BUILDING IOT TOGETHER:
FROM HYPE TO REALITY -
WIENKE GIEZEMAN

CRA: Wienke Giezeman, welcome to the TechBurst Talks podcast. Wienke: Thanks for having me. CRA: Why don't you tell us a little bit about yourself and your organisations there's many of them, right? It's not just one. Wienke: I'm Wienke, CEO of The Things Industries. I founded the company together with Johan, our CTO. And what we do is we help companies around the world build lower end solution by offering a cloud service that allows them to add it gateways and low power sensors to build sensor solutions. So we've now got around 3 million connected devices on our software around the world. We're doing around $4 million in yearly subscription revenue and and we're helping thousands of customers building all kinds of different solutions from temperature sensing to cattle tracking to things in retail. CRA: It's been a long journey because I think we met almost a decade ago now in Singapore, an IOT event, and you guys were just kicking off back then, and so was IOT.[00:01:00] Yeah. So what inspired you to get involved with this in the early days? Yeah, Wienke: that was really cool. I really remember very vividly, like we had this this event in Singapore where we first met and then I, IT was at the peak of the hype. It's almost where AI is right now, right? It is like so many kind of like ideas and opportunism. And, but we started like a few months earlier where there was this new technology came out, technology called wan. And so technology that allows to send small pieces of data over the air, over open spectrum. So no need to get any cellular subscription. And it's got small pieces of data from A to B. And in 2015, you and I came up with the ideas that if we can do that, and the range of that is around a kilometer. You can build shared infrastructure. 'cause if everybody sets up such a gateway and you all these enterprises share their infrastructure then yeah, you can build a massive global network. So operators were also doing that at the time. And over the last 10 years, basically the value proposition of that [00:02:00] technology converged towards private networks. And this is where, yeah, we excel in now in our market leader globally . CRA: And you've done a good job with it, that's for sure. Wienke: Thanks a lot. CRA: But you also created a community around this, and this is what I've always been fascinated by. Like anybody who's in this space knows you, knows your company, and probably works with you. Wienke: Yeah. So, that's very kind to say by the way. We started our company with this collaborative idea. And the mantra was actually let's build this thing together. And I think we've operated along that mantra saying, building these iot solutions is so incredibly hard. There are so many very different puzzle pieces to the iot solutions. There's hardware, firmware, network, cloud services data analytics. So you have to be a Lego brick. And maybe that's not always what you want to be, but if we wanna make this market together, we have to make it together. And I think we've consistently followed that. There's quite some consequences to following such a strong vision. It's hard to raise VC money because you're not saying that you're gonna win the [00:03:00] entire market, we're gonna be the ones that are gonna eat the entire pie. That's a different mantra. That's perfectly fine. But it's not what we were doing. And around. That means that you need a lot of companies and enough people and that, and then if you just be consistent in your actions and you share a lot of information, share a lot of ip, share, a lot of standards, and along people will follow at some point. And that's really where the things network is like a developer ecosystem of device makers, partners, solution makers that basically all see us as a trusted place and platform to build their solution. CRA: I think that's why we got along initially, because back then I remember I was doing a keynote at the IOT Asia event. Wienke: And CRA: I was trying to get people to understand the complexity of iot, because any iot solution is multiple products from multiple vendors. Yeah. You're gonna have a thing that connects over a network, you know it's gonna go through multiple different platforms, you gotta secure it. There's systems integration, so it's complex. And I just found, like everyone was saying, I've got an IOT solution. Like, no, you have a component. So I like the idea that you've always been able to aggregate this. Yeah. But now you've moved on, so you [00:04:00] started out with the things network. You also have the things industry. So how is this different? Wienke: Yeah, so basically what we started off building these lower end services, building software and services to make it easier to build a solution. We moved that into a SaaS offering where you basically can run our SaaS servers by some standardized gateways and standardized devices of which many of them we certified for a platform. And then you can start building your own solution. And this is what we offer at the things industries where you pay a subscription fee and then you get an SLA and we have global services on every continent. We have a service running and yeah, you don't have to worry about that. You have to worry. Only worry about making sure that you install