In some ways, machine to machine (M2M) communications is the dark matter of the telecommunications universe. Like the mysterious stuff that represents most of the matter in space -- but that nobody has ever seen -- there is a surprising amount of M2M traffic flowing through the Internet. It is growing and must be carefully tracked by planners.

People are starting to shine a light on this terrestrial dark matter. ABI Research says that worldwide installations of smart electric meters, a main M2M application, will grow from about 49 million in 2007 to about 76 million this year. KORE Telematics, an M2M hardware and software firm, estimates that there are 60 million to 70 million machine connections to wide-area networks (WANs) now. President and COO Alex Brisbourne estimates that the number is increasing at a 45 to 50 percent compound annual growth rate, suggesting half a billion device connections by 2012. A third estimate comes from Harbor Research. The company says intelligent device shipments will grow from 73 million last year to 430 million in 2013. Wireless sensor networking gear will represent much of that growth, the firm says.

Big Thinkers

Like celestial dark matter, M2M demands that people think big. “The way we frame it is that we call M2M the pervasive Internet,” says Harbor Senior Analyst Jonathan Berman. “The idea being that this is going to seep through every aspect of the lives of people, though they may not always be aware of it…. Everyone is expecting this to be an incredibly large market, to surpass everything we understood about the Internet and the Web. It is just a matter of time.”

More than a few of the building blocks of this expansive future are falling into place. Equipment prices are coming down, numerous wireless and cellular networks are covering greater areas and key benefits enabled by M2M – the abilities to conserve energy and operate in an environmentally responsible manner – are in vogue. Carriers are onboard, says Michael Ueland, the vice president and general manager of Telit, an M2M equipment maker. “We’ve seen it out of all the carriers. They are paying a lot of attention to it, adjusting rate plans to fit device communications. As they see voice applications level off, M2M is growing and growing fairly quickly.” He adds that while the average revenue per user (ARPU) is less than it is for human-handled devices, churn tends to be lower.

At the end of the day, the M2M market segment will feature a combination of cellular, satellite and wireless players, says Adam Crossno, the CEO of OnAsset, a service provider to the M2M industry. At this point, carriers are becoming more involved, he says, but are tempering their enthusiasm because earlier aggressive predictions didn’t pan out. “All are in the ballgame, but none are ‘all in’ yet,” he says.

Of course, all telecommunications is, strictly speaking, machines talking to machines. M2M typically refers to those communications in which humans aren’t hanging onto either end. These include consumer-oriented systems such as GPS and sensor networks that are literally and often figuratively stuck in the muck and mire of everyday life. Both levels of M2M are growing. Driven by the economy and by the emerging greening of telecommunications and IT, more sophisticated M2M applications are rolling out. Data monitoring and data alerts are the two areas growing fastest, says Tim Colleran, the interim CEO of ZeroG Wireless, a fabless semiconductor company.

Insiders have no shortage of examples of how M2M enables more efficient and greener operations. Electronic meter reading is not new. Increasingly, however, utilities are employing systems that collect more precise information about how much fuel is needed. Sending less than an average delivery – if, for instance, the family was on vacation and no fuel was used for two weeks – enables trucks to run lighter and use less fuel themselves. Likewise, a truck heading to the Canadian or Mexican border formerly had to stop and go over the manifest of the vehicle’s contents. M2M enables that information to be sent ahead automatically and the truck to get through much more quickly, thereby saving fuel and gaining other efficiencies.

M2M is growing more quickly in the wireless area, says KORE Telematics’s Brisbourne. He says that these systems tend to be less expensive, the sporadic nature of much M2M messaging dovetails nicely with wireless, wireless is more ubiquitous internationally, and many locations where M2M is needed are far easier to reach via wireless.

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