“The tariff and our solution must fit the customer, not the other way around,” says Florian Sonntag (Head of Project Management, FUSION IoT) from Epsilon Telecommunications in the 103rd episode of the IoT Use Case podcast. From the requirement and desire to provide individual IoT solutions for optimal connectivity to medium-sized enterprises, the brand Fusion IoT was created at Epsilon. In this episode, we talk about Narrowband IoT tracking (NB-IoT) and how Fusion IoT can take asset tracking for containers to a new level, among other topics.
Episode 103 at a glance (and click):
- [08:20] Challenges, potentials and status quo – This is what the use case looks like in practice
- [15:06] Solutions, offerings and services – A look at the technologies used
- [30:43] Results, Business Models and Best Practices – How Success is Measured
Podcast episode summary
When Epsilon refers to customers, it means classic German medium-sized companies, which typically consists of companies with around 5,000-6,000 employees. In this episode, we are joined by two IoT experts from Epsilon who give us practical insights into their connectivity use cases – Volker Mahler and Florian Sonntag.
In detail, a specific project is examined that revolves around asset tracking, specifically tracking of containers. Epsilon’s focus in this regard is not on 2G or similar technologies, but on pure Narrowband IoT tracking.
If you want to keep track of a container – and do so worldwide with coverage of different countries – you are faced with many challenges:
- What hardware to choose?
- What are the suitable radio systems?
- How to ensure the power supply?
Epsilon draws on a large network to provide its customers with comprehensive advice on these topics. All of this information about what the connectivity specialist does, how their solutions work and are structured in detail, what current projects they have, and how they envision the future of IoT can be found in this podcast episode.
Today we have Florian Sonntag, Head of Project Management at Epsilon Telecommunications GmbH for the Fusion IoT product, and Volker Mahler, Regional Manager East, also from Epsilon, as our guests.
Hello Florian, hello Volker. Welcome to the IoT Use Case Podcast! I am very happy that you are with us today. Florian, how are you today and where are you at the moment?
I’m doing great, thanks. Thank you for the invitation. I am working from home right now, as times are right now, you’re switching back and forth between the working at home and at the office. I’m looking forward to the day today.
Volker, are you in the same city? Where are you at the moment?
Hello Madeleine, thank you for the invitation. I also work from home, but I have been familiar with working from home for more than 20 years now. As a salesperson, one is familiar with the topic. I already had two client appointments today, but I went back to the office, back home, after lunch so we could record this episode.
Very nice. Thank you first of all for the transition, keyword customer appointments, we’ll come back to that in a moment. To introduce yourselves a bit and give some context to Epsilon Telecommunications: You are known in the market as the most successful German service provider for telecommunications, especially in the business customer segment. From the Upper Franconian town of Oberkotzau in the district of Hof. Where is that located?
In beautiful Upper Franconia. That’s a good half to three quarters of an hour away from Nuremberg.
You have 800 sales partners throughout Germany, a huge network. You provide support in the marketing of communication solutions and services for business customers, especially with the brand FUSION IoT you are the one to talk to about IoT, Industrie 4.0 and M2M. Florian, you are a project manager at Epsilon Telecommunications. Could you briefly explain to us why FUSION IoT is a special platform that you offer? What makes it so unique?
As you mentioned, we come from a background in the mobile and fixed network sector. FUSION IoT is our first own brand that we have launched. This is because in 2018, we realized that the IoT sector was poorly covered by the regular network operators in Germany for our target audience, which primarily consists of medium-sized businesses. That’s when we realized with FUSION IoT that we have the connections to the network operators, the network operators don’t offer a solution, so we offer the solution ourselves. In the best case, we aim to approach the IoT sector in the same way as we do in the mobile and fixed network field – independently. When it comes to network operators, we are independent and have the freedom to offer and provide customers with all the providers available on our platform, catering to their specific needs. I like to use the standard phrase: The tariff and our solution must fit the customer, not the other way around. We did not find this with the network operators, which is why we are now doing it ourselves with FUSION IoT.
In this case, network operators refer to companies like Telekom, Telefónica, Vodafone, and a few others. Keyword customer. Volker, you are Regional Manager East, in Sales. Can you briefly explain us what clients you’re working with?