the hardware, making sure you build the business case around it. And let us just do the cloud work CRA: but like over this past decade, you've probably looked at more solutions than anybody because you've got all the different partners. You've got your wall of fame at the event. what's the coolest type solution that you've actually seen? Wienke: You have cool solutions and [00:05:00] scalable solutions. So, a lot of cool solutions oh are I think with nature preservation or following rhinos or detecting forest fires with sensors and these kind of things. Scalable solutions are more in smart metering, so water metering they don't have active electricity, but also interesting what kind of data they do. All the use cases around schools for kids' safety, but also for instance, vape detection. So like we have partners that have sensors that have literally vape detectors in washrooms but also a rodent control. Detecting when rodent traps gone off. I see a lot in retail from counting people from kind of commercial data which is very interesting because yeah, that commercial data can, for instance, for a leasing company resulting higher lease or there's kind of some opportunity there. But also in buildings. The facility management. So just keeping track of toilet dispensers, like you can name it. And the funny thing about this fragmented market is that I get to, [00:06:00] to be amazed every day. We have now run 3 million devices connected to the platform and that's growing. The device grows around 50% year over year. Revenue is around 30% year on year. So like it keeps coming and the volume keeps coming. Yeah. CRA: Well that's good because now it's not a buzzword anymore. It's sort of got into business as usual. Yeah, and what I like is you're seeing a lot of people do these scalable type projects. Yeah. They've had chances to go out there and see what works. And now that they've proved that it can actually work to starting to scale. And I think you're seeing a lot in like utilities doing things. But I think there's still a lot of growth. So you're positioned well. Yeah. Now next thing is you've had this ecosystem and what you've done every year for I think the past eight years Yes. Is you've had the things conference, so you really like this structure, the things, everything. So you had the Things conference, you have another one coming up in September. So can you tell us a little bit about the Things conference? Wienke: Yeah, sure. The first edition was in 2018. And before that we actually were sitting together with a team we said, why don't we create an iot conference that we ourselves want to go to that are not kind of [00:07:00] filled with marketing stories that are about technology, about what's real, but also where people share things that didn't work and maybe not on stage, but at least like have a developer to developer kind of conversation. And so we said, oh, why don't we just do it ourselves? So we sent out an email to this large ecosystem that we have. It's like, we're gonna do an event. Are you gonna drop by? And then we had 700 people in the first edition without ever doing a conference. And we scrambled it together. We made sure that it was of course just of quality. But yeah we managed to do that. And since then, we have this every year. And what we've always done is we've focused on the lower wan part of it. And and this year also following that, let's make this thing together mantra saying, no let's invite more people to this ecosystem. And now we have around 150 partners. Yeah, big ones. So, Semtech Qualcomm, NXP Infinian AWS. Yeah. So, and we have around 2000 people there. It's gonna be a big party I'm very much looking forward to it. CRA: What I think is interesting is it started out as a [00:08:00] pure, almost like a lo developer conference. Yeah. But now it's going in and looking at supply and demand and all different components within the ecosystem. And it's not just LoRa anymore because you've got other people, I mean, the guys who are doing wifi halo out of Australia coming up. So you're getting a bunch of different things. It's more of almost like an iot type event. Wienke: It is. Going back to the Lego brick and embracing that, you're Lego brick actually is only 5% and the rest is, they have to have a gateway, which has a cellular backhaul, which has different firmware which is also connected to another management cloud, right? The companies and all our customers in the iot industry, they have this really large set of vendors. Right? So, yeah, so we thought, okay, if we're bringing in 2000 people every year to Amsterdam to talk about lower end, it just doesn't make sense to just keep this all for ourselves. Let's just share and make the market bigger. CRA: And that's good as well, because it'll help attract a different audience because people, if they're looking at Laura, would go, but now if it's much wider, I'm guessing you're gonna have a more diverse audience coming there just to [00:09:00] check it out. It's Wienke: amazing. So we have the Bluetooth sick, which is the organization we're trying to Bluetooth standard, the Set Wave Alliance. A lot of cellular players like Nordic sequence, KaiGen soar com and so, so yeah, we have all these different kind of flavors and yeah, it's gonna be a candy store and if you're into this