By Chris Donkin

Verizon SVP promotes purchases, not partners

Striking partnerships for IoT launches and moves into vertical markets could restrict the long-term benefits from successful ventures, Verizon Connect SVP product strategy Jason Koch warned, adding acquisition of companies already in the sector could ultimately prove a more lucrative strategy.

“It’s easy to partner with a third party to bring a solution to market, you just give up a bunch of the value capture when you do it,” he said. “You also give up the future value that you may not understand...especially with software and technology that changes so quickly, you don’t really know what you have at this moment.”

Koch, whose former company was one of several bought by the operator to form what is now the Verizon Connect telematics division, said although acquisition may be a better route to success in the IoT ecosystem it was also a more challenging one.

Speaking at the GSMA Intelligence Americas Summit on the eve of Mobile World Congress Americas, the executive advised when assessing acquisition targets, it is important to bring in those with a “full stack” solution in place rather than just the infrastructure.

He also warned operators building solutions themselves may prove problematic.

“You see it all the time,” he noted. “Companies think they have a core competency so they try and build something. After they try, and sometimes fail, they think maybe that wasn’t their core competency so they partner with somebody.”

Koch concluded: “Every company has to pick their own strategy based on time to market, known quantity, established business case. The easiest decision and lowest risk decision is to go partner [but] it’s not always the best long term strategy.”