EP 160 - How do you scale IoT globally and affordably - Ivo Rook, COO & President, 1NCE.
|Jan 13, 2023|
This week, we interviewed Ivo Rook, Chief Operating Officer and President of 1NCE. 1NCE is a leading provider of connectivity and software for IoT at a global flat rate. They offer fast, secure, and reliable cellular connectivity and services in more than 110 countries.
In this episode, we discussed trends in IoT adoption and the telecommunications industry that enabled the 1NCE business model to grow rapidly in recent years. We also explored the non-technical challenges related to scaling IoT, like business case economics, servicing cost, supply chain, and the overall need for simplicity.
Erik: Ivo, thank you for joining us on the podcast today.
Ivo: Hi, Erik. Thank you. It's so nice to be here.
Erik: I'm really looking forward to this conversation because I was just in touch with — I think it was Alexander. He knows a friend of mine in Germany, Markus Inding. Markus had connected us. I think it was probably late 2019. We just started chatting about what you were looking at in China, and then COVID hit. Then I've been kind of just keeping in touch with you guys since, or monitoring it. But I'm really looking forward now to this chat with you and learning a bit more about 1NCE and your business.
Ivo: Yeah, likewise. I've been following your platform for quite a while, and I quite regularly listen to podcast. I'm actually quite proud to be part of it now. I hope I can contribute to your listeners.
Erik: Yeah, I think this will be a really an interesting conversation. Just starting with your background, I think there's nobody better to talk about on this topic than you. You've got this incredible background of CEO IoT for Vodafone, SVP IoT for Sprint, EVP IoT for T-Systems. Certainly, you're the person to talk to. It seems like — I think back in 1996, at least on LinkedIn here, that was where I see your first touch point with the telco industry. What was it about telco that drew you to the industry?
Ivo: Yeah, let's start with the end. I'm now the COO of 1NCE, which is a company that has a very clear mission. Our mission is to really make sure that customers can use and deploy IoT sensors worldwide at a fraction of the cost that it previously was possible, without compromising any quality. I'm sure we'll get into that much later. But 25 years of telco, it makes me sound old. But let's call it experienced.
I have really seen it all. I've worked for really big companies in that perspective. I've done wireline, I've done mobile, I've done IoT. I always think that IoT is the pinnacle of telecommunication because it combines the relevance of networking from the wireline, connecting B2B data center's super mission critical data for customers. But it also combines everything from mobile. Mobile is a great technology with the potential to provide connectivity, basically anywhere in the world. But when you look at how the very big companies commercialize that in a way, especially in mobile, it's mostly domestic.
When I looked at my career and I got into IoT, I got really inspired by what our customers were doing with IoT. They were really changing the world, and they were allowing things that previously weren't happening. The more I understood that, and the more I got inspired by it, I was like, I want to work for a company that truly enables customers to change the world for the better using this technology and really do it global.
The realization was that you've got big operators on one hand who are incredibly successful — at least some of them — in IoT, and then you've got these really small companies on the other hand. Those have fascinating IT capabilities, truly brilliant global reach. But they don't have the cost base of some of the operators. We were really thinking about combining all those assets and then create a whole new company, and now creating a new company. I didn't go that far. But I was at the time working at an investor, I Squared Capital. We decided to invest in 1NCE with a consortium of investors.
Why? Because 1NCE in itself has many, many different components. I believe they have the critical ingredients to address IoT very, very successfully. That was a very lengthy answer, but to say I've got experience in telco, in wireline, mobile, and IoT. But I want to try and bring it all together and work with a company that provides a truly global capability to customers.
Erik: Okay. Very interesting to know that you were an investor. I guess, that gave you the natural touch point to get to know the management team and the business. You mentioned already one of maybe some of the background around the question, why now the need for a global business that scales at a price point that's at least similar to domestic? Is there anything else to the why now? Were there technological shifts that now made this business possible, whereas 10 years it wasn't possible? Or, was it more of an inspired founder team that said, we see the demand reaching a point where we think this can scale? What is the answer the question, why now?
