Q&A Summary.

How did your journey with OptConnect begin, and how has the company evolved since its early days?

My journey with OptConnect started at the very beginning, before the company even existed in its current form. Initially, we operated and connected ATMs—specifically, those small, standalone machines you’d find in bodegas or convenience stores, not the ones at banks. The critical challenge at that time was connectivity, especially for temporary installations like festivals and concerts. Customers needed a nimble way to ensure seamless internet connections for these cash-based services. That’s the problem we set out to solve, and OptConnect was born from that.

Over the years, we realized that many other unattended machines—kiosks, vending machines, digital signage—had similar connectivity needs. So we expanded. We’ve grown from those humble beginnings into a turnkey provider of IoT connectivity solutions, with over 1.2 million managed endpoints across nearly 50 industries, including healthcare, environmental monitoring, and industrial automation.

How does OptConnect differentiate itself in a space that is crowded with connectivity providers?

What sets us apart is the white-glove, end-to-end experience we deliver. Many organizations approach IoT thinking they need to build their own infrastructure from scratch. They want control, but they underestimate the complexity and hidden costs of scaling connectivity. OptConnect offers a cellular-based plug-and-play solution that allows customers to sidestep all of that. It’s like how you expect your home internet to work—you just want it to be there when you need it. We provide that same simplicity for mission-critical IoT deployments.

We came from an operator background, so we deeply understand our customers' pain points. Our solution is designed to remove every unnecessary decision: procurement, carrier management, network monitoring, cybersecurity, and device lifecycle management. Customers can plug in our device and walk away. Everything from connectivity to troubleshooting is handled in the background, autonomously when possible.

You mentioned that connectivity at scale is surprisingly complex. What are the biggest hidden challenges for enterprises?

There are several. First, rising labor costs and shortages of technical talent make in-house IoT management increasingly difficult. Many companies start out with some expertise, but when a key person leaves, that competency walks out the door. We help fill those gaps.

Second, data usage is a big concern. In consumer internet, you expect unlimited data. In IoT, every byte counts. When things go wrong—say, a device starts downloading firmware updates repeatedly—it can lead to massive, unexpected costs. Many customers only discover this weeks later, when they receive a shocking invoice. Our systems proactively monitor and manage data usage to avoid such surprises.

Then there’s network resilience. Carrier outages do happen, as we’ve seen with recent large-scale incidents. We have a built-in failover strategy and a proactive support team that often resolves issues before the customer is even aware.

Other hidden costs include truck rolls, unexpected maintenance, and supply chain disruptions. Each of these can eat away at margins and operational efficiency. That’s why we built our platform, ConnectIQ, which includes autonomous edge agents that can detect and resolve issues locally, often without human intervention. If all else fails, our support team ships out replacements overnight. We even handle inventory management.

What types of industries or deployment scenarios are a particularly good fit for your solution?

While we started in automated retail, our footprint now spans over 50 verticals. Some of the fastest-growing sectors include healthcare, security, industrial automation, environmental monitoring, and facilities management. Anywhere there’s a machine performing a critical function without human supervision, and where reliable connectivity is essential, we can play a role.

The "sweet spot" is medium-sized equipment that needs robust, scalable connectivity—think digital signage, vending machines, point-of-sale terminals, and irrigation systems. These are systems that aren't sensor networks with millions of endpoints, but they are mission-critical, and they can’t afford downtime. Our technology can scale both up and down to meet the needs of large enterprises and single-site operators alike.

When customers evaluate IoT solutions, total cost of ownership is often the make-or-break metric. How does OptConnect address that?

That’s absolutely right. Total cost of ownership is the key metric, and we work to reduce it across multiple dimensions. Our solution minimizes labor costs, reduces technical complexity, and prevents costly mistakes like overages or downtime. ConnectIQ, our bundled platform, includes tools for remote monitoring, automated troubleshooting, data management, and proactive alerts.

We also eliminate the need for customers to hold spare inventory or manage warranties. If a device goes offline and can’t be revived by our autonomous edge software, we ship out a replacement the same day. That minimizes downtime and operational disruption.

And then there’s the peace of mind. Customers know they’re not going to get a surprise bill because some digital signage pulled 30GB of video content unexpectedly. It’s a managed service model that removes friction, cost, and risk from the entire equation.

What trends are you currently tracking, and how is OptConnect preparing for the next phase of IoT?

The IoT market is maturing. We’re moving beyond experimentation to scalable, repeatable deployments. Customers no longer want to cobble together hardware, software, and connectivity from different vendors. They want integrated, proven solutions.

We’re investing heavily in our software platform to make our service even more intelligent and autonomous. That includes enhancing our edge computing capabilities, expanding analytics and diagnostics, and integrating with more third-party systems.

We’re also keeping a close eye on security, which is becoming a bigger concern as more critical infrastructure goes online. Cybersecurity is embedded in our design, from device provisioning to over-the-air updates.

In the end, our goal is simple: make connectivity disappear into the background so that customers can focus on their core business. When we do that well, we become a strategic enabler—not just a technology provider.

How has regulation influenced the growth of IoT applications across industries?

