We had a very productive CTIA panel session in New Orleans last week at the M2M Zone conference. My thanks to all those who took part!

We had a great set of panellists to discuss M2M global deployments becoming reality. See agenda here for more details. What really set the session apart though was the high level of audience participation right from the start. As a result, the discussion covered a lot of ground.

A favourite question that everyone wants to discuss is 2G versus 3G versus 4G for M2M. As explained, a key motivator for change in US is a spectrum crunch (see this previous blog post) that is not the case in Europe. It is also the case that 3G cellular modules will be much cheaper than 4G ones for a long time yet. Set against that, 2G modules are set to get cheaper more quickly than 3G ones over the next few years. Also, 2G coverage is much better than 3G will ever be in both US and Europe. The bottom line in this though is what network operator intentions really are. Many of them are saying they’ll stick with 2G, while others are clear they’ll drop it. That means less opportunity to use alternative 2G connections where reception is variable, while 3G can fall back to 2G (just one of the reasons 3G modules will stay much more expensive than 2G ones). It’s going to be down to the market to decide on a case by case basis.

A whole bunch of questions were asked about issues to be addressed with global M2M deployments – the need for international partners, provisioning and deployment, maintenance and support issues, the need to comply with local regulations, standards issues and – of course – roaming. You might have got the impression that it’s just too complex. However, Jim Cairns (VP Bus Dev at Multi-Tech) reminded us that “as we wander through these complexities, let’s not forget about the benefits”. Indeed, all suppliers are now intent on making M2M deployments as simple for their customers as possible. As far as the industry is concerned, reducing complexity for M2M users will lead to wider deployment and development of the market.

A question was raised about standards. Is there any standards activity for M2M? The answer is that – in some areas – there is plenty, in others none. See this previous blog for some thoughts on this subject. Also, this previous blog asks the question – open source or standards for M2M?

A great panel session. I look forward to the next one!

An intriguing initiative was reported this week in the US Energy Department’s launch of an interactive web platform – referred to as the Utility Data Access Map tool. This enables electric utilities in US to show consumers the data they can access on their electricity use – and through that save money on their electricity bills. Perhaps not something that utilities really want to encourage? See this link.

This is complemented by the Green Button Initiative. This enables consumers to download their usage data with one click of a button and import it for use in a growing range of energy usage applications, particularly smartphone apps. See this link

On the one hand, this initiative is intended to inform consumers of data on their energy usage that is available to them to download. However on the other hand it also highlights those energy companies who are not providing this data. At the moment, that looks like the vast majority, since there are big unallocated areas on the map. But that is likely to change quite quickly, to the point where many utilities have responded and their areas are suitably shaded. That will then tend to put the spotlight on those that have not done so, perhaps spurring on implementations. From that perspective, it looks like a neat way of potentially “naming and shaming” the slower utilities.

Of course the next stage will be to provide a similar sort of initiative to encourage consumers to use this data. One wonders how that might work . . .

It was reported last week that the European Commission is looking to regulate the Internet of Things “for a framework to control how billions of devices gather, store and share data”. See for example this link.

As reported, the call for input to the consultation process went on to say that the IoT “is likely to have a profound impact on society, in areas like privacy, security, ethics and liability. The policy challenge is to assess the right trade-off between the potential economic and societal benefits and the control that we want to retain over an environment where machines will gather, exchange, process and store information automatically. The effects on our private and public space require that people and their governments debate the appropriate governance and management”.

On the same theme, I spoke recently at a British Computer Society meeting entitled “Ethics and M2M”. Notes from this discussion were published in our last Snaps newsletter – the second article at this link.

Some thoughts come immediately to mind on this:

• There is clearly something that needs to be considered here regarding ethics and the Internet of Things
• But younger generations – who are more used to leaving personal data on services like Facebook – are likely to view the dangers differently
• I am reminded of the recent SOPA (Stop Online Piracy Act) and related PIPA (Protect Intellectual Property Act) and the reasons why they failed, which were several but to my mind included:
  • Legislatures knew what they were trying to address
  • They did not understand how the Internet works though
  • What they came up with would not have stopped the activity it was intended to anyway
  • On the other hand, it would have stopped other, quite normal activities – lots of unintended consequences
• With those thoughts in mind:
  • Does the EU really know what it is trying to address?
  • Do they really know what the IoT is and how it operates?
  • Is it likely that any regulation would actually stop activities it was intended to?
  • Is it likely it would stop other, wholly desirable activities instead?
  • What about areas not yet invented? Would it stifle innovation?
  • Would future generations view the dangers in the same way anyway?

