Rami Avidan is the CEO at Deutsche Telekom IoT, part of the largest telecommunications provider in Europe. Harboring over 20 years of experience in the IoT Market he has established innovations in the M2M and IoT sphere. In episode 5, Rami opens our eyes to the capability of IoT integration and the IoT Hub to create value in business infrastructures.

 

 

Episode Transcript

Tom White:

Welcome back to the IoT-Podcast, as always your host Tom White I’m here today with Rami Avidan. Rami, thank you so much for joining the podcast.

Rami Avidan:

Closest to be here with you.

Tom White:

Rami, could you please start by just introducing yourself, your background within IoT and how you ended up working for Deutsche Telekom in your current position?

Rami Avidan:

Sure. I’ve been in the IoT for a too long, let’s put it like that. I’ve been in this business now for 20 somewhat years. My first touch point with IoT was when I was one of the co-founders of this business called Wireless, we became one of the first global IoT MVNOs subsequently acquired by Core in the US. And then I also co-founded and was the CEO of Tele2s IoT business, Tele2 IoT. And I did that for around six years, and then I took a year or so off.

Rami Avidan:

I was an industrial advisor to some of the PEs and VCs on IoT and digitization matters and as part of that I came across the DT, right? I met the leadership of DT and we saw eye to eye on strategic questions and where they wanted to take their business and basically I then joined them in April of 2019, so I’ve been with the DT now for the better part of 18 months. I’m now the CEO of the IoT business of Deutsche Telekom. I should say that that does exclude the US Markets, which is a sister business to the IoT business that I’m running at Deutsche tech.

Tom White:

Right, okay. Oh, fantastic. Great. Okay. And would you mind describing your journey within Deutsche Telekom at the moment, and what’s happening with an IoT specifically within your area, specifically new technologies, complex IoT landscape, ecosystems, and everything that you’re trying to achieve there?

Rami Avidan:

Sure, first of all, I have to tell you, I am super excited obviously of being part of the Deutsche Telekom group. Deutsche is one of the largest communications players in the world with a very, very strong brand with great people, great reach. It stands for security, stands for reliability, stands for quality, all of the things that really matters for the area of IoT, right? And I think Deutsche done a pretty well in the space of IoT as I joined them. I think obviously being a very, very large group, it was a IoT business that was somewhat distributed across the group in different pockets and so I basically looked at it and I said, if you want to even scale faster and scale more, then I think there are some internal fundamental changes we need to do to be able to really deliver more value to our customers because at the end of the day, a customer doesn’t care about your internal sort of mechanics and modus operandi and what you do, what they’re looking for is somebody that can actually help them create value.

Rami Avidan:

And I think all of the changes that we’ve now done at DT and the changes that we are doing, we’re doing it so that we can free up more time, more capabilities to focus more on engaging with our customers, creating value for our customers. That’s basically what we’ve done and basically if you think about… we’re on a journey, right? We’ve created a GmbH where we are sort of compartmentalizing our IT assets into to give it more of a holistic sort of structure, we’ve derived a… I shouldn’t say a new but a refined strategy and a vision of our business and the position that we want to take is becoming the IoT orchestrator because of course if you look at the IoT landscape, like you rightly point out Tom, right? It is a very distributed and fragmented ecosystem, 1,001 technologies and platforms and variety of different types of players talking to the customers, right?

Rami Avidan:

There is no standardization, there is no harmonization and I think that is extremely confusing. And one of the underlying driving factors for IoT not really taking off the way that we anticipated it in the golden days or 10, 15 years back when we looked at all the analyst reports. But of course, if you take the DT position now, right? Becoming the IoT orchestrator, what does that actually mean? Right? It means a couple of different things to us. Number one, ultimately it’s about creating more value for our customers by reducing a set barriers that we’re seeing, right? And I would say that the barriers are in different layers, you have a technology barrier where customers are trying to marry a legacy infrastructure with a new infrastructure. You have a technology barrier that really comes from this sort of very unstructured ecosystem of capabilities because there are 1,001 capabilities, and if I’m a customer, what technology do I pick?

Rami Avidan:

For example, what connectivity barrier service do I pick for my specific use cases? Do I pick cellular technologies? Do I pick Wi-Fi? Do I pick a LoRa, Sigfox, Satellite? There are so many different types of different technologies and capabilities across the board, right? And I think… First of all, I don’t think that there will be one technology. We will still have my rid of technology, some of them that are going to be standardized, like I would say the cellular connectivity is some sort of standardized today from a customer perspective. But you also going to have these proprietary technologies that live there and fill a gap in the whole landscape. Then the question is for the customer, how do you manage all of that?