Regulation has become a surprising accelerant for IoT adoption. In some cases, it's unintended consequences of policy that are driving innovation. For example, rising crime rates in areas like California have forced retailers to adopt non-confrontational policies toward theft, while police departments deprioritize such offenses. This has created an urgent need for deterrent solutions that don’t rely on human intervention. Enter IoT: security trailers, AI-enabled cameras, smart shopping carts that lock up if they bypass checkout, and personal wearable security devices are emerging as solutions. These are real responses to social and legal shifts, showing how IoT can rapidly fill critical operational gaps.

Environmental regulation and resource scarcity have also played a role. Longstanding droughts in the western U.S. made water management an urgent challenge. IoT-enabled systems that monitor water levels, soil moisture, and weather patterns allow for smarter irrigation and resource use. This kind of granular environmental data is especially relevant in agriculture and wildfire prevention, giving connectivity a strong business case in previously offline sectors.

What industries are seeing the most exciting growth in IoT adoption?

Retail, healthcare, security, and infrastructure are leading the charge. In retail, the concept of a "smart safe" exemplifies how connectivity is changing basic operations. Instead of relying on employees to deposit cash at a bank daily, smart safes collect and digitally track cash deposits on-site, automating reconciliation and improving security. Healthcare is seeing a rise in wearable devices that allow patients to be monitored remotely, extending care into the home and reducing strain on physical facilities.

IoT is also being adopted in industrial applications where reliability is key. Whether it's mobile surveillance trailers for job sites or systems monitoring environmental parameters at remote installations, the ability to collect real-time data without a human presence changes the cost-benefit equation across sectors. And the underlying factor making this possible is the maturation of cellular connectivity—it's now ubiquitous, cost-effective, and flexible.

How are connectivity costs evolving, and what impact does that have on deployment?

Connectivity costs, once a significant hurdle, are steadily trending downward. But it's not just about the price per megabyte. The total cost of ownership includes hardware, cellular data, cybersecurity, maintenance, and end-of-life support. OptConnect, for example, helps customers manage these costs through flexible data plans that scale with use, avoiding costly overages or underutilized capacity.

Operationally, the economics of IoT are improving because providers can now deliver more value from each connected device. For instance, unattended devices often go down without anyone noticing. By tapping into device telemetry, businesses can detect early signs of failure and dispatch maintenance before it becomes a costly outage. This predictive insight can save money, extend equipment life, and reduce downtime. Add to that built-in cybersecurity protections—a must-have in today's landscape—and the ongoing support for hardware upgrades without capital reinvestment, and the economics start to look very favorable.

What are the hidden or underestimated costs in IoT deployments?

Security is the most often overlooked. Many assume that a device connecting over cellular is inherently secure, but that’s not the case. From a device hijack to a network breach, the risks can be significant. OptConnect has taken a security-first approach, including continuous monitoring for emerging threats. This is critical for industries like healthcare, retail, and infrastructure where downtime or data loss can have legal and financial consequences.

End-of-life management is another cost center that often catches companies off guard. Technologies evolve, and networks phase out—3G, for example, is no longer supported. When a network sunsets, companies are forced to replace or upgrade thousands of devices. OptConnect offers built-in lifecycle management, absorbing these costs and providing customers with hardware refreshes and migrations without disrupting operations or retraining staff.

Has 5G lived up to its promise for IoT?

5G was billed as a revolution in speed and latency, but so far its impact on IoT has been uneven. The infrastructure required for ultra-fast 5G—especially millimeter wave—is expensive and hard to deploy in rural or complex environments. Many IoT use cases, especially those in retail or environmental monitoring, don’t require the high bandwidth that 5G delivers. As a result, 4G LTE and its variants like CAT-M have continued to dominate.

However, the long-term potential remains promising. In NFL cities or urban cores where dense networks exist, 5G can support massive numbers of devices. The vision for 6G is even more transformative: ultra-low latency, high speeds, and native AI at the edge. These features could enable real-time applications in autonomous vehicles, remote surgery, and industrial automation. We’re not there yet, but the path is becoming clearer.

What role will Edge AI play in the evolution of IoT?

Edge AI could redefine how data is processed, especially in environments where latency, privacy, or connectivity is constrained. Connected vehicles are an obvious use case: systems like pedestrian detection, collision avoidance, and lane-keeping require millisecond-level decisions that can't wait on the cloud. Vehicles that can process and respond to local data streams are safer and more efficient.

In healthcare, Edge AI can enable diagnostic tools that augment provider capabilities. For example, robotic-assisted surgeries can become more precise with AI algorithms making real-time adjustments. Telemedicine and remote diagnostics will also benefit, allowing rural populations access to high-quality care. As compute power increases and 6G infrastructure matures, the ability to deploy AI at the edge will become both technically feasible and economically justifiable.

Are there any strategic developments at OptConnect that reflect these emerging trends?

Absolutely. OptConnect has been expanding through acquisitions that deepen its geographic reach and technical capabilities. Recent deals in Latin America and Europe have added new tools to the portfolio while reinforcing the company’s core mission: to simplify connectivity and deliver managed solutions that adapt to new IoT use cases.

