Announced today (see this link for more details) – Telit Wireless Solutions acquires ILS Technology, a leading provider of a ready-to-use, off-the-shelf, cloud platform to connect enterprise IT systems to m2m-connected devices and machines for business-critical use.
This is a deal designed to bolster Telit’s previous acquisitions of GlobalConect – which formed the basis of module management services in m2mAir – and CrossBridge Solutions which provided connectivity solutions for the North America market. Both of these acquisitions covered network layer services associated with connectivity management so the acquisition of ILS Technology provides a complementary acquisition for application layer services.
On the face of it, this is both a bold and logical move by Telit to expand its services offering. It represents a critical move up the value chain from supplying modules, remote module management and connectivity to providing application support as well – in other words, supporting the management of the M2M data flowing through the connectivity. It also provides a common thread linking CrossBridge Solutions connectivity for the North America market and Telefonica/Jasper Wireless managed connectivity elsewhere – all provided as elements of Telit’s m2mAir.
ILS Technology, previously part of Park Ohio, has been mainly operating in the industrial applications environment to date using primarily fixed line connectivity (but some cellular as well) so some work will be required to move this more into the cellular environment. We await further developments on this with interest.
There is a lot of discussion going on right now about when the next smart watch will appear. Samsung is expected to launch their Galaxy Gear smart watch at the IFA show in Berlin next week. The apparent aim of doing this is to trounce Apple, who may or may not launch their rumoured iWatch at their own event on September 10 in San Francisco.
In view of this and some pretty optimistic forecasts that have been thrown together recently, it is worth exploring the question – who really wants a smart watch?
Over the last few years, it has become increasingly apparent that use of wrist watches is declining – especially in the under 30 age group – in that less people are wearing them. If you use a watch just for telling the time, then your mobile phone is often just as handy and if you take your phone everywhere, why bother to wear a watch?
Females are much less likely to wear a watch than males. When they do, it is often more of a fashion accessory and the form factor is often extremely important – it must generally be small and stylish, or look like a piece of jewellery. At the same time, ownership of smartphones among females is shooting up compared with that of males – to the point where in some countries like the UK there is now a higher percentage of female ownership of smartphones than male ownership.
Even among males, watches appear to be worn less these days than was the case even a few years ago. For those that do, style is also increasingly important. While some want a big and chunky watch, others want something more refined and perhaps less feature rich. In other words, people want to choose what they wear and their choices are very different.
Against this background, the smart watch is aiming to disrupt the watch market by adding a lot of new features and apps. Will this be sufficient to change what people want to wear on their wrists though? How different will they look? Will everyone suddenly want to wear basically the same thing or will they want to choose between many different style formats? If these products are physically quite large, possibly with wide straps, how appealing will they be to the large majority of the target buyers?
Beecham Research’s new report on Wearable Technology (Wearable Technology: Towards Function with Style – follow this link for more details) explores these issues using a new methodology of fashion profiles – 35 of them. In this market, it is not just a question of early technology adopters and late adopters. It is all about aspiration and style, who wants to wear what and why. Smart watches are aiming to introduce many new features and applications under the headings of communication, fitness, personal security, retail, wellness and others. Important though these undoubtedly are, unless these new products address the aspirational and style needs of their target users they are unlikely to actually be worn. For the Wearable Technology market to really take off, it is not in fact the technology that will make the sale. It is how it looks and the different options available to change that appearance that will really count.
We recently conducted a survey with Oracle of the M2M/IoT market to see what people are expecting regarding application intelligence for connected devices over the next few years. Does it need to increase? If so, is this at the network center or at the edge? What are the implications of this? We presented the results at a webinar on June 27 – available here if you missed it and want to catch up on it.
Not too surprisingly, everyone in the survey reckoned that application intelligence for connected devices needs to increase in the next 3 years. Perhaps more surprisingly – in view of the increasing interest in cloud-based services – the vast majority of these also thought that greater intelligence will be required at the network edge. In other words, forget the idea that edge devices will stay the same or get dumber with all the intelligence for applications migrating to the center. It’s not going to happen like that. Why’s that then?
Firstly, the survey found that a full 81% of those expecting more application intelligence being required were expecting the need for real time decision making at the edge to increase. Why? M2M has always been about real time data, but it has also been about sending that data from a remote device or sensor to a data server typically at the center for processing and subsequent distribution of information. So why the greater need for more real time decision making at the edge? In our view this reflects a move towards optimization of operations rather than just monitoring them. This not only needs more data, it needs it more quickly. That’s of course very consistent with the ideas behind the Internet of Things.
