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Virtualization: A Critical Capability for Service Provider Success in IoT, 5G & Beyond

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© HEAVY READING | MARCH 2017 | VIRTUALIZATION FOR IOT, 5G & BEYOND 2 INTRODUCTION The Internet of Things (IoT) is a huge opportunity for communications service providers (CSPs), because of the sheer scale of investment it will attract and the business impact it will have globally. This white paper looks at developments in the IoT landscape and the critical factors and obstacles that CSPs need to be aware of as they consider the development of their network architecture to address the market and meet customer expectations. THE IOT LANDSCAPE Over the last three years, the IoT has become one of the hottest areas of interest for con- sumers, corporations and governments. As technology and software companies have intro- duced smart devices for home automation and security, enhanced peoples' health regimes with fitness trackers and smartwatches, and collaborated with automotive manufacturers to make cars more connected and intelligent, consumers have gradually become aware of the benefits of an instrumented and data-driven world. Figure 1: Companies With M2M Solutions in Place, 2016 Industry Percentage Retail 17% Transport & logistics 17% Health care/life sciences 19% Manufacturing 20% Automotive 28% Energy & utilities 28% Consumer electronics 29% Source: Vodafone M2M Barometer Report At the same time, corporations and governments have recognized the transformational potential of these technologies for competitive capabilities, business models and entire economic value chains. Increasingly, boardrooms and government chambers are focusing attention on the way in which the IoT is shaping the global landscape. Companies are just beginning to recognize how the IoT and the data it generates can reduce cost, improve supply-chain efficiencies, enhance product design and allow predictive maintenance. Gov- ernments are looking at how industrial policy needs to be reshaped to ensure that national industries remain competitive, and the degree to which regulations need to be adjusted or created to address such fundamentals as individual privacy, data security and a world that could soon be full of autonomous vehicles. M2M to IoT & Industrial IoT In reality, IoT is not a new market or technology. Machine-to-machine (M2M) and telemetry technologies have been in existence for well over 20 years. Many of the M2M communications and operations protocols are proprietary and unique to specific industries. Telemetry systems used in fleet management, asset tracking and infrastructure monitoring have used cellular

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