M2M, the Channel Opportunity?

M2M is about enabling the flow of data between machines and machines and ultimately machines and people. There are numerous applications for the technology and lots of opportunity for the Channel to exploit. For the first time M2M was seen at our Convergence Summit event, courtesy of O2, and it got a great response from attendees. David Dungay took a trip around the Channel to see where the opportunity for resellers lay with this new technology.

“M2M is one of the fastest-growing major new segments for service providers,” affirms analyst Godfrey Chua, who directs Infonetics Research’s M2M and Connected World program. “We forecast global revenue from M2M services to more than double between 2012 and 2017, from just under $15 billion to $31 billion.”

With more devices now connected to the Internet than people (over 12.5 billion devices in 2010 alone), the number of M2M applications is vast. According to Machina Research and Cisco 50 billion devices will be connected by 2020, and with them a potential to generate between $1.2 and $14 trillion worth of business.

So...What is M2M and IoT?

Ian Foddering, CTO, Cisco UKI says “The idea that a machine can talk to a machine, for some, is such an abstract thought that it is often forgotten that machine to machine (M2M) communication already exists today. It isn’t necessarily a fridge talking to a shop when it runs out of milk, but rather the existence of machines connected through the internet that shape our daily lives. By understanding that connecting the unconnected will bring together data processing, people and machines, resellers can thrive in this evolving market.”

Dan Cunliffe, Head of Partners and Strategy, O2 Wholesale added “The Internet of Things is a term we’ve probably all heard of by now, and will continue to hear more and more about. But what exactly does it mean? In the simplest of terms, it’s when objects can be connected to the internet and other devices wirelessly and are capable of identifying themselves and communicating data to other objects on the network.

Cunliffe continued “The market has been referring to the opportunity as the “Internet of Things” (IOT) and this is now becoming the “Internet of everything” as more everyday devices are being connected, in fact, recent research from the GMSA predicts the number of total connected devices will reach 24 billion worldwide by 2020, with business impact totalling $4.5 trillion dollars.

This means that in the future we will truly live in a connected world – our lives, homes and cities. Everything will be connected in an internet like way, providing us with valuable information and making people’s lives better. Furthermore, the launch of 4G makes the growth of M2M even more exciting, as with increased connectivity and speeds, it will allow the trend to thrive.”

Chad Jones, Vice President, Product Strategy at Xively said “We live in a world where devices and machines are becoming increasingly intelligent. We are linking devices together via the Internet all of the time to improve and streamline day-to-day processes, create new products and services, and develop solutions for commonplace problems. Machine to Machine (M2M) communications is a rapidly growing market, offering huge opportunities to businesses and resellers across all industries.”

Such growth and opportunities are usually referred to in relation to the Internet of Things (IoT), the concept of connecting existing devices to the Internet in order to collect date and develop new applications and services. The IoT is currently creating incredible opportunities for businesses, paving the way for a new generation of commercial products and experiences that will drive new revenue streams.

Although media coverage tends to focus on the technological advances and commercial potential of the IoT and M2M, businesses are starting to explore the possibility of creating their own sensor-based solutions for internal use, where IT can deliver real-time views into critical operations. Internal sensor-based solutions provide enterprises with the intelligence and tools needed to streamline key processes such as monitoring and asset management; avoiding the hassle and potential inaccuracies of manual data input and observation.

Jones added “Internally developed IoT solutions can improve supply chains through constant tracking of the location and status of objects throughout their lifecycle, or ensure critical company assets are always in stock with alerts that automatically notify systems when supplies are low, triggering replenishments. Retailers can monitor customer activity to monitor footfall and retail trends, informing improved store design and generating sales.”

Karl McCaffrey, CEO at gteq, commented on the growth he had recently experienced in the M2M market, “We are flying right now and are in our second wave of orders. Our first order was £750 000 over three years. The client is still just scratching the surface with M2M and trialling us at that. We are looking to stay away from the mass market utilities side of things, although if the order lands on my desk on Monday I will probably provision it! We are looking more for longer term solutions because our product is so sticky.

M2M has really become a buzz word in the last twelve months and we get people asking us about it all the time. When they see our back end they are always amazed because no one else can do what we can with it. We think we are on to something here. gteq has a dealer channel and we are established so that’s the route we are going to go down with selling M2M.

McCaffrey continued “Our experience with dealers, generally being sales guys, has been that they aren’t necessarily interested in the solutions but more how much commission they can make from it per month. One of the problems is that once they have done one deal for x amount of SIMs which nets them £150 per month, for example, they aren’t that excited about doing it again. We are trying to turn that on its head and look at paying them upfront because the dealers like that and are more likely to come back. “

The opportunity

Dan Cunliffe commented on the revenue opportunities when it comes to M2M, “With Machine to Machine yielding more automated data, monetising this ever growing data must be carefully considered. More products and related services can be sold, allowing resellers to add value to security, hosting and device management products and services. But, as every customer is unique, resellers should advise on the right devices that will benefit each business. Each organisation will have its own objectives, whether it be delivering more voice, mobile data or remote working services, however these will prove unmanageable without a strong foundation of connectivity and this should be at the heart of any reseller strategy.

