Amazon opens up the Sidewalk network to developers for free in the US to galvanise the IoT market
On 28th of March 2023, Amazon announced its Sidewalk network project launched in early 2020, now covers 90% of the US population and is open to developers to test, build and create new IoT applications. AWS also announced Sidewalk networks integration with AWS IoT core, enabling Sidewalk-enabled partner devices to easily provision, onboard, and monitor Sidewalk devices at scale. The service is currently available only in the US and developers can use the AWS IoT core for Amazon Sidewalk for free using the AWS Free Tier(details here)
A few companies working with Amazon have also announced the launch of sidewalk-enabled devices which includes:
Is Amazon Sidewalk just a connectivity network platform?
Amazon Sidewalk communication network is one of the 3 core components of the Sidewalk Device-To-Cloud (DTC) platform which includes:
The #Sidewalk platform is a Device-to-Cloud platform that is built on a crowdsourced, shared #IoT network that connects Sidewalk end devices with enterprise applications using the #AWS IoT Core. The AWS IoT core also offers developers application-level services and security among other functionalities. The application servers hosting the end devices and applications can either use AWS or third-party cloud application services. ?
How does Amazon monetise the Sidewalk platform when the Sidewalk network Is free?
By integrating the Sidewalk connectivity network, with the AWS cloud services, Amazon monetizes the data sent by Sidewalk-enabled devices to the AWS cloud. As enterprises use the crowd-sourced network to connect their devices, enterprise customers are charged a small fee every time a Sidewalk device transmits data to the sidewalk network server located in the AWS IoT core. In the near term, the revenues from data alone will be negligible as most of the Sidewalk end devices at the most transmit data a dozen times per day adding to a few Kbs of data per month.?
However, over time as sidewalk-enabled devices generate millions of data packets that are routed via the AWS IoT core rules engine, this will help grow its opportunity pipeline for its cloud application services. Amazon Sidewalk will help drive enterprise demand and adoption of its cloud applications especially to manage (sort and query) through large volumes of small data packets sent by end devices. AWS will gain the most value as enterprises start to build applications to leverage its consumer and industrial IoT analytics services, especially advanced analytics services (machine learning and AI services) generating new revenue streams.
Overview of the Amazon Sidewalk network technology
Amazon Sidewalk Network is a Multi-Radio Access Network(#MRAN) wireless connectivity platform used to build a crowd-sourced, community-owned, Neighbourhood Area Network (NAN). The network is powered by mostly consumer Sidewalk bridge devices that use a small fraction of the customer's internet bandwidth (~80Kbps) and share it with other sidewalk customers to create a low-bandwidth, low-power #NAN.
Amazon customers who had already set up a sidewalk gateway device (Echo Or Ring devices) at the time of the launch in early 2020, an over-the-air (#OTA) update automatically connected the edge gateway to the network. Echo or Ring customers have the option to turn off the Sidewalk network feature at any time. This OTA update route to create the Sidewalk network without customers’ prior consent is unlikely to be used in European countries with strict laws protecting customer privacy. ?
In return for the customer's participation, Amazon manages the network to create a city-wide network which end-users can use for free to connect their third-party sidewalk-enabled devices. The Sidewalk network is available for free to other enterprises to offer consumer and enterprise IoT solutions using Sidewalk-enabled 3rd party devices.
The Sidewalk network is built through the integration of 3 wireless connectivity technologies-
Identifying potential growth opportunities for the Sidewalk platform
Anchored on the Sidewalk communication network, the key strength of the Sidewalk platform is the complete integrated device-to-cloud stack. The Sidewalk platform helps enterprises easily onboard Sidewalk devices at scale and the low-cost pricing of AWS cloud services helps solution vendors reduce the overall solution TCO. A glance at the AWS IoT core price calculator will provide an indication of the cost of running devices using the Sidewalk platform.?
