The three M2M promises

November 30, 2011
I have never heard people asking for M2M but have talked to a lot of people about ways to solve problems in their operation by using an M2M solution. The way I look at it there are three key M2M promises we can make:Efficiency. As soon as we connect things together and add computing on top, we can collect, analyze and react very fast. Processes become quicker, problems are detected and solved faster, better control prevents fraud and mistakes and so on.

Sustainability. The desire to save the globe is well spread and most organizations and individuals try improve the way they do things to make their contribution or at least to look good. M2M solutions  are often part of attempts in this field and play key roles specifically in the Utilities and Transport industries.

Safety and Security. Connecting things and adding computing on top enables very efficient monitor and response systems. Today important assets like boarders and critical infrastructure are monitored by M2M systems using a range of different sensors, video surveillance equipment and other terminals to perform the task. Data is collected and analysis triggers the right response to each situation. In homes, offices and public areas we use similar but simpler solutions to protect people and assets.

Efficiency, Sustainability, Safety and Security go well together. When we solve a problem in one of these areas we often gain also in the others. In my experience it’s often a good approach to try identify important problems in any of these ares, prioritize them and start look at solutions using the connect and compute approach. Since we start from serious problems for the organization we are looking at and since we know that the three promises go well together, chances are good that we will deliver a solution which meets or exceeds expectations.

Needless to say efficiency can be translated into things like competitiveness, better margins lower cost and improved service which always are of interest in all organizations. This often makes it quite easy to put together tangible objectives for M2M projects, sell them to key decision makers and measure the results.

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M2M over fixed lines (PSTN)

November 22, 2011
Machine-to-Machine solutions have been around since analog modems came to market and millions of elevators, alarms, nurse phones, vending machines, franking machines, fax machines, recycling machines and level gauges utilize the fixed telephone networks (PSTN) to communicate. I have been trying for years to collect data on the number of machines connected to PSTN but it is information very hard to find. Operators typically don’t know what is behind the first socket of a PSTN installation and it is common that phones and machines share subscription.The two key limiting factors for M2M over PSTNare obviously that machines have to be connected by wire and the cost involved. The PSTN subscription alone is typically 100-300$/year which immediately prevents massive roll-out. The situation differs from country to country but it is often so that cost for new installations has to be carried by the subscriber and in some markets it takes forever to get a new subscription.Mobile networks rapidly grew to cover most of the geographies, modules were developed for none-phone usage and some operators started quite early on to build a new wireless generation of M2M solutions. This together with the massive Internet forces created a mobile M2M hype around year 2000 and our VC, BrainHeart Capital, invested in Wireless Maingate and Wireless Car at the time. I think most would agree that the ideas were great but it was far too early since technology, networks and services where not ready enough to fly.

GSM was developed to support packet switched data communications (GPRS) but a quite well hidden secret is that GSM also supports the circuit switched data communications (CSD) used in the traditional fixed phone networks (PSTN). CSD made it possible to move terminals from PSTN to GSM-networks which still is an attractive approach in networks where CSD is enabled. Typical usage has been encrypted phones and mobile fax. Still today this is an attractive way to move fixed terminals to a mobile network to save money, add flexibility, enable wireless offices or to enable fixed line operators to remove parts of PSTN that never can be upgraded to broadband and/or don’t have subscribers enough to carry the infrastructure cost. There is an important  difference between moving an existing PSTN terminal to a mobile network and to replace an existing PSTN terminal with an IP-enabled mobile terminal. Reasons for moving terminals include taking advantage of made investments in products and education, a desire to make changes step by step and last but not least that some applications like fax is technically very difficult if not impossible to do over a packet switched network (like GPRS). On top of technical arguments are things like the need to call a place and not an individual. Mobile phones are personal and fixed phones often shared.

The PSTN networks are on their way to be replaced by mobile networks but the situation differs a lot from country to country. In Sweden TeliaSonera has started to take down PSTN in rural parts of the country replacing the subscriptions with mobile alternatives. At the same time subscribers leave their fixed phone subscriptions behind and it was recently proposed that the concept of area codes are taken away to mirror the fact that the fixed phone is going away. The number of fixed line subscribers in Sweden are 2,5 million, almost half of ten years ago, compared to 13 million mobile subscribers. The concept of mobile one phone offices once invented by Spring Mobil in Sweden is now very popular in Northern Europe. By moving the switch to the network and removing the fixed phone infrastructure companies save a lot of cost and increase accessibility and flexibility. But the fixed infrastructure was often used also for other things that has to be taken care of including fax, door opening systems, conference phones, alarms and franking machines. I think the one phone offices will continue to spread and this will be the single biggest market for moving terminals from PSTN to mobile networks over the next couple of years. But it has to be underlined that it is not a simple thing to do since both fixed and mobile networks behave differently and many of the fixed network devices use odd protocols for communication. Most difficult of all is fax since it uses a very sensitive protocol.

In developing countries we often see fixed networks with limited coverage and mobile networks gaining momentum due to speed and cost of deployment. Most of these networks are still 2G and in combination with extensive use of paper mobile fax is a popular CSD application. But generally speaking I think GPRS will be the predominant connectivity method for M2M applications in developing countries many years ahead.

Moving devices from PSTN to mobile networks is an important part of the M2M industry. Since it seems like nobody has good enough data on the size of the M2M over PST market I would appreciate any data you could share with me on connected machines to PSTN and I hope one day to be able to share a decent overview helping us all to address this part of the M2M market which I often refer to as the narrow band data opportunity.