Looking ahead, one area of investment is environmental awareness. OptConnect is building new solutions that help customers monitor the operational context of their devices—temperature, humidity, motion—so they can respond proactively to issues. This aligns with the broader shift in IoT from simple connectivity to intelligent insights. Ultimately, the goal is to help customers not just connect their devices, but derive real business value from the data they generate.

Transcript.

Erik: Chris, thanks for joining me on the podcast today.

Chris: Erik, thanks for having me. It's a pleasure to be with you.

Erik: Yeah, well, I'm looking forward to this one. So we're going to be getting into some of the trends around IoT. We just did a rebranding. So we used to call ourselves IoT ONE, and then we rebranded as Asia Growth Partners just to emphasize our geographic focus. But I'm very glad to see that the term IoT is still going strong since we made kind of a strategic bet on that when we set up the company about 8, 9 years ago. It really actually seems to be accelerating as the technology matures. Is that what you're seeing as well, it's kind of just high level, growth rates stay fairly strong in IoT adoption?

Chris: Yeah, I think it's easy, Erik, for you and I to sit here and think about the future and think about the fact that there will be — I don't have a crystal ball, but I don't think I need one on this one. I think we can call it. I think there's going to be more connected devices in the future, more connected everything. How we interact with each other, how we interact with our products around the home that we utilize, our workspace, how businesses utilize connectivity. Boy, I think it's easy for us to sit here and predict. If there was an over-under, I think we know which way we would go.

Erik: Yeah, we just did a survey of some of our customers on what technologies they are most focused on. Of course, AI came number one. But close behind it was IoT, and I was a bit surprised. But then as I started to talk to some people, I think the thing that connects those two particular technologies is, they're both incredibly general purpose, right? Where there's a lot of technologies like AR/VR, for example, that have very specific purposes, and they might be very meaningful in those areas. But IoT, you start with maybe whatever missile, M2M connections 40 years ago. But then, as the technology matures, it's going to be eventually — it already is — in every industry, moving into pretty much every product category. So just a very general-purpose technology. But before we get into the more general industry trends, Chris, I would love to learn more about your company, OptConnect. I think you joined the company, and now you are president and CEO. But you've been with them for about 13 years. Were they already a mature company when you had joined?

Chris: Boy, no. We bootstrap this all the way from the ground up. So I've been basically in the space since essentially the beginning. Before the company was, my focus has always been kind of this entrepreneurial spirit of diving in and making something happen. I saw the potential for IoT clearly from the beginning. I think we were calling it telemetry, I guess, back to your earlier point about making a bet on what it would be called today. So from telemetry to M2M, to IoT, who knows what we'll call it in 10 years from now? But the foundational concepts have not changed. There is an incredible need for devices to be able to communicate with systems or with other devices. We have the internet for people. That's what we use all day long to communicate with the rest of the world. While the internet of devices or the internet of things, as we call it, is becoming a mission-critical part of everyday interaction that we have, we utilize it in the world around us every single day and hardly recognize that. I know or I will know that IoT has arrived when I can sit in a barber's chair — they always make small talk. I don't go to the same stylist or to the same salon. But I'll know that I've arrived when I sit down and they ask, "Well, what do you do for work," and I can just say, "Oh, I'm in IoT," and they go, "Okay." But so far, that's never happened. I have to describe who I am, what I do, why it matters. Then eventually, they either change the conversation, or their head starts to nod every now and then, one or two, and would go, "Whoa." Yeah, that's everywhere. I used that at a red box today where I paid my parking ticket for when I was parking for two hours, and I paid it at parking meter. I used IoT. It's in the world around us. It's everywhere.

So a little bit about me and in my role and really what drew me into the IoT space was, like all great stories, it was almost by accident. I didn't have a vision. Like I said, when I joined up, it was very, very early stage. Connectivity was not actually our focus. We were in the business of connecting or actually operating ATM machine. When I say ATM machine, it's exactly the type that you're thinking. It's the kind that you see in a convenience store. It's what you would see at a hotel lobby or in an airport. But a clear distinction: it's not the kind you would see at your bank, that you would walk up to or drive up to in the counter. There are two different fundamental styles of ATMs. The kind that we were connecting and owning and operating actually were the kind that are, you know, they take up two square feet in a store. They're typically right by the front door. You see them at a bodega or a C store, like I said. You stand up, and you put your card in. You ask for $20, and you get your money out. That industry had a challenge, and it was all around connectivity. That industry needed to be able to be a little bit more nimble. In fact, there was more a growing need to take cash and bring it to temporary events. Think of a lot of these festivals or larger carnivals, events, concerts. A lot of those were cash-based. And so our customers were approaching us saying, "Hey, how do I connect this to the internet? How do I go about making sure that when I do my transaction, the customer gets their cash and it's a seamless experience?" That's how OptConnect started. We were out to solve that particular problem.