Growth Prospects for Sidewalk Network: The Sidewalk network is currently available in the US only and covers over 90% of the population coverage. Amazon has made public its plans to expand its network footprint to other regions worldwide in the coming years. However, the success of the Sidewalk network in the US will set the pace of its network footprint growth in other regions.?
Since the Sidewalk network relies on Amazon #Echo and #Ring customers, One of the recurring challenges for Amazon will be to ensure Amazon Echo and Ring customers participating in the Sidewalk programme remain high and to reduce churn.?
Amazon will also need to ensure customer participation in the Sidewalk network programme remains high to ensure sufficient network redundancies are in place, in case some customers decide to turn off their Sidewalk feature from their devices. The only way Amazon can ensure the Sidewalk network continues to thrive is by ensuring participating Echo and Ring customers see immediate and recurring value in the form of new digital devices and services.?
In early 2022, to address potential opportunities in the enterprise IoT market, Amazon Ring announced its #Sidewalk Bridge Pro, a ruggedised outdoor gateway. The weatherproof, enterprise-grade gateway will help Amazon expand its network coverage to public spaces such as parks, city centres, universities, businesses, and other places which are not covered by consumer echo and ring bridge devices. The Sidewalk Bridge Pro is designed to be deployed by businesses and municipalities to complement the residential network coverage.
The Sidewalk Bridge Pro will help expand the Sidewalk network by enabling:
The success of the Sidewalk network will depend on the growth in the device and solution ecosystem in the US before it launches the service in other regions. The future regional network roll-out will also depend on regional privacy laws and the residential penetration of Amazon Echo and Ring bridge devices used to build the network. The Sidewalks regional network which includes LoRa and FSK technologies will operate on different sub-GHz frequency bands
Based on Amazon’s Sidewalk bridge shipment data, regional network footprint growth will likely be as follows.?
As the Amazon Sidewalk network operates as a single network, when regional networks outside of the US are rolled out, Amazon can offer a roaming-free global network as long as the device's radio hardware is capable of switching to regional Sub-GHz frequency bands.
Growth Prospects for Amazon Sidewalk Devices and Applications
Amazon's Sidewalk platform strategy is focused on driving device makers’ adoption of the platform to develop sidewalk-enabled devices for enterprises and consumer applications. Amazon has announced its partnership with hardware communication module vendors including #Nordic Semiconductor, #Silicon Labs, #Semtech, Texas Instruments and #Quectel.?
As the Sidewalk radio hardware matures, one of the developments to watch out for will be a single SKU global radio hardware that enterprises can embed in their devices. This would help global device OEMs and solution providers drastically reduce their design costs of having to modify their devices to operate in each region. This would also have value for enabling application verticals such as asset tracking that requires seamless connectivity across different regions.?
The Sidewalk platform operates on 3 business models to target consumer and enterprise markets: ?
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Business to consumer: Consumer IoT(Smart Home)
Ring acquired by Amazon in 2018 provides consumer home security and smart home devices. The sidewalk network supports Amazon Echo and Ring customers to connect Ring devices including doorbells, outdoor cameras, outdoor lights, and Alarm systems that are beyond the range of the home Wi-Fi network and other Personal Area Networks (PANs). The Sidewalk network's extended range capabilities will also help Ring offer new consumer devices such as pet trackers, asset trackers, outdoor irrigation systems, motion sensors and other connected devices.?
Business to Business to Consumer :Consumer IoT(Smart home, asset track and trace)
The sidewalk platform is open to other enterprises that want to develop IoT devices and services for end consumers. Some examples of enterprises using the Sidewalk platform to offer consumer IoT services are as follows.
Business to Business: Enterprise IoT: (Smart City, Industrial IoT, Asset visibility)?
Amazon Sidewalk offers system integrators and solution providers a fully integrated DTC platform to cost-efficiently test, build and operate enterprise IoT applications and services. Utilities and city municipalities deploying smart city applications such as streetlights, water meters, parking sensors, air quality sensors, and other environmental monitoring sensors will benefit from an integrated DTC platform service in reducing its solution time to market and cost. Enterprises benefit from Amazon’s vast partner network which includes software partners, hardware partners, service and consulting partners, system integrators, and distributor partners. The AWS Partner Network has more than 100,000 partners from more than 150 countries, with almost 1/3rd or 30,000 partners based in the US.?
