By 2020 there will be more machines than people connected to networks.
So says Nick Jones, VP at Gartner, who predicts annual M2M growth from 2011 will be 30 percent – albeit it off a very low base.
This is music to the ears of operators seeking new revenue streams.
The enterprise market, in particular, is increasingly interested in using M2M.
“Strong, long-term growth drivers for enterprises include cutting costs, streamlining operations and offering added consumer services,” says Marc Sauter, head of business development at Vodafone M2M.
“Customers are interested in a single global card managed through one platform with help desk access, QOS and SLAs. Bespoke solutions and a single price across geographies are very attractive giving customers known costs and telcos differentiated services.”
Operators have been announcing a range of deals: in June, for example, NSN and Everything Everywhere have announced an international partnership in the vending machine market.
However, operators wishing to exploit such opportunities must avoid their experience with OTT models where traffic but not revenues exploded resulting in capacity problems.
“The major challenges are in defining the M2M business case and ROI and identifying and pitching to the most attractive verticals. They then must build the ecosystem and end-to-end infrastructure,” says Nigel Upton, director of targeted innovation at HP Communications and Media Solutions Group.
Cloud-based connected device platforms, which facilitate the deployment and management of M2M SIMs attached to networks, could be one solution according to Upton.
M2M cloud systems combine a ‘pay as you grow’ model with fast, easy setup and tear down, scalability, flexibility and the required security and backend connectivity.
ABI Research estimates this market will reach $2.14 billion in 2017.
However, there are still issues to overcome as Musa Unmehopa, chairman of the Open Mobile Alliance, explains.
“Each unit will have its own specific characteristics but the industry needs common standards and solutions across different fields for management and provisioning,” he explains.
“Security is a big issue and will become bigger as mobile devices are provisioned over-the-air which is relatively insecure.
“Operators must also combat fragmentation: creating a common approach to remote management and provisioning is essential.”
For their part, vendors must prove hardware and software are backward compatible and easily integrated with existing back-end systems including provisioning, aggregation, management and billing.
Seeing collaboration as a means of offering a truly global service and of reducing market fragmentation, seven big mobile operators created an alliance to deliver seamless M2M services to multinationals in June.
Mike Short, VP at Telefonica Europe, says this model should help combat some ingrained deficiencies.
“Operators aren’t experts in developing applications for vertical sectors so need strong partners to provision applications. Provisioning support must be sophisticated, secure and accurate and data uncorrupted and securely transmitted.”
Ultimately, M2M is becoming more about systems and solutions than pure connectivity and from a single product into a complex ecosystem needing various suppliers to complete it.
“Operators are best positioned to make it easier for people by creating separate M2M divisions and putting together partners,” concludes Gartner’s Jones.
“They know how to run systems at high reliability, securely and offer hosted services. New wireless technologies and networks are being designed specifically for machines.
“The infinite opportunities are limited only by people’s imagination rather than technology. M2M fits in with many other things such as green, smart cities and healthcare. The technology is there, the question is what to do with it.”
European Communications is hosting a free-to-attend M2M seminar in London featuring a keynote by Vodafone. Click here to learn more