Traffic and Transportation

November 19, 2011
Traffic and transportation has what it takes to become an enormous market for M2M solutions. Many types of vehicles in separate complex systems utilize dedicated or shared infrastructure providing services to governments, enterprises and individuals. All individuals and organizations in the world utilize the transport systems directly or indirectly on a daily basis and are directly impacted by how well it works. The combined turnover of the transport systems is astronomic and saving a fragment of a percent here and there makes enormous impact.The three key promises for M2M solutions – sustainability, safety & security and efficiency– are all very relevant in the transportation systems. Vehicles consume a lot of the energy and create a lot of the problems in the environment. Transportation systems are important or critical infrastructure and traffic kills and injures a huge amount of people every year. Efficient transportation systems brings efficiency to individuals and organizations which impact wealth and quality of life for people as well as good business and investment climate for companies. Efficiency also enables the public sector to do what they are supposed to do with fewer resources.

ITS – Intelligent Transportation Systems– is a “vision” for how the complete transport system should look like, identifying key questions and priorities, standardizing language and interfaces, sharing best practices and so on. It has been under development since many years in national, regional and global ITS organizations. Even though ITS brings more questions than answers and continuously undergoes change it serves an important role to pull forces together behind a common objective, across industries and boarders. It becomes in a way a loosely connected research effort with people and organizations from both public and private sector focusing on different parts of the universe while getting influence and ideas from other parts. This “structured sharing in a common framework” is a good approach for innovation in the Internet era.

Transportation systems are historically divided into separate systems for each type of transportation: rail, air, road, etc. Due to organization and responsibilities the different systems are rarely synchronized. In order to build a transportation system that delivers what we want, we need to take on a holistic approach and make the individuals part of the system. If I have a choice between taking my car to a customer meeting or a combination of bus and Metro, I need a complete and real-time comparison of these alternatives delivered on the device I currently use at the time for my decision. Tickets and payments has to be easy to deal with not to prevent least resistance choices.

The only possible way to reach a smart, efficient, convenient, secure, safe and environmentally sound transportation system is to connect vehicles, infrastructure and people together and then put a lot of computing on top. This is a massive task which will create an ICT business opportunity in the size of a new Internet over the next decades. And this is why Transportation is one of the most interesting fields for M2M solutions.


Welcome to the Connect Compute Blog

November 11, 2011
With over five billion phones in mobile networks the mobile industry is looking for next growth area. It seems easier to fuel growth from a lot of new subscribers than developing the current customers and once again the good old idea of connecting machines is brushed off. The idea is as good as last time M2M was hyped, but now relevant technology, networks, services and systems are in place. And on top we have a reference: the governments push for connected electricity meters. The mobile industry players powerful marketing machines are pushing the news. Industry collaboration and M&A efforts are used by the players to position them nicely. Journalists, analysts and conference organizers are already up and running and everyone is repeating Ericsson’s mantra: 50 billion connected devices by 2020.

The power of connecting things and adding intelligence on top is immense and well proven. The telephones, the fax machines, the local area networks, Internet and the mobile phones are all great examples and the inventor of Ethernet, Robert Metcalfe, expressed this in Metcalfe’s law around 1980: the value of a telecommunications network is proportional to the square of the number of connected compatible devices. M2M is just another name for the same thing provided computers, not people, add the intelligence on top. To connect and compute is a generic approach to solve problems in almost any market or situation. Adding wireless connectivity to the equation obviously enriches the toolbox and addressable market a lot.

But this is not new! Already when the analog modems were invented to establish circuit switched data connections over the traditional telephone network, people started to connect things like vending machines, alarms, elevators and recycling machines to save money, speed up processes and increase competitiveness. I have been looking for years to find an estimate of how many M2M devices there are in the fixed line telephone network (PSTN) but never succeeded finding any. But having a company specialized in moving fax and other terminals from PSTN to mobile networks around the globe I am finding new types of devices in PSTN over and over again. And operators selling mobile office solutions or removing parts of PSTN all know what I am talking about from their own experience.

Last time M2M was hot in the middle of the Internet bubble some ten years ago, I was among the investors and could just conclude as so often – timing is all. In retrospect it was quite naive to believe in major M2M roll-outs when individual SIM cards still were sent out by the operators in envelopes.

So what makes me think timing is right now? The short answer is that I believe everything needed is in place with good enough functionality and pricing and some of the absolutely biggest and universal problems of today – security, safety, sustainability and lack of efficiency – all require machine-to-machine solutions to be resolved. The solutions will come from connecting things primarily to wireless networks and adding computing power on top. The M2M industry is already aggressive and media amplifies. But new technology never takes off before customers can identify the value of the technology in their own business. This is why I just started B3 Connect Compute (B3CC) – a network and technology independent consulting company specializing in helping potential users of M2M to identify key challenges to their business which M2M solutions can help take care of. Since most of M2M solutions has to do with systems and integration I started B3CC together with the Swedish IT consulting company B3IT Management. That gives us the ability to also design and implement the complete solution. We simply hope to show the way towards the huge potential M2M market by successful deployments of M2M solutions. Since the M2M industry is pre-mature B3CC also provides a full portfolio of services to the industry players as well as actively contributes to the creation and promotion of a well working M2M ecosystem.

The Connect Compute Blog is my contribution to keeping the rapidly developing M2M community together and up to date. It’s an informal personal ad hoc summary of my most recent findings, views and thoughts. I do my best to make reasonably frequent updates and try my best to answer to comments and keep it alive. It’s based on what to the best of my knowledge are facts and my intent is only to contribute not damage.


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