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The Future of M2M is . . . and the impact on M2M Forecasts is . . .

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.

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