Basically, these are the medium-sized companies That doesn’t include the likes of BMW, Bayer AG, and Airbus, but rather the classic German medium-sized company. So, we’re talking about companies with a workforce ranging from 5,000 to 6,000 employees, just to give you an idea of the scale. We also have a few international customers who work with us, whose European or German subsidiaries are our customers. Basically, our target group is the classic German medium-sized company, I’ll say Max Schulze GmbH, a long-established mechanical engineering company from Stuttgart or a large logistics company. These are the customers we usually work with.
Yes. Hm. Yes, I’ve just been talking a bit about the sales partners. You don’t sell directly, how does that work? Can you briefly explain that to us? Does that mean that you have partners who also offer the tariffs? Or how does this distribution network work in Germany or internationally?
Basically, at Epsilon we have the indirect sales model. This means that our sales partners, of which we have around 800 in Germany, work directly with business customers as points of contact and broker the products of the traditional network operators. Both mobile and fixed, data, cloud, phone systems and so on. Everything that the business customer or the company needs in the field of telecommunications. We support these sales partners with our teams. It starts with our engineers who do the planning. Just imagine that you’re setting up an international site connectivity. You have a facility in Germany, another one in Spain, and you’re planning to establish a facility in China. You want to connect these facilities so that data can be exchanged between them. These are things that our engineers assist in planning, for example. You can either utilize the products of the network operators or plan and create the connectivity entirely on your own. We then provide further support for implementation. You just have to imagine, we are such an expert wholesaler for this area./
Yes, very nice. I would like to come right back to how that works exactly in a minute. I always talk about real-world use cases here on the podcast, so I don’t talk about products or solutions as much. What kind of projects do you work on, what are the use cases and, above all, what is the added value behind them? Florian, can you briefly explain us which use cases you generally work with and just give us a few examples?
After all, we ourselves are the connectivity specialists. I’ll just take the liberty to state this. Through our network, for once through the sales partners, through the customers, but also manufacturers who rely on us, we of course also have the opportunity to offer different solutions and to bring the right people to the table. For example, we have also implemented a major project in the area of asset tracking, where we really bring together the network operators and manufacturers. There are also topics such as remote maintenance of solar systems, various energy management systems, or even remote control of construction machinery and the like. The range is very wide. We are also very well represented in the health sector in a wide variety of ways, whether it’s in emergency call systems or in various applications involving tablets and the like.
Okay, now that means there are different assets, that can be a vehicle, that can be a machine or what is asset tracking for you in that case or in that area?
In that particular case, it’s about container tracking, but with the specialty that we’re not tracking via 2G and the like, but really running pure narrowband IoT tracking where we’re providing the connectivity accordingly, which of course brings a certain challenge because we don’t have a fallback to 2G or anything like that. That was very challenging, but is going very well as of now.
[08:20] Challenges, potentials and status quo – This is what the use case looks like in practice
Very good. Now you’ve just mentioned two things where probably some of the listeners may not immediately know what kind of insights they entail. Maybe we can delve into that a bit and discuss the challenges involved. You’ve already mentioned it. There is now a standard called Narrowband IoT that can be used. What are some of the challenges you see from your customers on a day-to-day basis? So now when companies come to you and they don’t have that solution and they need support, what are the challenges that you see there? Do you have any examples of the use cases you just mentioned?
This starts out in different ways for us in the team. It depends on whether the customers approach us directly or whether they come via the sales partners. Depending on how the customer contacts us and in what state the project is thus far. That can be the traditional fast business. I need connectivity with the following challenges and we solve the whole thing or they want the following problem to be solved solely by us. They are not interested in what is behind it, what hardware or connectivity is in it. Then it’s really an issue that my team coordinates accordingly, brings the right people to the table, and in the end creates a product that solves exactly this problem for the customer and completes the whole thing.
Very good. To stay with the example, a customer comes with a specific problem, which could be, for example, what you said, asset tracking of containers, for example. That means a customer comes to you and says, we have such and such a challenge, we now need a bundle from you with tariffs and so on. Before we get to the solution, what kind of data is it, what kind of data types do your customers need? Do you have a few examples? Not everything is handled via mobile communications. What is there for your customers typically data in asset tracking?