As we started, we realized there are a lot of things just like the ATM, these unattended machines. They serve a critical purpose, and they need to connect to the internet. Maybe there's not a traditional method to connect those. It grew from there, Erik. We started to see opportunities around digital signage, around vending, around all types of kiosks. When you think about the world that way, you kind of zoom out, and you think about a machine that needs to connect to the internet — it's not attended. It's served some critical function — that world actually is pretty big and growing. That's really where it all started.

Erik: Oh, super interesting. Okay. Which also means that when you started, you were more on the service side of the business and then developing into the technology side, because you saw the need for technical solutions that can provide that seamless connectivity. But you were really coming from a service kind of a management perspective. What does that look like today? Because, as you said, now there's a lot more businesses. Are you still very service-oriented, meaning that you have key accounts and you're kind of hands-on in terms of helping them to manage, to maybe plan and manage their deployments and their assets? Or are you more on the technology side where you're providing the platform, the connectivity network, et cetera and then it's kind of, from the customer's perspective, a subscription and maybe plug-and-play model?

Chris: Sure. Yeah, that's a great question. To go back to the ATM story, obviously, we don't own and operate ATMs. We are well beyond that. It only took about a year to recognize that, man, if we wanted to get serious about that space, we really needed to build up a true company. And OptConnect itself was born. First of all, we like to say that we know exactly what our customers are experiencing. Because we used to be operators. We came from that side of the world, and we set out to make a perfected solution that took every decision out. When I say every decision out, let me finish that thought, every complicating factor that goes into operating and scaling and IoT deployment, we took that complexity out. And as a result, we were now the latter of what you were describing. We've turned this into essentially a turnkey solution that allows our customers to just plug it in and walk away.

I'll give you an example of what I mean and maybe for our listeners who are hearing this for the first time. I don't know, and I'm in the space. You probably are in the same boat. I don't know all of the switches, all of the fiber, everything that's involved in delivering the internet to my home that I use every single day. I just know that it arrives at my front door and is broadcast out of my Wi-Fi routers. Obviously, I know a little bit more about that. But my point and to illustrate that is, I don't get involved. When something goes wrong upstream, somebody cuts fiber, a switch goes down, something happens and my service is interrupted, I call a phone number and they quickly get it resolved. Typically, they're either already aware of it because they have tools or systems in place, or other customers have already reported it. But my point is, I don't pick out a shovel out of my shed and go walk up the road and start digging to try to find where that line got spliced. But to follow this example a little further, so many people in IoT are in this mindset that they have to build their own network, they have to build their own product, they have to build their own solution. We think there's a better way. And when companies decide that instead of building or even buying an IoT solution, they just want to utilize an existing solution that's robust and scalable, OptConnect is there with our cellular-based router solutions that they can plug in just like I use my internet home and literally walk away. We handle everything else so the customer doesn't have to worry about anything.

Today, we would tell you, yeah, there are key accounts. There are great customers. Our largest customers have tens of thousands of deployments. Our smallest customers, they have a single location. It's a mom-and-pop convenience store that connects a single ATM. Our largest customers, maybe they operate tens of thousands of locations all throughout the country. But the need is the same for either one of those two solutions or those two examples. They need quick, reliable, easy-to-use internet that they don't have to manage and get involved in. So hopefully, that answers your question.

Erik: Yeah, that helps. Then if I'm looking at the products, I would consider these mostly to be kind of medium-sized equipment, right? So we're not talking about putting devices into a million sensors that are being deployed around the world. What we're talking about is digital signage, vending machines, kiosks, entertainment, point-of-sale systems and then some industrial irrigation and so forth. But it looks like that's the system level that you're working on. Is that about right?

Chris: Yeah, that's right. We started — our background is in in retail. And so I'm giving a couple of examples there. But we've actually expanded pretty significantly beyond that now into a number of other industries, whether it's medical, or security, or facility monitoring, even environmental monitoring. Think of water management, irrigation systems, waste water. There's a number. So coming from one particular space inside retail, or even automated retail, if you will, now OptConnect has expanded into, essentially, we can go anywhere. We're in about 50 different verticals today, and that's expanding. But you're right. There is a sweet spot for what we do. We know that. We're able to scale up and down just outside of the strike zone there and be able to hit those. So we connect millions of end devices across little over, almost 1.2 million locations that we have under management today. That's growing pretty quickly, and it's in dozens of industries.

Erik: I know one of the key criteria, maybe the primary criteria, for your customers is total cost of ownership, right? There's hardware involved here. There's software. There's connectivity payments to the telcos. So there's a lot of different components. One of the things that you're doing as a business is, you're simplifying that so they can buy one service. If you think about total cost of ownership, what are the major cost buckets there, and how do you as a business work to reduce that for customers? Because I think that, from the customer perspective, is going to be in this area of, you know. I guess there's convenience and there's some other things that are also quite important. But what making the business case, this is going to be the primary one.

