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M2M Presentation at Telecom Council of Silicon Valley

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  • 1. We make ICT strategies workDaniel Kellmereit,CEO, Detecon Inc.May 2nd, 2013M2M in the Mobile Industry
  • 2. IntroductionThe application of M2M technology leads to improvements in productivity, efficiencyand transparency across industries; however so far we only see a fraction of what ispossible.20130502TELECOMCOUNCIL_M2M.PPTXMedicine &healthAgriculture/farmingSmart homeConnectedcarSmart meteringConsumer electronicsLogisticsPublic transportationePaymentThepromiseof M2MThe Limited Application of M2M– 2 –SecurityIndustrialAutomation
  • 3. ChallengesA number of challenges have slowed down a more exponential growth of m2m solutionsand the m2m market in general.©Detecon– 3 –20130502TELECOMCOUNCIL_M2M.PPTXChallenges in M2M AdoptionRegulationComplexvalue chainCostTechnologymaturityFragmentedSolutionsTechnicalissues Customizedsolutions Vertical specific Complex, industry-specific charging Inflexible SIM/modulesetup Custom devices forindividual applications Network coverageand performance Privacy/security incertain sectors Prolonged certificationprocess Roaming Regulation Standards,architecture &interoperability, Security and devicemanagement High level ofcustomization Lack of scalability& modularity Pricing models standardization Multiple industries andcompetitive players; Information not readilyshared or available
  • 4. FactorsM2M Growth Drivers©Detecon– 4 –20130502TELECOMCOUNCIL_M2M.PPTXM2M GrowthDriversRise of CloudFalling HardwarecostsDiversebusinessapplicationsBig Data/BIUbiquitousnetworkaccessMaturing providerecosystemToday we are on the verge of mass market adoption across industries; this change isfuelled by several factors like falling hardware & connectivity costs and ubiquitousnetwork access. Multiple options for high-performing wireless networks Drop in mobile data costs Ease of adding wirelesstechnology to devices Cloud becomes a mass market Costs for developing and deliveryof applications is reducedsignificantly Devices store more and moreinformation in the cloud Drop in memory,processor & sensor prices Growth of mobile devicemarket Large amounts ofunstructured data Rise of new technology toprocess and manage andstore data Improvements in analyticsplatforms Ecosystems of providers isbecoming more efficient Packaged services Emergence of openplatforms Growing developercommunities
  • 5. Market OpportunityThe M2M market will grow exponentially in the coming years, Building Infrastructure,Telematics and Healthcare are expected to be the largest verticals.©Detecon– 5 –20130502TELECOMCOUNCIL_M2M.PPTXSources: Machina Research, Detecon Research202120202019201820172016201520142013 20226007005004003002001000USD B8%5%3%12%3%34%35%Rest (8 %)(4) Utilities (5 %)(6) Industrial Automation (3 %)(3) Healthcare (12 %)(5) Smart Cities (3 %)(2) Telematics (34 %)(1) Intelligent Buildings (35 %) In 2022, Intelligent Buildings will be the biggest areafor M2M applications, followed by Telematics andHealthcare. The fastest growing area will be Telematics with aCAGR of 24%.M2M Size and Growth Areas of GrowthConnectivityRelatedRevenuesM2MPlatformRevenuesInstallationRevenuesDeviceService Wrap(Revenues wrappedaround connectivity)
  • 6. Frame TemplateM2M Value Chain©Detecon– 6 –20130502TELECOMCOUNCIL_M2M.PPTXThe M2M value chain is highly fragmented and complex; end-to-end solutiondevelopment requires standardization and horizontal platforms.Chipset/SIMs Modem/Module EquipmentApplicationBusinessIntelligenceConnectivityDevicePlatformApplicationPlatform Core chipset,uniqueidentity foreach M2Mdevice modems& modules,provide receptioncapability Customerequipment suchas smart metersor vendingmachine Dataconnectivity,mostly providedby telecom carriersSystem Integration & IT Services Operationsand businesssupport platform Platform tomanage andanalyze data Runs the corebusinessprocesses Planning, implementation, integration and management of solutions and add-on consulting services Data analyticsand businessperformancemanagementBI/ SoftwareM2M Value ChainHardwareConnectivity
  • 7. Frame TemplateNew Growth Areas©Detecon20130502TELECOMCOUNCIL_M2M.PPTXSuccess in M2M requires the capability to profitably serve a very large number of lowtraffic data subscriptions while moving beyond connectivity services.revenueperapplicationtypeapplicationtypeM2M - mobile long tail business?– 7 –CloudComputing$55b BusinessIntelligence$13.8b Big Data$11.7bLeverage connectivity footprint to moveinto higher margin services: Cloud Services Business Intelligence Big Databy either partnering and/or building ownplatforms.Possible Positioning Strategies2015 non-connectivityservices forecastSources: Detecon Research, IDC, GSMA
  • 8. Frame TemplateHigh Margin often equals High Process Complexity©Detecon– 8 –20130502TELECOMCOUNCIL_M2M.PPTXThe most attractive new services also tend to have high process complexity. Carriersshould try to leverage core competence areas to be able to compete.MarginsCustomization (process complexity)SIM/ChipsetsBiz applicationManaged serviceslow highlowhighProfessional servicesIT IntegrationModem/ModuleEquipmentConnectivityDevice platformApplication platformBIHardwareConnectivityBI/SoftwareIT servicesCurrent carrier/allianceofferingsFuture potential – extended offeringsSources: Detecon Research