Ivo: That's a very good question. I guess there were multiple things that are coming together. There are two types of answers to the why now. On the one hand, why is 1NCE now growing so rapidly, and why is 1NCE so successful? Then of course, there's the component, why did I now choose to join that team?
Let me try and first answer it from the view from 1NCE, the company. 1NCE is a very interesting vision. What 1NCE says is, we're a company. We work really hard to change the IoT industry so that our customers can change the world. When I heard that, I was like, well, this is fascinating. There's something humbling in the statement that they say, "We work really hard." Because they realize that technology ultimately starts with people. This is a very inspired team where everyone is an IoT expert.
Then the second thing is, they're basically saying that they are changing the IoT supply chain, the IoT industry, with new technology, with new commercial models, with doing things differently so that customers can actually take the benefit from that. Because they are the ones that are actually changing the world. I thought that was very refreshing, because it's a realization that the actual use case is with the end customers and not with the ones who are providing the IoT services.
Why does it answer your why now question? For me, it was both refreshing and inspiring to see that there is a company that realizes the supply chain had to be challenged. Number two, that they were taking it initially from a cost model. Then number three, when we were looking as investors at the business, we also saw that they actually have a really solid margin. We're like, wow. This is going to properly scale.
Quite frankly, when I saw all of that, I just wanted to be part of it. We're doing it right now. It's fascinating. I'm almost a year at the company. The more I learn about it, the more I learn about the vision of the founder, the execution of our CTO, Younes — who is a brilliant but also a very passionate IoT expert — and the confidence that we get from our investors, but most importantly, we're winning more than 300 customers a month digitally online. We have customers that, of course, we win through direct sales. We're doing three times the revenue this year. We're going to go three times again next year. It's quite fascinating.
Erik: Wow. That's an incredible growth record. It was in 2017 that the business was established. Am I getting that right? I mean, it's still quite a young business.
Ivo: It's a beautiful — it's not a story. It'a a very good track record of having a simple vision — ruthlessly executing it but making sure that when you're, with all respect, still a smaller company, you always need to take care of three things. Number one, you have to make sure that you're providing a solution to an actual problem. If you need to look for customers, and you can't convince them within 30 seconds, you're probably not onto something. You got to be honest to yourself about that. 1NCE has that.
Number two is, your technology should never be just stitched together network of vendors. You have to keep yourself honest. You have to develop your own stuff. Why is that? Because you need to keep your independence. You need to keep your costs under control, and you need to control your own scalability. Then number three, boring as it may sound, it's also mission-critical. You need to build a financial structure of the company that balances financial interest to keep yourself honest on the fundamentals, and also with strategic investors that help you go faster. Because they can either help you on the cost side, or they can help you on the demand side by buying also services from you. 1NCE has done that very cleverly. They've always balanced the financial concept with strategic investors and really good execution.
Erik: Yeah, I got it. I can see you guys are on a tear right now. CrunchBase, obviously, doesn't have all the data in the world. But it looks like you guys are raising another round every five or six months. Obviously, financing this type of growth, that's an effort in itself.
I'm really looking forward to getting into the business model, into the tech stack. Before we go there, let's start simple. Let's talk about your customers and your value proposition. You mentioned you have 300 customers coming online. So, that makes me feel like you're able to work with smaller companies that can place orders. Then I'm sure you have larger enterprise accounts as well. Who are they? Then what's your value proposition to these customers?
Ivo: Let's start about the customers from 1NCE first. They have one thing in common. That is, most of our customers are found and served 100% digitally. That goes for really small customers and really large customers. One of the beauties of the 1NCE model is that we basically all serve them the same. Because in IoT, you never know who is a small customer and who is a big customer. Because some of the smaller companies are some of your largest users and the other way around. We have more than 7,000 customers in total. We win about 300 customers online each month.
Now, when you talk about the value proposition, if I were to say very simple and very quick, we allow our customers to deploy and manage a connected sensor anywhere in the world for 10 years for €10 or $10 if you're in the US. We're expanding that now also to be available to Asian customers. We were a European company until two years ago. We started expanding last year. This year, we have gone from Europe to being present all around the USA, all around Asia. We're moving into LATAM soon as well.
