Internet of Things

How Sprint Got A 17-Year Head Start On The IoT

While the Internet of Things (IoT) is often talked up as the future — as the PYMNTS/Visa How We Will Pay study demonstrates — that misses a huge point.

As it turns out, the connected device future has showed up a little early. The study concludes that today the typical consumer owns four connected devices, and 75 percent of all consumers own something other than a smartphone, computer or laptop. After two years in the market, 14 percent of consumers use a voice-activated smart speaker like Google Home or Alexa, and 15 percent own smart watches.

Those already wired consumers appear ready for more. Among those approximately 2,600 consumers we surveyed, 83 percent of them told us that they’d use a connected device to enable a more seamless friction-free commerce experience; 66 percent see the potential for connected devices to help multitask their commerce and 44 percent said that they’d welcome the chance, specifically, to experience those seamless “autopay” moments for the things that they still tend to mostly buy in a physical store, like food, clothing and gasoline.

Consumers, the study found, don’t think the devices they have today are up to the task of automating and de-frictioning their commerce; they are just eagerly anticipating the future where those devices are available. After all, who would have thought three years ago that we’d be calling a cylinder sitting on the kitchen counter, Alexa, and asking her to order Pizza from Dominos.

And with all the explosive development in IoT lately, Mohamad Nasser, general manager of the Internet of Things at Sprint, told Karen Webster in a recent discussion that it is easy to forget how really early it still is in the development cycle.

“The IoT is the Wild West; everybody is doing their own thing in a proprietary style. Because the IoT looms so large on the hype scale, everyone wants to get into it — and there are a wide range of companies looking to create something. I must talk to three or four new firms coming out every week. Some of them have decent ideas; some are basically what I call three Freds in a shed.”

Sprint is far from new to the IoT game, Nasser told Webster — since they’ve been developing the idea for the last 17 years. In the year 2000, when the world was bemoaning the end of the internet fad with the bursting of the tech bubble and just getting used to the idea of carrying a feature phone in their pocket, Sprint was laying the groundwork, quite literally, for a world where people would want to talk to machines — and machines would want to talk to each other.

“When I started with the team [at Spring] seven years ago, we had about four million connected devices in the market. Right now we are sitting at about 13 million, which represents about 18 percent share of the market. We’ve been growing 26 to 30 percent year over year.”

Building Across the IoT’s Many Use Cases

Though Sprint works with almost 20 different verticals who see the potential to put IoT in the fast lane, Nasser noted that there are a few different ways that they help to bring that potential to life.

“There is the simplest things we do which is connect devices and make it easy to enter the Sprint network. And we aren’t biased.  We’ll connect a home, an office, a building, a car or a cow if you really wanted to. It does not really matter to us; we are connecting things to the internet.”

But Sprint can also act as an end-to-end solution provider that helps businesses integrate hardware, applications and connectivity all in one place and on the Sprint bill of service.

“We like and want to be the advisor to our customers because people are leery and concerned about complexity, and so we specialize in helping them through it.”

Nasser told Webster that Sprint does that sort of work in roughly 19 verticals, with four or five main areas where their end-to-end services approach seems more recently concentrated: transportation, wireless back-up (for example, usage based insurance), healthcare and retail.

Transportation, Nasser noted, encompasses everything from fleet management and asset management to white labeling its Velocity platform to partners like GM and specialty vehicles — “pretty much anything on wheels.”

Healthcare, on the other hand, has many unique needs around data security and privacy — street cred that Sprint has earned over the years, given the services they provide to the federal government. More on that later.

Nasser said that retail is the up-and-coming and even hot area for Sprint, developing products for payment, POS, mobile point of sale, digital signage, asset management and engagement models.

And all secure by design, he said.

Providing for Security

Looking back at the “How We Will Pay” study, security remains a big concern for consumers when they consider moving into a world of connected devices: 76 percent of consumers expressed concerns over the privacy of their data, and nearly as many — 71 percent — expressed concerns over data security.

And those concerns, Webster noted, pale in comparison to the safety concerns consumers have around the idea of connecting their car to the internet. If a hacker gets your card credentials, consumers know that the bank has their back. If a hacker cuts off your engine on the highway — well, that customer has a very big safety problem.

Nasser agreed, noting that when one is considering the future of the IoT — in regards to online payments security, data security and literal device security — the primary concern is in locking down the system.

“In our system, everything within IoT that touches Command Center sits behind a firewall. That is a self-service platform on a virtual private network for IoT devices.”

And that VPN/firewall combination, he noted, is strong enough to protect devices for the federal government and several state governments.

“We are able to provide security to all those three-letter agencies,” Nasser noted.

And while that has worked so far, he said, Sprint’s goal is to further assist another member of the Soft Bank-owned family, ARM Holdings. By combining patents the two firms mutually hold in data security, Nasser explained, the goal is to bake in security at the hardware level of devices.

“This is making it so a security token is created and shared from the moment the hardware is developed. At the time the chip … is being created and comes to life, a code is implanted inside that chip. This is not software; this is hardware-based security, and it is almost impossible to crack.”

Because for the IoT to function at the next phase of the mobile pay game, it has to be secure — and the security has to be continually reinforced.

What’s Next

The key for the smart technology marketplace, Nasser told Webster, is going to be standardization, because that really will build the kind of security that businesses and consumers will need to really build out use cases.

“The more prevalent that becomes and the more companies adhere to standards, the more we can all work to collectively minimize risk.”

Beyond that, he noted, it’s a matter of building the infrastructure — and knowing what it is that needs to be built.

“It all depends on how savvy you are in thinking about the IoT. We have been in this business for 17 years — we think about all kinds of things when we bring products to market. We need innovation, and we need new ideas [which] are going to continue, which is why I talk to so many companies every week — but the firms that make it are the ones that think about the infrastructure.”

IoT is not easy, he said — but it isn’t impossibly complicated either, if companies keep it simple.

“You don’t go and boil the ocean with IoT. If you decide you want to dip your feet into the water, then you start slow: Do one project, and you grow organically and based on your experiences as you do your first projects.”

It is, he noted, how Sprint has been building its IoT play for almost two decades. Two years ago — when the company was in what he called “dire financial straits” with a $2 stock price and real existential worries — IoT got pushed to the back-burner.

Now, with a new CEO and a stock at $9 a share, IoT is back on the front burner — just in time for the rest of society to start needing all that infrastructure that Sprint has been thinking about for a very long time.

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