The M2M Service Enablement space is heating up

September 5, 2013

1102_web-header.inddWe have already gone from connectivity focus to focus on operational value: faster, cheaper, greener, safer and so on. Pain and results are easy to quantify and ROI calculations fairly straight forward. But the actual development of the solution requires a M2M Service Enabler to become affordable to develop and maintain. This is old news together with my mantra: “data is the gold of M2M“. But it is interesting to see that the service enablement space is heating up.

To start with, my Swedish M2M Service Enablement alliance just said welcome to member number 14 and all Swedish mobile operators but 3 are sponsors. The members in general report growing interest and business as customers are becoming educated and ready to move. Next week 12 Swedish M2M companies will join me going to Düsseldorf as bilateral partners to the M2M Summit where we have a common stand and speaker slots. That is more M2M service enablers then ever participating in an international M2M event arrangement I have done up until now.

Earlier this week Telit announced their acquisition of ILS Technologies for $8.5m cash and Telenor Connexion the purchase of technology and IPR from Iowa. Both ILS and Iowa are M2M Service Enablers! Increasing M&A activity in a segment is always a sign of market consolidation and a result of executives being convinced that they know where the industry is going and where they want to be. I expect many more M&A deals with M2M Service Enablers involved over the next year or two.

My key advise to M2M Service Enablers remain: focus, focus, focus. As the M2M business becomes glocal you will meet competition from a lot of places and players. But customers only see two or three players in any given industry or niche.

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M2M – a glocal business!

June 29, 2013

Parking in NiceWhat more does it take to make M2M aka Internet of Things – everything or some things – happen big way? Let’s revisit the key components again. Data is the gold of M2M and the winners will be those who best utilize the data captured. Integration of data in existing business systems and processes is key to maximizing the value. Distribution of information through relevant channels and to terminals of users choice, using open api’s and gorgeous human-machine interaction is required for the applications to be used. Generic Device Control platforms on top of service providers networks together with Specialist Service Enablers are required to make it affordable to develop and maintain applications for clients of all types. The winners in Service Enablement will be the ones who understand the data they are dealing with and due to the huge amounts of industries and functions to be served Service Enablement will be a very fragmented part of our industry.

I see most of this happening now and our industry is definitely developing fast. We are in the teenage stage already with clients moving from thinking and talking to doing. From Powerpoint to pilots. There is absolutely no better way to understand what happens if one connects things than actually connecting some things to play around with. And there is no better way to go for that than to contact a Specialist Service Enabler who has most things ready. Connecting things and collecting the data in the cloud was good enough 1-2 years ago when technology was the key challenge. But today the challenges are mainly business centric why understanding the context of the data is key to succeed. This is why Specialist Service Enablers is the right choice when it is time for a pilot or proof of concept project.

But there is one major thing missing: Internet is global, ICT is a global business and Internet of Things will have to be global as well to prosper. Vendors and operators are working quite hard to make this happen which is great but it will take long time and they can’t make it themselves. Most organizations in the world are small to medium-sized and the software they use are mostly local or localized. Law, policies, culture, language, taxonomy, habits, taxation, religion, alphabet and friendship are examples of things that make people use local software. And it will continue to be like this for many many years. Since the data captured in M2M solutions should end up in business applications, maybe blended with data from public or commercial sources, we need what I call a glocal value chain. The global component is needed to drive economies of scale and enable international business etc. The local part is there to cope with the local requirements, to ensure proper integration in business systems and to engage integrators, consultants and developers locally bringing their clients with them.

Glocal value chains are always difficult to make work. But in our case, whatever we call our industry, I find it quite straight forward. The global part consists of operators (like Telenor Connexion) and their alliances (like GMA), Telecommunication vendors (like Ericsson and Telit) and international ICT vendors (like Cisco, SAP and Oracle who all have started to move now). Ever since Ericsson’s 50 Billion Devices statement this inside-out effort has been coming along quite well. The local part, i.e. developers, integrators, resellers and consultants, has in most parts not got going yet and therefore the small to medium businesses in general are in waiting mode or not even aware. Specialist Service Enablers constitute the missing link. Due to missing operator device connectivity services they have had to learn to deal with the connectivity layer directly. And the services they provide to customers in the industry they target is to a large degree useful across boarders. To me it’s clear: operator networks with device connectivity services together with Specialist Service Enablers interfacing to local developers and integrators is the way forward. The challenges are primarily commercial and practical, not technical. I am working with members of Swedish M2M Service Enablers in several projects along those lines and it looks very promising.


M2M in its teens – the industry is shifting gear

April 5, 2013
The M2M industry is rapidly leaving the first connectivity focused baby phase – thank god! – and enters the productivity phase. This is where we look at operational issues, capabilities and value. Vendors and operators are preparing themselves to be able to serve the market better and more efficiently. And new partnerships, alliances, initiatives and M&A activities pop up on a daily basis. This is all very good and makes life easier for developers, integrators and customers. But it is more about preparing for the business to take off than making it taking off. It mainly improves the capabilities to deliver in an efficient way.

