A market opportunity


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  • I wish I had the answer to these questions. Like everybody else, we don’t know exactly what’s going to happen, or when, or how. But, I can tell you that we do believe that there’s plenty in it for the consumer. And, Orange is determined to be a major player. We’re also determined to find out for ourselves, and we’re playing our part in testing and developing technology, including in the home networking area, to do so
  • A market opportunity

    1. 1. M2M & Telematics A market opportunity M2M System Telematics Consultants
    2. 2. <ul><li>Lars Odlén </li></ul><ul><li>MSc, MBA </li></ul><ul><li>20 years in product & process development </li></ul><ul><li>8 years of wireless M2M </li></ul><ul><li>Led M2M developments in several industries </li></ul><ul><li>Extensive international business experience </li></ul>M 2 M System Telematics Consultancy
    3. 3. What happens in the wireless world ? M2M System Telematics Consultants
    4. 4. Voice market saturates M2M System Telematics Consultants
    5. 5. Churn increases M2M System Telematics Consultants
    6. 6. ARPU decreases M2M System Telematics Consultants
    7. 7. 3G mobile-phone woes The introduction of third-generation faces technical and financial difficulties. M2M System Telematics Consultants
    8. 8. P ass the painkillers DO MOBILE phones cause headaches? In the case of third-generation (3G) telephones, the answer is undoubtedly yes—even though nobody is yet using them. Instead, they are causing technical and financial pain for all the companies around the world that are trying to build 3G networks. The idea behind 3G was to offer subscribers exciting new features, such as video clips and high-speed Internet access, for which they would be prepared to pay far more than they now do. Operators have spent vast sums—around $125 billion in Europe alone—buying licences to enable them to offer such services (see chart), and have run up huge debts in the process. Building the networks will cost about the same again. It is a huge gamble—and one that is looking riskier by the minute. Th is has serious financial repercussions. Given the expense of the 3G licences and infrastructure, the operators want to launch their services and start generating revenue as quickly as possible. But the uncertainty has hit their share prices; and the debt burden has led to cuts in their credit ratings that have made it harder for them to raise money. Britain’s BT, for instance, was forced to sell prized Japanese and Spanish assets to Vodafone this week, to reduce the massive debts it incurred when buying 3G licences. BT, whose long-serving chairman, Sir Iain Vallance, stood down last week, now plans a huge rights issue that may further upset its long-suffering shareholders. Worse even than these cash travails, the initial projections of how much operators could expect to charge for 3G services now look highly optimistic. It has become clear that 3G will take far longer than expected to become profitable, so operators will sink deeper into debt along the way. Amid all this uncertainty, it is clear that it will be several painful years, rather than months, before 3G becomes widely available. Even if the operators can meet their debt burdens and build the networks, it is not at all certain that they will be able to make much money from them. Today’s headaches might then seem mild compared with those that are to come.