In line with this, respondents also expected a greater need for local data storage at the edge. In addition to all of this though is the greater need for solution security right from the edge all the way through to the center. That also requires greater intelligence at the edge.
It’s all happening at the edge then. Is that the whole story? Catch the next webinar in the series in October for more on this.
The IMC (International M2M Council) was finally launched at the CTIA show this last week, after much discussion and meetings in Europe and North America over the last 18 months. We see this as a significant and very welcome new trade organization – one that is dedicated to giving an international voice for the M2M/IoT community and does not view M2M through the narrow perspective of a single technology, product category or vertical industry. The key aim will be to bring together vendors who collectively form the M2M Solution Provider community with Adopters of M2M solutions into a single membership organization. We believe it will be highly complementary to other regionally-focused M2M organizations, notably the increasingly successful M2M Alliance in Germany. Founding members of the IMC are Deutsche Telekom, Digi, Kore Telematics, Oracle, Orbcomm and Telit with more to follow soon we believe. See the website for more details – www.im2mc.org
Elsewhere, a trend we have mentioned before was very much in evidence at the show this year: the shift in focus from connectivity to extracting value from connected device data. While device connectivity will always be important – crucial even – it is becoming more accepted in the market as a given and something to build on. For the last four years, Beecham Research has drawn a distinction between what we refer to as the network layer (managed connectivity) and the application layer (managed data) within the overall scope of M2M Service Enablement Services (SES) – M2M platforms. We also predicted long ago the necessary shift in focus that is now evident: towards the application layer that has more intrinsic value than the network layer. Expect lots of activity – acquisitions and new development announcements – in the M2M market centred around the SES application layer during the next 6-12 months! Such activity will lead the market to a whole new ballgame – of which more later . . .
The most interesting and practical new service we saw at the show was Telenor Connexion’s (www.telenorconnexion.com) Split Billing Suite, initially aimed at the Connected Car market but with lots of potential elsewhere as well – for example in the Smart Home environment. The principle behind this is the need to find a way of sharing a single network connection between many different and diverse services, each often being provided by completely different service providers. Think vehicle diagnostics versus in-car entertainment. How do you get two such diverse services to share a single connection out of the car, so you don’t end up with dedicated connections for each service that may well price both of them out of the market? Who pays for that single connection? How does each independent service provider get access to that connection? Telenor Connexion’s answer is to offer an intermediate service that offers deep packet inspection so that service packet streams can be separated out in real time and directed to each service provider independently. We think this is an elegant approach to a problem that the M2M market has been wrestling with for some time.
I took part in an M2M roundtable event last week in London. The gist of it was – the M2M market has promised so much, why is it taking so long to deliver? This is a question that keeps coming up, so worth exploring.
There were 15 participants in this closed event, many with deep experience in M2M, others with less – so a useful cross-section.
It was generally agreed that talk of 50 billion connected devices by 2020 and other similar numbers have set high expectations for M2M that are not particularly realistic. However, it has also focused minds on the possibilities, which is useful. In addition, M2M tends to be equated with cellular connections, whereas in fact M2M (and Internet of Things) solutions use all forms of connectivity, including fixed line and a wide variety of short range wireless options in addition to cellular, satellite and other wireless wide area network alternatives. When you also take into account the numbers of sensors that could usefully be connected, the overall numbers get very large, very quickly. It is then not particularly meaningful to focus on the precise numbers of connections there could be. Other factors become more important – like how to create value from the data generated by all those connected devices. There is no point in connecting devices just for the sake of it – doing so needs to create value that people are prepared to pay for.
In fact, M2M as a business solutions market continues to grow at a steady rate and will continue to do so for the foreseeable future. There are certainly a range of initiatives that can speed this growth up and many are in progress already, but the business market is limited by the speed with which companies can implement these solutions and the business process change this normally entails. In my last blog post I talked about the term Industrial Internet now creeping in as an evolutionary step to M2M. Championed by General Electric (GE), this is an approach that promises to make intensive use of data from very large numbers of remote sensors. We call this “M2M on steroids” because it is essentially about M2M business solutions with much more intensive use of data. By all accounts, this type of use is not far off and provides a further path for M2M business solutions growth.
But what about connected device solutions for the consumer? Are these taking off as quickly as they should be? The short answer is – not yet. Beecham Research refers to such solutions that are focused either directly or indirectly on the consumer as Internet of Things (IoT). Very rapid growth in numbers is much more a consumer market characteristic than a business market one.