Chris: Yeah, you know, and I see it all the time. I talk to our customers, and they tell me that connectivity at scale, in particular, is just extremely challenging. It's significantly more complicated than many people realize. It often includes these hidden costs that you alluded to. Our solution radically simplifies the cost structure, the operating structure, the ownership structure. We help everything. So I'll give you a couple of examples. Let me focus first on some of the pain points customers experience when they're deploying large IoT deployments at scale. There's no question that anybody in this 2024 economy has seen rising labor costs. The cost of people is definitely going up. Our customers, often as a result, they lack the technical resources in-house. Maybe they can't keep up. Maybe they never invested in it. Maybe somebody moved on to a new position. We see that all the time. You know, companies had incompetency. Then somebody took another job and that competency walked out the door. So lack of technical resources is an area that we help supplement. I'll talk a little bit about what that looks like in a minute.

Let me touch on a couple other pain points that our customers have. One or the other is, essentially, and I don't know about you. But probably for the majority of the listeners and, certainly, in my case, I basically have unlimited internet at home. If I need to stream three TVs at the same time and I'm on a Zoom call or in a meeting, or my kids are doing work or whatever, in our world, basically, unlimited internet is really important. That's not the case in IoT. Every bit, every byte that goes across the network is expensive. It costs money. So often, we'll see something that goes wrong. And when it goes wrong, it typically goes wrong fast. Think about trying to update firmware on 10,000 locations. Well, that's a lot of extra data that it takes to push that operating system over the air so that the end application, call it a kiosk, has the latest firmware, or even a digital signage, the latest advertising, the latest video. Often, that results in higher-than-expected cost. In a lot of cases, our customers will report to us that outside of OptConnect, they didn't know that that was coming. They didn't know how to handle that. They just got a surprise bill. We're helping our customers manage that. Although it's becoming continually, increasingly important to manage that data, we're seeing more and more data traverse the network. That's another example where we can step in and help customers manage that process. If you don't know, you don't know. Oftentimes, you may not know for 45 days past the issue when you get the bill or the invoice from the carrier in the mail, all of a sudden, an extra $50,000 in overs that you weren't aware of.

The other, this is pretty significant, and we spent a lot of time on this. But these are just pain points. We hear customers talk about it as something like outage. I think everybody remembers. Not too long ago, in fact, there's been a couple. Verizon had a pretty significant outage that affected handheld devices, and everybody's phone switched to an SOS mode. We saw AT&T a couple of weeks prior to that. They had a pretty large outage. We have a plan for that, and I'll touch on that just a little bit. There are a number of other pain points our customers have. I'll just touch on a couple of them without giving examples. Designing the solution, how to do that is costly. Cyber security, handling the logistics of the supply chain. Specifically, supply chain can be incredibly painful if you don't really know how to plan for or manage that. Unexpected truck rolls, technical support calls. Who's going to handle all of that. Where do those go? What do they do when they get those calls? So there's a ton of pain points around here. I'm hardly doing it justice. But we think that there are a number of issues where they all result in the same thing — additional cost, additional labor, reduced revenue, additional downtime. Our solution, we've built to solve as many of those problems in a white-glove manner as possible. And as a result, we can quantify for our customers using OptConnect how they're resulting in a lower total cost of connectivity. So I'll give you a couple of examples. We have a solution that we call Connect IQ. It's basically a platform of platforms. It bundles together our software, all of our services. And the result is, we're able to do things with our device that result in higher uptime or less truck rolls for our customers.

(break)

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(interview)

Chris: For example, if a device goes down out in the field, our solution automatically detects that. It runs a script or, basically, you could call it an autonomous agent at the Edge. It takes a number of actions so that on the local side of that device or out of the Edge, it has the opportunity to tunnel back home, re-establish its connectivity completely autonomously without having to roll a truck. The alternative to that is, the customer doesn't know. Their customer calls and tells them their device is down. They have to roll a truck. Maybe it takes 2, 4, 24 hours. Who knows how long it takes? They've lost revenue. They created ill will with their customer. They had to roll a truck. All to find out that they needed to reboot the device just so it could re-establish connection. Our autonomous agents at the Edge will do all of that within a few minutes of detecting a problem, and the customer never has to do a thing.

If, in the event, none of that works how it's supposed to, we definitely have kind of a safety net in this customer support space where we will watch for, detect, and try to actually resolve those from our end. Even without a prompt from the customer, we'll proactively go out and watch and see what we can do to eliminate that issue. Or in the case of talking to a customer on the phone, we will actually even go up into proactively warrantying a device. We'll send out an extra device to the customer. They're up and operating. 24 hours later, they're done. They don't have to carry all that extra inventory. They don't have to commit to minimum purchases of equipment. They don't have to have carriers. We'll take care of all of that. So we maximize the customer's uptime for their equipment. That's another value-added solution. We do that through a series of software, through this bundled hardware, multi-carrier application that's just kind of this white-glove solution the customer doesn't have to ever touch.

Erik: Great. Thanks. Well, that really helps explain the business and I think also explain to an extent why IoT is continuing to scale as it is, right? Because, certainly, there are some exciting technology advancements in terms of being able to run AI compute on the Edge and so forth. But really, I think a lot of the scale is driven by companies that are, let's say, not so much adding capability to the core technology but reducing the cost, reducing the complexity, and making it a viable solution for a lot more applications. Let's turn to the application side then. You mentioned you're operating in 50 and growing verticals. Where do you see big upticks in growth recently? What are the big growth drivers in IoT verticals that are either happening maybe in the past couple years or that you kind of see starting to hit that hockey stick curve and expect to be really driving growth in the coming years?