    9. 9. What the future might hold <ul><li>No market growth </li></ul><ul><li>SOW (Share of wallet) not increasing </li></ul><ul><li>All playes offer same </li></ul><ul><li>Mobile communication becomes a comodity </li></ul><ul><li>Mobile com just another utility </li></ul><ul><li>Customers wants more for less </li></ul><ul><li>Technology migration require heavy investments </li></ul><ul><li>ARPU likely to decrease </li></ul>M2M System Telematics Consultants
    10. 10. When the future looks uncertain, why not rely on the past - You have a GSM network - You have spare capacity M2M System Telematics Consultants
    11. 11. <ul><li>Additional revenues </li></ul><ul><li>Now </li></ul><ul><li>Without investment </li></ul><ul><li>Without cost </li></ul>Without investments M2M System Telematics Consultants
    12. 12. Your future subscribers might not be persons, but machines Telematics M2M System Telematics Consultants
    13. 13. By 2005 there will be more machines communicating than people NTT DOCOMO President Keiji Tachikawa For the UK market this equals +100 million £ per annum, at almost no marginal cost (1p/msg, 200 msg/yr) M2M System Telematics Consultants There is a finite number of people but An ever growing number of machines
    14. 14. growth in machines % of devices that will be communications enabled Source : Merrill Lynch, June 2000 M2M System Telematics Consultants
    15. 15. total projected market penetration 41% 57% 72% 93% 118% 142% 171% 284% M2M System Telematics Consultants Voice Telemetry & Telematics Data
    16. 16. recognising the opportunity <ul><li>within the next ten years, telemetry in its various guises will reach into all areas of industry i.e. food, retail, leisure engineering and transport </li></ul><ul><li>invasive as mobile voice currently is today </li></ul><ul><li>Eventually everything will be connected </li></ul>M2M System Telematics Consultants
    17. 17. a glimpse into the future <ul><li>telecom will pervade all aspects of life </li></ul><ul><ul><li>human to human </li></ul></ul><ul><ul><li>human to machine </li></ul></ul><ul><ul><li>machine to machine </li></ul></ul><ul><ul><li>machine to human </li></ul></ul>communication interaction transaction control <ul><li>building the connected world </li></ul>M2M System Telematics Consultants
    18. 18. What is Telematics <ul><li>The fourth phase of the IT revolution </li></ul><ul><li>All devices communicate </li></ul><ul><li>Geography becomes irrelevant </li></ul><ul><li>Enables ”Business in real time” </li></ul><ul><li>A Productivity driver </li></ul><ul><li>Drives re-engineering and new business models </li></ul><ul><li>A new tool for mankind </li></ul>M2M System Telematics Consultants
    19. 19. Computing End to End Wireless Telemetry solutions Internet Wireless Source Ericsson
    20. 20. Three phases of wireless <ul><li>Step one (in progress) </li></ul><ul><li>Extending existing systems and processes to the field. Nissan saves 40% on sales costs by giving wireless access to pricing and inventory. HBOC (drugs) reduced incorrect shipments by 80% through wireless in their warehouses </li></ul><ul><li>Step 2 (in development) </li></ul><ul><li>Re-engineering business. NTT DoCoMo increased vending operator’s profits 70% by introducing Cashless Payment . Teclion saved 50% of service visits by remote monitoring. </li></ul><ul><li>Step three (tomorrow) </li></ul><ul><li>Creation of new business models that would not have been possible without wireless </li></ul>
    21. 21. <ul><li>Understanding the market </li></ul><ul><ul><li>End customers </li></ul></ul><ul><ul><li>Intermediary </li></ul></ul><ul><ul><li>Competitors </li></ul></ul><ul><ul><li>Environment </li></ul></ul><ul><ul><li>Economics </li></ul></ul><ul><li>Understanding the application </li></ul><ul><ul><li>Value chains </li></ul></ul><ul><ul><li>Players </li></ul></ul><ul><ul><li>Change drivers </li></ul></ul><ul><ul><li>Enablers </li></ul></ul><ul><ul><li>Technical requirements </li></ul></ul>Sounds great, but how do we get to making money M2M System Telematics Consultants
    22. 22. understanding who has to be involved <ul><li>It's like a team </li></ul><ul><li>the different players and the interaction between them is referred to as &quot;the value chain&quot; </li></ul>M2M System Telematics Consultants
    23. 23. the value chain supplier systems integrator service supplier network operator end user M2M System Telematics Consultants
    24. 24. the value chain <ul><li>it's very complex </li></ul><ul><li>many interested parties </li></ul><ul><li>a lack of standards </li></ul><ul><li>specialists and ways of working are specific to particular vertical markets </li></ul><ul><li>however overall framework is similar in all markets </li></ul>M2M System Telematics Consultants
    25. 25. What can an operator do? Help others play !