The value prop, therefore, is the ability to manage and sensor, deploy it anywhere in the world for a dollar a year, bought and sold and serviced throughout the world. So, you need to be truly global with having technicians all around the world and the ability to manage that device for 10 years. There's a lot of focus always on the cost and the data. But what we always say is, it's not just the data routing. It is the ability to deploy and manage over a timeline of 10 years for a very low cost. We also pointed out to our customers, we have to be in a position to do that and make a margin. Because if we wouldn't be making a margin, then our model wouldn't be scalable. I tell you, we deploy this. For $1 a year, we still make a very solid margin.
Erik: Okay. That's a brilliant model. Because probably 10 years ago, 20 years ago, anything that was being connected to cellular would be a fairly significant hardware investment. Now we're connecting things that cost dollars, devices that cost dollars, maybe tens of dollars. The cost, in many cases, is not the device. The cost is all of the — it's deploying the device. It's maintaining the device. It's maintaining connectivity to the device. These are all the things that it sounds like you guys are simplifying. So, no need to go and change cellular. No need to have that labor overhead that used to be a smaller fraction. Now it's often the larger fraction of the total cost of a solution.
Am I reading that correctly? How do you view the value of the cost structure, let's say, behind your component of the total cost of a customer deploying the solution versus the other things — the hardware and the software that they're deploying on the device?
Ivo: You're actually spot on. As a matter of fact, our company is called 1NCE for that very reason. We're obsessed with avoiding a second truck roll for your network. We really say the sensor should only be deployed once in its lifetime. When you think about that, that means you need to have data for the lifetime of that device available to route to and from the device. The device itself needs to be active for 10 years, and you need to be able to communicate with that device. Those are many components. But our philosophy is really, deploy once.
Now, there's multiple ways to try and get to that outcome, but it also needs to be economic. When you think about the business case for IoT, there are three components. You kind of mentioned it. There's the hardware. Let's put the hardware to the side for a moment. It's still quite expensive, but it's getting much better — some issues at the moment in the supply chain of chips, clearly. But the device is pretty much the same to everyone.
There are two big components. One is mostly overestimated, and the other one is underestimated. There are software and connectivity. When you connect on a cellular network, everybody is always obsessed with the cost of data. But actually, for most IoT use cases, the cost of the software and the IT associated with having a SIM live are actually higher than the cost of the routing of the data. Let me try and explain. The cellular network has always been provided by operators. Now, operators have never built cellular networks with IoT in mind. Good on them. They've done it for phones. It's proven technology. The world would not be the same if they did not support the smartphones. Operators have built these networks for phones.
That, however, has two disadvantages. One is that the average revenue per phone per month is around €20 when you're in Europe and about $40 when you're in the USA, and somewhere in between that in Asia. Now, when you build a network, and you anticipate that every connection renders anywhere north of €20, south of $40 a month, clearly, you have a certain cost associated with that as well. Then the second thing is, operators are domestic players. They monetize their domestic ownership of the spectrum that they bought through the auctions.
The problem with IoT is, first of all, it doesn't generate $20 to $40 in revenue per month per device. You're lucky if you were to generate $1. In our case, $1 a year. But the IT cost of being an operator and having a registered SIM inside an operator are already $5 to $6 a year. Why is that? They report the amount of connections to the street on a quarterly basis. So, that makes them auditable connection — they have lawful intercept, E911 compliance. All kinds of relevant IT cost of billing for operators are massive. Of course, they have much higher GNA being the big companies that they are.
Operators, they have economic advantage on the network side, on their own network. But IoT is a global business. That means that more than 70% of the revenue sits outside their networks, which is basically arbitraged on the wholesale market. Then they have the much higher IT cost. You combine all of that, then you see that operators have network advantage at home. But they lose that abroad, and they have a disadvantage on the IT. Then you have virtual operators, virtual IoT companies. They have the advantage of the lower IT costs, smaller companies, cloud based... But they have the disadvantage that they have to buy their connectivity from all the operators.
