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M2M: A New Source of Revenue for Service Providers (ET Telecom Blog Series)

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M2M: A New Source of Revenue for Service Providers (ET Telecom Blog Series)

Sanjay Kaul, Managing Director, Service Provider Business, Cisco India and SAARC

As the Internet of Things becomes a reality and more things start getting connected, organizations around the world will (in fact some are) use machine-to-machine (M2M) to improve efficiency, enable new business models, and enhance productivity and profitability. M2M technologies that encompass devices, networks, platforms and applications will allow networked machines to exchange information and take intelligent action.

Along with the expansion of the Internet of Things (IoT), devices are becoming cheaper and more powerful, seamless and reliable mobile coverage is now possible in many developed countries; new analytics technologies and business intelligence solutions are able to get deeper insight from raw data even as M2M solutions are continuing to mature. From a Solutions providers (SPs) perspective all of this means that SPs can use data from M2M systems to improve efficiency, develop new business models and generate revenue both for themselves and their customers.

Sizing the M2M opportunity
According to 6Wresearch, the India Machine to Machine (M2M) modules market is expected to reach $98.38 million by 2016, with a CAGR of 33.81% from 2011-2016. Cellular M2M modules are expected to grow with relatively highest CAGR of 35.32% for the same period. The increasing demand for remote monitoring & control, government initiatives, new income opportunities for MNOs, 3G networks and reducing human efforts are the factors that have spurred the Indian M2M market. According to the Cisco Monetization and Optimization Index (MOI), the opportunity from M2M (data services) in Asia Pacific is pegged at $149 billion by 2019.

Given the opportunity,solution providers are moving M2M beyond its initial drive to connect endpoints and instead focusing on how organizations can use their M2M data and generate positive return on investment. Success will come by adopting a holistic strategy. It will involve looking beyond basic functionality to more sophisticated monitoring. It will force solution providers to grapple with complex challenges in integration, connectivity and global deployment and require them to build predictive maintenance models that use the data being collected more effectively.

Business Benefits
M2M enables customers to save time and money by optimizing business processes. Cost saving remains one of the primary drivers for businesses to adopt M2M solutions today as the recovery of one misplaced diesel generator, for example, can cover the installation and running costs of an M2M tracking solution.

Here are some of the ways our customers are optimizing their business with our M2M solutions:

  • Remote monitoring and analytics reduce the cost of failure, minimize the need for ‘routine maintenance’ visits and problems can be fixed before they have an impact on the customer.
  • Accurate information is delivered in real time, enabling quicker business decisions, less machine downtime and better production yield. Information can be collected automatically and systems maintained and repaired remotely so engineers and service staff can manage their time more effectively. Asset tracking enables theft recovery, theft prevention, status monitoring and inventory.

Integrated Solutions
Creating M2M solutions means that there is a need to overcome multiple challenges, requiring innovations in platform, software, devices, data storage, analytics and business intelligence, as well as changes in business processes and business & operations support systems. A competent solutions provider will have to work together with an ecosystem of innovators, to develop and certify M2M devices, platforms and applications and ensure global connectivity.
Talking of certification and standardization front, some of the technology sector's largest and most influential players, including Cisco, GE, Intel, IBM and AT&T, have formed the Industrial Internet Consortium (IIC) to systematically evaluate and share standards that will improve the integration of the physical and digital worlds.  While it is likely to take time to develop and approve the wide-ranging protocols needed to enable highly integrated M2M communications; the value that the Internet of Things will bring will be immense.

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