Founder Spotlight: Arnold Bagabaldo of Packetworx, Bringing a Revolutionary Approach to our Society’s Way of Life
by Gianna Abao
With the changing dynamics of our society, it is no doubt that breakthroughs in technology are reshaping enterprise operations and manual processes. Hence, the birth of the Internet of Things (IoT) or the catch-all term for devices that send data to the cloud brought a broad change on the Internet, data processing and even in our way of life. Its revolutionary effects in our society are highly relevant to our world today amidst the season of the “new normal”. Not only that — to Arnold Bagabaldo, the founder and CEO of Packetworx, IoT is the contemporary catalyst of change to be globally competitive. Below Arnold tells us the immense value that IoT could bring to a third world country like ours.
Tell us about yourself and your background.
I am Arnold, an MBA graduate from Armstrong University in the USA. Although my undergraduate and graduate degrees are in business, I’ve been in the tech industry for the longest time. I’ve been into telco, BPO, and have run an ISP business as well. I ran a telco in the US that was handling over 31% of the voice traffic from the US to the Philippines, and was one of the pioneers in the BPO industry here in the country. We are also one of the pioneers of ISP business here. I sold my company and put up Callworx, later selling it in an MNA to TRG, which is now IBEX.
With the constant change in society brought by innovation and technology, could you give us a brief background of Packetworx, and share the core that it needs to fulfill?
We’re all familiar with the Internet. The IoT from our point of view is the next evolution of the Internet we know. This is critical because the Internet has changed our lives. We think of IoT as the next evolution that will also dramatically change our lives and impact a lot of businesses. Packetworx’s goal is to accelerate the adoption of IoT in the Philippines. We do this in two ways. First, we are deploying the network infrastructure that connects low power and wireless devices. Second, we design and develop devices that run on it. Packetworx does the heavy lifting of bringing data from the edge to the cloud, where it is used as an input for digital transformation, analytics, and AI.
IoT increases productivity, lowers costs, and will change how we do businesses. By enabling these in the Philippines, we aim to contribute to society and make the Philippines globally competitive.
How did you come up with the idea?
Around 6 to 7 years ago, I was in SM Megamall waiting for a parking slot, and I can’t help but to glance at the ceiling where the parking sensors are. The cables and conduits made me think that if I removed those conduits and cables, I could make a better parking sensor by making it wireless and battery-powered. It all started from there. I progressed into thinking that if I have this technology, the application of this technology is not just for parking sensors. Anything that requires low-power wireless communication will need this, and that was how Packetworx started.
With the advancement of technology, how did Packetworx evolve?
IoT, along with Big Data and AI, is actually at the leading edge of technology. That being said, internally, Packetworx has evolved. One of the largest impacts that it created for Packetworx is the ability to design and manufacture devices in record turnaround time. There are very few hardtech (hardware) startups out there, because hard tech is often difficult. It is a common sentiment that you need a lot of capital to manufacture products. It is not so nowadays.
Advances in electronics manufacturing allows small companies now to design, develop, and manufacture hardware. Packetworx got lucky and caught this wave as we were starting. The same thing happened to software industries where you have libraries of codes. The advancement in software technology made software development a lot easier than before. You no longer need to start from scratch and use assembly code to develop software. Algorithms and libraries are now available that make rapid development easier.
This is also similar in the hardware industry where you have a small robotic manufacturing equipment that allows you to develop and manufacture devices in record time at the lowest cost. Previously, in order for you to make a product, you need to have various resources. You also need to have a minimum quantity to manufacture products. However, with the advances in hardware manufacturing technology, you can now do this in a small space. We have a 175 sqm office where Packetworx can manufacture 200 IoT devices in an hour with the use of 3D printers, CNC machines, pick-and-place, and even a reflow oven.
In your opinion, what kind of impact has Packetworx had on the society?
We’re a social enterprise and our office is open to the public. We have actually hosted educational tours before COVID. If you looked at our Facebook page, we’ve even hosted tours from schools coming from the provinces. We also helped students to do their thesis up to this day. Actually, I just got an inquiry from a group of students from La Salle wanting to get assistance in doing their IoT-related thesis. We have facilities and tools that are not normally available to schools. Our engineers are also open for consultations. Again, our office is open and free. We do not charge for it. We even lend equipment for IoT projects, not just for students, but also for entrepreneurs and hobbyists.
We do this because if you go over the Internet and look for IoT, you will see that a lot of countries are adopting it to accelerate growth in their country. For example, the government of Brazil adopted IoT as one of their government thrust. There’s a research conducted by McKinsey indicating that IoT would contribute to Brazil’s GDP by as much as 200 billion dollars per year.
