M2M: Great Potential, But Great Challenges as Well

Carl Weinschenk

One of the sectors about which vendors and services providers are most excited is machine-to-machine (M2M) communications. Heavy Reading Insider analyst Simon Sherrington, in a piece hyping a more substantial report for the site, takes a look at the opportunity as well as the considerable obstacles to tapping into it.

First, he does a nice job of ticking off the great potential of M2M. As folks who follow telecommunications are well aware, it is a long and wide-ranging list. What is fresher is his look at what must be done to monetize those opportunities:

Operators must strip costs out and automate systems that must deliver bespoke solutions for individual M2M customers. They need to change the types of support they offer, and introduce much more flexible rating, charging and billing processes. This all requires the purchase or development of new technologies -- as telcos' traditional systems were not designed to provide services in this way -- and technology providers have emerged to fill the gap. The most successful among these so far have been those offering managed M2M platforms -- typically hosted, cloud-based platforms that offer many of the infrastructure elements that telcos need to put in place.

The bottom line, then, is that M2M is a hugely promising sector – but the very nature of that promise makes it difficult to tap into. That makes perfect sense. The drama will be the ways in which the telecommunications and IT industries tackle the challenge. Work clearly is moving ahead. One of the companies that Sherrington mentioned as an enabler, Axeda, announced a partnership this week with JackBe. The partnership focuses on mining and use of data generated by M2M platforms.

The Carbon War Room, an organization that – you guessed it – advocates cutting carbon emissions, released a report at Mobile World Congress that maps out strategies to save billions of tons of carbon. The entire report is online. The accompanying press release suggests that the savings can come from actions of individual companies in the food chain and those firms working in concert.

The Carbon War Room’s assessment that companies can work alone and together to cut emissions dovetails nicely with Sherrington’s assessment that much development work is necessary to tap into the potential. Put aside for a moment the rather huge point that what The Carbon War Room – which, by the way, was founded by Sir Richard Branson – advocates is something that could help save the planet. On an operational basis, both parties are making the assumption that the nuts and bolts work of creating an M2M infrastructure still is in its infancy.

Sprint is among the carriers most deeply involved in M2M. The Carbon War Room report was mentioned in (and perhaps inspired) an interview by GreenBiz.com’s Joel Makower with Sprint Nextel Vice President for M2M Wayne Ward. The interview didn’t directly take on the maturity of the infrastructure needed to enable M2M to reach its goal. But the overall breadth of the interview left no doubt that Ward sees both the potential size of the market and the steep challenges to profiting from it.

The takeaway is that news and commentary about M2M virtually always focus on the astronomical amount of money that it can generate. It’s good to remember, however, that nothing comes for free. In this case, the cost is creating a deep and flexible infrastructure.



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