Rami Avidan:

I think we are focused on helping customers reduce that barrier. Then of course, what we’ve seen is a big shift from linear business models to circular business models over the last couple of years. And I think the last sort of six months of the pandemic is going to drive that thinking much further as well, where the ecosystem changes. Somebody who used to be a supplier is not your customer. Somebody who is your competitor today or yesterday is now your partner and actually maybe also a competitor and the customer… it’s all becoming interlinked. And of course, that’s also very confusing for the customers because the players that they used to engage with under certain frameworks if you may, that is now changing, the lines are getting blurred. And of course, we want to help our customers create clarity by orchestrating the ecosystem.

Tom White:

Yeah. Thank you very much for that. And if I can say anything from my perspective and what we see in the industry is that your particular era in Deutsche Telekom is really synonymous with doing great things in IoT. There’s so much content out there, there’s much marketing and I’m really… A good feeling about the work that you’re doing. Regularly, I see posts on social networking sites like LinkedIn with literally hundreds and hundreds of comments and likes Rami… you really are quite famous within this industry, right?

Rami Avidan:

Yeah. First all thank you but you know, I’m… honestly speaking, let’s be crystal clear, I am the figurehead for this business, that doesn’t mean that, I am the business, this business is consisting of so many talented people. I am simply one of the people that are bearing that message to the market, right? But I can honestly speaking and I have run a lot of teams and all of my teams have always obviously been very good, let’s be honest. They’ve been supercharged people and talent, but I think this DT team really stands out. These are a bunch of people that have been in this game for many years. They’ve been in the trenches as they say, they really have super insights, they’ve also burnt themselves. I think the mother of all learnings are the mistakes that you make along the waves. And I think we’ve made a lot of mistakes and we’ve learned from them. And I think that’s a great way of looking at the past, right? And so the team is phenomenal and we have a really good story to tell, right?

Rami Avidan:

We know what we want to do and what we want to do is create value for and together with our customers. And we have huge clarity on how we want to achieve it. And I think that’s coming across now, right? And we’re so eager to tell the world of this new position and what we want to do and how we want to do it, then how we’re actually doing it, because it’s not only a vision, right? We’re actually doing it. And so that’s why you’re seeing a huge sort of a social media onslaught from not only me, also a lot of other people in the team.

Tom White:

Yeah, absolutely. I mean that leads me really on nicely to my next question and actually Rami. In terms of your personal opinion and obviously that of the business, what challenges and opportunities do you see in the IoT ecosystem facing right now and in the immediate near future given obviously the outcome from the pandemic.

Rami Avidan:

Yeah. Let’s compartmentalize, the IoT ecosystem may be in two dimensions, right? You’ve got the players in the IoT ecosystem that build solutions or have capabilities that they’re looking for somebody to consume and that’s somebody, of course is some sort of customer at the end of the day, somebody using those capabilities to create value, right? If we start off with the IoT ecosystem perspective, I think a lot of the barriers that we see there is that there isn’t really a harmonization, there isn’t a standardization around technologies around business models. And that of course, is a very complex thing for the ecosystem players, right? What technologies should we be developing? Should we start trying to rally around certain set of capabilities that we all can sort of integrate and then may the best man win? Or are we going to continue to try to drive these proprietary technologies that I ultimately don’t believe in, right? And obviously work now for Telekom for many, many years.

Rami Avidan:

I think the reason why the Telco industry has been successful in deploying their solutions on a global scale, it’s one of the most penetrative technologies in the world, right? Think about it, right? It’s almost more penetrated than TV, maybe even more penetrated than radio today, right? You have people in villages in Africa and in South America having a mobile phone, but they don’t have a TV, right? And so obviously I’m a big believer in standardization and I do believe that we’re taking big steps towards that, but we have to do much more. Then I think that, the other barrier for the ecosystem is of course the interoperability, because of course, as we do not have the standardization, interoperability between these different solutions is very low and very limited. And yes, of course a lot of people are doing a lot of work around simplifying API infrastructures to allow for these different solutions to work with each other but it’s still a very complex thing to do to get an entrant IT solution to work flawlessly together, right?