In asset tracking, it all comes down to what information I want in the first place. There is once the variant, where I really have an nearly live tracking with route and the like. Or I just see where my asset is going. Has it left a certain position, is it moving or not? The really basic information. I am located at such and such a place and I have moved. Or just information like, let’s stay with container tracking, my container door has been opened, my temperature has changed. Depending on how much information I want to retrieve, the amount of data also changes and then also the type of technology over which the whole thing has to be transmitted.
Yes, Volker, do you perhaps have any examples from your sales expertise? You talk a lot with other customers. What other data is of interest to your customers? So do you have any examples of asset tracking with the container or any other examples?
Of course, the topic of containers is perhaps the easiest to imagine now, so it is also one of the more simple use cases at first glance. At second glance, you realize that if I now simply want to keep an eye on a container worldwide or just in Europe or in South America, then you have quite a few challenges. This starts, for example, with the choice of hardware. What are the most suitable radio systems? How to ensure the power supply? Of course, these are all things that we do not have in production or manufacture ourselves, but we have a large network to advise customers. That is, most clients have an idea, a challenge, and need someone to assist them and just say what works what doesn’t. Then, of course, you need the security in the various countries worldwide that when my container is on the road there, I can also log it into any network. You just said that not everything is done via mobile, that’s true of course. If you think about normal connections now, in a company, I have my workstations somewhere in the office. These are not usually connected with IoT, but everything that moves or even machines that are delivered, there is often no way for customers to connect these.
For example, we have customers, a classic machine builder, who deliver machines worldwide and they are controlled remotely so that certain downtimes are minimized, that there are no unnecessary flights of technicians. For example, one of our customers supplies the Japanese automotive industry. If they have a problem with the machine, then I have to put some technician on a plane here in Germany, fly to Japan and repair it there. That’s just the old world, how they used to do it, how it used to be solved. Today, everything is done remotely and diagnosed up to the point where someone really has to be physically on site. But now the customer can’t just go to the company and say, “Please integrate my machine into your network. Provide me with Internet connectivity there somehow.” With the issues of security, rules and laws that exist in every country, it’s just difficult. These devices and machines collect data from sometimes thousands of built-in sensors, ranging from very simple things like temperature, speed, wear, weight. Everything that you can collect in terms of data, with whatever sensor, has to be transported somehow. That is the representation of the typical triad in IoT. You have some sort of data collection somewhere, whatever device you’re doing it with, whatever value you’re collecting. There are also quite a lot of things that are now available to customers that you can implement that, also in the inventory. Just because the machine has been running for 20 years doesn’t mean you have to throw it away. In that case, you can also bring them into the digital world. Then comes the point that the data must be transported. Our core competence is to transport the data mobile all over the world, really literally all over the world. Then comes the third point, the visualization of the data. It starts with the cloud system, continues with pure software that records the machine-human interface so that you can also do something with the values when you are sitting in the office in Munich and the machine reports some value to you. Then it needs to be translated into something that you can work with. Similarly, the analysis of the data and so on.
[08:20] Challenges, potentials and status quo – This is what the use case looks like in practice
I still have a few questions about how exactly the solution works. I have now also gained some understanding of the challenges your customers face and the various use cases. Florian, you already named some at the beginning. I think the examples give you a bit of a tangible idea of a few customer cases. Now what’s most exciting is how you put such solutions together. I would like to inquire further about data collection, starting from the hardware side, all the way to processing in the cloud and analysis. Very fundamentally, starting from the hardware perspective. Florian, you just said that Narrowband IoT is one such topic. How do you actually extract the data from the containers in this example? So do you have partners doing that connectivity now, or how does that data collection work for you in the first step?
There is, after all, the variant of where the information that the hardware, which either the customer provides or we bring along in the project, is fed to in the first place. That is, for example, to a cloud or a server that the customer provides. Our hobbyhorse is connectivity. For example, we establish an IPsec tunnel directly to the IP addresses of the servers we want to access, ensuring that no one can access them externally. We can specifically address the SIM cards that are currently used in the asset tracking field, with a five-digit number of SIM cards, and retrieve the information we specifically require from those cards.
Okay, that means your customer chooses the hardware themselves, where the SIM card will later be installed, and also provides the servers. Übersetzung: That means you start where the customer says, “I have an edge device or module that I want to use.” A SIM card is inserted with the tariff you select. Can you put it that way?