    26. 26. Competitors Vending Security Automotive Automation Utilities M2M System Telematics Consultants
    27. 27. Opportunity Vending Security Automotive Automation Utilities Generic middleware platform M2M System Telematics Consultants
    28. 28. Business model step 1 End customers in various vertical markets Operator Solutions and applications providers Trough SI /AP M2M System Telematics Consultants
    29. 29. Business model step 2 End customers in various vertical markets Operator Partners The telematics wrapper M2M System Telematics Consultants
    30. 30. M2M System Telematics Consultants Telematics means <ul><li>New customers </li></ul><ul><li>Substantial volume growth </li></ul><ul><li>Low investment </li></ul><ul><li>Low uppkeep </li></ul><ul><li>High profit segment </li></ul><ul><li>Low churn </li></ul><ul><li>Broadening of Brand name </li></ul>
    31. 31. CASES Cases M2M System Telematics Consultants
    32. 32. Case Operator M2M System Telematics Consultants
    33. 33. M2M System Telematics Consultants M2M System Telematics Consultants M2M System Telematics Consultants M2M System Telematics Consultants
    34. 34. Developing a telemetry managed solution M2M System Telematics Consultants
    35. 35. <ul><li>What is the Orange Managed Solution? </li></ul><ul><ul><li>An end to end process for developing a new system </li></ul></ul><ul><ul><li>A Gateway to simplify the technical connection </li></ul></ul><ul><ul><li>A single point for customer support </li></ul></ul><ul><ul><li>Not restricted to a specific market </li></ul></ul>Overview M2M System Telematics Consultants
    36. 36. Components <ul><ul><li>Measures </li></ul></ul><ul><ul><li>Reads </li></ul></ul><ul><ul><li>Controls </li></ul></ul><ul><ul><li>Remote </li></ul></ul><ul><ul><li>Moving </li></ul></ul><ul><ul><li>Fixed </li></ul></ul><ul><ul><li>Existing </li></ul></ul><ul><ul><li>New </li></ul></ul>Device Modem Managed Gateway Software <ul><ul><li>GSM Radio Access </li></ul></ul><ul><ul><li>Uses SMS </li></ul></ul><ul><ul><li>GPRS and 3G in the future? </li></ul></ul><ul><ul><li>Connects applications to a telemetry devices </li></ul></ul><ul><ul><li>Converts SMS messages to XML </li></ul></ul><ul><ul><li>Buffers Data </li></ul></ul><ul><ul><li>Internet Accessible </li></ul></ul><ul><ul><li>Operated and Managed for Orange </li></ul></ul><ul><ul><li>Customer Specific </li></ul></ul><ul><ul><li>Back-end System </li></ul></ul><ul><ul><li>May be an ASP </li></ul></ul><ul><ul><li>ERP </li></ul></ul><ul><ul><li>Records </li></ul></ul><ul><ul><li>Controls </li></ul></ul><ul><ul><li>Co-ordinates </li></ul></ul>M2M System Telematics Consultants
    37. 37. Parties <ul><li>Device Integrator </li></ul><ul><ul><li>Connects the Device to the Orange Managed Gateway using a GSM Modem </li></ul></ul><ul><li>System Integrator </li></ul><ul><ul><li>Connects the Customer’s Computer System to Orange Network using the Managed Gateway and the Internet </li></ul></ul>Device Modem Managed Gateway Software M2M System Telematics Consultants
    38. 38. How does it work? Customer’s Data Centre Customer’s Remote Devices Customer’s Bespoke Software Sensors, GPS, etc
    39. 39. How does it work? Orange Managed Gateway Customer’s Data Centre Customer’s Remote Devices Customer’s Bespoke Software Managed Gateway Unix Middleware API Server Farm Sensors, GPS, etc Customer Support
    40. 40. How does it work? Customer’s Data Centre Customer’s Remote Devices Customer’s Bespoke Software GSM Modem + SIM Device Integration System Integration Sensors, GPS, etc Orange Managed Gateway Managed Gateway Unix Middleware API Server Farm Customer Support