Scalability and speed of deployment should also be considered, as end user organisations will want the option of expansion without hindrance when more devices are connected to the wireless network. If broadband roll outs are too slow and take longer than originally planned, then again that trust between the end customer and the reseller is at jeopardy.“

Many resellers may have already sold their long term contracts for the latest technology trends -BYOD and cloud. Whilst they can renew these solutions and associated services, many are now looking for the next new technology or service their customers can benefit from, and which they can generate revenue from. By helping customers implement the technology needed to support an Internet of Things approach, this opens up a new world of opportunity for both the customer and the reseller. However there are some key factors resellers should consider before making this move.

Foddering added, “As the concept of the Internet of Everything (IoE) continues to quickly grow, it represents an opportunity for the channel evolve its value add. The Internet of Everything is making networked connections more relevant and valuable than ever before. The concept is creating new capabilities and richer experiences for resellers to create openings for their customers. Currently, Cisco estimates that 99% of physical objects that may one day be part of this idea, are still unconnected. For resellers, this means they have several chances to benefit by facilitating interactions between machines and businesses.

As we introduce more connected devices, underpinned by the move from IPv4 to IPv6, users will become more reliant on the internet for their daily activities. While this presents an array of opportunities, it will also bring with it potential challenges - for instance, a growing attack surface against which to have a robust security capability to support the number of devices coming to the network. Providing knowledge, along with technology-enabled security capabilities, will leverage IoE’s potential growth for the channel. Resellers can optimise this opportunity to create new revenue streams, such as, but not limited to providing technology and business consultancy services to aid these challenges.”

Applications

Talk about Machine-to-Machine applications and people immediately think of the GSM solutions and opportunities driven by large mobile network providers and European legislation such as that which will require all new cars to have eCall installed by 2015

“But” says Mark Shane of distributor ICON “these are the headline makers in a market which also includes on-site/on-premises M2M solutions delivered using enterprise wireless communication technologies. These on-site solutions use the familiar DECT or WiFi wireless communications to deliver M2M services around a site. Fault reporting, asset protection, and machine & plant status monitoring are a few of the services that are delivered across enterprise wireless communications.”

“Our channel partners already have a significant installed base of solutions in the manufacturing, healthcare, and hospitality sectors.”

Mark added, “However, there are only a few vendors in the UK that can deliver the infrastructure for an M2M on-site solution. At ICON we distribute to and support the channel in delivering these solutions. The important point for the channel is that these vendors rely on the channel to deliver the solutions.

JT’s M2M Business Development Manager Paul Bullock commented on M2M applications, “A good example of how M2M is being used successfully in industry is the telehealth arena.  The health sector is using tracking technology to protect people with early stage dementia who can become disoriented  and lose their way., M2M can send back a message via a SIM card to a relative letting them  know that the person has left a certain area and giving them the new  location.

Machine-to-Machine technology has also created pay-as-you-drive motor insurance. New insurance products are now being marketed that offer coverage based on-vehicle usage and can even report on where a car is travelling to and how it is being driven. It’s a tool that has been used to reduce prohibitively high insurance costs for young drivers in particular.”

McCaffrey added “Gridteq’s M2M Praxis platform will benefit almost all industries, businesses models and processes. From a single platform Praxis provides anytime anywhere access to M2M data instantly and securely. From any notebook, tablet, smart-phone or web enabled device. This high level of control enables reseller partners to increase revenues, improve service and enhances compliance and live the greener agenda.”

What now?

Cunliffe says“An effective relationship between reseller and their wholesale partner will be crucial to taking advantage of these M2M opportunities. Factors to consider will range from the reliability and consistency of the broadband product, to the quality of customer service which allows for fast response, should issues such as device malfunction occur, meaning resellers must pick their vendor with utmost care.

Each organisation will have its own objectives of what it wants to achieve with the Internet of Things. However, these options will prove unmanageable without a strong foundation of connectivity. Scalability and speed of deployment should therefore be considered, as end user organisations will want the option of expansion without hindrance when more devices are connected to the wireless network. If broadband roll outs are too slow and take longer than originally planned, then again that trust between the end customer and the reseller is at jeopardy.”

Foddering continues “M2M is quickly becoming a sizable source of value, with an end result that will ultimately benefit people and society. As this landscape continues to evolve over time, Cisco predicts that $14.4 trillion of value will be ‘at stake’ for businesses over the next decade, which gives resellers the opportunity to continue to deliver valuable solutions as the market evolves”

This is a new and exciting market which the channel is intimately involved in growing. The fact that a solution needs to be integrated with the organisations communications platform, is provided by integrating solutions from different providers, and is intimately tied up with an organisations workflow and manufacturing processes, means that it is a true value added solution. It’s also a market in which we are seeing considerable activity and one we believe is an ideal growth opportunity for the channel.”

Ed Says…

Although the world of M2M may seem a little too far in the future it really isn’t. M2M is here and starting to grow and find its place across a number of industries. Many resellers will have opportunities within their base already and not even realise they are overlooking potential revenue sources. Suppliers are beginning to roll out their M2M products to the Channel and if you are looking to ride the next technology wave then you best give it a look.