Converged Wi-Fi CPE Value-Added Services Will Prove to be Greater Than the Sum of Their Parts

The deployment of value-added services—software level programs which add additional features to Wi-Fi CPE—has emerged as a key area of innovation and differentiation within the Wi-Fi industry. Each individual service can help improve network performance and/or unlock new features, but the realization of their full potential depends on their integration with other services. This will allow for the convergence of data from diverse sources, spanning from location and motion sensing to device and application usage, which will provide a deeper and more comprehensive array of data than possible with any single service. This convergence will ultimately increase the value proposition of these services, drive further innovation, and enable the flourishing of new business and service models.

Value-added services include features such as Wi-Fi management, cybersecurity, enhanced privacy, parental controls, and Wi-Fi motion sensing. The software is typically created either by a developer specializing in one individual service (which they intend to sell to Internet Service Providers (ISPs), equipment vendors, or directly to the end consumer), or by an ISP or equipment vendor in-house (for the purpose of enhancing the capabilities of their hardware). The former model tends to create singular services focused on a specific use case, with examples including Wi-Fi Sensing solutions from Cognitive, Origin, and Aerial, parental control applications from Bark and Qustodio, and the latency management program Domos, discussed further below. In contrast, the latter often involves the creation of a platform which encompasses a broader suite of services, like Optim from ActionTec or SURFboard from Arris. However, both models have inherent deficiencies. Two of the key challenges of isolated services is that the direct value which can be extracted from them can be limited, and the data they collect cannot be used in conjunction with data from other services. On the other hand, platforms built to span multiple services are often comparatively basic in their features and limited in the data they collect, as the developers lack the singular focus on a specific use case. The optimal arrangement is a combination of the two. A collaboration and integration between multiple complimentary specialized value-added services will create a comprehensive platform. This will allow for the sharing of data between multiple services, generating far richer data than any individual service alone could provide, integrate the services into one centralized control platform, and streamline the integration of these services into hardware. This realization of this fact is slowly being reflected in the market, as was evidenced in the recent partnership between a trio of Wi-Fi value-added software providers—Cognitive, Lansweeper, and Domos.

 The first, and perhaps most recognizable, member of this new alliance is Cognitive, a leading developer of the nascent Wi-Fi Sensing technology, which leverages Radio Frequency (RF) signals from pre-existing Wi-Fi infrastructure to detect presence and motion. The company counts over one hundred ISPs as customers and has a deep and long-standing partnership with Wi-Fi services provider Plume. The second is Lansweeper, which maintains an IT Asset Management (ITAM) software providing full visibility of all connected devices, users, and software on a network. Finally, the third member Domos has developed a platform for managing, analyzing, and optimizing end-to-end latency. In March 2023, the three companies announced that they would combine their specialized solutions into an innovative package of smart home services for ISPs to deploy in residential Wi-Fi networks. The integration of these three solutions will converge data from multiple sources to provide a much richer and more comprehensive array of data than would be possible with any individual solution. ISPs will then be able to use this data for tasks ranging from resolving service quality issues, optimizing Wi-Fi networks, or the development of new revenue streams.

As industry competition intensifies—particularly between ISPs but also amongst equipment vendors—the simple throughput and performance differentiators of the past will no longer be sufficient to stand out from the pack. In this context, the leveraging of rich and insightful data from converged value-added services will be key in the next stage of innovation for consumer Customer Premise Equipment (CPE) and will enable their raising of their value propositions to consumers. The gains from converged services will help to maintain existing customers and attract new ones, reduce operational costs, and open up new revenue streams with additional products and services. ISPs looking to introduce value-added services to their customers should consider the following points:

• Identify Suitable Partners: To ensure that the selected solution is the best fit, request sample kits from multiple vendors to trial competing services.
• Forward Thinking: Rather than being merely reactive, become proactive by identifying partners early before the necessity arrives. Engaging with partners at early stages of development will allow you to exert influence on the direction of their development, i.e., which features they will prioritize or which markets they will focus on.
• Leverage Customer Base: Both ISPs and equipment vendors act as a gateway to large customer bases, so access to these consumers should be leveraged in negotiations. The early stage of maturity of many value-added service vendors means that they are often willing to be flexible with the terms. 
• Diverse Approaches: There is no one-size-fits-all approach, and thus customers should have the option to pick-and-choose which combination of services best meets their needs.
• Vendor Interoperability: The benefits of value-added services can be multiplied if equipment of other vendors is also compatible, and so vendors and ISPs should invest in platforms which facilitate this cross-vendor interoperability. Collaboration between multiple vendors in the ecosystem (either vertically or horizontally) is one way to achieve this.

Value-added service vendors have much to benefit from integrating their solutions with those of other vendors. Opportunities include:

• Development of New Service and Business Models: The integration of multiple applications and the aggregated data created through the convergence of multiple sources can create additional value for consumers and unlock new potential revenue streams. For example, the combination of motion sensing with device and application management can enable the powering on of devices or the booting of applications when individuals walk into a room.
• Greater Personalization: Utilization of data on usage patterns could be used to identify personalized upsell opportunities for individual customers or to develop new products and services.
• Facilitation of Go-to-Market for New Services: Bundling multiple services will enable new players to enter market, as it will give them exposure, heighten their value proposition by compounding their data with other services, and streamline their integration into CPE. This has been the case for Wi-Fi Sensing vendor Cognitive, whose bundling with more mainstream Wi-Fi Management applications will broaden its market appeal.  
• Enable entry into new market segments: Partnerships can also facilitate the transition into new market segments. For example, the ITAM software Lansweeper has traditionally served the enterprise market, and so entering into a partnership to develop a solution for ISPs is a new area for the company.

At the same time, when forming partnerships value-added software vendors should ensure that they deliver on some of the following factors:

• Create Synergy: Identify complimentary value-added services to partner with. Avoid bolting on services as an isolated point solution for a single use case, but instead incorporate them as a core member of a broader cohesive package.
• Vendor Neutrality: For services which coordinate between multiple devices, ensure that cross-vendor interoperability is supported. This allows ISPs deploying equipment more freedom when selecting CPE, as well as enabling better manage supply chain challenges.
• Pre-Integrate Software with CPE: Work with equipment manufacturers to either pre-integrate or ensure the compatibility of their software with hardware. This will enable instant, out-of-the-box access to the software, removing unnecessary barriers to its adoption for customers.