Chris: I love this question too. Because there's a couple of obvious, and there are some not-so-obvious impacts here that help give some favorable trade wins, if you will. First is regulation. Regulation has the ability to influence markets for the good or markets for the bad. I'll give you maybe a bad example of how less than ideal regulation has resulted in a really great IoT opportunity but maybe a catastrophic social experiment. California crime is way up. There's no doubt. Everybody knows that it's become a safe haven. There's a certain dollar amount threshold that you can get away with, and it's not criminal activity. As a result, all of the entire retail markets have had to shift in order to lock down their products and become more — they're managing shrinkage. They're managing violence. At the same time, many of them, many large corporations have adopted a non-confrontation policy. So if there's a dispute with a customer, or they're getting ready to walk with some product out the door, employees are instructed, "Don't intervene. Don't interfere. Just call the authorities." Authorities are now saying, "This isn't worth our time. We're not going to investigate." So crime is up. Therefore, to combat that, IoT can step in and bring innovative solutions to market. The advent of mobile security trailers as a deterrent is big. I'll give you another example. The ability to stop a shopping cart at the front door before it has the ability to exit. By locking up the wheels when an algorithm detects that that shopping cart hasn't actually gone through the checkout, the goods haven't been purchased, those are a couple of other examples. Those are awesome situations. Then just security cameras, personal wearable security cameras, systems and installations for security monitoring, all of these are examples of where some decision upstream resulted in an environmental situation. Now, you've got crime that's basically tolerable. We could dispute whether that's a good thing or a bad thing. But IoT can step in, and each of those are significant applications where you can actually make a meaningful difference. You can deter it. You can prevent it. You can eliminate it if you can track it. So that's an area that we're excited about.

The other thing that can influence this is — I say this kind of delicately. But in the western United States, for the last 30 years, there was basically this prolonged drought. It was becoming increasingly easy to see that this scarce resource, water — which happens to be free and falls from the sky, but when it doesn't fall, it becomes pretty meaningful and it's certainly not free — you can see how that's starting to impact. So we thought, okay, well, this is a great opportunity to help manage and monitor something that clearly is going to become a problem. Fortunately, the last two years have been pretty favorable, but the trend continues. Being able to monitor and manage water as a resource is another growing opportunity for the business. We're seeing all sorts of industries that, for the very first time, they're making a step towards adopting connectivity as a solution. We talked about a number of these medical devices, wearable medical devices, that could sit home with a patient. There's business there. We've seen a lot of excitement in the retail space around a concept that we call a smart safe. It's basically the equivalent of a retail location, either having to deposit cash from their till at a bank every night or whatever it might be. It's taking that deposit box at the bank and bringing it to the retailer and putting it in a back office or underneath a counter so that the clerk or the employee never has to take that cash and actually go to the banking facility. So there's a number of drivers there that help the markets kind of adopt. But the reality is, the biggest of all of these, the macro trend, is that cellular is viable. It's ubiquitous, and it's cost-effective as an alternative source of connectivity. That's empowering dozens and dozens of applications in hundreds of industries to explore the adoption of connectivity. So that's where we're at, Erik. And we see lots of areas. There's dozens that we haven't even been able to get to yet. But if we do, our end market product is highly, highly adaptable to various industries.

Erik: Thanks, Chris. Maybe we could touch quickly on that topic of cost structure. Because some of those use cases that you mentioned are clearly very important, right? Talking about measuring rainfall, for example, or moisture on a more granular level, I mean, that can be very important for monitoring wildfire risk or for optimizing use in agriculture. But then, of course, there's a cost attached to that, right? So it's really a question of economic viability. What do you see in terms of cost of connectivity trends for IoT devices connected to cellular? Is there a consistent year-over-year decline? Is it more that as new architectures come online that there can be step changes in terms of the cost structure? How does that look like?

Chris: Yeah, it's a great question, and it's one to think about. When you think about upfront costs, you think about operating costs, you think about hidden costs, certainly, there is a trend towards a more cost-effective piece of hardware. And we see that as well. Then there's the second piece, which is maybe more of the operating cost that gets a little less visibility but is important. First of all, you have these ongoing cellular costs. Those fluctuate based on usage. They fluctuate based on geographic location. They fluctuate based on carriers. OptConnect's flexible data plans, it can help stabilize those costs. We can keep that in check. We try to always be medium. You don't ever want to see a massive overage. You don't want to see something where the bottom just falls out altogether. But we try to help maintain that so our customers have a predictable cost structure. There certainly are economies of scale that customers can tap into. Volume over time, volume in aggregate, and essentially committing to growth. That helps us. We have commitments on our side too, so it helps us be able to forecast and plan around those. So when you think about the operating costs, there's certainly a variable fluctuating cost that we help bring down and stabilize for customers.

