M2M Presentation at Telecom Council of Silicon Valley


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M2M Presentation at Telecom Council of Silicon Valley

  1. 1. We make ICT strategies workDaniel Kellmereit,CEO, Detecon Inc.May 2nd, 2013M2M in the Mobile Industry
  2. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 13. Contact InformationDETECON, Inc.33 New Montgomery20th FloorSan Francisco, CA 94105U.S.A.Phone: +1 (415) 904-7919Email: info-usa@detecon.com©Detecon