research methodology provides an

evaluation platform for benchmarking

industry participants and for identifying those performing at best-in-class levels.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth

and achieve best-in-class positions in growth, innovation and leadership. The company's

Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined

research and best practice models to drive the generation, evaluation and implementation

of powerful growth strategies. Frost & Sullivan leverages more than 50 years of

experience in partnering with Global 1000 companies, emerging businesses, and the

investment community from 45 offices on six continents. To join our Growth Partnership,

please visit http://www.frost.com.

360-DEGREE RESEARCH: SEEING ORDER IN THE CHAOS

2018 global iot solutions customer value leadership awardsierra wireless is a leading global...

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