Machine-to-Machine Communications – This is Going to be BIG!

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Frost & Sullivan analysts of Machine-to-Machine Communications.

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Machine-to-Machine Communications – This is Going to be BIG!

  1. 1. Machine-to-Machine Communications – This is Going to be BIG!! Nancee Ruzicka, Senior Research Analyst OSS/BSS Global Competitive Strategies Stratecast (a Division of Frost & Sullivan) May 11, 2010 © 2010 Stratecast (a Division of Frost & Sullivan). All rights reserved. This document contains highly confidential information and is the sole property of Stratecast. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Stratecast.
  2. 2. <ul><li>Ten times more connected machines than people </li></ul><ul><li>Fifteen times more connected machines than mobile handsets </li></ul><ul><li>Anything can be instrumented </li></ul>6.8 billion people 4.1 billion mobile handsets 60 BILLION CONNECTED MACHINES!!! This is going to be BIG!
  3. 3. What is M2M? <ul><li>In-use for more than 50 years </li></ul><ul><li>Simple </li></ul><ul><ul><li>Wired sensor that performs a task when triggered </li></ul></ul><ul><li>Fixed communication via phone line or broadband </li></ul><ul><ul><li>Device connected via phone line or internet to download data </li></ul></ul><ul><li>Embedded mobile communications </li></ul><ul><ul><li>RFID </li></ul></ul><ul><ul><li>Fares/tickets </li></ul></ul><ul><ul><li>Mobile payments </li></ul></ul><ul><li>Smart Grid </li></ul><ul><li>Smart City </li></ul><ul><li>Transportation management </li></ul>
  4. 4. How Does it Work? 1. Sensor detects that the vending machine is out of cola 2. Message is automatically sent to the warehouse 3. Inventory is checked and the vending machine is queried to determine what other flavors are needed 4. Route driver is notified that the machine at <<location>> needs to be refilled and sends an updated dispatch schedule along with the quantities of each flavor that are needed. 5. Route driver refills the machine. 6. Warehouse is automatically notified when machine is filled. 7. Inventory is updated
  5. 5. Why The Emphasis Now? <ul><li>Infrastructure refresh is creating critical mass </li></ul><ul><ul><li>Volume </li></ul></ul><ul><ul><li>Global supply chain </li></ul></ul><ul><ul><li>Efficiency </li></ul></ul><ul><ul><li>Productivity </li></ul></ul><ul><li>Economics </li></ul><ul><ul><li>Volume/demand drives innovation </li></ul></ul><ul><ul><li>Improved manufacturing processes </li></ul></ul><ul><li>Connected Applications </li></ul><ul><ul><li>Web-based </li></ul></ul><ul><ul><li>Analytics </li></ul></ul><ul><li>Communications </li></ul><ul><ul><li>Ubiquitous coverage </li></ul></ul><ul><ul><li>NFC </li></ul></ul><ul><ul><li>Regulations are adjusting </li></ul></ul>Connected Applications Economics CSP Network Infrastructure Refresh
  6. 6. Devices, Sensors, and Controllers Networks and IT Networks and IT Networks and IT Users and Applications Users and Applications Industry Utilities Health Care Infrastructure & Buildings Safety & Emergency Consumer & Home Retail & Finance Transportation
  7. 7. Participants <ul><li>Equipment Manufacturers </li></ul><ul><ul><li>Industry-specific </li></ul></ul><ul><ul><li>Mobile device </li></ul></ul><ul><ul><li>Network equipment </li></ul></ul><ul><li>Software Developers </li></ul><ul><ul><li>Embedded applications </li></ul></ul><ul><ul><li>Workflow applications </li></ul></ul><ul><ul><li>Operations and management applications </li></ul></ul><ul><ul><li>Integration </li></ul></ul><ul><li>System Integrators </li></ul><ul><ul><li>Application strategies </li></ul></ul><ul><ul><li>Customer – application – service – network </li></ul></ul><ul><ul><li>Multi-vendor integration </li></ul></ul><ul><li>System Enablers </li></ul><ul><ul><li>Multi-vendor management </li></ul></ul><ul><ul><li>Global network integration </li></ul></ul>
