The machine-to-machine market is poised for the biggest transformation in its 10-year history due to the adoption of cloud-based solutions for M2M applications, according to the latest research report from Maravedis-Rethink. The consultant firm’s report predicts that over the next three years, the M2M market will shift from vertically focused, and often incompatible, solutions to platforms and standards that can be used across many sectors.
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Cloud analyst and author of the report Bill Lesieur said that cloud computing will help address many of the biggest challenges to mass market M2M adoption. The move to the cloud is expected to impact different aspects of the M2M sector with the greatest effect on the two critical areas of deployment cost and scalability.
The top three verticals expected to benefit most from cloud-based M2M are utilities/energy, automotive/telematics and transport/logistics.
M2M will lay the foundation for the “Internet of Things,” which is expected to be one of the biggest growth drivers for the device supply chain and for service providers in the second half of this decade.
“The cloud has dramatically reduced the cost and time to get pilot programs up and running in order to establish organizational support and maintain interest in M2M initiatives,” said Lesieur in a statement. “Based on discussions with vendors and end user customers, large enterprise M2M projects historically have taken two to three years to complete and often at least $25 million in IT infrastructure investment. Cloud can slash that to a third or less.”
By 2020, the total potential revenue for mobile network operators with M2M applications is $1.2 trillion worldwide, according to the operators’ association GSMA. And the global revenue impact of M2M is expected to reach $4.5 trillion by 2020, of which $2.5 trillion represents the connected life market and $2 trillion represents cost reductions from the connected life, for example, through service improvements.
In the report, Maravedis-Rethink’s Lesieur points out that wireless carriers are eager to play a key role in the “Internet of Things,” even though it raises spectrum issues. “Some operators will keep 3G or even 2G networks running to support M2M, but most systems will rely on 4G gateways,” Leisur states.
Some carriers have already moved in this direction. On July 10, seven mobile operators announced they have entered into an alliance to collaborate on M2M services. The carriers—KPN, NTT DoCoMo; Rogers Communications; SingTel; Telefónica, through its Telefónica Digital unit; Telstra; and Vimpelcom—said they will partner on roaming and development of other M2M services.