Packetworx has taken to itself to have this as our goal, which is to enable and accelerate the adoption of IoT in the Philippines to make the country globally competitive. There’s a lot of applications across the board. Imagine flood sensors that are the size of a pack of cigarettes with batteries lasting for 3 years and are wirelessly sending data to the cloud. Flood sensors would only cost you 100 dollars. We have the app called “PacketTHINGS” that allows you to visualize installed sensors in a lot of intersections and cities. That’s one example of how we can help the Philippines to prepare for the next age and to make Filipinos more resilient to natural disasters. That’s just one aspect of . There’s still a lot of other things that can be done.
What are the key features that Packetworx has with its growing popularity on IoT?
LoRaWAN is a part of a family of technology called Low Power Wide Area Network (LPWAN). The low power means devices could last for years, a decade or more. An example would be water meters that last for 10 years on battery. Meanwhile, the wide area network means that it is long range. These are the two key features that make LPWAN relevant in our society today. Imagine having devices in isolated areas. You can stick a sensor on a door and be able to determine how many people come and go, whether the door is open or not. The longest range that we have demonstrated in the Philippines is 51 kilometers, this performance from a battery-powered device transmitting data to one of our base stations. These are the key features that we are introducing into the world of IoT. IoT is a very broad subject. LPWAN is a particular segment of IoT that we are addressing.
What are some of the most prominent challenges you have faced in growing Packetworx, and how did you overcome them?
In the beginning, Packetworx has been conceptualized as the ‘Telco for Things’ which has been my background. I wanted to put up a wireless network where you can connect LoRaWAN devices. When we started and met with our first 2 to 3 customers, it became apparent that the different use cases would need different devices. That is a big challenge especially when you are in the early stages of technology. There were limited devices available, and we had this problem of telling our customers that each device had a particular use. That's how we got into the device development and manufacturing business as well. The network won’t be useful if there are no devices. The issue with manufacturing devices is that if you approach it traditionally, you’ll have to design a device, outsource the manufacturer, and engage with electronic subcontractors that require 5,000 to 10,000 unit minimum order for them to produce.
A startup won’t be able to do it, because all your capital would be tied up in the inventory, and the problem with that is if your next client decides that it's not the right product for them, you need to make alterations on the product to make it valuable to the next customers. You’ll be stuck with 5,000-10,000 units in your inventory. Your startup is dead. That was how we got into having our own manufacturing equipment and the knowhow in Rapid Product Develolment (RPD), so we would not be dependent on large quantity orders and do it ourselves. That is one of the key things that allowed the company to grow and survive. We had to be able to develop, design and manufacture products for our clients in record turnaround time. That was the biggest challenge that we needed to address in order for the company to move on.
With the current health crisis and even during natural calamities, IoT has been a tool in providing essential services. Could you share how Packetworx is adapting to the “new normal”?
The new normal actually enhanced the awareness of use cases of IoT in the society. We have a lot more inquiry during the pandemic than before. There is more urgency in terms of having these solutions implemented, because we are not a first world country. We usually address tasks by throwing human labor at it. With the pandemic currently going on, human labor is limited. Enterprises are forced to look into automating things. A great example would be electric meter reading. We used to send people to read meters, but what do you do if you can no longer send people out?
This accelerated the adoption of IoT. Internally, adapting to the new normal wasn’t that hard for Packetworx. A lot of our processes are already digital, so we can do it online. It is unavoidable to go to the office, as we are partly in a hardware development and manufacturing business. We need to manufacture devices. Since majority of the processes are done internally by Packetworx, we do not have to depend on external companies to manufacture devices. We are not too affected by the pandemic. Our suppliers and wholesalers of components, devices, and materials didn’t really slow us down. We still have access to that. We have minor challenges in terms of shipping. However, this is partly addressed by keeping stocks of components at the office, so we are not much affected by the current situation of the new normal.
How do you see Packetworx in the next 5 years?
When the Internet started, it took only 5 to 10 years until you can no longer recognize how people do business. Before, we send letters and meet face-to-face. We also have to read books to get information. Nowadays, we send emails and most, if not all the information is on the Internet.
I see IoT doing the same thing in all aspects of the business and in our lives. Imagine having self-driving cars in the country. I view Packetworx being at the forefront of this change in the Philippines. We are here as enablers of IoT, so we remove complexities and do the heavy lifting for all of the platforms and software developers out there to make solutions for the clients. At the end of the day, IoT is not about the devices and connectivity, it is about the utility of the data that it provides to enterprises and the community.
For example, if you are monitoring flood, you are not interested in the sensor you’re using. You are interested in how high the flood is or when the flood is occurring. It is the utility of the information that is important to us. Packetworx’s goal is to enable other businesses and enterprises to build on top of what we are doing. We are doing heavy lifting for them. We create devices and deliver data to the cloud. Once the data is in the cloud, they can do their thing. They can develop applications, AI, and analytics to make sense of the data and contribute to society.
There is a lot of power when you get data, and IoT will bridge the supply of data. It is going to make a profound change in our society. We are here to give control over it to the Philippine enterprises, and not just leave it to international companies to come in and own our data. We are trying to get to the point where we are in control of our own destiny.
Click here to learn more about Packetworx.