market two days and you are up to speed. CRA: Well now we're gonna switch a little bit. We're gonna start talking about some trends and we're gonna see what's going with iot and Laura But first of all, so we've both been around IOT since it was completely overhyped, and that's when everybody had those ridiculous forecasts about how huge the number of connections and market size is gonna be. And then it's now come back down to reality now. Yeah. So what do you think were the complexities, like why didn't we reach those lofty aspirations, or why is it gonna take us longer to reach them? Wienke: Yeah, so, what it's taking longer I think at the core is what IOT does. It interfaces with physical things and we applied scaling patterns from a cloud and even like a [00:10:00] consumer software or platform world. So if I build a Facebook, I create an app that changes your behavior and. Basically can control your thumb so you have one thing that's Uber standardized, that's a black screen, like a small black screen in hand with your phone. The only one is they made you they to control over your thumb. So basically that's extremely scalable, right? That level of control over things is really hard. And this leads to this insane fragmentation. And that's why it's hard. The interesting thing I think with all these expectations is that I don't think the perception of the opportunity is wrong, but getting to the opportunity, exactly what we're saying, it's taking us longer. But what I now gradually more and more see is that really the high grossing iot business cases. I believe that actually they're exceeding expectations in their niches. Our joint friend from caliper he's building very high value and how high value driving [00:11:00] devices that also requires a significant investment. But the business case is even stronger, right? We might, as a technology industry, be a bit disappointed and we had higher expectations. Maybe we were expecting to get a bit bigger slice of that pie. But our customers they're seeing the benefits and there's no doubt to that because, well, we always, we have 3 million devices and I always say to the team with 3 million device on the platform, but our customers they invested $300 per device in total cost of ownership. Right. So we're talking about a very large sum of money that our customers invested. They didn't all give it to us. They only give a small portion to us. I think our perspective on these expectations and how we looked at them, yeah, they were definitely wrong. Yeah I'm CRA: very bullish on more red headed. 'cause I think initially what happened, we focused way too much on the technology. Especially when Low Power Wan first came out, remember on LinkedIn there was the LPWAN Wars. It was the NB-IoT guys slamming Sigfox and slamming LoRa And I'm like, you idiots [00:12:00] quit talking about this. It doesn't matter. You do what's right. 'cause there's different use cases for each one so quit infighting amongst yourselves. and start delivering value. No one talked about value. Everyone talked about the tech for so long. Yeah. And you mentioned what he's doing with Caliper now. I love it because he has probably the top spect. Housing unit that you can get. He doesn't even talk about the technology. He goes straight for the business case and knows the lever's. Depress saying, I can save you X number of dollars by doing this. And then by the time you show them that they see the cost, they're ready to move forward. So I think that's great 'cause people are understanding it's not a tech game, it's value. Show me how it delivers value and then we'll go ahead and deliver it. I think that's why we're seeing a lot of these utilities cities, you know, doing more energy infrastructure type projects. Because the savings is there and cities don't have a lot of money right now, and pandemic wiped them out. So it's like it gives them a chance to start doing something that delivers value and saves them money at the same time. Wienke: No, definitely. I was just saying is like this iot technology evangelism that at some time and [00:13:00] five years ago that turned into iot crusades. And yeah I totally agree with you. I never understood that and we've been always passionate about the technology that we create, but we never went on a crusade. We ever tried to pull anybody down. And in the end exactly what you're saying is the one that wins is the end customer. They take the biggest risk and they get the biggest pieces of the pie. Yeah. CRA: In this field, I've been called an evangelist so many times and I hate it. And I'm like, I'm not an evangelist, I'm a pragmatist because I'm looking at this and I can see how we're gonna screw it up, but I'm trying to let you know this is what we need to do to get it right. And unfortunately it just takes a lot longer than we had hoped for. So the market is picking up, it's looking pretty positive, I would say. What do you seeing the top trends that you're seeing right now in iot? Wienke: In the technology space, the main trend is that it's cooling down. So there's not like another iot technology, another iot platform. Every month there's more of a consolidation or pullback almost. So I think that will create natural rationalization. So I think that's really [00:14:00] good. From a kind of end user and systems