Today’s initiatives are signs of a developing industry. Building blocks are put together into candidate platforms and architectures. As always most of them will fail over time but still it is an important part of growing up. Let’s look at a couple of recent M2M “teenager activities”:

  • Telefónica and Telit cooperate in M2M Air, providing managed M2M services globally
  • Etisalat group just joined KPN, NTT DOCOMO, Rogers Communications, SingTel, Telefonica, Telstra and VimpelCom in the M2M Multi-Operator Alliance
  • Ericsson and SAP announced a partnership at MWC and talk about the M2M Eco-system
  • Satellite operator Orbcomm acquired MobileNet who provides custom mobile data solutions for the heavy equipment and railroad industries
  • Wipro and Axeda announced a strategic alliance to provide services and end-to-end solutions to help organizations connect with any asset, leverage machine data to enhance business processes and develop new innovative enterprise applications.
  • TeliaSonera, France Telecom-Orange and Deutsche Telekom collaborate to increase the quality of service and interoperability for machine-to-machine (M2M) communications
  • Claro Brazil joins a growing list of Jasper Wireless operator partners including AT&T, América Móvil, NTT DOCOMO, Telefónica, VimpelCom, KPN, SingTel, Etisalat, Telstra, Rogers, CSL and more
  • Several operators including TeliaSonera, Swisscom, XL and have signed up with Ericsson to use DCP for improved M2M service delivery
  • AT&T has several M2M initiatives including AT&T Control Center together with partners like Jasper Wireless, Axeda, Sierra Wireless and SensorLogic.
  • Airbiquity and China Unicom are teaming up to provide telematics services for the Chinese automotive market
  • Vodafone Vehicle Connect and Towers Watson’s ‘DriveAbility’ programme will accelerate the pace at which insurers can get new services to market, and at a competitive cost
Looking at mobile operator subscriptions for M2M, the market continues to grow roughly 25-30% per annum. The number of cellular M2M subscriptions nearly doubled between 2010 and 2012 to reach 143.7 million according to Pyramid Research. They also claim China is growing over 40% per annum and will become the largest cellular M2M market this year. We should remember that a lot of M2M applications share cellular subscriptions or use other technologies to connect.

So operator’s M2M business is growing quite rapidly but from small numbers. In a fairly well-developed M2M market like Sweden, M2M subscriptions are roughly 20% of all mobile subscriptions today. But still most of the market potential is untouched. Policy-driven markets like smart meters, big global markets like connected cars and consumer oriented stand-alone solutions are all fairly well addressed. But small business is big business also when it comes to M2M, and these companies are only addressed by independent Service Enablers, developers, integrators and turn-key solution providers. The alliances, partnerships and M&A activities aren’t reaching that far. A company connecting 100 of their “things” per year in maybe 25 countries across the globe is simply of no interest to any of the large players. The same goes for ,a company who want to develop a specific application to connect 25 of their “things” in a country, unless they are filthy rich.

Success in SME will come from successful platform support for specialist service enablers, developers, integrators and turn-key solution providers. That has little to do with technical issues and a lot to do with trust and business models. This has to be resolved before M2M will grow up.


Utilities and M2M

December 27, 2011

Utilities normally come up first when talking M2M. Primarily electricity but also water and gas. It’s huge global businesses and infrastructures dealing with things that are closely related to the sustainability issues as well as safety and security, everyone on the planet including politicians are involved one way or another and on top it’s one of few areas where M2M solutions already have been used in large scale. Many utility companies have telecommunication business experience which makes them knowledgable buyers.

Smart Grid is the white paper or vision for how the electricity industry will cope with the new world where production, distribution and consumption of electricity is managed in real time all around the grid and where usage is optimized over time. The basic idea is to connect everything and add computing on top. If the smart grids happen we are looking at a new industry of “Internet size” in 30-50 years which has made many large corporations starting to dig there already.

Given the limitations of our globe it is obvious that we have to do something and I am convinced “connecting and computing” is a major part of it. But the scale of the project means it will take a lot of time, financing has to be sorted out, concepts and solutions have to be proven and so on, which explains why we still see primarily pilot projects and trials. And when it happens big way, most of it will be a game for large players with big projects and thin margins like most infrastructure business.

The first step towards the smart grids are connected electricity meters for automated meter reading (AMR) and we are in the middle of that huge roll out project right now. Global shipments of smart meters exceeded 100M 2011 and is estimated to be 250M by 2016 (ABI Research). EU wants 80% of the meters to be smart by 2020 and Italy and Sweden are already done. North America has already more than 50% meters connected (Berg Insight) after the American Recovery and Reinvestment Act (ARRA) which included US$ 43 Billion plus tax incentives for the energy sector. Also Asia is speeding up their efforts with Japan having the most advanced power grid monitoring systems in place, China announcing a five year AMI plan, Singapore working on their Intelligent Energy System and South Korea their Smart Grid Demonstration Project. Some 1,5B smart meters will be deployed during the next 10 years and meter manufacturers like Landis & Gyr, Sensus and Itron and communication module providers like Telit, Cinterion and Sierra Wireless are all working hard to capture this big business opportunity. But since the traffic per smart meter is tiny (probably less than half MB per year) it is not obvious that the smart meters is the salvation for network providers. A mix of different technologies is used to connect the meters to the central applications. Reportlinker estimates 38% of M2M connections in the utilities industry today to be cellular connections growing to 57% by 2020. MAN, including power line communications (PLC) and community WiFi, accounts for 53% today and is estimated to 28% by 2020.

Even though energy companies and governments are keen on rolling out smart electricity meters some consumers are not. Several US consumer groups like in Naperville, Illinois, are fighting the smart meter roll-outs in order to give the consumers the option to stay with the old meters. But more often consumer groups are pushing smart meters to put the consumers in control.

Replacing meters for electricity, water and gas with smart ones is only the beginning. Making the grids smarter will require a lot of relevant networks and IT systems to be made available. The grids are also part of the national critical infrastructure protection efforts why I believe we will see governments getting very much involved in how to build, operate and protect this infrastructure onwards.


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