This is, what I believe, the secret sauce of 1NCE. They build a company where they can actually — the courtesy of investors like Softbank and Deutsche Telekom in our company, they can buy network capacity all around the world as an operator. They have the low cost of IT as a complete cloud-based digital company. Combine those two things, they are what we call 1NCE is an IoT operator — very low cost of data and incredibly low cost of IT. That allows us to deploy a sensor anywhere in the world for 10 years for $10.
Erik: Okay. Fascinating background. I think it's always very interesting to understand why a younger company and how a younger company is able to build a cost structure that an older company or, let's say, a legacy market leader simply can't build. It's not because they don't have the resources. Often, it's not necessarily because they don't have the vision. But it's because they have a legacy business that has a certain structure. This is a fascinating case study, I think, in building a business that simply couldn't be built by a legacy company. Obviously, they've recognized this and seen you as a great investment and a great partner.
Let's make this a bit more tangible on the use case side. So, we've already crossed off mobile. You're not going to be my mobile service provider, although I would love that. I guess, some things like street cameras probably are not going to be on the list as well. Streaming video data, I think that would kill your cost structure. I'm sure there's got to be a tremendous long tail of use cases or different product categories that are using the 1NCE network. But maybe we can cherry pick a couple of the more common categories. What would be a great use case for 1NCE?
Ivo: Yeah, by the way, let me correct one thing. We actually do have use cases with cameras. They work really well. I'll try and explain that. Obviously, not at completely the same price point but close to it. Now, there's multiple use cases. What matters, of course, for us is that most of our customers are truly global companies.
What I like to mention are smaller companies that are big suppliers in smart cities, in smart lighting. There's a smaller company — it's actually a company out of Romania — that have built their IoT solution completely integrated onto our platform that allows them to turn city lights into smart city lights. Because they have embedded our connectivity as a component into what they call TCU, the telecom control unit, it allows them to capitalize it. It allows their customers to capitalize. So, what their customers are buying is a smart device that is fitted to a light bulb that actually turns, with all respect, a dumb light into a smart light. Those are solutions that are being supplied to the largest of cities in the world. Even the capital of the US will soon be using this solution, which is fascinating and we're clearly quite proud of.
The ingredients are very interesting. Number one, complete integration between our platform and our customer. Number two, this customer is supplying connectivity towards their end-customer as a component of their hardware. For them, the unit is connected. Their customer doesn't have to worry about that. Number three, single SKU is globally available anywhere in the world.
Then we have fleet companies, fleet companies who have some of the complexities that they deploy devices into cars. Sometimes when it is in the use cases, for example, to track vehicles, if they were stolen and so on, clearly, it's not clear where these devices are in the car. They need to be hidden. They deploy them in the car. But the car changes owner. It goes for 10 years. How do you stay in touch with the device over 10 years when there's multiple owners and so on? So, they're rebuilding their business model based on our technology, with the notion that that device, whatever happens, will always be contactable over 10 years, even if the car changes hands. They can remotely change the data packages and the use cases on those devices.
That brings me to my challenge to you that, actually, as long as it’s CCTV, it doesn't break the bank in terms of high throughput. We also have camera solutions. Because while we're well-known for the €10 for 10, we actually allow our customers to build their own data packages, completely automated top-ups so they can build towers that vary duration of how long they want a device to be active. We always say they need to have a duration that is longer than the economic lifecycle of the device they deploy, higher or lower data packages, and then a combination of pre-loaded data packages and automatic top-ups.
I'd like to think, actually, that our IoT solution is even more relevant than our ability to have low-cost data. The customers that, for example, work in AWS, they can see, activate, manage, deactivate, top-up, change data towers on their own deployed devices through their AWS suite. Because we're deeply integrated with them. There's multiple ways to go about this. But in the end, what is very important — this is our guiding engineering principle — our services need to be as consumable as software, downloadable, configurable, click and add, and switch on and off always through software digitally, needs to be reliable as electricity, which basically means everywhere in the world. But we also say it needs to be as consistent as software in electricity, which basically means it needs to work the same anywhere where you are.