On the face of it, it seems quite likely that it may well do more harm than good – at high cost. It certainly sounds like a gravy train!

The Digital Things 2.0 executive brainstorm event took place on March 28 in San Francisco and went very well – see agenda here.

This is a different type of event. It is very interactive and promotes quite intensive discussions amongst the invited audience. It is all about getting a group of people together who know about the M2M market and have an opportunity to share their views about upcoming issues in a structured way. I believe this is the sort of event the M2M market needs – structured debate on new sources of value in the M2M market as we head towards the Internet of Things.

We had a great cast of M2M luminaries as stimulus speakers and panellists for the day including: Jeff Smith, CTO for Numerex; Brian Murphy, Head of M2M Americas for Vodafone; Leo McCloskey, VP Marketing for Airbiquity; Kent Dicks, President and CEO for MedApps; David Kalb, Director of M2M Business Development for AT&T; Niels Helkov, VP e-Health Americas for Orange Business Services; Brian Anderson, VP Marketing for Sierra Wireless among others. My colleagues and I also presented new ideas from Beecham Research.

Many issues were discussed during the event – too many to report on in this blog. We will cover more in our next Beecham Snaps newsletter, to be published mid-April. Here’s a flavor of some of the topics covered:

Defining and Mapping Business Models – provided an outline of new business models appearing in the M2M/Internet of Things space and the potential role for telcos moving up the value chain. This is on the basis that value is migrating away from network connectivity.

Results from a poll of the delegates showed that only a small percentage thought operators should provide only basic connectivity without any higher-level functionality. “Managed connectivity” was then the only option that wasn’t rejected by any of the delegates. “Value-added service enabler” scored higher than a “customer stewardship” role.

A key concern that emerged from the Mindshare feedback was vertical proliferation and the weakness of standards in this field. Much proprietary development has been going on, which isn’t helping. A tension was identified between the effort to improve the standards, and the effort to deliver current projects. Operators were also seen as being light on industry knowledge.

Inertia was identified as a big issue. Operators couldn’t expect customers to change, they had to change themselves. But this is where the inertia kicks in. Silo structures are also a problem.

Scale and size are an issue. One delegate remarked that companies typically go through phases of commoditisation and differentiation, and operators usually tried to break out of it with a big acquisition. But M2M companies are not usually big enough to change the culture of an acquirer, especially not one the size of a telco. This makes culture change required for M2M development more difficult.

The Role of Cellular Networks in the Internet of Things – many M2M services are prohibitively expensive without more innovation. The industry is passing through a “bottleneck”, where innovations outside it are driving it onwards, but existing constraints holding it back. One unusual example is the use of technology from robot vacuum cleaners to control robots searching a shipwreck.

More specifically, “yesterday’s” M2M had been constrained to limited and highly task-specific functions. “Today’s” only differed in terms of scale. Revenues are much greater, and the scope has increased from single plants to national and continental deployments. “Tomorrow’s” M2M, though, will be far more generalised, more global, more autonomous, and will increasingly link different M2M systems.

See our Beecham Snaps article mid-April for more on this. Sign up here to receive it automatically. Our partner STL Partners will also be publishing a report based on this event.

Beecham Research will now be taking this discussion forward to our next executive brainstorm, to be held in London on June 13. Those interested in attending might like to look at this link http://www.newdigitaleconomics.com/EMEA_June2012/

What do you think about where the value lies in the future as M2M drives towards the Internet of Things? Comments on this content and on upcoming issues regarding this are welcome and could be integrated into our current research program.