The truth is – many of the IoT ideas need to be made a lot simpler than they currently are and consumers need to want them. At the same time, they need to make money for those who provide them – or at least, they need to provide value to their businesses. This is often not the case at present and the business models do not look very attractive. There is a lot more work needed for this potentially enormous part of the market to reach its potential.
We were in San Francisco two weeks ago, hosting our Digital Things executive brainstorm. This covered a lot of useful ground, including a discussion on how significant the concept of the Internet of Things actually is. Participants ranged from the highly practical – from a background in what works in the M2M market today and what tends not to work – to the aspirational – can this help humanity as a whole?
The general sentiment, as expressed in the instant voting, was that the Internet of Things truly represents a huge new opportunity and not just a new way of looking at existing trends. There were also dedicated sessions on business models for IoT, IoT platform requirements and on Big Data. You can see the agenda for the event at this link. Next stop – London, where we will be discussing a similar agenda on June 6.
It is certainly the case that much of what is being discussed right now regarding the Internet of Things is consumer related. A lot of the business models associated with consumer connected devices do not work very well at present. This is in contrast to those for business related connected devices – usually referred to as M2M – which generally do work and have increasingly proved to be highly effective. There is a lot that needs fixing in the consumer connected devices segment.
However, the term Industrial Internet is now creeping in as an evolutionary step to M2M – see our Snaps newsletter article this month on Big Data at this link as an example – and this promises to be hugely significant. Championed by General Electric (GE) and, using slightly different terms, also by Cisco Systems this is “M2M on steroids” as indicated in our newsletter article. The prospect is that – through much greater awareness of how machines are operating in their overall environment – much greater optimization of operations are feasible. This means a lot more sensors and the creation of a lot more data, with data analytics techniques being increasingly used to provide timely and precise information. This promises both further refinement to already-proven M2M business models as well as the introduction of new ones, and potentially substantial disruption in high use segments of the M2M market.
If you think there are just a few, then you would be wrong.
Beecham Research has been researching and analyzing the Wearable Technology market and its potential for the fashion industry for some time. As part of this, we thought it would be useful to create a Wearable Technology Application Chart to show just how broad this market is. You can access this chart as a free download at this link – Beecham Research Wearable Technology Application Chart.
Take a look – you may be surprised. In all, we have identified 20 application groups within 6 key sectors. Within each application group there are then many different examples already being used. At the outer edge of the chart are images showing examples of products already out in the market for each application type. And this is just the start . . . there are many more to come, whether the rumors about Apple getting involved in this are true or not.
This chart was first featured at the M2M Evolution conference in Miami on January 29, and was subsequently launched at the Wearable Technologies conference in Munich on February 4. It also featured at Wavefront’s M2M Summit in Vancouver also on February 4. The feedback we have had from these and other viewings has been very positive so far – that the chart provides a good representation of all the main applications currently in use or under development.
For those familiar with Beecham Research’s M2M Sector Map – available here for free download – there is of course a close resemblance in format. Our reason for that is, there is a similar underlying message:
This is a market with a very broad range of applications with many just waiting to be picked up and used.
Some of the key enabling technologies are now excitingly real. We will be talking about those and the real potential revenue for Wearable Technology – also known as ‘Connected Clothes’ or even ‘Digital Clothes’ – in our new report on this market, which will be available shortly.
In the meantime, we are still looking for further feedback on this chart. Have we missed anything important? Do let us know . . . !
‘Connectivity’ for consumer devices was a much bigger story at this year’s CES than in previous years. The one that particularly caught my attention was the connected fork, part of the line-up featured in this article. Why would you want to connect a fork to the Internet? In this case, the reason is to detect how fast you’re eating and maybe encourage you to slow down. That way you might discover you don’t need to eat as much as you thought – an aid to reducing weight.
This just goes to show that, if you look hard enough, you can find a service opportunity from connecting virtually any thing to the Internet. It’s all about looking at devices and objects from a different perspective: what could you do with data provided by the thing? Of course, the service dreamed up may not be compelling enough to make a fortune, but that’s a different matter.
I have been talking and writing about connecting things to the Internet in order to create new services for a long time. Up to now, though, these have been mainly business-related things, from CCTV cameras, combine harvesters, digital displays and jet engines to MRI scanners, point of sale terminals, trucks, vending machines, even clams to get an early warning of pollution in sea water and many more. What is really beginning to capture the imagination now, though, is connecting everyday things to help improve our lives. We already have the connected pillbox that glows to remind you to take your medicine at the right time. Now we have the connected fork and a whole host of other new ideas coming up.