Erik: Interesting. Obviously, a lot of IoT devices don't have proper user interfaces. Just to understand more at this point that you mentioned global connectivity, is it pull the device out of the box, and the user activates it in some way, and then it's active? What does that user journey typically look like for, let's say, an industrial device that doesn't have a proper user interface? It could be used by somebody in China. It could be used by somebody in Ethiopia. So, you can have language barriers, et cetera. You need that simplicity. It's the value proposition of just one SKU globally for a device that doesn't have a front end.
Ivo: Yeah, you clearly know your way around IoT picking those examples. Those are exactly the challenges we're solving. As a matter of fact, we look at ourselves as a supply chain company. I'm repeating. We say we work really hard to change the IoT industry. But what we really say is the IoT supply chain, so that our customers can change the world.
Now, since we have built this company with a myopic focus on IoT, we've actually disrupted the supply chain of IoT. Let's start with that unpack experience and activation, deactivation. It's actually interesting, but there is no need for a SIM to ever be offline. This whole notion of having to activate a SIM, we've actually removed that complexity out of the supply chain. Our SIMs are all ways active. It's one of the differences — advantages, if you'd so like — between us and operators.
I totally understand why operators cannot keep all of their SIMs active all the time. For starters, as what I said earlier, they report on the amount of active users they have on a monthly basis. Therefore, they cannot keep a SIM online while there is no usage on it. We do not have that disadvantage. We've exploited that. For us, a sim is already active even when we ship it, which allows our customer to actually see the device immediately. They do not have to go through an activation sequence, which as you may probably know from phones can actually be a bit clunky. Either they put the sim directly in the device themselves, or we have a very good partnership with a company that does all of our logistics everywhere. Again, what we said, you keep it simple. Keep it consistent. Do things the same everywhere in the world, deep IoT integration.
What we can do is, for example, when a customer in the US is using devices that are actually built in Vietnam, or in Taiwan, or in China, we actually ship directly to where they are building their devices. Because their SIM is already active, they use the active SIM to be testing the SIM in those facilities so that they go into the device. The device then gets shipped to the end-customer. It is already working. The customer can actually track it already when it's on their way over to them. These are may be small things to always own component that actually simplify managing an IoT supply chain materially for our customers.
Erik: I'm curious. This is just a little bit of a curiosity here. But if I'm imagining that there's a factory in Vietnam, they have the device deployed, it's already been activated, they ship it, it goes on a container, lands in the port of Los Angeles, and then eventually it makes its way into the hands of somebody in Columbus, Ohio. As it switches from network to network, is this becoming a track and trace? So, you can say it has left Vietnam, the port. It has arrived here. Are they able to use the fact that it's connected and that is switching networks as a supply chain track and trace solution as well?
Ivo: They could. Obviously, this is the customer's data. It's their data. They need to decide whether or not they want to start reading the device as early as it arrives at their factory. They choose when they start looking at it. To go into real specifics, obviously, when customers have pre-loaded the 10 years of the ability to exchange data with the device, some customers have actually five months in their own supply chain. They don't want to let that go off the 10 years that they could be using it in the field and deploying it with their end customers.
So then, we agree on what we call supply chain grace period. It's this type of discussions that I believe are so important. Of course, everybody knows our €10 for 10. But what I said to you earlier, it's our vision actually that customers come to us not so much for the €10 for 10 title. Of course, they need and like that. But it's about the flexibility about the IT, the supply chain, the logistics integration, and our true ability to accommodate their supply chain.
As a matter of fact, we are updating in that perspective our strategy. Previously, 1NCE was well-known for the €10 for 10. What we are building right now, and all of this is going to go live this year, is you will hear us talk about 1NCE with 1NCE Connect which is the €10 for 10, 1NCE OS which is our software proposition with multiple tools that allow our customers to manage a device from birth all the way to recollection. It's, by the way, one topic on it. It's not yet so well understood, but going to be a problem — mark my words — in the supply chain of IoT. It's IoT device retrievals. At this moment, millions, billions of devices are being deployed in hard-to-reach places. Those contain precious metals. Those contain plastics. Those contain all kinds of things. Who's going to retrieve them? How are you going to do that? I anticipate the big companies deploying these millions of devices are going to be held accountable for that. So, what we're providing? Our software tools from the birth of the device, all the way to their last moment and in between that help our customers manage their supply chain. Then our third service that we're launching is basically our platform business.
