How Success Leads to the IoT’s Failure, and How to Fix It

How Succes Leads to the IoT’s Failure, and How to Fix It | by Michael Vedomske

In our first post, we showed that the Internet of Things (IoT) offers a simple and scalable business case best served by Low Power Wide Area (LPWA) wireless connectivity. Later, we showed that the longevity enabled by LPWA provides the foundation for the IoT as a technical and business solution. In this post we look a bit further down the road at the implications if a certain class of LPWA technologies were to gain traction as public IoT wireless providers.

To frame our discussion, we’ll consider two scenarios. The first scenario is one where a public LPWA wireless provider must pay for the network infrastructure and shows how this can lead to business failure. The second scenario is more generous and allows for the public LPWA wireless provider to have cost-free infrastructure. We will show that even in this scenario, the LPWA provider’s success will ultimately lead to its own failure. Finally, we will show how the problems in both scenarios are addressed.

Success for Public IoT Networks

To begin, let’s take a look at what it means to be successful as a public IoT wireless provider. Success, in any business, is using each resource to its maximum revenue potential. For wireless networks, the vast majority of resources are spent on infrastructure (and in cellular’s case, licensed spectrum). These infrastructure costs include site acquisition costs such as zoning and permitting, power conduit, physical access point installation, the initial field deployment costs, backhaul (the service that transmits the data back to the provider from the access points or APs), and the recurring lease for space on the tower. These costs scale along with the network. These costs are applicable to any technology aiming to operate as a public wireless network provider. The exact details of how the infrastructure costs break down vary some from region to region, but the overall pattern is the same.

Scenario 1: Paying for Success

Building and profitably running a public network is no cheap endeavor. Success is found in using the infrastructure across as many paying customers as possible. The paying customers are devices in a public IoT network. And, the number of paying customers is determined by the capacity (or data throughput) available at each access point. An important side note here that the reader should understand is that many LPWA wireless technologies like to talk about the number of address spaces an AP has as capacity. That misses the mark. A useful benchmark of capacity is the number of messages of a given size (e.g. 32 bytes) that can pass through an AP during a given time (say one second).

A useful benchmark of capacity is the number of messages of a given size (e.g. 32 bytes) that can pass through an AP during a given time (say one second).

Those messages can be divided amongst devices according to their data needs. If each device needs a lot of data, then fewer can be served in a given time interval. If each device needs very little data, then more devices can be served in that interval. This is real-world capacity and is how any wireless technology should be compared apples to apples.

Each device pays some nominal fee to be connected. Therefore, capacity becomes the limiting factor for profitability of public IoT networks. The higher capacity per tower, the greater the profitability of that expensive resource.

capacity becomes the limiting factor for profitability of public IoT networks. The higher capacity per tower, the greater the profitability of that expensive resource

Simply put, sufficient capacity per tower is essential because it allows for the tower to be profitable. Each device brings in a certain amount of revenue. Each tower or access point (AP) can only serve a certain number of devices because the data throughput at any given time is divided up amongst the devices according to their data needs. So, multiply the number of devices the AP can serve times the amount of revenue each device brings in, and you have the AP’s revenue. Aggregate the tower profitability across the entire network, and you have the network profitability.

Network financials with words.

Here’s where the first scenario leads to failure: most LPWA network technologies have such low capacity, or endpoint count per access point, that they cannot profitably build public networks. For most LPWA technologies, the capacity is so low per AP, that the revenue doesn’t even come close to covering the costs to put up the AP, much less support it and provide back office services.

For most LPWA technologies, the capacity is so low per AP, that the revenue doesn’t even come close to covering the costs to put up the AP much less support it and provide back office services.

It could take a few years before this becomes apparent in actual networks. But it will happen and when it does, it will leave devices stranded. This is the first longevity nightmare scenario: to have an entire network simply shutdown due to bankruptcy.

Luckily, capacity can be calculated pretty handily with sufficient information for a given technology. What’s particularly painful about this issue (for the devices on the provider’s network) is that it cannot be addressed through afterthought, bolt-on approaches. Unluckily for these technologies, the only way to address such low capacity per device is to design an entirely new technology (which is the cellular approach, but the issue there is the continual technology sunsetting cycles).

Success to Failure Scenario #1: Towers are filled to capacity, but that capacity isn’t sufficient in number of devices to profitably support the towers. This lack of capacity per access point leads to business failure and stranded devices.

