M2M Will Be a Big Star, Any Way You Look at It

Carl Weinschenk

Machine-to-machine (M2M) communications is a bit tricky to define, since all modern telecommunications consist of one device (or machine) sending and receiving data from another and, therefore, fit the literal definition of the term. The easy rule of thumb is that what professionals are referring to when they discuss M2M is that it is highly automated communications in which humans are absent or in the background.

For instance, a sensor in a refrigerator truck that sends red flags to dispatch when the temperature passes a certain point is M2M. On the consumer side, GPS - in which many messages go back and forth between the satellite and the end user unit once the communications is initiated - is M2M.

The other thing that makes M2M a bit tricky to fathom is that it is a part of other nascent telecommunications endeavors. Home automation, for instance, is a potentially lucrative business for telephone and cable companies, among others. It is based on M2M. Thus, it is a bit confusing to figure out whether the new business is M2M or home automation. Another example: Is using M2M to track technicians driving (Are they speeding? Using the recommended route? Taking too long at lunch?) most accurately defined as M2M or field-force automation?

In any case, M2M is big, whether it is an independent sector or a mega-enabler. Connected World describes plays by Cisco and GE in the energy management sector. The first paragraph from the story, which also covers a project from far lower-profile CEIVA Energy, sums things up nicely:

There's a trend in the energy-management space toward smarter systems, and lately many heavy hitters have been getting in on the space, suggesting the trend must have some legs. M2M (machine-to-machine) technology is the force behind this trend, providing the data connection that delivers key energy information to consumers and to business owners. By delivering actionable energy data, these M2M-enabled systems help us make more informed decisions about energy use.

Three studies released this week point to the great potential of M2M. Frost & Sullivan notes the upward trend in the percentage of revenue telecommunications firms earn from M2M. The number was 3.0 percent in 2010 and 4.2 percent last year. The figure will grow to more than 20 percent by 2017, the study said. The acceleration will be due to a broadening of the target audience:

"2012 is expected to be a year when telcos will begin developing consumer M2M opportunities in addition to their current enterprise focus. Companies with a strong consumer brand and deep consumer digital offering could most readily capture this approach," says Frost & Sullivan Senior Industry Analyst, Yiru Zhong.

Meanwhile, Pyramid Research looked at the likely paths of three telephone companies - AT&T, Movistar Mexico and MTS Russia - and came to the same conclusion as Frost & Sullivan: M2M is expanding. The release discussed AT&T's partners and customers in M2M.

Finally, GIA released a report on satellite M2M services, a subsector of the broader category. It says that the value of the market will reach $1.6 billion by 2017. The release says that the lion's share of the business uses cellular networks. Satellites can be used to fill in the gaps where cellular can't reach:

Inconsistent cellular coverage in difficult terrains, such as, oceans, deserts, remote rural areas, offshore drilling sites, diamond mines, etc., provides a business case for satellite M2M, given that rugged mobile, mission-critical requirements requires superior and enhanced M2M (machine-to-machine) connectivity.

M2M communications already is big, whether it gets top billing or quietly provides backup. All indications are that it will grow rapidly during the next decade.

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