Perhaps I could briefly clarify that again. In principle, there are always two different approaches. Either you have a customer who has a device that needs to transfer data. We also work a lot with manufacturers, for example of sensors. They say, I would like to deliver 250,000 sensors for heating and air-conditioning control to my customers worldwide in the next three years. I would like to connect them to my network, please.
In the very beginning, when we started many years ago, if the first customer wanted 5,000 of them, as a salesperson, you would have had a moment of consideration. Meanwhile, anything up to the mid-six-figure range is really day-to-day business. If you look at asset tracking, for example, which we use as a synonym for goods, we’re really talking about hundreds of thousands of containers at the major service providers, hundreds of thousands of pieces of equipment that are on the move around the world. In the IoT sector as a whole, I think we have more than a billion networked, mobile devices active worldwide. This is perfectly normal. Now someone comes along who has something like that and wants to connect it worldwide. Or they ask how exactly they can do that. That is, they do not have a device, but they also need the radio interface, the advice, the help, the support in choosing how to do it. With which transmission system, how to connect that, how to secure that. These are simply two different approaches with customers.
There are customers who simply have an idea and ask how they can do it and there are customers who have a specific need. Then we don’t say that you have a choice of three tariffs here, pick one that might be right for you. Of course, we have certified SIM cards for a handful of standard applications – let’s take elevators as an example, there are certain legal regulations that we have to fulfill, we have standard tariffs, and it’s always the same use case. But for all other customers we create individual solutions. After all, that is precisely one of the differentiations from the network operators’ standard platforms. If you’re with network operator A, B or C, let’s say in Germany, Telekom, Vodafone or Telefónica, they all have great, outstanding products that I can only recommend to everyone. Of course, we also sell them in our standard model.
But there are customers, the vast majority in the midmarket, who need specialized solutions. There are challenges that we can meet because we specialize in them. To put it casually, a large tanker may find it a bit more challenging to afford that compared to a small, fast boat like us. That way we can build individual solutions for our customers. By connecting several network operators, we have options on the platform that a single network operator does not have on its platform. If, for example, you are in production and you are now creating SIM chips, SIM cards, there are a wide variety of options and you are producing thousands of pieces and you are using different network operators, different connections, interfaces, platforms, you cannot pool them with each other. This is always a huge effort, also costs a lot more money in case of doubt and you can change that completely with our solution.
Sorry if I’m interrupting you, just to be clear, you were just talking about connectivity of carriers now. That means you have a corresponding solution behind it with FUSION IoT, where you have exactly this “connection”. How does that work? I am now the fleet operator from the container example and have 250 different assets that I want to connect. Then I come to you and say: here is my challenge. How does it work? What would you do and how does this connection to FUSION IoT work with the carriers? Can you explain this to me? How would you advise the customer?
In our platform, we have connected various network operators for the time being, but we are completely free to set our own tariffs. That was important to us. In the end, the customer doesn’t care whether the SIM card is blue, red or green. In the end, the important thing is that it has connectivity. Improved proposal: The challenge for projects on a European or international scale is to gain access to specialized networks. An example of this is narrowband IoT coverage, which cannot be provided by every network operator in every country if it is needed for this project. This brings us back to the phrase: the tariff must suit the customer and not the other way around. This means that we can also pool different carriers among each other. This means that I take the part from each carrier that fits exactly for this project and form a joint tariff for the customer. In the end, that means pooling it.
A quick question: Why can’t they do that? So why can’t a carrier do it themselves?
Because the carrier can only sell its own solution. So if I go to a big red carrier now, they will of course only sell me their own SIM cards, which is perfectly understandable. This goes hand in hand with all the advantages that the red SIM card offers, but also with all the disadvantages. If we want to iron out the disadvantages, which may then be better covered by a blue carrier, we can combine that. The carrier itself can’t do that.
That’s where the heart of our FUSION IoT platform lies; we can react flexibly to the customer. Often when a project starts the customer has a fixed point and realizes they need the data volume, their data traffic to the following servers etc.. Afterwards they find out, for example after six months of live operation, that some things have changed. More data is retrieved, the information is still needed at other points as well. We are flexible in that respect, we can adapt that at any time. We can flexibly adjust the tariff up and down at any time. We can customize the interfaces and the VPN connections and do this accordingly across different network operators.