    41. 41. How does it work? Customer’s Data Centre Customer’s Remote Devices Customer’s Bespoke Software GSM Modem + SIM Device Integration System Integration Sensors, GPS, etc Orange Managed Gateway Managed Gateway Unix Middleware API Server Farm Internet Orange Bill Customer Support SMS Telemetry Data (Compressed)
    42. 42. System Integration Device Integration Orange Telemetry Managed Solution will build on existing Orange Telemetry Offerings Airtime GSM Modem High Volume Messaging Orange Wholesale Telemetry Orange Telemetry Kit Orange Telemetry Managed Solution <ul><li>Wholesale Telemetry : Unbranded airtime via wholesale deals with Telemetry Service Providers. (Claire Betty) </li></ul><ul><li>Telemetry Kit: Orange branded modem and airtime (Roger Hill and Sam Mitchell) </li></ul><ul><li>Telemetry Managed Solution: Full lifecycle telemetry solution, including monitoring, integration, and hardware. </li></ul>
    43. 43. <ul><li>Reduced development time </li></ul><ul><li>Scalable, High performance messaging </li></ul><ul><li>Reduced message latency </li></ul><ul><li>No single point of failure </li></ul><ul><li>Removes complexities of modem hosting </li></ul><ul><li>Flexible, horizontal approach </li></ul><ul><li>Easy Migration path from SMS to GPRS </li></ul><ul><li>End to End monitoring and support </li></ul><ul><li>Base for ASP development </li></ul>Advantages
    44. 44. <ul><li>Orange will be a ‘One Stop Shop’ for new telemetry products </li></ul><ul><li>Reduced product development time </li></ul><ul><li>Quicker customer connection </li></ul><ul><li>Not restricted to specific industries </li></ul><ul><li>Easy Migration path from SMS to GPRS </li></ul><ul><li>End to End monitoring and support </li></ul><ul><li>Built using ‘Off the Shelf’ technology </li></ul><ul><li>Designed for the b2b marketplace </li></ul>Key Features
    45. 45. Case Lift service M2M System Telematics Consultants
    46. 46. What is the biggest saving in lift service? <ul><li>Not to visit the lift ! </li></ul><ul><li>Unmanned visits </li></ul><ul><li>Need based service intervals </li></ul><ul><li>Preventive maintenance </li></ul><ul><li> Reduces annual service visits by 50% </li></ul>M2M System Telematics Consultants
    47. 47. GSM based monitoring/alarm system M2M System Telematics Consultants
    48. 48. <ul><li>Emergency telephone </li></ul><ul><ul><li>Rapid connection </li></ul></ul><ul><ul><li>Automatic identification </li></ul></ul><ul><ul><li>Redial </li></ul></ul><ul><li>Service need </li></ul><ul><ul><li>Starts </li></ul></ul><ul><ul><li>Fault symptoms </li></ul></ul><ul><li>Statistic </li></ul><ul><ul><li>Customer reports </li></ul></ul><ul><li>Cost reduction </li></ul><ul><ul><li>Quick installation </li></ul></ul><ul><ul><li>No telephone line </li></ul></ul>ICU™ (Information Communication Unit) M2M System Telematics Consultants
    49. 49. M2M System Telematics Consultants IT system architecture Lift ICU GSM network Internet CRM system & db WWW publish- ing Firewall Call centre PSTN GSM Field Service engineers Customers WWW Reports WWW GSM data SMS WAP Alerts Reports Backreports Customer info Regional offices Head office SMS Voice Machine reports Customer IT system SMS server
    50. 50. Extranet log-on M2M System Telematics Consultants
    51. 51. Reporting M2M System Telematics Consultants
    52. 52. Alarm buttons pressed M2M System Telematics Consultants
    53. 53. Pop-up screens M2M System Telematics Consultants
    54. 54. SMS or WAP messaging Power lost at 12.32 on lift number 12345 Main street 123, entry B M2M System Telematics Consultants
    55. 55. Visit scheduling M2M System Telematics Consultants