Interesting you've mentioned it at the start. More and more operators are realizing that for them to play a global role in IoT, they need to change the cost base of having a global IoT proposition. Running it on their domestic network, just leaning on their roaming rates, and then having a very heavy over the top domestic deployed IoT platform with typical vendors, this is not economic for them. They're starting to lose business towards the more agile smaller companies, the MVNOs, for which I have a lot of respect. It basically is the following. It is happening in the world. Any IoT use case where the software costs are higher than the network costs, at this moment, MVNOs have better cards than operators.
Therefore, what you see is that more and more operators are actually interested to cooperate with us as being their distributor, even including connectivity of an IoT system, allowing them to have the same low cost offering in their portfolio. 1NCE, going forward, has three main product lines: 1NCE Connect, that is our lifeblood; 1NCE OS, which are our software tools; and the 1NCE platform, available to operators to exploit it, to build their own portfolios.
Erik: Okay. Interesting. Maybe we can go a bit deeper into the network side. If I understand correctly — maybe I don't — you have partnerships in something like 180 countries, most of the countries in the world with telco operators that have a presence there like SoftBank in Japan. You're using their bandwidth to create the 1NCE network. First of all, is that correct? Is that every time you go into a country, you have a partnership with one or more telco operators there, and that's how you are able to serve in that country?
Then the second question would be, is that separate from this point that you just mentioned of telco operators using the 1NCE platform? Is it that they're also then building other services, that they're directly selling but using your technology as the back end there?
Ivo: I can't go into many details, but I can give you the theory behind it and the practice. On your first question, how do we do it, we've got a very strong partner in Deutsche Telekom who have invested at the very beginning into 1NCE as what they call control disruption. They were fascinated by the idea, and they've been a brilliant partner to us. Because on the one hand, they challenged us. But on the other hand, they also have given us a SIM property that allows us to deliver services in 140 countries in the world.
But everybody who is in IoT knows that with a single SIM property, you're not going to be flexible enough. So, we've added a partnership in China with a local operator to also deliver services in China. We are extending that local capability to include some of the more relevant but complicated countries in the world, where you need to have local established relationships with one or multiple operators. Typical countries include Turkey, India, but also Brazil, which we think is a very attractive market.
Then we have a new equity participation. As a matter of fact, you said at the very beginning, it looks like we're doing a round every month. We actually did one very well-organized, very big round with multiple tickets investing into 1NCE. We have strategic investors and financial investors. The financial investor is I Squared Capital and the SoftBank Investment Fund. But then quite rapidly, thereafter, came the strategic investors with Deutsche Telekom increasing their stake, and the SoftBank operator stepping into 1NCE. That allows us initially to deliver our services, including connectivity, towards the likes of SoftBank. Obviously, we use the SoftBank network in Japan, but also others. But to build together with SoftBank an extension of our footprint.
That's the recipe that we follow. It's strong partnerships with operators. Because we realize that they are very important in IoT because they do supply the networks. But then to also give them an opportunity to benefit from our lower IoT costs. So, the negotiations go a little bit like, you give us access to our country, we give you access to the world. It's almost literally is the negotiation that then takes place. Now we have a number of other operators who basically say, "Okay, we'll give you very good conditions to access my territory. But in exchange for that, I want to be able to have your portfolio in my portfolio." We're signing those deals quite regularly now. Well, that's a simple way of saying it.
Erik: I like that. Well, let me just ask one last question here. Maybe there's also a couple other things you'd like to cover. But you are, on the one hand, a relatively young company and, on the other hand, already a fairly sophisticated company in terms of your portfolio and your partnership model. You're also in an area that's evolving very rapidly. You have NB-IoT sent from satellites coming online. You have 5g. You have edge computing, et cetera. There's a lot of other things going on in the space. Can you share, at whatever level you feel comfortable, your vision for the future? If we look forward five years, if we look forward 10 years into the future, what do you see 1NCE evolving into?
Ivo: Yeah, it's interesting. First of all, in IoT, one can get lost chasing the next thing. I always challenge our teams a little bit. Just the sheer fact that we develop something new doesn't mean that we made progress. So, the philosophy we'd like to keep in 1NCE is to stay focused on where our strengths are, and not to chase every new phenomena inside IoT. You've got to make your choices. If I were to make or simplify an incredibly complicated world into two main streams that I see, number one is universal connectivity, and number two is hyperlocal. What do I mean? Those two are mutually exclusive, actually. On the one hand, you've got a lot of developments, fascinating with AI, low latency, 5g, autonomous cars, incredible things in robotics. You've actually done a podcast on that recently. It's a fascinating one with AI and robotics.
But to be frank, as much as I love that world, that's not for us. These super high bandwidth with super low latency with the fascinating edge cases, they are domestic at this moment in the evolvement of the technology. I think those are best addressed by operators who are committing billions to 5g. What we focus on is what we call universal connectivity. Our ambition, as I said earlier, is our services need to be consumed as software, reliable as electricity, and as consistent as software and electricity.
Now, in this universal connectivity, global supply chain simplification needs to happen. We believe, for example, that it's actually a highly inconsistent thing that our supply chain in IoT, in the industry, is actually not very efficient. It's actually not as digital as you would want it to be. It's kind of ironic. We are digitizing supply chain of our customers. But when we look at the supply chain of IoT itself, it's actually not so digital. Let me give you a case in point. We're still shipping plastic SIMs. When you think about it, how crazy is that? We're shipping plastic SIMs that contain a chip that are going to be chucked into devices that have plenty of chips available, that could easily host the credentials that we put on our chip. We're embracing eUICC, but we don't believe eUICC is going far enough. We, actually, at some point, want to eradicate the complete physical shipping out of our supply chain. So, that's one thing for the future that we're investing a lot of time and, in partnership, money on.
Then we really believe that software tools are very important up and above connectivity. So, we're investing in our 1NCE OS, which basically gives customers the ability, for example, to save battery cost or battery performance through the means of software. One of the biggest considerations for our customers is, how long will my device work on a single battery load? Not in the laboratory but deployed in real life. What we see is that there's a bit of an over promise. They deliver almost similar to electric cars. When you read the mileage in the folder when you buy it, and when you start driving, you rarely achieve it. Well, the same goes for IoT battery-powered devices.
We're providing tools to use software protocol optimization to allow our customers to optimize the battery usage when the device is either communicating or pulling data and so on. We achieve fascinating results. 17% is the minimum but up to 60% battery improvement using our software. So, we believe these are highly relevant tools to be deployed by our customers. This is also an area where we invest.
Then, lastly, universal communications also mean blending different network bearers — narrowband, Cat-M, LTE, satellite, and more adjacency but more fluid integration between LoRa and narrowband and so on. This is also an area where we invest a lot of our time and capabilities.
Erik: Okay. Great. I love that focus. Certainly, that market space is going to keep you busy. That will be a niche but a very, very large niche. So, plenty to do there.
Ivo: Yeah, we couldn't grow faster than we're growing right now. At this moment, our growth is actually paced by the ability to hire the best possible people. One of the biggest advantages of 1NCE is we — all kudos go to the people that went their way before me. When you see what Younes and Alex have built in regard this development center that we have in IoT with very talented software developers. We're now also building a development center in Uruguay to be sure that we are mitigated of not only having software development in one part of the world. Now we have one in another part in the world. The real, real credit goes to those people who build our own capabilities and allow us to be an independent player with our own software at low cost, high flexibility. Then we just need to focus it.
Our real strength at this moment is to be one of the truly global players. That's why we now have offices in Miami. We have offices in Tokyo. We're opening in Singapore. We are all around Europe. Clearly, we're going to go to Uruguay. We're there already. We're looking at potentially going into Sao Paulo, and we're just getting started.