This is a very important point. Many IoT projects that I also see in our network start very small. You start with one case and then eventually you have five, six different ones. And then, however, something changes. So the data volumes are changing, the data traffic. And then, of course, I need flexibility, otherwise I have to deal with all these tariffs. And that probably costs me quite a bit of time and money in the end, I would imagine.
Here, too, we support the customer accordingly. We also have a key account manager on each client right now on projects that are just starting up, and they are actively looking at the traffic and the progress of the maps. They are also in close communication with the customer and check whether the traffic and consumption peaks are in order. We also like to watch something like that and it is also part of our daily business.
Very nice. Then thank you first of all also for the explanation of how the platform works. Volker, how would you advise this customer now if they approached you and said, we want to connect 250,000 devices here and asset tracking? How would you advise there?
Basically, you then look at the story for the future together with the customer. The past is less interesting; what really matters is what he wants to do in the future. What is the range of flexibility that we need to plan for from the outset? Then we look at that, what the radio systems are, what do they need? Florian has explained a bit about this, Narrowband IoT. To put it simply, this is a very, very slow transmission system. Unlike our fast 5G phones, we can penetrate extremely deep into buildings. One example is the topic of smart metering, if you have such meter systems, such interface systems, then they are mostly in the basement. In deep basements and thick walls, one realizes on their mobile phone that there is no reception. Narrowband IoT usually has reception there. It is highly energy efficient. Another example from us is sensors for parking space management. The sensor detects, for example, whether there is a normal combustion engine car on it or whether it is a battery-powered car. It can then interact and report that the parking space is occupied or specify the allowed time for parking. This sensor has no power connection. Nobody goes to the parking lot with 10,000 parking spaces and installs any power lines across it, these sensors have their own battery with them. With narrowband IoT, there are definitely sensors whose batteries last seven or eight years.
Amazing. Of course, it depends very much on the use case at the end, what I want to implement and how it develops.
Exactly. You just have the challenge, as soon as the issue takes on a global scale, you’re talking to hundreds of network operators where you’d have to find a solution. If you now talk directly to one of the known carriers, you can only ever access the network, which they can also represent worldwide, e.g., through roaming partners. However, since we currently have seven carriers connected to our platform, this increases dramatically. We can present connectivity directly to the customer in many more countries around the world, so they don’t have to rely at all on what a single carrier they would normally talk to could do. Furthermore, we are of course also able to connect additional carriers for specific projects. If we need a carrier in South America because we can’t solve the problem any other way, we can talk to them and connect them to our platform if that’s what they want at that moment.
There are also marginal cases, for example in Africa or somewhere where you need a wide variety of access points, where it makes total sense to use a network like yours. What I wanted to mention is that we also have a lot of cases in our network that are expanding. For example, we have just such a project with the Sulzer company. This is a pump manufacturer that does something together with Siemens Large Drives. And the scenario of various partners joining forces and sharing data is now emerging more and more. I can just also imagine that this could really become a problem if I don’t have that flexibility in my contracts. After all, more and more data is coming up. I may start networking the engine. Then comes the transformer manufacturer, then comes the sensor. In the end, I suddenly have a lot more traffic or different traffic. So that’s pretty cool what you guys are doing.
That’s exactly what it is, a different kind of traffic, simply because the projects are also partly different. And then I often find myself handicapped when I focus on a single network operator and try to develop my second, third, fourth project around their conditions.
Exactly. Yeah, it’s really cool that you’ve got people who are looking at this progression of the maps, what the consumptions are like, and really going in with consulting as well. So you guys go in there and also advise the customer on things like that.
Yes, that is our approach. Of course, it’s great when the customer books a huge tariff with me. But that doesn’t do me any good at all in the long run. Because what does the customer do in the end? They leave us to look for a suitable tariff somewhere else that might be a better fit for them, if necessary. Why not optimize it right away to the extent that our tariff fits this project perfectly because it is flexible. It’s more of a philosophical question where companies act differently. We have chosen the path of open communication, where we simply provide active support, and so far we are doing very well.
Before I come to the last question, briefly the summary from my point of view. First of all, thank you for the presentation of the cases. I think it was well understood who your customers are, what challenges they have, and what challenges you face on a day-to-day basis. FUSION IoT, you have a multi-level mapping through a corresponding partner tariff. You somehow have access to any network providers, which are also constantly expanding and connecting into your platform. I am completely flexible with you, can really manage the whole thing across network operators in this corresponding portal and above all always and everywhere. We discussed the cases, which is very relevant there for many customers, and I have the flexibility for tariff adjustments, which is not a given in the market.