Another developing theme at CES was wearability. The idea that we will make better use of technology and generally improve our lifestyles by wearing it, either as easily-worn devices or integrated into our clothing in some way. This picks up on a developing trend, where technology moves from functional to usable to wearable. One can draw an analogy here with mobile phones. In the beginning, we had those “bricks on sticks”. Functional yes, but not particularly usable beyond the precise purpose it was designed for – making phone calls while moving. This evolved through several generations of mobile handsets, until we had the next breakthrough which was the iPhone. This introduced a next stage of evolution – a highly usable, portable device with a virtually unlimited number of applications. So what is the next stage of this evolution? Perhaps when the parts of the device are split up and you wear them. The human interface might then change again, no longer relying on hard or soft buttons to make them work.
The point about all this is that the time for connecting everyday things to the Internet has truly started to arrive. There will still be lots of new ideas for connecting business-related things, but there is now a clearly developing momentum for connecting consumer-related things as well.
Where does IOT (Internet of Things) fit with M2M? Are they different, or are they the same thing? Is one transitioning into the other? These questions were a little esoteric a few years ago – they really did not matter. We think they do matter now though. Regarding IOT, how can you build it if you can’t agree what it is and what it’s for? At the same time, how can you forecast it accurately?
Regarding the definition part of this, Beecham Research’s view is that M2M as we know it – “M2M Now” – is transitioning right now along two different paths – what could be called “M2M Future” and IOT. This transition was outlined in the summary of our recent survey for Oracle – see this link for more details. Here’s a key extract from that report:
This body of research indicates that there are two key trends underway in the rapidly-developing M2M market.
The first is in the B2B segment. Here, M2M data from remotely-located assets and devices is increasingly being used for strategic purposes and value creation throughout the enterprise. This is a far cry from the early days when M2M data was strictly the domain of the service department and used for mainly operational purposes.
The second is in the B2B2C segment, where the opportunities associated with the Internet of Things (IOT) are now becoming apparent. IOT in the B2B2C segment will be characterised by data from large numbers of remote devices and sensors in one sector being combined with data from other sectors and with data from social media. This will impact consumer lifestyles and provide enormous potential for new services.
To avoid confusion with other definitions of IOT that are out in the market right now, we refer to our definition of IOT in the B2B2C segment as “Digital Things”. We think this draws a necessary sharp distinction between what is required to support business operations and strategies in the future (M2M Future) compared with support requirements for the consumer, or citizen in such application areas as Smart City (Digital Things). It also follows that this distinction is really at the application level rather than the network level: we expect basically the same network infrastructure will carry both application types but the application support requirements for each will be very different.
We like this definition because it builds on what is already in place, rather than seeking to replace it with something ill-defined that is not in place. We think it also makes it clearer where the new thinking needs to be: not so much in the M2M Future area that is already reasonably well understood, much more in the Digital Things area that – in our view – is not mapped out at all. We also think the standards work would be better focused on the Digital Things segment where there are currently very few platforms, rather than on the M2M Future segment where there are already plenty.
All of this has profound implications for M2M forecasting. I very much agree with the sentiment in Jeremy Cowan’s article this week – The $$ cost of M2M hype and false hopes – which questions the accuracy of recent big number M2M forecasts. It is becoming very much more important that M2M forecasts take into account likely market changes over the next few years because of the infrastructure investments required and the likely growing dependency of businesses on their connected assets. Then there are the big bets that M2M suppliers need to take to grow their businesses. To take just two examples, 5 years ago the M2M market had only a handful of M2M platforms and most of those were in the fixed line market. There were no connected consumer products like eReaders. Now there are over 100 M2M platforms in the market and eReaders are transforming the publishing business. 10 years ago there were no connected residential smart meters and no real justification for installing them. Now Italy and Sweden have already completed nationwide installations in every home. On the other hand, 10 years ago it was confidently expected by some that virtually all vending machines would be connected within 5 or 6 years. The reality now is well short of that and likely to remain so – except in Japan. Car telematics and home healthcare monitoring were other applications thought to be on the cusp of take-off 10 years ago. They still are.
No forecast is going to be entirely accurate. The longer range it is, the greater the opportunity for it to be wildly out. On that basis, it seems to me that a 10 year forecast based on projecting today’s market offerings has virtually no chance of being even remotely accurate. Segmenting a forecast according to key concepts like those outlined above should help to limit those problems.