There used to be a two week gap between Mobile World Congress and CeBIT. Now they’re back to back and Embedded World in Nuremberg is the same week as MWC. That may not matter to most exhibitors and visitors, because there is not actually that much overlap between these shows. However, with the rising interest in M2M, each of these three shows is now relevant to our market. It makes for a busy few weeks, but at least the CTIA show in US has moved this year from March to May so is now well outside this period. Of course, by doing so it is now very close to the annual M2M Forum in Milan, Italy which happens on May 3 this year.

Comparing notes with others at the show, CeBIT felt a little smaller this year (I understand that Hall 1 – dubbed the largest exhibition hall in the world – was not used this time). It still reported visitor attendance of 334,000 – about 5 times larger than MWC the week before and more than twice the size of CES in Las Vegas in January. There again, while MWC is more about getting mobile supply chain vendors together, CeBIT is more about targeting technology adopters and so has a different feel to it.  Also unlike MWC, M2M was not yet everywhere at the show. You still had to search for it in different halls spread across the largest fairground in the world. However, M2M Zone at CeBIT has done an excellent job of bringing M2M-focused suppliers together to create a more cohesive M2M presence at the show . . . just like M2M Zone at CTIA has already done in fact. There was some lively discussion in the seminar sessions, not least when it came to the topic of security in M2M and the old favourite 2G versus 3G for M2M.

There is a blog entry from last October on this 2G versus 3G debate by Steve Pazol – currently of nPhase – that is well argued from a North America perspective. See this link. Having orchestrated the sale of the rest of nPhase to Verizon, Steve will be leaving the M2M industry shortly. Read one of his final interviews here on m2mapps and click here for my previous blog post on this.

Digital Things 2.0 Executive Brainstorm – San Francisco March 28, 2012

Now – if you want to take part in a debate about where M2M is headed over the next few years, you should register for the Digital Things 2.0 Executive Brainstorm event in San Francisco on March 28. Follow this link to find out more and gain a 25% discount.

We first introduced this highly interactive format to the M2M market last year in London – in May, and then further developed it for our November, 2011 event. Both of these were very successful and are based on a format where delegates vote using terminals available on each table in real time on a variety of issues presented.  The results and scoring are thrown up on the main screen immediately and this forms the basis for highly interactive panel discussions between panellists and delegates.

In San Francisco, we will explore New Sources of Value in M2M and the Internet of Things by examining the following issues.

• The likely impact of the Internet of Things (IOT) on business models
• The developing role of cellular networks in M2M/IOT
• The future role of Service Delivery Platforms in an IOT environment
• How this plays out in particular sectors – Energy, Healthcare, Transport (Telematics)

We have an excellent panellist and speaker line-up. To find out more, click here. To register, click here. Time is running out so please register now. We look forward to seeing you there.

Last week was Mobile World Congress  (MWC) week in Barcelona of course. Like many others, I have been making the annual pilgrimage to this event – and its predecessor on the beach in Cannes – for many years and from an M2M perspective it has changed considerably. In the early days it was all about handsets and if you could find a cellular M2M module somewhere you counted yourself lucky. The conference never so much as mentioned M2M in those days.

Things changed a lot last year after the GSMA commenced its Embedded Mobile program and followed this up at MWC with its Embedded (Mobile) House. It soon became clear that the Embedded House offered the best (and lowest cost) cappuccinos in the show and quickly became the place to be. It was a huge success. This year we had the Connected House – equally successful I think.

In contrast to earlier years, M2M was everywhere in this year’s show. It was almost as if a booth was not complete unless it had something referring to M2M in some form or other. Of course, it does mean the cellular community has now thoroughly hijacked the term and it is worth remembering that M2M is in fact technology-agnostic: it is just as relevant to fixed line solutions, satellite and short range wireless as it is to cellular – see our recent Snaps newsletter on this point at this link. M2M is of course all about implementing practical results – solutions – and these technologies are just various alternative ways of achieving those ends.

One growing trend arising out of this new concentration on M2M is therefore particularly encouraging: M2M-speak moving from its connectivity focus in the early years to an increasingly service-related focus now. Terms like Smart Grid (a horribly over-used term at the show) and Smart City (a poorly defined term that currently means whatever you want to read into it), as well as the GSMA’s own Connected Living (to replace Embedded Mobile) indicate the way people are beginning to think of M2M. Of course we already have eHealth (or mHealth at MWC), and Telematics has been with us for years.