integrator perspective, what we see is , that systems integrators and product makers they, of course, they always look at IOT. And that means if you have done that over the last 10 years, you have been disappointed, let's say every two years. ' cause then you're disappointed. You don't do it one year and then you get excited and then. And what I think is that that in iot, the building blocks are getting so interoperable and solid that they're getting disappointed in iot because of the technology is less likely . And I think that's a really clear trend. I think what we see more is, let's say 10 years ago or five years ago, you would have somebody from an innovation or product team and they had did this. Very big ideas. And then they were not really connected to reality with regards to tech the pragmatism. And I think now more and more we see customer yeah, we figured this A, b, c out. This is the architecture. We need this from you guys. We've tested out, we have [00:15:00] an open source version for that reason. 'cause people wanna figure out the product out themselves first I think that one of the trends is that we have some pragmatism. CRA: Well, that's good. It was much needed. It just took us a little bit longer than it should have to get here. But now what about specific sectors or regions or countries? I know we've talked a lot Yeah. We've mentioned utilities quite a bit, but I, what are your other prospects? Like, what do you think are the areas that are the most interesting right now? Wienke: Yeah, so I get this question at least once a week. And from what we see is it's extremely fragmented. And it's really hard for me actually to look at and to pinpoint one example. So if you look at scale and where there's a lot of devices sold, definitely in metering, and also that's where the margins are low, right? So, yeah. Is that a big opportunity? Yes or no? And on the other side there's a lot of these small operational niche problems out there. Facility management, building management I don't have a satisfying answer. Like, look at that industry. Go chase these problems. Maybe the answers out there, I don't have it, but what I see across the board our [00:16:00] customers are successful if they really know the business domain problems of their sector. They know the trade secrets, they know all the ins and outs, and then iot is just a tool to enable. But unfortunately I I don't have any data or actually, because it's so fragmented CRA: and the data's kind of pointless. Anyway. I've done enough research and I used to work for a research firm. I don't trust any of the numbers when it comes to I OT because basically there's so many numbers out there. Figure out how big you want it to be. You can go find someone to justify your assumption. But anyway, so we now need to move on a little bit about ai. 'cause I think this is important because what you were talking about there is that they had the solutions, but they're understanding how to deliver the business value. And this is the idea about taking data. So capturing the data. Turning it into insights and then into knowledge and into wisdom. And that's what allows these people to get this benefit out of it. So this is why we need AI and iot, right? How is it impacting, what you see with their, with your clients and with the people in your ecosystem. Wienke: What's really good about iot data and also about the iot data that constrained devices do. already a lot of thought have been through in how to structure and how to send and [00:17:00] how to model the data because actually the connectivity comes at a cost. So you're optimizing that, that means that iot data delivers quite clean data for AI to process. , So that's a bit of a contextual thing. Then if you look at the architecture, there's edge AI so Edge AI can be in a sensor where it can already analyse some data and determine if that is actually relevant data for a business' decision so what you see there is all kinds of AI in sensors. So smarter sensors that. Either bring better results or have really good filtering on your business requirements. And then you have the AI in the cloud. I think the biggest bet would be on a kind of like the telemetry data and analyzing that my hypothesis is that with, the generative ai that you can create applications to more easily make the object talk with the one that's in charge of the operations. And that's in the field. So think about like the objects in a [00:18:00] building, talking with the facility manager just through the WhatsApp, just through his mobile phone, right? So I think there's a lot of opportunity because, I always think that if iot data ends up in a graph in a dashboard, you've failed because you basically, you kept it within the IT department because Yeah. Then we can build graphs in the IT departments, but then nobody in the business wanted anything. But if you can make it conversational. There's, a much higher likelihood of adoption. CRA: With ai, the fact that we're leveraging so much, there's so many cool things you can do if you're in an industrial plant or in manufacturing where generative AI allows you to talk to the equipment. That means suddenly having more data is very important. So it's actually gonna generate demand. So AI is gonna start generating a lot of demand for these types of