Erik: Great. Well, maybe that's a good place for me to ask you how folks can get in touch. Because we certainly have plenty of potential customers listening. But I think we also have a lot of people that could be either joining the team or exploring how to partner with 1NCE. What's the best way from these different perspectives for people to learn more and then, potentially, to get in touch with the 1NCE team?
Ivo: We have again — here we make choices. We have chosen LinkedIn. You could argue if that was the right choice or not. Because quite frankly, LinkedIn, I don't know anymore if it is for business context, which is free advertising. But we have a well-maintained LinkedIn page where people will see our job openings, regular updates on our technology. That's the most powerful source.
Ultimately, what I always tell people, if you want to be part of making sure that IoT becomes a global optimized supply chain that allow many, many super clever companies to change the world for the better, then come and join us. We're always looking for people. Here's our hiring philosophy: we hire for confidence. But in our world, confidence can only come out of two sources, preferably from both: experience — so that people are not doing it for the first time — and expertise, so they really know what they're talking about. We always look for people that are confidence based on experience and expertise.
This is our vision. We believe IoT can scale. IoT should scale. We have removed the cost barrier. We are removing supply chain issues. We're optimizing through software, whether that is battery management or being able to pinpoint where the device is without having to use GPS.
We're also conscious that security needs to be addressed. So, we're making investments on SIM identity. We can already identify a SIM in AWS. I actually thought you did a very interesting podcast with Roy. I believe he's the CEO from SecuriThings. As much as I don't want security to stand in our way, we have to be conscious that it does. For those who are interested in scaling, then you should listen to that podcast. We're also using a lot of technology to make sure that security is an enabler, not a service that we sell. But we're obviously putting it into the DNA of our products.
Erik: Yeah, that's an important point — security and also privacy. You mentioned the convenience of a device being able to change hands from one owner to another. But then obviously, that introduces some privacy challenges. So, just there's a management challenge that the device provider then needs to figure out as ownership shifts and then data access shifts with that ownership. But I imagine, these things are areas that you're working on with partners and enabling through your platform and your OS.
Ivo: We have to. When you think about 1NCE on the one hand, we're super simple. €10 for 10, everybody can remember that. But actually, what it means is, we provide IoT lifetime connectivity. That's a big thing to say. It's even a harder thing to do. But that's what we love. That's what drives us. I love it. Our customers are uniquely surprised. All of our employees are super motivated. Because we're actually very proud that we can say we provide to our customers lifetime IoT services. There's not a lot of companies who can say that. But it also gives you an enormous obligation and an enormous responsibility. That's why we're continuing to invest in software.
Erik: It's a powerful vision. As you continue to succeed on this vision, I think this would be a very good thing for the industry as a whole. We need simplicity as much as we need anything in terms of moving the industry forward. Ivo, I think we've given quite a broad and deep overview of 1NCE and the space that you're operating in. Is there anything that we didn't touch on that's important for folks to understand?
Ivo: I think we covered a lot. I would just say, never try and understand everything in one call or in one question. I'd like to say to everybody, also the audience, stay curious. Stay curious about this industry. If you're curious about 1NCE, get in touch with us. Also, see technology as a tool. I don't know what it is, because big tech always sounds like it's become a purpose. Frankly, it's not. It's tool.
One of the most universal languages in the world nowadays is coding. With coding, you can do incredible things. But let's just make sure that we focus on what really matters. That is to improve physical life for our planet, for our people, for doing good stuff, being inclusive, developing use cases that actually help us use a little bit less natural resources. That's the stuff that really matters. Ultimately, tech is not a purpose. Tech is a tool to make that happen. If we were all to become a little bit more digital, we'll all become a little bit more efficient. I'd like to think we've just done all a little bit enough to make this place a better place.
Erik: Yeah, great. Well, that's a great thought to end on. Ivo, thank you again. I really appreciate your time today.
Ivo: Thank you so much, Erik. I enjoyed it a lot. Hopefully, I'm back sometime.
Erik: Absolutely. Let's talk in a year or two.