March 6

Luigi Capobianco

Swipe to Buy Now: Why Can’t Companies Just Purchase IoT SIM Cards on Amazon?

why iot is more complex than just being able to buy it off amazon

For hardware resellers who are looking to sidestep into reselling connectivity, flexibility is everything. Connectivity often has low margins, and so the ability to achieve recurring revenues and scale are essential, to facilitate the shift from hardware alone to hardware+. 

We’ve discussed in the past about the complexities for hardware resellers in reselling connectivity, and how without control over the whole tech stack, a cookie-cutter or replicable use case is the only way to make it work. Many hardware resellers are opting out of selling connectivity altogether, because it’s just too complex. The same thing is true for IoT SIM cards. Without a clear, replicable use case where devices use a predictable and standardized amount of data each month, buying a batch lot of SIMs from Amazon, or any other retailer just won’t cut it. 

IoT: A More Complex Beast than Consumer Devices

IoT has far more specific needs than a consumer device such as a mobile phone. First up, IoT devices are subject to high regulatory requirements. Next, they are often left in the field for months or even years at a time, and critically, they have no single user who can troubleshoot if something goes awry. 

If an individual purchases a SIM card for their mobile device, and they realize it’s not the right service, they aren’t getting the data they need, or they don’t like the support, they can simply swap it out for another one. If a company buys 1,000 gateways with 1,000 SIM cards, there is no capability for defining what offer to set, and when these gateways are shipped to 10 different locations, visibility and control is impossible. 

Let’s say for example, that the offer that comes with the SIM cards is more data than your customer needs for their specific use case. Even 15 or 20 MB more per month could cost them heavily if you multiply this by 10,000 devices. Of course, a business can’t risk the drop to a lower data package, because having enough data is essential. Imagine a cold chain use case, where without sufficient data on temperature or humidity, an entire shipment needs throwing out, or a dashcam or telematics use case where blind spots cause insurance headaches or compliance gaps. In a world where IoT is becoming ubiquitous, data is mission-critical for devices to function as intended. 

For a standard use case where all devices will use the same amount of data each month, companies might be able to make a set data package work. But what about complex gateway use cases where SIMs could be used for anything from an HVAC in an industrial setting, to a traffic light on a busy highway? Data usage between these two cases will vary dramatically, and you’ve gone for a one-SIM-fits-all solution, which is likely to be a poor fit for the business. If they’re not happy, how would you even begin to approach “swapping out” these SIMs? The cost, the time it would take, and the sheer effort makes the idea impossible. 

The Scale of IoT vs Consumer Devices

It’s fairly common to find an IoT company who needs 20,000, 30,000 or even 50,000 SIM cards. This would be a mid-sized number of IoT devices, nothing that would break any records. However, how frequently could you find a company with a need for 20,000 mobile phones or consumer devices? Almost never. Even if a company has 20,000 employees – the likelihood of the business buying mobile contracts for all of their staff is slim to none. Furthermore, even if they did decide to buy all of their employees the latest iPhone – they certainly wouldn’t be throwing them into an Amazon basket. They would approach this purchase in a bespoke way, partnering with a vendor who could give them a tailored offer that meets their needs. 

The magnitude of IoT is even greater, and so the sheer scale demands a targeted, controlled and reliable approach, one which handles its complexity in its stride. When selling gateways for example, the flexibility needs to be there to target specific connectivity needs, rather than forcing customers to opt into generic offerings.

Time to lay the facts bare: For hardware resellers looking to sell connectivity, an off-the-shelf SIM will never do. For the model to make financial sense, resellers need to be able to sell connectivity at scale, and support complex use cases, where data needs will be dynamic and vary dramatically between devices. 

Interested in reselling connectivity without losing flexibility for your customers? Let’s schedule a time to talk.

March 6

Luigi Capobianco


Recent Posts

See All

Share this Post: