Machine-to-Machine (M2M) enables all types of devices – from utility meters to cars and home appliances – to be connected and Internet-ready, reducing the cost of management, enabling faster repairs and offering a platform for innovative consumer services, such as prepaid, pay-as-you go car insurance. The range of M2M applications is impressive and the impact these applications are having on our daily lives is huge.
At last week’s M2M Conference in Herzalia, Israel, an impressive line-up of speakers covered topics ranging from automotive to mobile payments to health applications and utility infrastructure. Listening to all the speakers, it was clear that three points are common throughout all M2M applications, regardless of industry. They are scale, efficiencies and potential for additional streams of revenue.
When I entered the mobile market nearly a decade ago, I was overwhelmed by its scale and size. No other item, device or appliance ─ be it cars, televisions, routers or PCs ─ are sold in as many numbers as mobile phones. But now the scale of numbers being predicted for all connected devices across markets dwarfs the mobile market. According to statistics presented at the conference, Intel reported that 5 billion people are currently touched by connectivity, with more than 15 billion intelligent connected devices by 2015 generating more than 35 trillion gigabytes of data by 2020. According to Machina Research, in the utility market alone 1.5 billion smart meters will be deployed in 2020, 370 million of which will be using a cellular connection. According to Analysis Mason, across markets there will be more than 2 billion cellular connections. For every one mobile device that we have in our pocket we will touch more than one dozen connected devices throughout the day. The potential for change in the way we make decisions is immense when you consider that all of these connected devices will be sending and bringing information to us when and where we need it.
The second point that was prominent in all of the presentations was the efficiencies that M2M will enable in all markets. In the utility and energy market the European Union has set 20/20/20 goals for 2020. The goals are to cut greenhouse gas emissions by 20 percent from 1990 levels, increase renewable energy usage by 20 percent and cut energy consumption through improved energy efficiency by 20 percent. Machina Research predicts that accurate automated meter reading will save the U.S. utilities companies $20 billion in 2020. According to Harbor Research, dispatching a service technician to an M2M device location can cost $500 or more per visit for a device with an average ARPU of only $10.
My presentation discussed the transition of managing M2M devices to managing M2M services. My main message was that while the need and benefits achieved from remotely managing devices is becoming clear to all device manufacturers, there are additional opportunities for the device manufacturers’ customers – consumers and enterprises – to subscribe to services enabling them to independently manage their own device applications. Several audience members confirmed that the management of device services is trending upwards.
This business model targets manufacturers that are developing enterprise devices, specifically productivity platforms, including ruggedized tablets, point-of-sale kiosks, warehouse management devices and more. These platforms run customized applications that evolve over time, many times during the 8-12 year lifetime of these types of devices. Supplying the device and a solution that enables the customer to manage their own customized application is a competitive advantage that Red Bend forecasts will become the norm, much as it has in traditional enterprise IT.
The Internet changed our lives in the 90s. In the past 10 years mobile has again changed our lives, and by 2020 our lives will be changed yet again with billions of devices that we use everyday being connected to the network, making intelligent decisions based on information available from other connected devices and making our lives better.