There is no such thing as an M2M solution – only end customer or vertical market solutions

There is a lot of talk these days about M2M solutions showing up in many different industries. And for good reason! Many companies in industries ranging from agriculture and mining to oil, gas, etc. are discovering the dramatic efficiency and productivity gains that can be achieved as a result of bringing data from the field back into the Enterprise and acting upon that information in real-time. These systems typically connect a machine in the field to central enterprise computers (or increasingly cloud-based servers) i.e. another machine, utilising a combination of a wireless data and internet connections. The solution is indeed based on M2M technologies but it is not in and of itself an M2M Solution.

To understand this, let’s take a quick look back at the history of M2M. Back in the early days of cellular the only service offered by carriers was voice i.e. good old telephone calls. Next came text messaging (SMS) – it’s hard to believe today but for many years SMS was regarded as gimmicky and languished as a little utilized service primarily used to send out voicemail notifications to mobile phone users. As digital networks came into being, cellular carriers were excited to be able to offer consumers and businesses data services. With the rapid growth of the internet in homes and businesses around the world, there was pent up demand for these data services to be provided on Smartphones and laptops.

A strange thing was noticed by the eagle-eyed analysts working for the carriers as they looked at the traffic profiles to better understand their costs and margins. The analysts noticed that a small amount of data traffic was being generated not by phones or laptops but rather this traffic was flowing from one modem to another. These modems were typically connected to some kind of machine in the field (perhaps a pump on an oil pipeline) and to central computer at the enterprise. In other words no humans involved! This traffic was dubbed Machine-to–machine, which quickly became abbreviated to M2M.

As their thoughts turned to the future, the realization set in that M2M is destined to become an increasingly important and potentially dominant segment of the traffic carried by wireless (and wire-line) carriers. This in turn led to very significant investments in the search for “M2M solutions”. This very brief history explains why there is so much talk today about emerging M2M Solutions. There are lots of M2M Subscription services available from carriers, M2M Wireless Modems, M2M Platforms. However a meaningful solution by definition must solve a real-world problem. A commercially successful solution must solve a problem or address a pain being suffered by a business (i.e. paying customer) or better yet a set of customers (i.e. a Vertical Market).

And there’s the rub. By focusing on providing an M2M solution there is a significant risk of developing technology for technology’s sake. For developers aiming to create a viable business it is critical to understand what problem the proposed product/system/solution is solving for the customer.

The solution may very well be based on using M2M technologies to deliver the promised benefits. However it is important not to lose sight of the fact that while M2M may be a key part of making the solution possible, it is not the solution by itself.

Arriving at a compelling solution may be looked at in three ways:

1. The Technical Challenge: At first blush, the M2M aspect of the solution is all about providing connectivity i.e. connecting the sensor or data collecting element in the field with the central or cloud based application server. However in order to ensure that the system operates effectively and efficiently without human intervention or supervision there are many design aspects to consider. These include but are not limited to:

  • System Architecture (mesh vs. star; cellular vs. ISM, etc.)
  • Hardware vendor selection (sensor/modem/GPS module)
  • Carrier and carrier plan selection
  • Communication protocols (i.e. UDP vs. TCP)
  • Management platform used to configure, activate/de-activate modem

2. The Business Model Challenge: When data is brought in from the field in (near) real-time it can be analyzed automatically and used to drive key operational decisions. This in turn has the potential to dramatically and positively alter the performance of that business. It is critical to understand the costs of deploying such a solution, collecting and analyzing the field data in order to ensure the business model is truly sustainable.

3. The Business Transformation Challenge: It is impossible to overstate the transformative potential M2M brings to a wide range of businesses. Think how Fedex created a unique competitive advantage and customer offering once the company incorporated automated package tracking into its operations. Utilities such as PG&E, Oklahoma Gas and Electric in the US to British Gas in the UK are already reaping huge benefits from even early SmartGrid/Smart Meter implementations. And even the billboard industry is being revolutionized with dynamic, remotely updating displays. This is a true game-changer for their customers (i.e. advertisers) who are now able to respond in real-time to changing local and global events. As the world becomes ever more competitive companies that fully capture, understand and apply real-time data to and from the field will change in ways we can only begin to imagine today.

Over the coming years many companies will rise to prominence (and great profitability) delivering solutions based on M2M technologies to a wide variety of industries. Indeed, certain industries will be improved and transformed beyond recognition as a result. Great success awaits developers that take the time to understand customers’ problems and couple that with the creativity and expertise to deliver solutions which can be easily and effectively deployed.

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6 Comments on “There is no such thing as an M2M solution – only end customer or vertical market solutions”

  1. Outstanding encapsulation of the challenge of this technology and it’s history. Appreciate this very much.

  2. Simon, myself and several colleagues at KORE reviewed and knew we had found a like-minded spirit as soon as we saw the title of this piece. We’ve been saying for years now that M2M “happens” in very specific vertical segments. (We blogged about it recently at http://blog.koretelematics.com/2013/03/alex-brisbourne-lends-perspective-to-m2mnow-blogspace.html). To take it a step further, we break down the M2M market into the following key application segments–connected energy, industrial process, passenger vehicles, ATM/remote payment processing, premises security, fleet management, pay-as-you-drive insurance, rent-to-own subprime lending, digital signage, and mHealth–with mHealth and remote payment processing topping the current growth cycle.

    1. Thanks for the comment. As you point out there are several application segments already showing great results in terms of real business and many more vertical markets exhibiting great promise for the coming years. Within a few years it will probably be hard to look back and remember a time ‘before M2M was everywhere’!

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