This is great news! We have been going on for years about M2M being about services not connectivity. Beecham Research’s Sector Map (see link here) has Service Sectors at its centre on purpose. But there is another aspect of this that is also particularly encouraging. Everyone is now talking about M2M, but with the focus now shifting to services and the opportunities represented by them, maybe we are getting closer to the day when the term “M2M” itself can recede into the background.

The prospect of a mobile spectrum crunch in the US within the next two years was raised again today in a report from CNN Money (see this link). Basically, wireless spectrum is a finite resource and the allocation for mobile voice, text and Internet services is being used much more quickly than new spectrum is being made available. It has a lot to do with the introduction of the iPhone and subsequent smartphones (24 times the network usage of a voice only cell phone). In fact AT&T calculates that wireless data traffic on its network has increased by 20,000% since the iPhone launched in 2007. Whether you believe this figure or not – as per Tim Farrar’s blog (see this link) there may be some significance in the use of the term “wireless traffic” as opposed to “mobile traffic” – the increase has been dramatic and unexpected. Although this is also a growing problem elsewhere, it is particularly acute in the US.

This shortage of spectrum led directly to AT&T’s abortive (but expensive) attempt to acquire T-Mobile USA and also to its move to 3G for new M2M module certifications, which has had further unforeseen consequences in the M2M market. So the looming spectrum crunch has already had implications for M2M in US even though it is in no way contributing to the problem.

Of course it may do in the future. The prospect of hundreds of millions of new cellular M2M connections over the next few years will make a difference even though data usage for each connection is tiny compared with a smartphone. It is not so much the data usage that matters here, it is the network overhead and M2M using 2G is very inefficient (about 2% usage, I understand). The trouble is, 3G is no better. On the other hand, 4G is much better. So maybe the right answer for M2M is really to stick to 2G until 4G is affordable and skip 3G altogether.

This spectrum crunch has really arisen for a completely different reason though. This is that the pricing of bandwidth has not kept in step with demand. When you have an increasing demand for a scarce resource, the price usually increases to compensate. Look what happens to the price of oil when there is the threat of a shortage. This normal economic model has been suspended in the mobile world – in fact reversed, as the trend is now for larger amounts of mobile bandwidth at ever lower prices. So we should not be too surprised when major consequences arise.

The comments received on my last blog – New Standards for M2M Services – have raised some interesting points.  I would like to respond to these by introducing what may be an alternative approach to standards-setting for the M2M Services Layer.

The goal of standards for M2M is to maximise interoperability. There is no doubt that standards are required for device interfaces to ensure that different M2M solutions can understand the data being delivered by the remote devices. Standardization at that level means that devices can be made in the millions and be linked to a wide range of applications and services.

Does interoperability for M2M services mean there has to be a standard M2M Services Layer though? A different way forward would seem to be for platform providers to place their protocols and software agents into an Open Source environment so that application developers can choose who they want to integrate with. This is a “market decides” approach that may in fact be a lot quicker than formal standards, which almost by definition must lag behind what is going on in such a diverse and fast-moving market as M2M.

A proper Open Source environment has rules about who can add new code, when this can be done and who needs to approve it. Java Platform Enterprise Edition (Java EE) is an example of how this can work in practice. Linux is also an example.

Recent work by the Eclipse Foundation (www.eclipse.org) has led to the creation of an M2M Internet Working Group – see www.eclipse.org/org/industry-workgroups/m2miwg_charter.php. As this says, the aim of this Working Group is to encourage, develop, and promote open source solutions that can be used to overcome market inhibitors found in most M2M ecosystems. Just taking the first two such inhibitors identified, these are:

• Fragmented market: wide range of embedded platforms, programming models, connection types, communication protocols.

• No widely accepted M2M architectural guidelines

The key advantage of Open Source for M2M services compared with standards is ease of implementation. All the code is out there. Developers can then make their own choices of how they want to maximise the market opportunities for their applications. Maybe this represents a way of getting to the same place more quickly.

