Interview: Erik Brenneis, Internet of Things Director, Vodafone

As the champion of a technology that is still in the early years of its potential, it feels strange to refer to Erik Brenneis as an Internet of Things ‘veteran’, but that’s essentially what he is.

Since joining Vodafone’s IoT business in 2009, Brenneis has led the firm’s development from its early stages through to 136 million connected devices, helping to establish the British telecoms company as the market leader for managed IoT connectivity services for the eighth year in a row, according to Gartner’s 2022 Magic Quadrant report.

Brenneis currently heads Vodafone’s Business unit – the team responsible for supporting Vodafone’s largest customers, which include Ford and Amazon Kindle, as well as smaller businesses – with the exec believing they are a key driver of new technology adoption.

Across all this, Brenneis is also the face of Vodafone’s IoT Spotlight Report – the annual barometer on the impact that IoT is having on businesses. A couple of months ahead of 2022’s report – which will survey over 1,500 firms globally, TechInformed caught up with the exec to find out what the state of play is with IoT in enterprise today.

What role is IoT playing in digital transformation and how is Vodafone enabling this?

In the last few years IoT has become mainstream and the pandemic has only accelerated this journey as businesses adopted new technologies to achieve resilience, flexibility and maintain productivity.

We started out building the software systems and the global networks to be able to easily connect anyone who wants to connect a device – whether it’s a car or an elevator on electricity meter – and that has now been achieved.

Now IoT is at the centre of digital transformation as companies move on from simply trying to understand IoT to harnessing it to achieve their business goals.

Are your customers more data savvy now?

There are two categories. The first are the early adopters, the car manufacturers and large electric utilities companies who have had connectivity in their products for many years. They know what to do with the data, they know how to monetise the data; they build services on top of this and use the data to define – with car firms, for example, suitable insurance products based on how their customers drive. But there are many new customers who haven’t completed their processes yet and here we take on a consulting role, explaining to them what they can do with the data.

Where are the pain points now in terms of IoT adoption?

One would think that the biggest worry for customers is security – the worry that somebody might hack into their products and destroy them or sabotage them, but as our last Spotlight revealed, surprisingly few customers (18%) cited this as a barrier to IoT deployment.

The biggest obstacle now is that when a company decides to connect a product, it needs to change its internal processes to make full use of it.

“Many companies using IoT find themselves turning from a manufacturing company or product-only company into a service company – which can impact their business model”

Take a company that supplies botting machines, for instance. The old model would be to deploy them around the world and sign a (very expensive) support contract with the customer. The new model sees these machines connected and remotely supervised. But that means it’s not enough to ensure that the machine itself works (which we can help with, that’s the easy part) now they need to change all their internal processes, so that somebody is continuously monitoring these machines that need to be remotely managed.

So many companies using IoT find themselves turning from a manufacturing company or product only company into a service company – which can impact their business model.

Businesses willing to undergo this level of transformation must be weighing up the ROI – presumably the cost savings are outweighing the investment?

One of the first drivers for IoT projects was the cost savings – a fleet management company connecting its trucks to work out the optimal route so that it can save on fuel – that business case then pays for itself. But now the company might find that once all the trucks are connected there are other services it can offer. More and more IoT customers are using the technology to deliver better services– bringing a more digital experience into connected cars, for instance. This is the second wave of Internet of Things use which is focussed on further efficiencies and better customer service.

Now the next-level Internet of Things projects are the ones where firms want to have data to deliver a better product, by finding out as much as they can about how the customer is using the product. Car manufacturers are doing this already and that’s also been a key driver for consumer devices.

You mentioned IoT security – which aspects of the process are Vodafone’s responsibility and what are the customers’?

Normally, customers are responsible for their own IT systems. So, if somebody operates a fleet management system – that’s an IT system connected to the internet, so they need to take their normal cyber security measures. But the data which goes from the telematic device all the way to the assistant – that’s our job and we have the highest security. We encrypt the data between the device and the customer’s control centre as well as the data pipe, which we monitor through AI. We also have authentication mechanisms between the SIM card and the control centre. We have never had a successful cybersecurity incident where anybody has managed to break into our Internet of Things system.

Which sectors are you currently engaged with and where are you seeing the biggest uptake?

Despite semiconductor resource shortages the automotive sector is experiencing, the car industry is still seeing the biggest uptake. There are millions of cars produced every year and most are now connected with IoT. Our European market share (in automotive) is about 70% so that’s a huge business for us.

Utilities are also big users – electricity metres were the first to be connected but now more and more gas metres and water metres are also getting connected thanks to narrowband IoT.

Industrial applications, manufacturing companies, smart factories, production machines are also big business. Healthcare is also booming – on one hand we’re building IoT connectivity into medical devices such as pacemakers and dialysis machines for monitoring purposes, but IoT is also being used in the medical logistics supply chain.

How is the chip shortage impacting your business?

It is fortunately not impacting us directly as we deliver a service. The only physical device we need to ship to our customer is our SIM cards and we’ve put enough on stock in our agreements with suppliers to ensure we can deliver. But indirectly the semiconductor shortage impacts our business a little bit, because if it wasn’t there, then our customers would be producing more products that could be connected. But we believe that once the shortage has gone demand will return. And we’re also seeing strong connection growth despite that. We’re growing connections year on year now by roughly 25%.

Why do you think it’s important to democratise IoT for smaller businesses?

Well, for two reasons. One is that are there are just so many SMEs globally, that once they start connecting their devices and products – that’s a huge market. Ten years ago, somebody needed to invest quite a bit to get an IoT project up and running because things weren’t as standardised as they are today and building communication into your device meant some project specific work.

Secondly, if you land a really good product as a small and medium enterprise suddenly you can have millions of connections. There’s a company in Italy called Octo Telematics, which has fewer than 100 employees, but millions of IoT connections because their business is to produce telematic boxes, which they sell to insurers, who instal these boxes in cars to monitor driving performance. So, lots of these companies have been and will be very successful.

Complex supply chains and multiple stakeholders mean that today’s IoT platforms require interoperability – how does Vodafone support this?

That’s an interesting topic. In the past IoT systems were usually closed and data was only available in the control centre, but now you might want to share with others. You want to run artificial intelligence over it, you want to make more use of the data. How we deal with that via our IoT managed productivity platform with standard APIs, where everybody who is allowed to access the data can access the data.

What will be your focus at Mobile World Congress next week?

We’ll be looking at the impact that Internet of Things has on the green agenda and demonstrating how IoT connections can enable customers to reduce their carbon footprint. To measure carbon emissions, for example, we’ve developed algorithms to calculate this in partnership with The Carbon Trust. We’re also going to present a series of green products, such as forest monitoring solutions which can detect forest fires and monitor the health of trees. We want to show customers that we can connect their devices and drive efficiencies – that’s what we’ve always been doing – but now we can also help them articulate and optimise their carbon savings.

So, sustainability is linked to the improved efficiencies that IoT brings?

Yes, and our goal is to continue to develop our Internet of Things connectivity service to make it simpler and more reliable and offer solutions for our customers who don’t just want connectivity but maybe also an energy management or a waste management solution to monitor their operations.

Our digital agricultural platform MyFarmWeb, for instance – which we about to expand into Europe – gathers valuable Internet of Things data that will ultimately make it possible to save time and reduce water waste and pesticide use. This will enable them to demonstrate their farm’s sustainability credential while also improving yields and reducing bills.