Then on the other side of that, there's this question about value, where all the cost structure comes down. How can you add additional value? It's something that we obsessed over, actually. Are there things that we can do? Is there information we can provide? Is there data we can tap into and help paint a picture? Can we give our customer a better idea what's happening environmentally at their machine? Remember, these are unattended machines. So there's nobody there keeping an eye on maintenance. If you're there every day and something happens, you can easily repair that or take care of it. But when nobody's there, what are the indicators that are there to tell you a problem is about to occur or a problem just occurred? We think that we have an opportunity to give our customers additional insights that help them become more aware what's happening at their location and be able to manage that appropriately. So OptConnect, again, I'll just come back to, there's obviously some hidden costs as well that I'll talk through. For example, cybersecurity. IoT and security go hand in hand. You can't spell IoT without security and devices that they require additional resources. So our security-first approach gives us robust protection. We're watching for emerging threats. We're reducing potential issues, breaches, any costs associated with that. That's an added service that just is included. In fact, it doesn't get a lot of fanfare. Maybe you don't even want to shine the spotlight on it intentionally. But having a secure, reliable solution is certainly something that can become a hidden cost and become part of the forefoot very quickly in the event of a major issue.

So you asked the question: tell me about the total cost of ownership. Well, through the life cycle of the device, there's one last element that's super important that can drive up. It's a hidden cost. That's the end of life of a device. The device replacement or the disposal of the device at the end of its cycle has to be considered when you think about the cost of a deployment. A lot of people will think or tell you that just acquiring a piece of hardware upfront one time is important. But if that device has an issue midway through your financial model, you got to model in another additional device. Well, with OptConnect, we cover that. It's completely under warranty. As long as our customers are under contract and paying that monthly fee, we can transition them to new technology. We can migrate. We can upgrade the legacy equipment, the systems. The customer never has to worry about something going bad or having to retrain their workforce around all of it. At OptConnect, we replaced hundreds of thousands of 3G devices for our customers and our competitors' devices when the networks, some set of that equipment. Customers came flocking to OptConnect because they knew that they would get a reliable solution, that they would never have to incur another CapEx purchase for a piece of hardware ever again. So it's that approach that helps our customers see a quicker return on their investment.

Erik: Great. Thanks, Chris. Let me touch quickly on two recent technologies that came to market. I'm curious to hear how they're impacting your customers. The first is 5G. 5G, of course, is being used for higher bandwidth use cases. But it's also had a value premise around IoT. What I've heard, and I'm curious on your perspective, is that that has been somewhat underwhelming, the actual impact of 5G or the utilization for IoT. 6G might be much more of a game changer. It feels like 6G, although it's still very much in the design phase, is likely to be really designed to enable IoT at a different scale than is currently deployed. But across your networks, are there scenarios where 5G is helpful? Or are you typically connected to like a 4G network, and that is fine?

Chris: Yeah, that's a great question. Again, maybe just for clarity for the audience or the viewers, 5G is an iteration of LTE. 4G is part of LTE. So the underpinning platform is still LTE. Obviously, it's a long-term evolution. And so 4G was planned, 5G was planned. It could go on forever, but the technology underneath really isn't going to change. It's moving to LTE, allowed for network changes to enable new technology. Whereas old legacy networks required complete rip and replace of the network in order to change. So 5G is and continues to be, expected to be, revolutionary, faster speeds, lower latency, connect millions of devices seamlessly. Those are all important. However, the rollout hasn't been as transformative as anticipated, mostly because it's incredibly expensive to build a dense network. One of the things, coverage in particular, in maybe remote areas. It's a lot more difficult to get those bandwidths or for that signal to propagate from the tower and get adequate coverage. You get into an urban environment where there's organic things like trees and leaves and rain and cloud and dust. That can interfere with those signals, especially the ultra-high speed, ultra-high frequency connections. And so consequently, businesses aren't universally upgrading to 5G because of the cost and because of the experience. But it will get better. The carriers continue to invest in this very, very heavily. There's pockets where it's very good. Think of the NFL cities, if you will. Those are some of the big cities that were able to get that speed very, very quickly.

But yeah, you mentioned how 6G could become a game changer. Even though it's still early and it's in its theoretical stages, it is expected to be a significant leap forward. Even more low latency, even higher speeds. There's rumor it could be up to 100 times faster than 5G, which when you start thinking about latency and speeds as low as a micro second, we don't even know how to manage that. I don't remember. When you think about blinking your eye and how we do that, it's so quickly 100 hundred times faster than that. Pretty crazy. There's other benefits that we like to think about, the enhanced density. You've got more capability at the edge unlike previous generations. Maybe AI Edge computing directly into the network, more autonomous IoT devices. All of these are in the realm of possibility. Certainly, the other area that's kind of painful today is just around energy efficiency. I think the iterations around 6G could certainly do that. That's going to lead to new business models, new industries. You combine all of those ultra-reliable, low latency, AI, the ability to connect millions of devices. 6G could be pretty transformative. You think about logistics, smart cities, health care. That could all happen at an entirely new scale. I did want to highlight one important thing that came with LTE, the CAT-M network, which is a segmented piece of the network that allows for specifically designed around IoT devices. That has been a bright spot for our industry around connectivity and some of these new networks. So certainly, some new exciting things come. Even though that's way off in the future, the vision promises pretty dramatically in connectivity.

