Exploring Verticals, Market Sizes and Business Models
Presented by:
Victoria Romero-Gomez, Product Marketing Manager
Recur...
© 2010 RECURSION SOFTWARE, INC. 2
Pictorial of the M2M Verticals
Source:
© 2010 RECURSION SOFTWARE, INC. 3
How Carriers Segment M2M
ATMPoint‐of‐sale/ATMFinancial Services
Communicating appliances...
© 2010 RECURSION SOFTWARE, INC. 4
M2M Venue Market Sizes
© 2010 RECURSION SOFTWARE, INC. 5
M2M Market Size by Device Class
M2M device shipments
could reach 430 million
units by 20...
© 2010 RECURSION SOFTWARE, INC. 6
M2M Challenges & 
Opportunities/New Revenue
 Wireless Data Revenue: Up 22% Y/Y on track...
© 2010 RECURSION SOFTWARE, INC. 7
 Anywhere content
access
 More app selection
 Better performance
 Avoid data-caps
Ti...
© 2010 RECURSION SOFTWARE, INC. 8
Win Developer Hearts & Minds
Solve problems with current Developer‐OEM app store model:
...
© 2010 RECURSION SOFTWARE, INC. 9
Smart‐Client (Pervasive)
 P2P Edge Platforms (ex. Voyager)
What is the Best App 
Archit...
© 2010 RECURSION SOFTWARE, INC. 10
The Pervasive Smart‐Client 
Value Proposition
Improved Infrastructure
 Offloads proces...
© 2010 RECURSION SOFTWARE, INC. 11
The Pervasive Smart‐Client Value 
Proposition
Cost/Revenue
 Does not require new hardw...
© 2010 RECURSION SOFTWARE, INC. 12
Potential New Business Models
Developer‐Centric
 Sell product to entire developer comm...
© 2010 RECURSION SOFTWARE, INC. 13
Summary
 Pervasive platform is a service delivery platform that 
adds value and collec...
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The Pervasive M2M Market Opportunities & Verticals

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An overview of how analysts and carriers segment M2M and potential new business models

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The Pervasive M2M Market Opportunities & Verticals

