M2M enables new business models

March 30, 2012

This post was published on M2M Daily March 15, 2012: http://www.m2mdaily.com/m2m-editorials/m2m-enables-new-business-models/

Many industries end up in the huge global market with ever increasing competition putting immense pressure on cost, performance, functionality, service, etc. One approach to change game plan is to change business model from selling products to selling functionality. Something-as-a-service and pay-per-use are concepts along those lines. It is likely that clients in general prefer such offerings since it feels fair to pay for use, it feels good not to have to take care of product problems and in relevant cases it’s great not even having to host or see the products. For vendors it is easier to manage manufacturing, production and service if they own the products, they improve R&D since they get to know everything about the product life cycle but they will get their revenues distributed over maybe 34 to 60 months instead of up front. That is horrifying and require a lot of change to any company going down this path.

M2M is a key enabler to business transformation. Today we can connect products to the vendor’s relevant systems for planning, maintenance, financial reporting, invoicing, support, etc. From a technical point of view this enables change of business model to for example a pay per use model. Since we can monitor, control and manage the products remotely we can constantly improve everything that relates to the product during its life cycle including preventive maintenance, tune for more efficient energy consumption, decrease downtime due to alarms, make software upgrades over the air, etc. These are obviously relevant benefits also with a traditional business model but the point is that with full control of a product through out its life a service oriented business model looks more attractive.All of this is pure technical and no one should underestimate the complexity from a business, organization, systems and management point of view to make changes like this. But still, M2M makes it technically possible today.

We see an increasing number of cases where companies connect their products but it is most often to improve a specific thing like maintenance. And the risk is that the technical implementation works for the purpose but can’t support  the next request coming up somewhere else in the company. It is still quite rare that vendors also change the business model but there are interesting examples of companies who do. Innovative business models seem more for newcomers than for established businesses. If it ain’t broken, don’t fix it! Well, if it is a good idea someone will do it and it might be disruptive.

I would argue that now is the time for companies to start look into these things. Keep an eye of what competitors and players in adjacent industries does, start play with ideas of what we could do if we connected our products and what the results would be. And most importantly, if you decide to get going, ensure you build a solution supporting needs you might have over the life time of the products.


Services Enablers key to successful M2M deployments

March 23, 2012

A key challenge for the M2M industry right now is to enable time and resource efficient development of specific M2M applications to industries or even companies. As soon as the interesting devices are connected in a proper way, data needs to be collected, organized and combined with other relevant data in order to provide useful information to new or existing applications. Devices need to be monitored, alarms have to be taken care of and maybe even transfer of money needs to be handled. This is what is done in M2M Services Enablement systems – the key to successful M2M deployments.

The Services Enablement systems can be deployed in three different ways: as extensions to operator connectivity offerings, as independent services from a third-party or as an in-house service to support M2M initiatives. It seems obvious that devices in many cases will be connected using a mix of technologies which further complicates this issue. It is my experience that we always end up in different communication technologies for wide area networks, local area networks and personal area networks/short-range communications. And even though wireless most often is preferred when feasible, also fixed networks will be used onwards. Needless to say, it is challenging to build a Services Enabler solution and to choose which solution to use in a specific situation.

We need to make it easier for potential customers to understand and decide which type of solution to use in order to accelerate deployments of real M2M solutions. Six Swedish companies just joined forces under the name of “Swedish M2M Service Enablers” in an ambition to start work together on educating the market on the importance of Services Enablement solutions and to try establish some common language and even APIs. The collaboration is also an attempt to market the companies to customers and partners abroad. Please visit http://www.swedishm2m.se to read more about the initiative or take a look at the press release issued today at http://www.mynewsdesk.com/se/view/pressrelease/swedish-m2m-services-enablers-initiative-launched-to-jointly-promote-swedish-companies-with-world-class-solutions-744720

Walking in the customer’s shoes

March 8, 2012
This post was published on M2M Daily February 23, 2012: http://www.m2mdaily.com/m2m-editorials/walking-in-the-customers-shoes/Mobile
M2M is back again with more support than ever. One difference from the last attempt is that now the M2M market is quantified back and forth. Another difference is that we have a huge amount of smart meters rolled out or in the process to be.

In the rear we have Ericsson’s 50 billion devices thunder roaring. And closer to the market we have analysts looking down the different verticals and mobile operators working to position themselves well now when the race is about to begin. Media sings the M2M song loud and clear and many M2M conferences, newsletters, blogs and web sites are in place, which wasn’t the case either back then, ten years ago.

I believe it is time for mobile M2M now and base my view on three things:

1) it is a great idea – connecting things and putting computing on top can help us sort out a lot of challenges

2) we have what it takes to get going – technology, services and know-how is in place and affordable now

3) we can’t do without it – efficiency, safety and sustainability are the three key promises of M2M and these issues are on the serious agenda in all countries and organizations around the world

We are still missing things like a solid standardized service layer to make application development for the very complex and fragmented market more efficient and scalable but even without that, we have what it takes to get going today.

But even if everything looks fine I see a potential risk to the M2M project. The messages come very much inside out, from the industry to the market. Still we know that nothing happens until people understand what technology will do for them and their business. Some organizations have used mobile M2M to resolve issues despite the complexity and cost involved and I must assume the reason for that has been that they saw obvious and big benefits thus an attractive ROI. But in most cases this is not obvious and that is something we in the industry have to resolve by more interaction with potential clients directly and through extensive partnerships. More outside in. When we look at our selves we know that most of the maybe 100M M2M SIM-cards activated today are used in electricity meters pushed by politicians and in eReaders and other “big phones”. We have to work harder and smarter to address the more complex and fragmented “real” M2M market where ROI is king and the potential is enormous.

Mobile World Congress 2012

March 5, 2012

Mobile World Congress 2012 is over and to me it was a busy congress without any exciting major themes or news. Nobody is using Bluetooth headsets any longer, most exhibitors used apps on pads and smartphones to visualize what they deliver and the expected grand return of Nokia never happened. Among the most interesting things were Mozilla’s Open Web Devices – a mobile open source os built-in html5 – and Wireless Power Consortium with their prototypes.

M2M was presented, discussed and promoted almost everywhere but it was more the presence of M2M at the congress than what was demonstrated that made impact on me. Once again there was a Connected House filled up with consumer products connected to Internet and a couple of cars outside. The Embedded SIM was demonstrated by GSMA in partnership with Gemalto and Giesecke & Devrient and it was cool to see over the air provisioning of operator credentials in action. This ability to change mobile operator over the air will make life easier for owners of M2M installations and vendors of connected things.

The take-a-way from MWC 2012 was the M2M momentum in the industry. Nothing surprising yet good to see. I heard statements like “M2M is one of the few growth areas we are investing in” over and over again during the week. It feels like M2M is here to stay now.

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