In 2022, Amazon announced a collaboration with Arizona state university and Thingy to connect environmental sensors such as sunlight sensors, air quality indicators, and moisture sensors in places like commercial centres, parks, and wilderness areas.?
Asset Visibility(Location tracking and condition monitoring): Asset track and trace applications have been a key vertical use case for the sidewalk network. Amazon has been partnering with solution vendors to develop its platform capabilities to offer more seamless and accurate geolocation services. In November 2022, Semtech announced a strategic agreement with AWS to license its LoRa cloud geolocation services to help AWS IoT core offer indoor and outdoor geolocation capability.?
On March 28, 2023, Amazon announced its Sidewalk solution partner, #OnAsset intelligence, introduce its Sentinel 200, a Sidewalk-enabled asset tracker for logistics use cases. The Sentinel 200, is a multi-year battery life device with temperature, humidity, light, shock and motion sensors that provide timely and granular data on the location, status and chain-of-custody of shipments and assets moving through the global supply chain.?
The sidewalk platform in its current form lacks several key network requirements to succeed in the B2B segment. One of the key network capabilities missing today is the Sidewalk Networks ability to guarantee network quality of service (QoS). However, The Sidewalk platform with its free communication network offers enterprises an opportunity to test proofs-of-concept at a minimal cost and examine the financial feasibility of digital transformation programmes.?
Analyst view: “A rising tide lifts all boats…but those unable to change and adapt will fail”
With Sidewalk, Amazon integrates device-to-cloud data management capabilities with a communication network to offer simplicity to the enterprise's digital transformation programs. Device-to-cloud platforms that integrate multi-RAN technologies is a solution to reduce technology complexity. That said, the success of the Sidewalk platform will depend on how quickly the technology's adopted by device makers and enterprises to develop innovative new applications and services.?
A cautionary tale: Sigfox, an early pioneer of the low-cost Device to Cloud platform using a proprietary LPWA network technology.
To give credit where it's due, #Sigfox was an early pioneer and strong advocate of a low-cost device-to-cloud (DTC) platform to address the market demand for massive IoT applications. Sigfox believed for enterprises to adopt massive IoT applications which may require deploying 100sK or millions of battery-operated sensor devices, it's crucial to drastically simplify the process and cost of transporting data from the device to the cloud. Sigfox was an advocate of the need for very low network TCO to encourage enterprise digital transformation.
To achieve this, Sigfox built its own DTC platform from the ground up based on its proprietary LPWA network also called Sigfox. Sigfox built and operated its cloud services located in Toulouse, France and only in 2021 had migrated its Sigfox network server to Google IoT core(which also shut down in 2022).
Sigfox launched its device-to-cloud platform services at around $1-$7 per annum per device. The cost varied depending on the volume of end-point connections but included regional sigfox connectivity service and sigfox cloud services. Sigfox as a disruptive technology faced severe criticism for its extremely low device-to-cloud connectivity pricing strategy and lack of financial viability to continue operating several of its large nationwide and citywide networks in Europe and the US respectively.?
Sigfox witnessed some early success in smart home, smart metering and asset tracking use cases connecting almost 20 million end-points on its network within a span of 5 years. However, due several factors including financial difficulties due to slow revenue growth and the fallout from the Covid-19 pandemic led to Sigfox filing for bankruptcy in early 2022.?
Sigfox assets were subsequently acquired by Unabiz, a Sigfox network operator and system integrator. Unabiz in collaboration with over 60 Sigfox network operators is managing the sigfox technology and developing integrated solutions for enterprise Digital transformation.?