solutions. Wienke: But the at the ball has to start rolling, right? You have to be something small is machine A in hall C running right? You know, it's CRA: funny, I think just before the pandemic I was at Bosch Connected World, I think it was the last, must have been early 2020. Like literally we were deciding whether they were gonna have the event or not, and they were talking about AIOT back [00:19:00] then. And they were the first one. I remember having a few meetings with Dirk Lama and Thomas aka, who used to run Asia Pacific for them, they were talking about this stuff back then, but then we had this pandemic and everything went quiet for a while, and now I'm glad to see this finally coming around And people are figuring out that it's not that, oh, we just do AI and we just do iot It's like these things can leverage each other and you get more value out of leveraging IOT. When you use ai. Yeah. And you know, for AI you need data. Yeah. And like you said, you get pretty clean data coming, a lot of these solutions, so Yeah. Makes it easier. Okay. Any other trends you think coming up? Wienke: So if I look at our conference AI foundation is joining. So that's good. The other one is CRA. It's a trend that's just regulation cyber Resilience Act. I thought you were talking CRA: about me. Wienke: Yeah. You're gonna get a lot of hits to Google now. . So the Cybers Resilience Act is basically new European regulation that is extending on the RED. And it's part of this standard CE certification. And basically it requires people that sell IOT solutions to follow additional rules and. [00:20:00] From our perspective, these are pretty basic rules, but that there's a good segment of the market that needs to step up. So we have a really concise track at our event about the Cyber Resilience Act, but also about Edge AI Satellite iot is a long lasting promise I'm just so eager to see that work. I love all our partners that use LoRa technology to to communicate through LoRa through a satellite with the cloud. The product market fit has to be, has to be found yet there. But that just takes time. I don't wanna say there's a trend, but I think I think there's still something exciting. There's still something, there's still a dream. CRA: But funny, just a couple weeks ago I did a podcast on space compute. Yeah. So guys that are sticking servers up in space, which is brilliant. Like I didn't know anything about this, but I know the guy and I wanted to see what he was doing. Yeah. And he educated me. And it's fascinating when you talk about this is proper edge processing because you're in lower earth orbit. So, what about for Lorawan and for iot, what's next for this? What is it gonna take to get us to that next level? Is there certain things you think structurally [00:21:00] or does something need to happen for the ecosystem to work better or for our ease of deployment. Wienke: Yeah. So, so I think the rationalization, if you now look at the candy store of IOT technologies. We've come from everybody trying to offer everything and I think it will help the market if there's some consensus around winners and losers. I think loprawan clearly proved his niche in private networks. It had a promise of doing wide area networks. We didn't see a lot of growth there. We see more growth in what we call LPLAN low power local area networks. And we also created some vertically integrated products. We have a managed gateway, which we ship to you, and this is literally plug and play, plug it into power. It has a cellular back hole and it boots up in it. And if I plug it in here within. 20 seconds, we'll have a lorawan network in this entire neighborhood. I think you will see more of these vertically integrated components because they are so common to be used in solutions. And then I think with with [00:22:00] cellular, I think you'll see More and more embracement of the cut one bis. CRA: What about for your company, your companies I should say, what do you think's next for you in the next five years? Wienke: Yeah, so the course, the things industries, the things network is the open source community around it. We're now growing around, in a device count 50% year on year. And in our revenue around 30% year on year. And we're a profitable company. And that means that we can invest in our product leadership strategy, make sure that we have the best product for our market. So I expect that to grow quite linearly over the next five years. And we just make sure that we keep our customers happy and that goes on. What is really clear, and also what we're seeing here at our conference is there are a lot of other technologies that can at scale, can have a lower TCO if there's a really proper cloud management platform. And so this is already what we did with cellular with our own gateway. So yeah, you can imagine as what we do and what we do successfully to take away this the headache and the TCO [00:23:00] for managing these networks and these solutions that we can do that for many other technologies as well. CRA: Okay. Now I want to ask you for some of your reflections, 'cause you've had one hell of a journey. You've ridden the wave where IOT was the greatest new thing, and then it went really quiet. Then you had the pandemic in the middle of it. But you've been able to get through all of that relatively