Rami Avidan:

And so I think as we go towards standardization more and more, you’ll get harmonization and also you’ll definitely improve on the interoperability between these different systems, because remember IT is in essence, an area that is built of what I call systems of systems, right? So many different systems working together to create the end value. So those, I would say are the barriers, if we start off with that for the ecosystem. If I now look at the barriers for the customers, either users. Obviously, those barriers that we have in the ecosystem are translated to the customers, right? That there is… there has been historically very low standardization and obviously because of that low interoperability, but also the customers problems are also others in the sense that we as the ecosystem players coming back to the business model logic, right? We obviously we build these different things and we want to cream out as much as we can from them commercially, which is natural for a business that ultimately is there to make a profit.

Rami Avidan:

But of course that puts a lot of strain on the customer, because of course as you stack all of these different solutions that you need to have in place on top of each other, with margin stacking, because everybody wants to take their piece of that chain. If you look at that fundamental and cost for the customer that has historically been way too high. Now it’s been way too high for the customer in relation to what they know that they can create in value. So when the customer does their business case, they look at the cost which they have high clarity on because we the players are telling them look, a SIM card on a device and an application and this and that costs you this much, so they have clarity, they know where they cost, what they don’t have clarity on is the value creation that it’s going to give them as a customer.

Rami Avidan:

And here I think is the biggest problem. Most of these customers, if you look at some of these reports that have been coming out from a many of these different analysts, basically they say two things around 20% of all the businesses that have been asked the questions, don’t have a digitization strategy in place. Now, the 80% that do have a digitization strategy in place, 50 to 60% of them have their corporate strategy and then they have the digital strategy. They’re decoupled. Now what that means of course is that, your digital strategy is not an integrated part of your overall company strategy, which is then of course not going to allow you to implement it at the pace and the ability to achieve the value that you’re looking for, right? I think that’s a fundamental problem. And it comes from the fact that we as an ecosystem together with our customers, haven’t spent enough time focusing on the value that the investment of an IoT solution will create for the customer and what is then the value.

Rami Avidan:

There are obviously high… And you have to stop me and tell me if I’m all writing too much here, but-

Tom White:

No, no. It’s good, carry on.

Rami Avidan:

… there are four areas, right? First of all, it’s about cost savings, right? I…. Efficiency gains, right? That’s a big part of IoT being able to automate, being able to streamline, being able to take out processes and put in place technologies to take certain decisions along the way, right? That’s a big area. Another very important area when it comes to digitization is of course the ability to share up new ways of communications with your customers, right? New ways of having a relationship with your customer, which is super important in this globalized world of ours, right? But staying on that sort of same topic, customers are of course super interested in creating new revenue streams, right? And of course, digitizing your capabilities is going to allow you to generate new revenue streams, then thirdly of course, it’s also about us becoming smarter about how we use the world’s resources and as we digitize, as we’re going to circular economies, we are going to use much less of the world’s resources and have a very positive environmental impact, right?

Rami Avidan:

And fourthly, as most companies, not all, but many companies have previously been very focused on their very narrow geographic footprint. But as the world is becoming global, they’re realizing that they may be able to sell their services to many corners of the world. And of course when you do that all of a sudden, you need partners that can help you globalize, partners that are there to help you deliver a global solution that allows you to tap into customers that are far away from your home market should decide to do so, right? And so those are important areas to fundamentally understand, right? And the final thing on the customer side talk, you have this sort of situation of non standardization, complex landscape, lots of players with complex business models, that at the beginning is seen to be high cost. You then have the customer’s not really having clarity on the strategy and having an integrated strategy. And the final piece of course is the value creation.

Rami Avidan:

Now if you look at those four areas that we talked about, if you look at all of those areas, what is the real value in IoT? The real value in IoT, is not having a product being connected. It’s not having a process being connected so that you have an understanding of it. It is what you do with the data and if you think about what most of the customers have done in the past, the way they’ve done it is that they’ve built silo solutions within their own organization. Now if you take a typical factory for example, right? They have a line on the factory, maybe being connected or parts of that line being connected. They have the logistics chain being connected over there, and they have something else being connected over there but these things don’t talk to each other. You’re not talking about the machines talking to each other, I’m talking about that the data needs to talk to each other. That’s the concept of big data and analytics.

Rami Avidan:

And what we’re seeing now is huge shift within our customer base, to actually understanding that actually we may have, we may actually be fine having underlying silos of these solutions as long as we bring the data together, because just the correlation of all of that data put together that is going to create the ultimate value for you as a customer and how you then tap into that value. And that can be a manual process, it can also become a digitized process that we’re now seeing a lot of customers are doing. I hope that makes sense.