Erik: Yeah, great. Thanks for giving that context. The last topic I wanted to touch on was Edge AI. There are some scenarios. In a connected vehicle, for example, where clearly this is going to be really fundamental to the technology. Then there's a lot of others where it might not be core to the value proposition of the device, but it might be a very significant value add or enable additional capability. Where are you seeing customers today, either already adopt this or start to explore deployment of Edge AI?

Chris: You know what? This is pretty neat stuff. Because, like you said, I like the connected vehicle. It's a perfect example. Not currently extremely applicable to OptConnect today but very well could be. Allowing those connected vehicles to process the data locally. Think about collision detection and lane keeping, pedestrian recognition, emergency braking. All the things that I think companies like Tesla are doing really, really well, those are really important. You know, I love my Tesla for the period of time that I had it. I don't currently own one now, but I aspire to get back to there here pretty quickly. I had purchased the advanced computer that was allowed for some of the beta testing. Very, very impressive to see what they've been able to do. And it only continues to get better. The other is, you think about vehicle-to-vehicle connectivity and autonomously being able to drive with a near instantaneous decision based on what another vehicle is doing. Vehicle to vehicle or vehicle to everything where everything interacts with the vehicle. Think of traffic lights, other infrastructure, power grid, charging. Everything improves. You can see how you can influence that for good. Better traffic flow, improved safety, better use of infrastructure. You think of California. Given the mandate, everything needed to move to electric vehicles. Then just a couple of months later, they're saying, "Please don't charge during peak hours because our infrastructure can't handle it." These are diabolically opposing views. And being able to do that more intelligently are areas where Edge AI, I think, can become the core of everything in the industry. I think we're still a ways off before there's mass adoption there, but there's plenty there.

There are some other ones, Erik. We probably don't have time to get into them. But if you think about health care, think about remote surgery and what Edge AI can do to enable some of the advanced diagnostics, some of the capabilities, to be able to augment and assist providers and doctors. I'm not foreseeing the day when we go and get a scan by a robot, and that becomes our full-time primary care provider. I think there's always going to be a need for the human element there. But man, you could certainly augment some of the hospital capabilities, some of the processing times. There's a whole potential around this. I'll give you just one brief example. I saw a very specific surgeon for my eyes who came out of UC Berkeley, performed a series of procedures. I had four different surgeries to get my eyes to where they're at today. I've had terrible vision. I was able, through a number of these surgeries, be able to now have 20/15 vision. It's awesome. I had to wait months to be able to see this specialist. Because I had to wait for the right time for them to be in my geography to be able to make an appointment to see them. Think about how telemedicine could help augment that, even telesurgery. Everything I had, all the surgeries I had, literally putting your eyeball under a scalpel while you're awake, by the way. Sorry to pay a gruesome picture. It was incredibly important. But the doctor had robotic assistance. That could happen in real time with some of this advent technology around 6G, et cetera. They could make split-second adjustments and allow robots to respond to surgeons' command without latency, without issues. I could have probably had my procedure months in advance when the doctor was three states away instead of waiting till they came into my backyard. So just a couple of examples of how I believe, into the future, we'll see more capabilities around Edge AI.

Erik: Got you. Well, Chris, thanks for sharing your perspective on where you are as a business today but also the industry and where we're going. Anything that we haven't touched on, maybe any new developments that you're planning to launch next year that you'd like to share before we cut off?

Chris: Yeah, I think stay tuned. There are some really exciting things happening at OptConnect. We've been able to expand our capabilities through some really awesome acquisitions. We recently completed an acquisition in Latin America, a company by the name of M2M DataGlobal, earlier this year. Just a couple of weeks ago, we concluded another acquisition in Europe, a company by the name of Capestone. They each have their own unique set of capabilities. But through it all, our commitment is to building, with security, with sustainability, a very simplified solution that helps our true legacy customers take advantage of all the advents of IoT that are coming at them so quickly that they probably can't capitalize on them on their own. So the technology we build helps not only connect more devices, but it helps connect people. We help foster better quality of life through the use of IoT in a B2B model. We just think that's awesome. It's been a lot of fun to see how our customers are reshaping the way we interact with our world every day through the use of IoT. So stay tuned. There's definitely more coming from a product perspective, like I hinted a little bit earlier about helping our customers see what's happening environmentally in their world and, certainly, a little bit more on the growth side. That's probably all I can say about that at the moment. But keep a close eye on OptConnect. We're up to some really fun stuff.

Erik: Yeah, that's great. Well, I wish you success in integrating those businesses. That's a lot of geographic expansion, Chris. Thanks so much for joining me on the podcast today.

Chris: Yeah, I appreciate it. Pleasure is all mine. Thank you for having us. We look forward to speaking again in the future.

(outro)

Thanks for tuning in to another edition of the Industrial IoT Spotlight. Don't forget to follow us on Twitter @IotoneHQ and to check out our database of case studies on iotone.com. If you have a unique insight or a project deployment story to share, we'd love to feature you on a future edition. Write us at erik.walenza@iotone.com.