‘Covid-19 is a catalyst speeding up the IoT adoption trend’

22 May 2020

Frank Stoecker. Image: Emnify

Emnify CEO Frank Stoecker discusses the impact of the Covid-19 pandemic on the IoT industry and moving cellular networks to the cloud.

The Covid-19 pandemic has spurred on digital transformation in many areas, as companies rethink traditional strategies and try to reach people who may be staying home more. While this is a challenge for many, it presents opportunities for others.

Frank Stoecker, CEO of German cellular IoT and M2M connectivity management platform Emnify, now finds his company in a growing market with a product that is in demand during the crisis.

Here, Stoecker tells us about the impact of the coronavirus on the IoT industry, the changes his company anticipates and what some of Microsoft’s recent acquisitions could mean for the future of the telecoms industry.

‘The pandemic has accelerated the transition towards automation and greater efficiency’

In a nutshell, what is Emnify?

Emnify is a company serving customers in the cellular IoT space. We are enabling devices and applications to be connected within a cellular network, on a highly scalable global level. We provide our customers with APIs so that developers can easily manage and integrate all kinds of cellular activity when they build and create their own IoT devices and applications.

That’s the heart of what we are doing. We ensure that any kind of IoT device can easily connect to any kind of mobile network, globally.

Our customers are IoT solutions providers – the companies that provide IoT devices and solutions to enterprise customers or government customers. We enable those IoT solutions providers to connect their applications globally.

How has the coronavirus impacted your business?

Basically, we are a SaaS company that is partly a utility, providing a basic, essential service. The impact to our business has been limited and it is basically mirrored by what the impact on our customers is.

Since the end of March and in April, there has been a negative impact when it comes to closing new business, but overall from a revenue perspective, we have not been impacted.

Have Emnify’s goals changed in response to the coronavirus?

As mentioned, we have seen a dip in new sales that we have had to adapt to when it comes to how we approach new sales in future. I’m in doubt that any large conferences or trade shows will take place in the next 12 months, and that’s traditionally a source of new customers and a place to meet industry partners, players and competitors. We are going to have to change how we communicate with partners and competitors.

From an overall business strategy, we don’t have to adapt. We are generally in a growing market with a product that has proved to be essential and in demand in this crisis. We have made more rights than wrongs and we won’t need to change our general direction.

In the next year or two, we want to invest further in transitioning connectivity into a cloud-native resource and we will expand our global reach, in terms of where we have offices. We still plan to grow and add to the fantastic and talented teams in our offices already.

How has the pandemic affected the IoT industry as a whole?

IoT is often used in various central services, which are essential for society to function. That means that for companies that are not using IoT today, this situation could accelerate their transition towards digitalisation. We see and believe that this kind of transition will accelerate now and that Covid-19 is a catalyst speeding up the trend of IoT adoption that otherwise would have happened over the course of maybe five, six or seven years. The pandemic has accelerated the transition towards automation and greater efficiency.

For individual businesses, there are two sides of the coin. There are businesses that have been negatively impacted, for instance IoT companies that provide services for non-essential businesses. One example is fleet management for holiday rental cars – they have obviously seen reduced usage.

On the other side of things, fleet management related to logistics has seen an increase in business. Same kind of use case, but two totally different outcomes.

Do you think many businesses are using this as an opportunity to introduce new technology and IoT capabilities?

If we run into a recession, then that usually comes with a need for businesses to reconsider what they are doing, find efficiencies, optimise processes and that will definitely be driven by the digitalisation of businesses and processes.

The IoT part of this trend will definitely now accelerate in this crisis. In a very smooth, always growing economic environment, businesses can get lazy. Now they will be forced, by the impact of the macro environment, to change this.

In an environment of accelerated development, what is Emnify doing to ensure that IoT networks remain secure?

We provide different kinds of security applications that make it much easier to implement and securely cross-connect applications and systems. That’s partly what we specialise in.

The majority of IoT back-end applications are being built on top of large IoT platforms provided by AWS or Microsoft Azure. One of the key aspects of what we do at Emnify is to run mobile network infrastructure completely on the cloud. We’ve been doing that since 2014.

That means that we can connect to devices in radio networks all over the world, such as Vodafone, T-Mobile, Orange, you name it. We technically take the data from the devices and deliver it directly into the back-end applications of Azure and AWS without the need for the data to travel through a public internet.

We provide clients with their own private mobile network. They have full end-to-end control over each device, certificate, sim cards, and so on. All of these features are available as a cloud service and can be as easily implemented as any other cloud services.

On the topic of mobile networks running on the cloud, what do you think Microsoft’s recent acquisitions of Affirmed Networks and Metaswitch Networks could mean for the future of the industry?

When we look towards 5G, where a lot of data is being built, generated and processed, and also with local on-campus private networks, where enterprises run on their own 5G network, that is the place in which Microsoft seems to see itself – enabling this last-mile connectivity piece.

By acquiring those companies, Microsoft will be able to build a network application infrastructure stack that it could be able to run as a cloud service for large-scale enterprises and mobile operators. That’s why this is now a trend.

With this kind of infrastructure, which could be provided some day in the future, technically you can run your antenna and radio infrastructure – I don’t know exactly what Microsoft has in mind – but you could possibly buy your mobile network from the likes of Microsoft or any other company.

Emnify is going in a similar direction – not exactly like Microsoft, but an adjacent area.

Why is this a better direction to go in than using traditional infrastructure?

There is an increased need for infrastructure services with 5G, compared to 2G, 3G or 4G. Microsoft may want to jump on that market because it’s an adjacent market to their cloud strategy, where they provide cloud computing infrastructure and application capacity out of the cloud.

They are now seeing the telecoms infrastructure arena as a very large market in the future. They may be entering a competitive arena to the classical network infrastructure provided by companies such as Ericsson, Nokia or Huawei.

Kelly Earley was a journalist with Silicon Republic