Tom White:

Eeh (affirmative), absolutely it does. Yeah, thank you so much. That’s fantastic insights actually Rami, really appreciate it. It sound very much on the money with where things are today, right? Can I talk to you very briefly about the IoT Hub? [crosstalk 00:19:39] There’s a lot of information out on the internet at the moment and within the community about the IoT Hub. Could you just explain for some of our listeners what that is and the benefit to new and potential customers?

Rami Avidan:

Sure. First of all, let me just make something very clear. The IoT Hub is not yet another platform, because we have enough platforms in this industry, right? That’s not what it is. What it is… and I like to call it, it’s an orchestrator. Okay. But let’s be clear on what I mean with an orchestrator, because in the old world when you looked at an orchestration layer, it was basically you integrated deeply and a set of underlying capabilities that you then fundamentally use those capabilities to the orchestrator. That’s not what we’re talking about here, okay. We may very well do that for certain unblind capabilities, but generally speaking that’s not what we’re talking about. What we’re talking about here, is the ability for our customers and for our partners to come together and for all of us, to be able to find an infrastructure that we can implement in our organization, where we can develop our solutions on top of… that makes it much easier to consume the services I’m talking about reducing barriers, that the concept is very simple.

Rami Avidan:

The idea is… It’s like a goodie bag, right? You come to the IoT Hub and you’re able to pick out the different pieces that you may need and if there are pieces that are not there, they’re very easily integrated into the IoT Hub, meaning that you as a customer can marry your legacy, use cases with your new deployment of each cases. And you are able to manage that from an information perspective and control perspective in one giant orchestrator. My lead architect, he doesn’t like the concept when I call it an orchestrator, because as that’s in technology terms that’s not good, you know there’s been so many orchestration layers and this and that. He likes to talk about it like a giant remote control.

Tom White:

Okay.

Rami Avidan:

Right? You know those hybrid remote controls, where you put all of the different things into one, right? That’s the way he likes to talk about it. I’m not sure that I really liked that because then you do have to integrate all of the different online capability. Let me give you an example, right? We’re busy integrating some of the very big cloud players in the IT space as we speak. Now of course, we are not going to try to take a position where we tell our customers, you should be developing all of your capabilities and solutions on our stack, right? We completely understand that the likes of AWS and Microsoft and Google and Alibaba, and IBM is where the developer community, so generally speaking, going to develop the capabilities. But of course, what we’re seeing here is that customers are going more toward what we call hybrid clouds, right? Where they don’t only have one, they have several and then of course, all of a sudden becomes more of the complex, right? Because these infrastructures are typically very proprietary, right? So the device works with that cloud and that infrastructure.

Rami Avidan:

And what happens if I want to move that data from this device to that cloud? Well you can’t, right? Because it’s fixed. But what if you could, what if you had somebody that could actually help you navigate that landscape and make it very simple? The IoT Hub for us is a way of being able to come to the ecosystem and tell the ecosystem, look here we have an infrastructure where both from a southbound perspective and a northbound perspective, we want to integrate your capabilities and together with you come to our customers and be able to create value for our customers using those different feature sets. Now, the one thing we haven’t talked so much about is one of the big things I think is very valuable for customers and that is building their own ecosystem, right? We talked about the landscape being very complex.

Rami Avidan:

We talked about it being lot of different players and lot of proprietary technologies and how do I look at this one and what I am… If I want to give customers one very big advice is to stop looking at suppliers and vendors. What you as a player disregarding of what industry you’re in a IoT, if you want to digitize your business using IoT capabilities, and I think this is very true for digitization in general, you need to build your ecosystem of partners and players that want to help you create value. And what you’re going to look for is what I call the multiplier effect. What you as a customer would be expecting from those players, is that they bring their own ecosystem as well. So you’re getting a multiplication on your ecosystem with their ecosystem. So this is the ecosystem of ecosystems, right? Where you bring in competence and capabilities to create value for the customer.

Rami Avidan:

And that’s the essence of the IoT Hub, to be able for us to have that community come together, develop solutions, to use solution, controlled solutions in a much more simplified manner. I hope I didn’t lose you while I tried to explain that.

Tom White:

No, no, completely. To me it sounds like you’re reducing a lot of the complexity, right?

Rami Avidan:

That’s right.

Tom White:

And creating an open IoT ecosystem. I think you’re a 100% right. I think it’s a minefield, sometimes the smaller players and customers in which way they need to orientate their solution and what they need to do and I liked the idea of the orchestration and also from your architect’s point of view the remote. And I can understand why he calls it a remote. So, no, it’s fantastic. This IoT Hub, is it out in production now, is it out to market?

Rami Avidan:

We obviously, we started thinking about the IoT Hub sort of summer of last year. And then of course, we went into development and we’re doing this in-house, right? We released our first sort of, release candidate one if you may, earlier on in Q2 this year, and we now have a set of partners and customers playing around with it. We’re in that sort of feedback, testing, iteration mode-

Tom White:

Like a beta mode subscription.

Rami Avidan:

I would call it an early beta, yeah. We are planning to start going to markets in two one with IoT Hub, but remember again, we are not necessarily going to sell IoT Hub because that’s not what customers creative… I mean, having IoT Hub doesn’t in itself create value for the customer. What creates value to the customer is the all of the underlying capabilities that they can tap into, right? For the time, just to give you an example. For the first time, a customer can have a complete end to end view of their device information and their connectivity information, that hasn’t been done before. So you have one ability to actually understand that entire part of your IoT ecosystem, right? Just as an understanding of what it is that we’re actually creating. And we’re doing that across multiple set of platforms. And so of course the first feedback from our customers has been, honestly speaking super positive, right?

Rami Avidan:

Then of course there are always areas and things that customers say, Oh, you have been on we…, we would like this feature, this function, or that capability, or that. So of course we’re putting all of that feedback now into our sausage mixer, right? And we’re going to prioritize, but so far so good.

Tom White:

Okay. Oh, fantastic. Rami, one last question if I may actually, and then thank you so much for being so open so far with all of this, it’s really fantastic. It’s been well documented in the past that you’ve always mentioned that IoT is more of a strategic concept than that of a technology point. What would be your sort of main take home advice for companies based upon that statement?

Rami Avidan:

I’m very happy that you picked up on that, because over the years that’s something that I’ve been pushing really hard because I think people get lost in technology. And honestly speaking, if you forget about commercial and legal barriers, if you just put that to the side for a second, there is virtually nothing we can’t do today with technology, basically anything you want, you can do with technology today. But the real question is, what is it that you want to do? And this is where most people fail. They don’t know, they don’t know what they actually want to achieve. Now, I’m not… I’m broad stopping in it. There are of course, very successful organizations that have crystal clarity on what it is that they want to achieve and they have a roadmap, not technolo… what they have obviously a technology role, but they have a strategic over, right? We start here, we move over here, we do this and we do that, right?

Rami Avidan:

I think the automotive sector although… a lot of stick has been given to the automotive players but I think, very early on just to give you an example of what I’m thinking about, right? They realize that the buying patterns of the millennials is going to fundamentally change, right? Those buyers, that it’s going to represent the future buying pool for those OEMs, these guys don’t… they don’t care about they own a car. What they want is to have access to a car, which is why they started coming up with this shared pooling concepts and, and renting concepts and all of these different things, right? They also started launching their apps. And why did they do that? Why did the car manufacturers launch the app? Wanted to sell more? No. It was to create a relationship between them as a brand and the users of their vehicle, because most of the cases, those OEMs don’t actually themselves sell the vehicle to the user. There is a distributor in the middle, are you the car salesman? And they may or may not be related to that brand, right? They can be selling several brands.

Rami Avidan:

What the auto manufacturers want to do is to set up an regular line of communication and interaction with you as a customer to take you on this journey. That’s what I mean with having a strategy, right? And you can take many years this strategy. Again, to me IoT, ultimately is about understanding the strategic direction that you want to take and the value that you want to create while getting there and then the technology is a secondary discussion. Okay, we now know what we want to achieve. Let’s now discuss how we achieve it with the right types of technologies and capabilities. That’s why I always talk about the strategy needs to come first, technology comes second.

Tom White:

Fantastic. Thank you so much yeah, I really loved that concept of the millennials wanting access to something rather than owning it and I think that really is the operative sort of phrase there isn’t it and they will take the message. Rami, we’ve been wanting you on the show for such a long time. Thank you so much, obviously for taking the time out today to talk to me, I really appreciate it. I know you’re super, super busy and perhaps, you know 18 months time, We’d love to catch up again and see, see what journey you’ve got on, and what the business has gone on.

Rami Avidan:

We should do this into a yearly session, Tom. Hey, how about. Thank you for having me. I really, really enjoyed it, Tom. Thank you so much and I’m looking forward to interacting going forward. Thank you so much.

Tom White:

Thank you so much. Okay. Bye bye-bye Rami.

Rami Avidan:

Bye-bye

 

 

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