Following ETSI’s (European Telecom Standards Institute) recent first release of an M2M Services standard at their workshop last October, this week saw two further related announcements. First, a joint announcement involving no less than 7 Standards Development Organizations from around the world, including ARIB (Japan), ATIS (USA), CCSA (China), ETSI (Europe), TIA (USA), TTA (Korea) and TTC (Japan). This initiative “recognizes that M2M services often rely upon communications networks for connectivity between the myriad of devices in the field and the M2M application servers, and have identified the need for a common cost-efficient, easily and widely available M2M Service Layer, which can be readily embedded within various hardware and software.” This will initially focus on the M2M Service Layer. It is to be hoped that each of these organizations has the same understanding of what the M2M Services Layer consists of.

The second announcement came from the ITU, also looking to establish a focus group on the M2M Service Layer, initially looking at the requirements for e-health. It is to be hoped that this will be consistent with the first initiative.

These initiatives are of course to be welcomed. Anything that helps to speed up, simplify and reduce the costs of bringing new M2M applications and services to market should be hugely beneficial. So long as they actually do that.

My concerns have more to do with how this plays out in the real world.

I have already talked elsewhere about Beecham Research’s own recently completed study in this area (click here for details) – what we refer to as M2M Service Enablement Services (SES). At present there are well over 60 M2M platforms in the market and this is growing quickly. They do not all do the same things – not by any means. During the course of the study, Beecham Research identified over 110 different service elements that either are or will likely shortly be offered by different platforms. None of them do them all though nor can they because of the way the market is structured. That structure is  unlikely to change much, although of course the supply chain must be reduced in length and complexity.

So therein lies my first concern. Will these standards incorporate all such service elements? It seems unlikely. The M2M SES market is moving rapidly in many different directions, including billing, customer support, provisioning, application development, system integration and event processing to name a few. If these and other requirements are not fully catered for in the new standards, who does them?

That leads to my second concern. If the market gets to think that simpler all-embracing solutions are just around the corner, will they wait . . . only to find they aren’t?

That leads swiftly to my third concern. Who is responsible for implementing all this? This is not like introducing a new technology where technology suppliers just launch new standards-compliant products into the market. It is also not like a new cellular mobile feature that is totally in the domain of the mobile operators. These M2M services are appearing from many different sources, in different parts of different value chains.

Is this a recipe for market confusion that has the effect of slowing down rather than speeding up implementations?

Following on from the announcement before Christmas of SensorLogic’s assets being acquired by Gemalto/Cinterion, the new year has brought news about two others on Beecham Research’s list of the Top 16 movers and shakers in M2M Service Enablement.

News received on Friday (January 5, 2012) of Verizon’s move to buy the 50% of nPhase it didn’t already own were followed on Monday (January 9) by AT&T announcing a new, higher level resale agreement for Axeda’s services.

Actions like these were predicted in Beecham Research’s latest report on M2M Service Enablement Services, just published (for details, click here).

For Verizon, the choice of nPhase was the logical one in order to achieve a totally integrated M2M service. At a personal level, it represents a triumph for nPhase founder Steve Pazol in steering the company through its third ownership transaction to what should now be a stable outcome. It remains to be seen if Verizon can build its momentum in the M2M market through this deal.

Previously, Axeda’s services were available from AT&T through a co-sale arrangement so this announcement represents a deeper commitment by AT&T in Axeda’s services. It is reminiscent of AT&T’s already well-established partnership with Jasper Wireless and confirms the complementary nature of Jasper’s and Axeda’s services. The deal is “an exclusive among major U.S. mobile carriers” to create AT&T M2M Application Platform powered by Axeda, which presumably impacts both Verizon and particularly Sprint. It is also unclear as yet if these announcements will affect nPhase’s partnership agreement with Axeda.

So what next in this rapidly developing part of the M2M market?

Beecham’s report concludes that “SE Services represent a significant future revenue opportunity for MNOs, resellers and M2M suppliers. We expect SE services to be a catalyst for great change in the M2M market and to accelerate visibility and market development. We also expect SE services to provide a significant opportunity for differentiation between market players”.

With this in mind, one can speculate that the European carriers are not far behind. With the pace quickening in this part of the M2M market, we shouldn’t have to wait long for the next instalment.