    56. 56. <ul><li>Networking </li></ul><ul><li>Virtually present </li></ul><ul><li>Self managed </li></ul><ul><li>Empowered </li></ul><ul><li>Knowledgeable </li></ul><ul><li>Access to information and support </li></ul><ul><li>Quality built into the process </li></ul><ul><li>Need based actions </li></ul><ul><li>Producing result s , not time </li></ul>Tomorrow is already here M2M System Telematics Consultants
    57. 57. Service organisation Case lift service <ul><li>Doubled productivity </li></ul><ul><li>Reduced call outs to half </li></ul><ul><li>Increased customer satisfaction </li></ul><ul><li>Doubled profitability </li></ul><ul><li>Less churning </li></ul><ul><li>More motivated workforce </li></ul>Result M2M System Telematics Consultants
    58. 58. Case Gaming <ul><li>Problem </li></ul><ul><li>Cash shrinkage </li></ul>M2M System Telematics Consultants
    59. 59. Case Gaming <ul><li>Monitor cash box </li></ul><ul><li>Desired effect: No cash shrinkage </li></ul><ul><li>Side effects </li></ul><ul><ul><li>Uptime </li></ul></ul><ul><ul><li>Fetching profile </li></ul></ul><ul><ul><li>Games preferred </li></ul></ul><ul><ul><li>Cash handling cost </li></ul></ul>Solution M2M System Telematics Consultants
    60. 60. Transforming IT structures Case Copiers <ul><li>C ountries are pretty independent </li></ul><ul><li>The way they run service vary </li></ul><ul><li>Their IT systems also vary </li></ul><ul><li>We have left them alone as long as they made profit </li></ul><ul><li>But now the market gets tougher </li></ul><ul><li>And we need one IT system for Europe </li></ul>M2M System Telematics Consultants
    61. 61. Case copiers con’t <ul><li>The problem is that some countries are quite advanced </li></ul><ul><li>Sweden, for example, have an AS400 system that they have been developing for ten years </li></ul><ul><li>There is nothing on the market as good as that </li></ul><ul><li>So they would never accept a new system </li></ul><ul><li>But we need to change ... </li></ul>M2M System Telematics Consultants
    62. 62. Case copiers con’t Solution Existing country specific IT systems ASP Wireless interface Layer XML <ul><li>SMS </li></ul><ul><li>Alerts </li></ul><ul><li>Acceptance </li></ul><ul><li>WAP </li></ul><ul><li>-Back reports </li></ul><ul><li>-Spares ID & order </li></ul>New functionality Field service M2M System Telematics Consultants
    63. 63. Case copiers con’t Solution X Existing country specific IT systems ASP Wireless interface Layer XML <ul><li>SMS </li></ul><ul><li>Alerts </li></ul><ul><li>Acceptance </li></ul><ul><li>WAP </li></ul><ul><li>-Back reports </li></ul><ul><li>-Spares ID & order </li></ul>Service management system New functionality X X Call centre Web access -Customer handling -Service scheduling -Billing -Reporting X X FIELD FORCE M2M System Telematics Consultants
    64. 64. Case copiers con’t Solution ASP Wireless interface Layer <ul><li>SMS </li></ul><ul><li>Alerts </li></ul><ul><li>Acceptance </li></ul><ul><li>WAP </li></ul><ul><li>-Back reports </li></ul><ul><li>-Spares ID & order </li></ul>Service management system New functionality Call centre Web access -Customer handling -Service scheduling -Billing -Reporting Wireless PSTN LAN Web WAP e-mail e- fax CUSTOMERS EQUIPMENT FIELD FORCE M2M System Telematics Consultants
    65. 65. Telematics & M2M apply to every business M2M System Telematics Consultants
    66. 66. <ul><li>Increase profitability with </li></ul><ul><li>Telematics & M2M </li></ul><ul><li>260 page report, covering: </li></ul><ul><li>Forecasts </li></ul><ul><li>Business cases </li></ul><ul><li>Value chains </li></ul><ul><li>Technology </li></ul><ul><li>Practical advice; How to </li></ul><ul><li>Competitive sutuation </li></ul><ul><li>Lessons learned </li></ul>10% discount for you Refer to The best of wireless
    67. 67. questions M2M System Telematics Consultants
    68. 68. Thank you for listening [email_address] M2M System Advisors to Industry Leaders