successfully, I would say. Yeah. So looking back, what do you understand about this industry today that you wish you knew when you started out? Wienke: Yeah, that's an amazing question. So there's a lot of stuff that I think we wish we knew earlier. The how incredibly hard hardware is, and this is something we learned very early on, luckily because we did a Kickstarter. This gave us a lot of empathy for our hardware partners which helped us. We stopped doing hardware ourself. So I think that's one. I think one other is. That in our market earlier on, realising that it's really only the solution that drives the entire business model. And the hypothesis of building wide area [00:24:00] networks, which was one of our earlier hypothesis that what I said, we're gonna build shared infrastructure. And that's still to an extent, something we do, but it's a feature. So the one part of LP one for me, it's just a feature. And the data transport is the key value proposition. There's a lot of micro things also being an entrepreneur and doing that. But I think one of the things that that the reason why we're here is because we're very open always open to, to talk, to collaborate even if that would enable a competitor and this is what we do with our conference right now. We're promoting competing technologies. And that's because we very much believe in our own strength, in our own domain and our own niche. CRA: I'll be honest, I think it's the smartest thing you could do. I went to your event last year and the one thing it was still Laura developers more. So when you started bringing in all the rest of the ecosystem, I was very pleased because I think that's what we need to see. We need to get this whole community going together to learn from each other, but also because there's so many components that come together, there's more partnerships these companies need [00:25:00] to have for all of 'em to be successful. The more successful companies in that ecosystem, the better it is for everybody. Yeah. So I think this is a step in the right direction. So thanks. And now there's a lot of new companies coming out. So let's say that I'm a startup right now and I'm thinking about going into IOT solutions. You've been around for a long time, you've seen more IOT startups than probably anybody. What advice would you give to them? Wienke: Own the domain problem on the business side. I was talking with one startup. What they did is they had a sensor you can put on a large building . With a lot of glass, and then you put it on the inside of the glass and it would detect when it was required to clean the outside of the building and optimizing that. And I thought it was just an amazing example Understand that problem, that market, the trade secrets the politics. What are people saying, but more important, what are they doing? Where are they putting their money in? Who's paying who? Like, just know it all and then look at the iot solution. Focus really much on your business [00:26:00] domain. CRA: I agree with you completely on that. I always say like, if you wanna sell technology, you better be able to handle a 15 or 20 minute business discussion first. . And then come back and say I understand your business, I understand your problems. By the way, this solution that I have can help do X, Y, and Z and it's gonna give you value here, and here, and save you money, drive efficiency or whatever. Yeah. So the tech's important. But if you come in there and just sell 'em, tech it doesn't matter. You're not gonna get very far. You go in there and solve a problem for them and show them you understand their business and how it works. That's where you gain traction in a lot of these customers. Wienke: you do that, then that's the way you know how to build a better product. CRA: And the final question, so let's go back 10 years. So just before you and Johan decided to start the things networks. Let's say that iot never happened, what would you be doing now instead, if there was no iot, there was no things, network industries, conference, what would you be doing in your career or in your life? Wienke: I do think there's a lot of other businesses where more openness and more collaboration could expand the market and create opportunity for you. And I think i would've always been somewhere in the open [00:27:00] source, open networks net neutrality kind of spaces where you can motivate people just to open up a bit, share a bit, let them know. Yeah. Like, this is how the internet was created. We all opened up and and we all eat the cake and then we bake together. So yeah, probably something in a similar direction. CRA: Well, those are wise words to finish on because I think it's not just a few industries could benefit from this. Pretty much everybody could. Everywhere you go, you run into siloed organizations. Closed thinking. And people don't want to collaborate. They think that if you share, you're giving up power and it's like, no, you share, you work together. You can actually deliver more. So anyway, Vanka, thank you very much for joining us this afternoon. A nice sunny day in Amsterdam, which is brilliant. So I wish you all the best for the event coming up this September and I will leave all of the information about the events and the things that in the show notes. Wienke: Thank you very much.