[30:43] Results, Business Models and Best Practices – How Success is Measured
I am always asked about the business case. In the end, it has to pay off. What is the business case for your customers? Do you have any KPI’s or return-on-investment statements from your customers?
It depends on the individual case. Together with the customer, we consider the complete value chain at that moment. As soon as you leave the status of prototype construction, special series, small series, you quickly have high costs if you go into continuous operation and not all processes are optimal there. You now produce 150,000 units of a control unit per year. Activation of the SIM card or SIM chip during installation at the factory calls for additional costs per time unit in the amount of X, which we take into account. Then we make a complete invoice for the customer and then it can be quite possible that there are extreme savings because they share the interfaces with us.
Thank you for the example. These are exactly the kinds of things that are very exciting to work out, and we have already addressed some business cases and challenges in the podcast itself that you solve with your solution. Are you currently seeing any emerging trends? You have a huge ecosystem and many use cases. I’m curious to know what percentage of these use cases can be standardized. How much of the consulting process is truly individualized for each customer?
Basically, the applications are similar. There was once a fitting saying: 70 percent of a solution is always standardized and the same. The missing 30 percent makes the difference, because each customer simply has different requirements for the solution due to their own systems, due to what has grown historically. And therefore it is 70 percent naturally standardizable and copyable. But we have also witnessed what various competitors have tried to do, that the off-the-shelf product in IoT only works on a small scale. Especially in the direction of medium-sized businesses, this simply no longer fits and then we have to be able to act individually.
Volker, do you see it that way too?
Yes, I see it perhaps even a bit more extensively. The technical solutions we work with all have intrinsic standards, of course. It simply has to do with networks, technical conditions, regulations and standards. Every company, especially SMEs, faces the challenge of digitalizing processes and leveraging data. That means you can’t use time or people to scale your business in the future. Demographic change will mean that there will no longer be enough workers available for certain activities. You just have to digitalize and automate certain things. This requires a consistent view of the entire business model.
With large customers, we often open up new areas of business. Where the customer, with our solution, suddenly realizes that they can invoice something to their own customer or generate revenue because they are providing them with value again. Today, you really want to pay for the services you use – as-a-service. No one in the world wants to buy a drill, you just want to drill a hole in the wall to hang a picture. This exists on an industrial scale, where you can utilize it as-a-service. Now, if I’m having a large excavator As-A-Service, I need to be able to bill my customer live for how much is moving, how much he’s driven, and how much he’s consumed. I can’t send people there to write down any hour meters, give it to the office somehow, and there’s someone sitting there typing it back into the laptop, so that someone somewhere prints out an invoice again, which I send somewhere by mail and drive there to the mailbox.
I’m sure you’re smiling now, but I still meet customers from time to time where it’s the same. At a medium-sized construction company, with just under 300 employees and an average age of over 50, the junior manager asked me, what can we do? I will not be able to completely replace these people. We simply have to streamline and digitalize processes. Perhaps a very small hint from me: a bad process also remains a bad process digitally. Digitalization is not an end in itself, but must generate real benefits. We often encounter situations where we can say that based on our experience, we can do it faster and better. This then brings a clear benefit to the customer.
Exactly, and there again is the flexibility to be able to react to such new service models, to work together with the customers in such billing models that you bring along. Thank you, Volker, for your explanation. Up to this point, first of all, thank you very much for being with us today. Thank you very much for your time, Volker and Florian. With that, I would turn the final word over to you. It’s great to have you here with us. That’s the path we all want to take.
Many thanks also from my side. When do we do the next one? We have more to talk about. It was a pleasure, very exciting. I’m looking forward to the final product.
From my side as well, thank you very much for the opportunity to share a bit about what we do. I hope that if anyone has any further questions, our contact information is available on the internet. No one should hesitate there. We are always ready for a dialogue. We have many examples where you can simply take a look and see if it fits for someone. Then we look forward to part 2.
Very nice, then many thanks to you, your info is linked in the show notes accordingly, you are also represented at our network. Questions are welcome to Volker or Florian in the show notes or to me. Thanks for today, see you next time, have a nice week, ciao!