What difference does an operator M2M alliance make?

December 23, 2013

GMAMobile operators are working hard to formalize alliances for the M2M market. Global M2M Association recently added Bell Mobility and Softbank to the team of collaborating operators. The other GMA members are TeliaSonera, Deutche Telekom, Orange and Telecom Italia. The M2M Multi-Operator Alliance just re-branded themselves to M2M World Alliance and includes SingTel, Telefonica, Etisalat, NTT Docomo, Rogers, KPN, Telstra and Vimpelcom. The aim is to provide something like a similar customer experience across the covered countries, making the alliance brothers and sisters look attractive to customers and partners.

This sounds easy, obvious and becomes a way to compete with the really big players like AT&T and Vodafone. But reality bites. Even if they all use a very standardized network it is very challenging to bridge national, cultural, strategic, technical, operational, practical and political differences between the large organizations and countries involved. And on top, most M2M business is and will remain local. The devices are in many cases fixed why roaming is less of an issue. One can argue that by collaborating with colleagues operators will learn from best practice and further down the road they might make collective decisions on systems to use etc. That would be good but not really so much benefit for the M2M customers as for the operators themselves.

Another way of looking at it would be that as long as these efforts circles around connectivity and related services like billing, support, certification and device monitoring chances are realistic that they could be fruitful. However, the value delivered would be difficult to charge for since customers expect this to work already. And having operators to collaborate on industry specific solutions with increased revenue potential seems less realistic. And as long as all territory isn’t covered the common facade will need odd additions to give some customers what they are looking for. Yet another challenge to the alliance concept is all M2M solutions using other connectivity than the cellular networks. And even worse, it’s obvious that most solutions will use a mix of connectivity and the mix will change over time. Mobile operators have almost 200M M2M subscriptions in use by now and the growth rate remains 25-30% per year. But there are a lot of devices connected using other fixed and wireless technologies. A quite common estimate is that some 10% of the connected things will have a SIM card.

Don’t get me wrong: I really like the airline alliances and appreciate the efforts undertaken by the operators to collaborate. But I don’t think these efforts will change the destiny of M2M in any substantial way.


M2M enabling efficient marketing

December 11, 2013

Evian DropCompanies are investing a lot of money year after year to communicate with their customers and influence their perception of their company and brands. The budgets are there basically to sow for future sales and they remain on the same level year after year measured as a percentage of sales. The ever-increasing challenge is the growing number of channels to be used, and the constantly changing relative importance of them. But the best channel by all means has always been the product itself. Customers who buy it has it and use it often for a long time. People around them might see them using it. Satisfied users as well as dissatisfied users are happy to tell others about their experience.

All of this is well-known facts. But what is less known is that it has become realistically possible to establish a continuous dialogue with the products and also the users of them depending of what product it is, by using modern M2M or Internet of Things technology. Examples of products that often are connected already are: trucks, electrical meters, cars, alarms, vending machines and coffee machines. They are typically connected for operational benefits like being able to tell the truck driver to go to a service facility and depending on where he is propose which one, for electricity companies to measure and report consumption almost in real-time, for vending machines to understand when it’s time to go there to fill it up and better schedule the service route, for coffee machine rental companies to change recipes over the air and for alarm companies to get the alarms automatically. This is all fine and the normal first phase of an M2M investment. Operational value is easy to realize and make ROI investments on thus easier to get project approval and budgets for.

As we all know by now: data is the gold of M2M. And with these things connected we can gather and interpret the data from the connected things and start use it to create strategic value. Examples could be that the owner of the truck could measure how drivers actually drive, provide training to them and become a more sustainable company, the electricity company could offer customers better price off-peak hours, vending machines would get decision support from real data to know what products to have on weekends and warm days in different parts of the country and to use dynamic pricing, coffee machine companies could tune the choice of coffee for different seasons and learn customer’s coffee drinking habits and the alarm companies could add new adjacent services to their alarm infrastructure to become more competitive. All these things are examples of how the collected data could be used to add brand value, competitiveness, customer loyalty, innovation and attractiveness for employees, etc.

We are in the teen-age of M2M aka Internet of Things and many companies have started to connect their things, mainly for operational reasons. But it is still very rare to see companies using the data to create strategic value. Most consumer goods is not connected and if it is, there is no organized use of the data collected. Most professional equipment isn’t connected either and if it is, the data is rarely used in an organized fashion to create strategic value.

But this is about to change and I think we will see a lot of new examples in 2014. A number of new relevant ways of connecting things are available including the power-efficient and very small Bluetooth 4.0 chips with innovative solutions like iBeacon, networks optimized for connecting millions of autonomous things like Sigfox and a host of different ways to associate real life things with an avatar on the Internet like QR-codes, smart cameras, RFID and innovative solutions from companies like Evrythng.

This isn’t about technology. It is only when clever strategists, progressive marketing directors, creative advertising agencies, determined product managers and innovative business developers really understand what is practically and financially possible today that true innovation beyond operational value creation starts to happen. Interesting examples of creative customer communication through products could be the Evian Smart Drop, Volvo’s On Call app enabling their B2B+B2C model and Apple’s recent launch of an iBeacon based service in all 254 Apple Stores in the US.


No news is good news – M2M will remain fragmented!

December 5, 2013

gold-bars-3Data is the gold of M2M! This remains the most important thing to keep in mind when trying to understand where the industry is going. When collecting the data from sensors and sub-systems of all sorts, we need to understand the context in order to turn the data into useful information. Data analysis without understanding the context opens up for poor conclusions and decision-making down the road. No news here! The value of the information created appears when the information is properly integrated into business systems, decision-making systems, etc. No news here either!

The good news is that the need to understand the context for the data collected and the fact that value materialize when the information is integrated into ERP systems, processes and decision-making systems clearly points towards a fragmented market with successful players focused on industries or functions. Good news is that this is how the software industry has been structured for years. And efficiency is achieved by generic platforms, tools and API:s which specialized applications can utilize.

Since M2M will have to become an international business to benefit from scale this brings us a “glocal” value chain like this: customized or specific software provided to customers by local integrators, resellers or consultants working with specialized international M2M Service Enablers. Software used is based on generic platforms, tools and API:s – this is where Oracle, IBM, Microsoft, SAP and others come in. And the M2M Service Enablers are agnostic to devices and connectivity. And sensors are provided by a variety of specialized companies. 

Voila!

So which conclusions could we draw? The three most important conclusions to me are that:

  • M2M Service Enablers need to be agnostic to connectivity and device
  • there are many M2M Service Enablers in each country today and only the ones who are really specialized, context aware, will survive when it becomes an international market
  • generic software companies as well as connectivity providers need to figure out how to work with the best M2M Service Enablers

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