Verizon is making a significant push into the burgeoning Internet of things, (IoT) and already is seeing some good returns on the effort.
During a conference call with analysts and journalists Oct. 20 to talk about the company's latest quarterly numbers, Frank Shammo, executive vice president and CFO, noted that in the first nine months of 2015, Verizon had generated $495 million in revenue related to the Internet of things, its telematics business, and $175 million in the third quarter.
The company in August launched Hum, an aftermarket connected car technology and subscription service that can run in more than 150 million vehicles in the United States. In addition, Shammo pointed to gains Verizon had made in smart city offerings, most recently with the city of Savannah, Ga.
"With our experience in networks, devices, platforms and applications, we are creating an ecosystem that will foster innovation and expand the entire IoT market," Shammo said, according to a transcript on Seeking Alpha. "We are very well positioned to capitalize on these new opportunities that require both the ubiquity of mobile service and the capabilities of platforms above the connectivity layer. This will enable us to monetize usage through new commercial models, include data analytics and applications."
The carrier on Oct. 28 expanded its efforts by unveiling a strategy aimed at making it easier for businesses and developers to embrace the IoT and accelerate its adoption globally, with the foundation being an open development platform called ThingSpace.
During a Webcast event at the company's Innovation Center in San Francisco, Mike Lanman, senior vice president of enterprise products for Verizon's Product and New Business Innovation unit, said there is a lot of interest among developers, enthusiasts and businesses of all sizes to create applications for the Internet of things, but that they're confronted with a variety of challenges, not the least of which is finding that the various pieces they need—from the development tools to create their software to the technology they need to test and deploy it—are in disparate places. It can be discouraging, Lanman said.
"It's no wonder so many people with great ideas about the Internet of things don't get out of the gate," he said.
With ThingSpace, Verizon officials are looking to bring all the tools developers need into a single place, creating an "easy on-ramp onto the Internet of things," Lanman said. ThingSpace is a self-service Web interface that can be used to manage entire IoT environments: developers, customers and partners can use it to create applications, manage devices and market their services. At the same time, Verizon can use the platform to launch its own integrated vertical offerings, officials said. ThingSpace will start off offering hundreds of APIs to aid in application development, and Verizon is working to grow that into the thousands in 2016, Lanman said.
Verizon in December is hosting a conference in Boston, where programmers will get access to the APIs on ThingSpace in a hackathon.
In addition to the ThingSpace platform, Verizon officials said the carrier has created a core network within its LTE architecture that is optimized for low-payload IoT devices that is less costly and easier to use than such networks like WiFi, Bluetooth and ZigBee, all of which demand some level of customer intervention to use, Lanman said. The new network core, which will launch in the first quarter of 2016, will cut in half the cost of connecting to a 4G network, he said, adding that Verizon will halve the cost again in 2016.