M2M – The Next Generation|Sasken

  Sep 17, 2014 8:53:17 AM

While mobile phones allow people to communicate with other people and/or computer systems while on the move, machine to machine (M2M) technology lets machines transfer information between one another using the same underlying mobile networks.

This blog will have series of posts covering aspects of M2M in terms of

  • M2M and the need for M2M now
  • Global M2M Market opportunity
  • M2M value chain and M2M business models
  • M2M Enablers
  • Representative Use Cases

In this post, aspects of what M2M is, the need for M2M now and its market opportunity will be covered.

M2M more broadly refers to the concept, which is best brought to life by the following paraphrased Wikipedia description. The M2M concept comprises a device (such as a sensor or meter) to capture an event (such as temperature, inventory level, etc.) that is relayed through a network (wireless, wired or hybrid) to an application (software program) that translates the captured event into meaningful information (for example, items need to be restocked) that causes relevant action to be taken.

M2M – Why Now?

  1. Proliferation of mobile internet connectivity:
  2. According to digitalbuzz, there are now 1.2 billion people accessing the web through their mobile device and 50% of the average global web users as either their primary or exclusive means of going online.
  3. Global mobile traffic now accounts for 15% of all internet traffic
  4. Government Mandates:
  5. Examples of recent government mandates include smart metering legislation, which requires utilities to implement smart-grid technologies and safety initiatives in the connected car realm
  6. In the European Union, for example, it has been mandated that all member states provide smart metering to 80 percent of their customers by 2020
  7. Innovation with devices:
  8. This applies to the advances in just the past few years with regards to UI/UX and the growth in real time analytics and the capability to handle Big Data
  9. Search for new growth markets/ new sources of revenue:
  10. Service providers are well aware that voice and data services are commoditized and the pressure is on to find new sources of revenue
  11. Progress towards standards:
  12. Seven standard organizations agreed to an initiative, called OneM2M, which aims to develop specifications which provide:

“a common platform to be used by communications service providers to support appliances and services as diverse as the smart grid, the connected car, eHealth and telemedicine, enterprise supply chains, home automation and energy management, and public safety” www. onem2m.org

Global M2M Market Opportunity

Here are some of the common and widely-quoted estimates.

  • Machina research, January 2013: the number of M2M connections is forecasted to grow to 18 billion by 2022 from 2 billion in 2011, a CAGR of ~22%
  • Strategy Analytics, January 2014: M2M industry will grow at a CAGR of 18% to $242billion in 2022 from $45 billion in 2013.
  • Infonetics Research, October 2013: M2M services revenue should hit $31 billion by 2017 with M2M connections topping 4 billion. The 2012 revenue from M2M services was ~$15 billion, across ~1.4 billion connections. In terms of current revenue about 33% was from automotive, transportation & logistics and another 16% was from M2M backhaul services.

[Note: Machina research, strategy analytics & Infonetics research have a different definition for M2M.]

Authored by Syed Faiz

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