Machine-to-Machine: The Future of Business
The mPower M2M Summit held at the Westin Bayshore February 7th brought together technical and business professionals alike. The event discussed the current state of the Machine to Machine market and the future M2M technology will bring. With many current market leaders presenting at the event there was much to learn from.
It was common opinion that the market itself is still in its infancy. However, with the emergence of mobile capabilities and other new and advanced methods of connecting devices, it’s ready to spread through the market and influence future business models.
The M2M Market
The M2M market is already greatly diversified affecting everything between retail to healthcare. The nature of M2M means that anything can be connected creating a tremendous amount of potential but a lot of technical complications moving forward.
In 2011, there were 35 million cellular units connected which is expected to almost triple in 4 years projecting 95 million in 2015. In the midst of a weak economy, the M2M market has increased its total network connections by 25 million in the last 2 years to a total of over 75 million. In 2015 this is expected to grow to about 190 million. The numbers are staggering, but size is only part of what constitutes a market.
The M2M market is divided into 3 broad segments: after market, regulatory, and OEM/Line Fit. The after-market segment consists of things not originally intended to be connected with other devices. They will typically already be in the market and to connect them is expensive and somewhat labour intensive. An example of an after-market product is a vending machine. Regulatory are products that are mandated to be installed. If for instance each new car had to have a breathalyser on it to track drunk driving, it would be a regulatory M2M product. What makes this segment unique is that it is both obligatory and is installed during the manufacturing process. OEM/Line Fit is similar to regulatory but it is done voluntarily by businesses to provide some extra benefit or create efficiency. Currently, the largest of these segments is after-market but the largest potential of growth within these segments is OEM/Line Fit as it can act on endless amounts of markets.
A Business Approach to M2M
This large potential and growth has not gone unnoticed by budding entrepreneurs and businesses with an extremely long list of M2M solutions providers currently in the market place. It’s an unlawful time in the market with a lot of competitors vying to come out on top. For businesses wanting implement an M2M add on to their products this means that choosing the right partner alone is a task to be carefully planned.
What is important to understand when implementing a M2M product is that it is an extensively coordinated operation involving multiple parties and a wide range of factors. In order to navigate through the undertaking it is important to ask key questions:
1) Which parts of the M2M product will be done in house and which will be outsourced?
2) Will the product be sold under the current companies name like Ford Sync, or be implemented by a third party like OnStar?
3) Will it be 2G, 3G, 4G, or another source of connection that will drive the product? Take into account the cost of data and the availability of technology in different regions.
4) Should the compatibility of the device be limited to one or two other platforms or as broad of range as possible?
5) What are the costs associated with the implementation of each decision?
6) What are the revenues expected to be generated with different business models?
7) Will the product/service be provided locally, in rural areas, cities?
Already the implementation of a simple M2M product has shown great amounts of variables. With the constant integration of different networks with one another, a rising concern is that of security. With the data being collected by M2M products and so many companies involved in providing and processing this data it is getting harder to ensure a safe reliable network.
Starting with the complete evaluation of business goals and technical consideration should determine the partner you will work with.
The Future of Business
With so many variables, hurdles, and concerns when implementing a M2M system it’s hard to think that it would be worth all the trouble. However, M2M can provide so many great benefits but it requires some innovation. Some of examples of the way M2M has been utilized are remote energy meter readers, bridge toll devices, and remote medical monitoring. The possibilities are endless within customer service, service providing, monitoring, and many other applications. MRI machines charging on a per use basis has created a completely new business model. The nature of how MRI’s are bought and maintained has completely changed.
M2M is a B2B driven market that has great reason for optimism. In the future, the connections between devices can be unbelievable. However, moving forward it is important to look at M2M in a holistic point of view, seeing it as only a technology that enables businesses to provide greater value to customers or efficiency in their business. With most emerging technologies, businesses may employ them for no reason other than everyone else is doing it. The most important factor to consider with M2M is what value will be added to either your customers or your organization.
