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"Today the $2 trillion market for telecoms services dwarfs the internet of things (IoT). But within a decade, the IoT economic opportunity is set to rocket to $8 trillion. This provides telcos with a significant new way to grow, cutting across consumer, enterprise and machine-to-machine (M2M) business units.
Telcos currently focus on mobile-connectivity services, which account for less than 5% of the average IoT revenue stack. This strategy misses out on 95% of the value above the connectivity layer.
Some telcos have started to provide services higher up the value chain. A few telcos are even offering IoT applications directly to enterprise customers in narrow verticals. The full IoT market, however, touches many different industry verticals. This calls for a far broader and more diverse set of business partners in the IoT service-delivery ecosystem.
Telcos can succeed in this environment, without straying far from their core competencies, by adopting an enabling-platform strategy to drive local ecosystems of innovation and secure control points in the commercialization of value chains.
We call this new strategy Digital Ecosystem Management (DEM)."
