Differential pricing based on differential usage of devices. Fascinating conversation!
Sramana Mitra: Let’s start by introducing our audience to yourself as well as to LogiSense.
Flavio Gomes: I’m the Founder and CEO of LogiSense Corporation. My business has been around for just a bit over 20 years. It was officially incorporated in 1998, but its history goes back to the early 90’s when I started one of the first regional ISPs in our community. It was in the very early days. It was about 1992 to 1993 when the internet was a new medium.
At that time, things were very expensive to operate. We built a lot of the technologies and tools to manage that business. One of those tools were the
monetization platforms. After a couple of years, I sold that business successfully and took the intellectual property. I realized that there was a great opportunity now to help other service providers in the technology space leverage our capabilities from a billing and monetization platform.
Roughly around 1998 to 1999, I heard my first Voice over IP (VoIP) call. It was a terrible experience. It sounded very jittery. Then and there, I knew that this was going to be a significant disruptor to the communications industry as a whole. We explored it further and built tools and technology around the billing and monetization of voice services. In North America, it’s a very complex ecosystem. There’re a lot of different moving parts and elements that make up a voice call.
What that led to was a really elegant and technological way of billing for usage and billing for consumption. It dawned on me early that the world was changing to an environment where people want to pay for what they use. There were numerous discussions and debates around all-you-can-eat models and debates around usage models. I fundamentally believe that the usage element of digital transformation and communications was going to prevail. So far, that’s been playing out.
We really cut our teeth in that very challenging environment of billing for VoIP. It was essentially data. It was voice converted to data. Then in the mid 2000’s, this concept of M2M started to permeate the conversation that I was having with other leaders and my peers at conferences. I found that super fascinating. It’s a little bit of an old wine in a new bottle scenario because telematics has been around for a long time. This concept and notion of machines talking to other machines in an analog world where digitally incapable machines are being outfitted with sensors created a lot of excitement around automation and intelligence.
There are these major inflection points that happen in technology. Every 20 years, you see these major movements and revolutions that happen around technology. Twenty years after that, it was the internet. Now we’re in this profoundly exciting and important era of IoT. All of these sensors are going to be distributed amongst all of these different types of business models and environments. These sensors are doing some interesting things.
They’re obviously taking data from the environment and sending them to central processing applications in the cloud, but what they’re really doing is enabling organizations to transform the way they look at their business model. Back in the old days, it was prevalent where things would be sold on a one-time basis and then you would have some sort of a maintenance agreement.
Now organizations are looking for recurring revenue relationships with their customers. They want to sell once and engage them over a longer period of time. That opens up benefits such as predictability to your revenue streams, long-term engaging relationships, where you get higher multiples. All these sensors are generating billions and billions of events or transactions. These organizations have then discovered that it’s a long-tail model whereby not everyone uses the IoT infrastructure and ecosystem in the same way.
That being said, it precludes and presupposes that they will start to negotiate relationships in a personalized and granular way. That’s what LogiSense has discovered. We create technology and tools to help our customers fine-tune their pricing, their product catalog, and service delivery models in a manner that is unique and personalized for each one of their individual customers in the IoT ecosystem.