  1. 1. Exploring Verticals, Market Sizes and Business Models Presented by: Victoria Romero-Gomez, Product Marketing Manager Recursion Software vgomez@recursionsw.com www.linkedin.com/in/victoriaromerogomez @vickyrgomez @recursionsw The Pervasive M2M Market OpportunityThe Pervasive M2M Market Opportunity
  2. 2. © 2010 RECURSION SOFTWARE, INC. 2 Pictorial of the M2M Verticals Source:
  3. 3. © 2010 RECURSION SOFTWARE, INC. 3 How Carriers Segment M2M ATMPoint‐of‐sale/ATMFinancial Services Communicating appliances InfotainmentVideo game handhelds Photo frames Cameras Connected Consumer ElectronicsConnected TVs Security Smart HomeAll Consumer devices (aka Emerging Devices)Home automation Dynamic Digital SignageTelematics Emerging OpportunitiesRemote monitoring Emergency ServicesWireless routingIndustrial Automation and controlAutomation and control VendingVending SecuritySecurity Public TransportFleet managementTransportation Utility MeteringSmart grids; Automated meter readingUtilities TelemedicineHealthcare Telematics and Fleet ManagementAsset trackingAsset Tracking SprintAT&TVerizon (joint venture nPhase) ENTERPRISECONSUMER Indicates similar segment Color code= Source: Carrier websites
  4. 4. © 2010 RECURSION SOFTWARE, INC. 4 M2M Venue Market Sizes
  5. 5. © 2010 RECURSION SOFTWARE, INC. 5 M2M Market Size by Device Class M2M device shipments could reach 430 million units by 2013
  6. 6. © 2010 RECURSION SOFTWARE, INC. 6 M2M Challenges &  Opportunities/New Revenue  Wireless Data Revenue: Up 22% Y/Y on track so far to meet estimate of $54B 2010.  Data usage growth rate (CAGR) of over 25% per year through 2014.  “Connected device” (branded M2M) for AT&T and Verizon outpaced postpaid subs in  Q2 2010. Operators are fiercely competing in prepaid, enterprise, connected devices,  and M2M segments. Connected devices are now 7% of AT&T’s subscription base.  1H 2010, the average US consumer was consuming ~230 MB/mo up 50% in 6 months,  indicative of a pending wireless data tsunami.  Wireless connectivity for M2M devices is the first step. Software and content that  “follows me” whatever I go on whatever device, using whatever telco or wifi network  available is the next step.  Consumer apps dominate the app stores, while enterprise deployments are not easily  tracked or are custom solutions. App store prices falling and/or free apps becoming  norm. Source: Chetan Sharma Consulting
  7. 7. © 2010 RECURSION SOFTWARE, INC. 7  Anywhere content access  More app selection  Better performance  Avoid data-caps Time for a New Pervasive M2M App  Value Chain  Extend app to more devices= differentiation  Offer new revenue opportunities  Lower development cost  Reduce exclusivity of apps for differentiation  Easier platform management  Supply more, unique on-deck apps User/Subscriber Communications  Reduce traffic across entire network  Reduce app exclusivity  Substitute data-cap with new service revenue Network Hardware/ Software OEM Be like Apple: Profit from every link in the app value chain Developers/ Enterprise Potential Revenue Potential Revenue Infrastructure/Systems Operator Potential Revenue
  8. 8. © 2010 RECURSION SOFTWARE, INC. 8 Win Developer Hearts & Minds Solve problems with current Developer‐OEM app store model:  Connectivity and Access: Community and social tools, like instant messaging (IM) and project sharing,  allowing developers to interact, would transform a transactional and static environment into a sticky,  dynamic, growing community. The developer‐minded application store must be a hub of collaborative  testing and development, rather than a mere distribution channel.  Personalization: Using network enablers (location, presence), customer information (purchase history,  usage history, etc.), user identity support, and behavior analytics. This will both driver better targeted  content and marketing opportunities for developers (e.g. demographic or behavioral marketing)  Purchase Convenience: Through pre‐existing billing and payment enablement, buyer authentication and  payment authorization (namely, access to operator billing systems). The ability to complete a sale with  the fewest number of clicks cannot be overstated.   Distribution and Reach: Access to a large mobile customer base across multiple devices. On‐portal  storefront placement, catalog control, secure delivery and digital content locker support.  Multi‐platform Support: Remove developers need to make platform decisions by cross‐platform support.  Operational Support: Extending robust operational systems and processes as services to the developer  community, e.g., CRM‐as‐a‐service, testing services, etc. This is truly an evolution from app store to true ecosystem!
  9. 9. © 2010 RECURSION SOFTWARE, INC. 9 Smart‐Client (Pervasive)  P2P Edge Platforms (ex. Voyager) What is the Best App  Architecture? Thin Client‐Server (Centralized)  vs.  Mobile Web (HTML,  JavaScript)  Mobile Enterprise solutions (ex. Sybase,  WebSphere) Client enters data,  each click sends  data to server Server hosts all   services and content,  acting as a gateway. It  receives requests and  data, performs filtering  or transactions and  sends output back to  client(s) if shared Each client has server  intelligence and capabilities.  Client displayed data.  Process repeats for each  click or transaction.  High bandwidth use Bidirectional  communication Intelligent client and server processes  autonomously until a  request to share is  made.  Clients can be  faceless, such as  sensors, and use  any language or OS Content or messaging is  sent P2P/Group  (guaranteed messaging) Description: This model uses mature technologies, such as  HTML and JavaScript or an enterprise platform pull only Bandwidth  Efficiency Description: This model uses mature technologies in a new  way, by creating intelligent clients that act as servers,  hosting and sharing data remotely on the device Every click= data Process/host  data at edge
  10. 10. © 2010 RECURSION SOFTWARE, INC. 10 The Pervasive Smart‐Client  Value Proposition Improved Infrastructure  Offloads processing to the device, resulting  in faster, more efficient networks (30x  faster than web services)  Preserves LTE or 4G capacity for M2M  explosion and data‐intensive content like  video  Offers a horizontal platform and  architecture for all M2M initiatives and  increases cross‐selling opportunities  Shifts infrastructure cap ex towards new  revenue generating services  Embedded/Mobile‐ready New Business Models  Introduces new business models, lessens price  pressure, dependency on data‐caps, and may  provide alternative strategy around net‐ neutrality  Deliver more targeted advertising by capturing  customer behavior end‐to‐end
  11. 11. © 2010 RECURSION SOFTWARE, INC. 11 The Pervasive Smart‐Client Value  Proposition Cost/Revenue  Does not require new hardware or OS, but  has negligible changes to the existing  mobile app dev process (code to API)  Less competition for developers, better  share of developer revenue split User Experience  Device agnostic: eBooks, TV, PC,  embedded, sensors, etc., and “follow‐me” content capability  Returns control from hardware to the  service providers, perceived value by  subscribers  Adds stickiness to subscriber base through  content access on more devices, shifting  perceived customer value and revenue  away from the app developer.   Conserves bandwidth for better user  experience   Avoids dreaded data‐caps opens up new  service revenue
  12. 12. © 2010 RECURSION SOFTWARE, INC. 12 Potential New Business Models Developer‐Centric  Sell product to entire developer community  Alternatively, open product and launch own app store  based on M2M devices, not platform  Build Enterprise solutions though integration partners Service/Infrastructure‐Centric  (Traditional):  Bundle platform to networks as a package with  infrastructure solution  Offers new subscription services (per person, per  device), while lessens reliance on data caps  Offer professional services or partner with  integrators for enterprise apps Operator‐Centric:  White label Network app stores or subscription to  content “locker”  Offer developer revenue split and access to more  devices  Create incentives for developers to build data  efficient apps (reduces infrastructure cost) Customer‐Centric  Apps shared among peers, viral marketing,  crowd‐sourced content  Completely ad‐based platform or Person‐to‐ Person virtual currency (influencers)  Get Jar meets Social Network Multiple revenue streams from  multiple sources
  13. 13. © 2010 RECURSION SOFTWARE, INC. 13 Summary  Pervasive platform is a service delivery platform that  adds value and collects revenue throughout entire  mobile ecosystem  There are sufficient control/standards to establish an  any‐device content distribution network  Incentivizes developers to conserve bandwidth  Spans consumer market into lucrative enterprise  applications and sensor networks  Legacy interop to tie into multiple systems and  hardware

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