Amazon Sidewalk in many ways has a similar business model to?Sigfox. Similar to Sigfox, the Amazon sidewalk platform offers very low-cost device-to-cloud connectivity, but with several strengths to ensure longer-term sustainability of the business.?
Will Sidewalk complement or compete with other LoraWAN operators in the US?
There are several existing LoRaWAN service providers in the US including:
Senet and Everynet two established LoRaWAN operators have deployed regional network infrastructure and offer it to enterprises in a Network as a Service (NaaS) model. Amazon Sidewalk network will compete with public network service providers but will potentially complement system integrators, solution vendors and other enterprise private networks. As the Sidewalk network footprint grows, it will become difficult for these public network operators to justify their connectivity costs compared to a free network. That said, Amazon Sidewalk which uses LoRa for long-range connectivity could benefit from partnering with LoRaWAN-managed network operators such as Senet and Everynet to densify its city-wide network and expand its geographical network footprint, especially in rural and industrial areas.?
Nova Labs, Helium Network is one of the largest community-owned LoRaWAN networks in the US(coverage map-https://explorer.helium.com/iot/cities) and will directly compete with Amazon's Sidewalk Network. The Helium network has nearly a million hotspots running the LoRaWAN and is available in over 163 countries. Helium operates its LoRaWAN by rewarding its hotspot owners with blockchain-powered tokens that are generated for transferring device data to the cloud. Today Helium network has nearly 100 device makers and solution providers using the Helium network to offer IoT solutions.?
System integrators such as Comcast MachineQ will benefit from leveraging the Sidewalk network by minimizing its network infrastructure costs and using its resources to develop vertical IoT applications and services for end customers.?
Will Amazon Sidewalk complement or compete with Telcos Cellular LPWAN services in the US??
AT&T, #Verizon and #tmobile : Cellular LPWA network (#LTEM & #NBIoT) with nationwide coverage since early 2018. Teclos in the US has been monetizing its NB-IoT and LTE-M networks by offering connectivity services and several end-to-end solutions for enterprise customers. Today, Telcos cellular LPWAN connectivity services vary from $12-$36/device/annum and are calculated based on the end device’s data usage. Telcos have struggled to monetize their LPWA network infrastructure with connectivity service alone and have developed a three-pronged monetization strategy. Telcos in the US today offer enterprises a choice of IoT connectivity and/or software platform and/or end-to-end IoT solutions built through an ecosystem of hardware and solution partners.?
Amazon Sidewalk will directly compete with telcos’ LTE-M and NB-IoT networks and their consumer smart home(B2C and B2B2C) offerings with the Sidewalk network. Furthermore, with Sidewalk Bridge Pro, Amazon will also be able to target enterprise IoT(B2B) applications such as smart buildings, smart parking, environmental monitoring etc where telcos offer connectivity services and/or end-to-end solutions.
That said, a heterogeneous network architecture that integrates cellular networks and the Sidewalk network will further augment the Sidewalk platform in addressing a broad range of enterprise IoT solution requirements. Cellular LPWA network's nationwide coverage will also help the sidewalk platform address applications such as outdoor asset-tracking requiring broader geographical coverage, lower latency and frequent data transmissions.
Will Amazon Sidewalk complement or compete with Mesh networking technologies used in smart city applications in the US?
Mesh networking technologies based on IEEE 802.15.4(#Zigbee, #Thread) and #Zwave are two dominant connectivity technologies used in smart home applications. Proprietary LPWAN technologies such as LoRa and Sigfox are more energy efficient and hence have gained market share in the smart home market replacing mesh technologies to connect battery-operated sensor devices. The extended range of capabilities of LPWAN technologies has an advantage over Wi-Fi and mesh network technologies that require additional gateway or bridge devices to extend the network range to basements or the periphery of the homes.?
Mesh networking technologies also have a growing market share in several smart city applications such as smart metering, parking and smart street lighting. These applications’ network requirements are currently addressed through the deployment of private networks. The sidewalk network is likely to have little to no impact in these segments until it can guarantee network QoS which is a critical application and business requirement.