By: Rob Bamforth, Principal Analyst, Quocirca
Published: 29th November 2012
Copyright Quocirca © 2012
M2M (machine to machine) has enjoyed a decade or so of market push and occasional hype, yet still seems not to be meeting its full potential—why is that?
Firstly, the predictions for growth and market opportunities are huge but often hard to compare objectively. Some talk of the number of deployments, others the number of devices (billions), and yet others the numbers of cellular connections (100s of millions). There have also been predictions of M2M revenues running into tens of billions of dollars by the late 2010s.
Then some of the terminology isn’t helpful. When George Colony predicted in the 1990s that light bulbs would eventually have IP addresses it conjured up the sort of imagery popular in the BBC TV programme, Tomorrow’s World, and possibly ABC’s ‘The Jetsons’. Others started to use the equally futuristic term ‘the internet of things’ and talk of connected consumer appliances and hint that, with M2M communications, technology ‘can do anything’.
Yes it can, but only if someone thinks it is sufficiently worthwhile to spend money on, and the problem with many grand M2M schemes is that several different agendas have to be brought into line, business processes need to evolve, and there has to be broad acceptance from all stakeholders. These are much harder to achieve than fixing some of the technical challenges, and even harder when the value chain is distorted or has the wrong centre of gravity, say towards a ‘bitpipe’ connectivity provider such as a mobile operator. M2M, like many applications of technology, should start with a business need in a business process, not with a choice of communications or even software platform.
The market sizing is also fraught with problems. Sure it could be big, but the revenue split is complicated, going to a mix of hardware vendors, software vendors and network service providers. When would this be cannibalising other revenue, and from where or whom? Perhaps most critically of all for certain M2M projects, over what timeframe?
While consumers of mobile phones are used to upgrading or changing once every year or two, many M2M deployments will see devices and entire systems in place for ten years or more. One of the flagships of the M2M application landscape is smart meters—for electricity, gas and other utilities—but these types of metering devices typically have an average lifetime of twenty or more years. That would span over several generations of mobile cellular technologies, so clearly the return over time of investment is going to be much more important.
This has to work for all stakeholders too—suppliers, government/legislators, right down to the end consumer. Returning to application posterchild of the M2M movement—smart meters—it seems that even enlightened consumers are generally unconvinced of their value and many others are simply not aware of smart meters at all. Utility companies are not helping. For example, in the UK, electricity suppliers do not provide consumer microgenerator sites (houses with solar panels) with import/export meters, so it is impossible to gauge just how much power is being fed back in. Smart meters and smart grids need to begin with some smart thinking and consumer engagement.
The underlying problem is that the M2M space has been too focused on the underlying plumbing—network connectivity, provisioning platforms and billing—and has not done enough to build application platforms and ecosystems of coherent and deployable solutions that meet business needs.
Building a solid foundation with interoperable standards is necessary, but not sufficient on its own, and it is indicative of the overly telecoms-centric approach of many in the M2M space. What is needed for the next stage of real growth is a more innovative and fast paced IT application style approach, that combines open technology with an equitable sharing of the opportunity and its rewards. That means away from the infrastructure providers and towards developers—a model made successful in different eras by Microsoft, Sun and Apple.
The infrastructure is still vital, but M2M applications require seamless universal coverage, not cherry picked silos, and even where wireless connectivity is vital, cellular is not always the most appropriate technology and there are a number of alternatives that might prove much more suitable in the mix. For example ZigBee standards provide a low cost way for devices to communicate over short distances, and the low frequency radio technology proposed SmartReach (a consortium of Arqiva, Detica and BT) offers long range, in-building penetration at a lower data rate that is more than sufficient for a smart grid or smart meter solution.
The industry just needs to smarten up a little and think about the needs of the application, not the re-marketing of existing plumbing.
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Published by: IT Analysis Communications Ltd.
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