Scenario #2: When Success Leads to Inevitable Failure

For the second scenario, let’s suppose that the wireless provider is able to obtain infrastructure for free. Success in this scenario is the same, fill each tower to capacity with paying customers. As most LPWA technologies have low capacity per tower, it won’t take long to fill these assets to capacity.

Once the network towers are filled to capacity the astute business would want to increase gross revenue. Moreover, some large and influential customers may demand more capacity as their growth plans have relied on being able to deploy more endpoints. So far this is all reasonable. So, as any good business would do, the LPWA wireless provider puts up more towers to add more capacity to the network. The ability to add more capacity by adding more access points is called “capacity scalability.” In the cellular world this is called “cell densification” and is well known as a crucial public network capability. And having this capability is the only way to grow the IoT to the numbers that we hear so often in the press. To be truly scalable, a network should be able to add an AP and that AP should be able to serve the same number of endpoints that the prior APs were able to serve.

However, most LPWA technologies are completely incapable of adding more capacity once the network is filled. This inability is also ultimately grounded in technical limitations.

most LPWA technologies are completely incapable of adding more capacity once the network is filled

Network scalability requires not only capable APs but also intelligent endpoints. Intelligent endpoints are capable of obtaining channel conditions, adjusting transmit power, and many other functions that must be baked into the technology from the chip to the firmware to the network structure and management. If a network can’t scale, then as it grows, it will begin to interfere with itself, destroying its own performance.

Other LPWA technologies cannot scale because they, by design, do not support transmit power control, among other involved capabilities. Let’s explore how that impacts scalability. Suppose that a tower, call it Y, is filled to capacity, and you build another tower nearby, call it Z, that can serve some of Y’s endpoints.

Because other LPWA providers have no notion of reducing signal power (e.g., Sigfox, LoRa), those endpoints will continue broadcasting signal as powerfully, or “loudly” as before. As such, tower Y will still hear all the endpoints it heard before tower Z was built. Moreover, when tower Z gets its own endpoints, many of those will be within listening distance of tower Y. This means that tower Y’s old endpoints will not only be heard by tower Z, but will still be heard by tower Y. So in net, no capacity was added! And adding another AP nearby will not solve this problem. The APs will hear each others’ endpoints reducing their prior capacity and then additional endpoints will reduce the old capacity even further.

In short, any additional endpoints added to new APs will interfere with the old APs. This is the opposite of network scalability. This means that once such a public network reaches capacity it is done, forever. This also means businesses with growth plans who were planning to continue to add devices will be unable to. Those organizations with devices already on the network will suffer performance degradation.

And the “success” story becomes even worse. Some technologies have private networks and proposed public networks that would operate side by side with no coordination in the 900 MHz band. The private networks would act like shadow APs interfering with public network buildouts. This effect actually expands to other 900 MHz network providers as well as they operate on the same band. And unlike the 2.4 GHz band, which has 80MHz of band to operate on, the 900 MHz band is much more limited. A network deployed in bands with limited available spectrum or using technology with limited spectral agility, will lead to degradation and failure. And as before, this is not addressable by any means other than a complete sunsetting of the old technology and replacing it with new technology capable of capacity scaling.

Success to Failure Scenario #2: Network fills to capacity but lack of network scalability leads to network overload and thus network failure leaving devices stranded.

How to Fix This Mess

The two scenarios just described do not meet the vision of the IoT we are often given.

The fact that the most profitable path leads to network failure in both scenarios means that such technologies are doomed to failure.

This is a bold statement and one not lightly made. And as stated before, the root causes are easy to hide and the failure is one that plays out over time. But no business, municipality or enterprise should willingly join a network ultimately doomed to fail for reasons that cannot be fixed except by completely redesigning that network’s technology. But LPWA is still the answer, so long as it has profitable capacity levels per AP, and the network technology is perfectly scalable. Ingenu’s RPMA has solved both of these crucial LPWA capabilities.

LPWA is still the answer, so long as it has profitable capacity levels per AP, and the network technology is perfectly scalable.

Long-term Success Scenario: LPWA technology with profitable capacity per tower and capacity scalability. RPMA is the only LPWA technology with these crucial capabilities.

Profitable levels of capacity and capacity scalability require innovation at all levels of a wireless technology. These solutions require innovation at the hardware, firmware, and network levels and cannot be bolted on without working out the interdependencies between those levels. The vision of the IoT is still fully possible.

RPMA is the only viable LPWA technology to provide public IoT wireless connectivity. Contact us to learn more.

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