  • 9. ConnectivityVerticals /ApplicationsM2M DevicesMiddlewarePlatformStandardized M2M devicesM2M StandardsM2M StandardizationWhile standardization efforts will accelerate market growth, the real breakthrough couldbe a clearing effect on platform and device level as seen in the mobile industry.©Detecon– 9 –20130502TELECOMCOUNCIL_M2M.PPTXSources: Detecon, European Telecommunications Standards Institute (ETSI)Logistics,TransporteHealthUtilities,SmartGridVehiclesMedicalequipmentSmartmetersConnec-tivityConnec-tivityConnec-tivityM2MPlatformM2MPlatformM2MPlatformLogistics,TransporteHealthUtilities,SmartGridM2M platformHorizontalscaling across platform, architecture, application frameworks globalcommunicationstandardsCurrent –Vertical StandardizationFuture –Horizontal and Vertical StandardizationhundredsfewhundredsfewConnectivityConnec-tivityVehiclesMedicalequipmentSmartmetersDevelopercommunity
  • 10. Carriers - Way ForwardWhile standardization initiatives are ongoing, Carriers should not wait and continue toorchestrate vertical and horizontal solutions through partnerships for platform building.20130502TELECOMCOUNCIL_M2M.PPTXSources: Detecon ResearchStandardization efforts willaccomplish limited all-encompassingset of M2M standardsCarriers may miss the boat if waitingfor standards; consumer needs willdrive market forwardCarrierBest PracticesSIStrategyDeliveryHardwareHorizontalPartnershipsVerticalPartnershipsCarriers should orchestratepartnerships and develop managedservices capabilities Orchestrate vertical partnerships to develop level of expertise inkey verticals and offer both packaged reseller and partner-provided application Enhance vertical offerings through a developer community Orchestrate partnerships across value chains provide devicemanagement and application platforms Horizontal solutions should feature pre-integration ofcommon business platforms (such as SAP) Transform from utility capacity-based model tomanaged services model with end-to-end responsibility Ensure global coverage through global roamingarrangements and common service levels Develop SI expertise; provide application and solutiondevelopment, integration, and deployment Position in-house integration department as a centralcomponent of the M2M offering Position as an end-to-end solutions provider Offer supplementary consulting services with specializedpartners on strategy, business case, application roadmapand the development of reference architectures Implement rapid device certification process, customersupport and developer module kits Provide support services such as helpdesk, warrantymanagement, device refresh and reporting
  • 11. High ROI Use CasesExpensive assets with high utilization and high cost of downtime provide some of themost profitable business cases today, as the industry matures, we will see very differentuse-cases.©Detecon– 11 –20130502TELECOMCOUNCIL_M2M.PPTXSources: Detecon ResearchUse case UK Rail Use case Rolls RoyceSituation In UK, train leasing contracts based on a metric of trainmovement (decoupled from the number of physical trains) Opportunity for leasing company: Maximize train utilizationtimeSolution: Collect live data with cellular M2M from instruments on thetrains to bring trains in for maintenance on an as-needed orpredictive basis, rather than on a scheduleBenefit: Improved operational efficiency Reduced number of trains needed– lower CAPEX/OPEX)Situation: Aircraft downtime is very expensive Many maintenance issues come up on short-term basisSolution: Collect live data from the jet engine with satellite-basedtechnology to schedule maintenance on a predictive basis Remote real-time detection and diagnostics of enginefailuresBenefit: Improved operational efficiency Real-time engine data for instant countermeasures Improved safety through remote diagnostics
  • 12. M2M in AutomotiveThe automotive industry can leverage M2M technologies in multiple ways, therefore wecurrently see a number of large strategic initiatives in this field.©Detecon– 12 –20130502TELECOMCOUNCIL_M2M.PPTXComponents & Features: M2M SIM Telematic BoxProvides: In Car Wifi & OTT Services Remote Car Diagnostics eCallCar (Driver)Components & Features: CRM with Customer M2M Integration Stock Management M2M supportedProvides: Remote Car Diagnostics Marketing & Sales Support Real Time Inventory ManagementWorkshopDiagnosisDataCar & Driver Profile• Prevention [Trigger: Low Battery]• Planned Maintenance (Calendar Integration)• Marketing & Sales Campaigns [Trigger: Car Profile]M2MM2MBIBI Low Battery Life Route in GPS System Meetings (Outlook)Unstructured Data Structured DataComponents & Features CRM with Customer M2M IntegrationProvides: Proposal for Car Renewal CampaignsDealerPush Message:Caution – Black ice inapprox. 25 miles.1Sources: Detecon Research1Case for Big Data2BI3Proposal for CarRenewal based onDriver Profile3Low Battery AlertChange Batterybefore Travelling3
  • 13. Contact InformationDETECON, Inc.33 New Montgomery20th FloorSan Francisco, CA 94105U.S.A.Phone: +1 (415) 904-7919Email: info-usa@detecon.com©Detecon

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