In late June 2022, Telefónica Tech, the Telefónica’s unit focused on growth opportunities in business-to-business sectors (e.g. cybersecurity, big data analytics, cloud and IoT) announced the launch of a security monitoring service for enterprises operating in industrial and IoT environments. Furthermore, Telefónica Tech has gained certification in Nozomi Networks’ MSSP (Managed Security Service Provider) Elite, helping it to promote its managed service capabilities to companies seeking solutions across operational technology and IoT domains.
Strategy Analytics Take
Through its expanded partnership with Nozomi Networks and its MSSP certification, Telefónica Tech is enhancing its position in a small but growing OT & IoT domain of cybersecurity. Strategy Analytics believes Telefónica Tech is well placed to benefit from the synergy between its IoT and Cybersecurity activities as demand for applications dependent on IoT continues to grow and operational technology becomes increasingly connected. Therefore, Telefónica has added a further string to its bow to its already strong cybersecurity operations profiled in our adjacent market profile report.
Telefónica has a rich IoT security offering based on the business needs, size, and industry vertical of their customers. Adding Nozomi Networks’ MSSP Elite certification would strengthen Telefonica’s IoT security proposal further. Telefónica IoT security proposition is structured in three levels: Core, IoT Specific and Generic Security.
Source: Telefónica
The trend toward digitalisation is continuing across a variety of industry sectors and verticals, including agriculture, energy/ utilities, F.I.R.E, transportation, health, and manufacturing among others. In some sectors digitalisation effort may involve IoT deployments and IoT use cases to improve asset utilisation/ efficiency, to reduce costs, and to comply with regulations, among others. IoT is being targeted at a broad range of functions, from switching equipment on or off based on specified parameters, measuring and controlling a variety of attributes (e.g., temperature, humidity, flow rates, etc)., predictive maintenance, and a number of other use cases. As highlighted in our Telefónica adjacent market report, it is active across a broad range of IoT use cases.
However, significantly, end-user research into IoT deployments conducted in 2021 highlights 35% of users highlighted security as the most articulated obstacle to deploying IoT apps across almost all verticals, with costs (29%) and network management (25%) following in second and third. By expanding its IoT security offering Telefónica is positioning to address the needs of a wide range of customers.
Source: Strategy Analytics, IoT Deployments Survey, 2021, n=943
Cybersecurity represents a significant opportunity for growth given the increasing threats faced by companies and organisations of all sizes. For example, the US Cybersecurity and Infrastructure Security Agency (CISA) observed the growing global threat of ransomware against critical infrastructure organisations in 2021.
Cybersecurity, and in particular addressing evolving enterprise security needs, represents a critical adjacent market opportunity for the majority of global CSPs, as highlighted in our series of adjacent market reports covering the diversification efforts of the top 10 largest global CSPs by revenue, AT&T China Mobile, China Telekom, Deutsche Telekom, NTT DoCoMo, Orange, SK Telecom, Telefónica, Verizon and Vodafone. Most of the CSPs profiled offer enterprises a variety of cybersecurity solutions, spanning network security (e.g. firewalls), end-point security, threat detection and response solutions, managed cyber defence, and consulting services to assess their digital needs and requirements.
Cybersecurity including IoT Security is a top-of-mind topic across CSPs. Mainly CSPs are working on strengthening their security offering either developing in-house capabilities or partnering with specialised security vendors or both. While we don’t have all the answers right now on: Which strategy is working well for CSPs? Which vendors should CSPs partner with or acquire? What other CSPs (competitors) doing in this space? etc. Strategy Analytics’ IoT research team will be addressing these questions and many more related topics in the future.