  8. 8. Opportunities <ul><li>Communication is key </li></ul><ul><ul><li>Embedded transmitters need something to talk to </li></ul></ul><ul><ul><li>Broad deployments favor public networks </li></ul></ul><ul><li>Management becomes critical </li></ul><ul><ul><li>Network management </li></ul></ul><ul><ul><li>Data management </li></ul></ul><ul><ul><li>IT management </li></ul></ul><ul><li>Trusted advisor </li></ul><ul><ul><li>Security </li></ul></ul><ul><ul><li>Design </li></ul></ul><ul><ul><li>Integration </li></ul></ul><ul><li>Partner to deliver value-added products </li></ul><ul><ul><li>SaaS versions of industry-specific products </li></ul></ul><ul><ul><li>Access elements, network elements, IT elements </li></ul></ul><ul><ul><li>Managed services </li></ul></ul>“ Nearly 70% of corporate respondents consider mobile network operators to be desirable partners as the world migrates from standalone embedded mobile devices to systems…” * * Source: GSMA/Accenture survey of operators, enterprises, and consumers
  9. 9. What M2M Customers Want <ul><li>Tailored pricing plans for connectivity </li></ul><ul><ul><li>Usage </li></ul></ul><ul><ul><li>Quality </li></ul></ul><ul><ul><li>Service level agreements </li></ul></ul><ul><li>Billing for use of their devices </li></ul><ul><ul><li>Real-time </li></ul></ul><ul><ul><li>Transaction-based </li></ul></ul><ul><ul><li>Policy management </li></ul></ul><ul><li>Manage my devices </li></ul><ul><ul><li>Monitoring </li></ul></ul><ul><ul><li>Configuration </li></ul></ul><ul><ul><li>Provisioning/activation </li></ul></ul><ul><li>Integration of their device with the mobile network </li></ul><ul><li>One-stop for global deployment and support </li></ul><ul><ul><li>Value-added products and services </li></ul></ul>
  10. 10. Challenges <ul><li>Finding the right business models </li></ul><ul><li>Availability </li></ul><ul><ul><li>Access network deployments </li></ul></ul><ul><ul><li>Data capacity </li></ul></ul><ul><li>Scalability </li></ul><ul><ul><li>Large, distributed networks </li></ul></ul><ul><ul><li>High transaction volume </li></ul></ul><ul><ul><li>Complex data management </li></ul></ul><ul><li>Quality/Reliability </li></ul><ul><ul><li>Multi-tenant OSS/BSS </li></ul></ul><ul><ul><li>Multi-industry support </li></ul></ul><ul><ul><li>Management of the managers </li></ul></ul><ul><li>Interoperability and standards </li></ul><ul><li>Security </li></ul><ul><li>Industry expertise </li></ul>
  11. 11. Conclusions <ul><li>The timing and technology are right for rapid adoption of M2M </li></ul><ul><li>Enterprises consider IT and networking to be the biggest challenge of deploying and using M2M capabilities </li></ul><ul><li>Business cases for offering products and services to enterprises and consumers must be carefully thought-out and planned </li></ul><ul><li>Lack of interoperability and standards can derail everything </li></ul><ul><li>Security has to be designed in from the start and continuously emphasized </li></ul><ul><li>We’ve already started!! </li></ul>
  12. 12. Related Research <ul><li>Stratecast OSSCS 11-04: Realizing the Potential of a Smart Grid – Opportunities for CSPs and OSS/BSS Vendors </li></ul><ul><li>Stratecast SPIE 2010 #11: Machine-to-Machine (M2M) Communications – This is Going to be BIG!! </li></ul><ul><li>Frost & Sullivan Energy and Power Systems NF5B: U.S. Smart Grid Market </li></ul><ul><li>Frost & Sullivan Energy & Power Systems N72B-14: U.S. Smart Grid Market – A Customer Perspective on Demand (customer survey) </li></ul>
  13. 13. Next Steps Request a proposal for a Growth Partnership Service to support you and your team to accelerate the growth of your company. ( [email_address] ) 1-877-GoFrost (1-877-463-7678) Join us at our annual Growth, Innovation, and Leadership 2010: A Frost & Sullivan Global Congress on Corporate Growth, September 2010, Silicon Valley, California ( www.gil-global.com ) Register for the next Chairman’s Series on Growth : The “GIL” (Growth, Innovation and Leadership) Culture: A Critical Element to Long-Term Success Tues, June 1, 2010, 2 pm ET ( http:// www.frost.com /growth ) Register for Frost & Sullivan’s Growth Opportunity Newsletters and keep abreast of innovative growth opportunities ( www.frost.com /news )
  14. 14. For Additional Information Jake Wengroff Global Director Corporate Communications (210) 247-3806 [email_address] Nancee Ruzicka OSS/BSS Global Competitive Strategies (920) 685-2845 [email_address] Perry Somers Dir. of Business Development, Stratecast Frost & Sullivan / Stratecast (360) 416-4982 [email_address]

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