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.