One category within the rapidly growing global mobile networking market is Machine-to-Machine (M2M) applications, which can be a source of significant revenue for service providers and of numerous benefits to end customers. Outsourcing M2M network services to managed service providers allows customers to rely on their provider's infrastructure and expertise for connectivity, scalability, security, and management. Mobile M2M managed services provide the best value when wired networks are not available or are cost-prohibitive to install, when client assets are mobile, and when businesses want to outsource these network services to a third party. Research suggests that the mobile M2M managed services opportunity will be significant in the next few years, allowing managed service providers to increase their average revenue per unit (ARPU).
The Cisco® Integrated Services Router (ISR) 819 M2M Gateway is a platform designed for customers that require secure, bidirectional communication to sensors, actuators, or other peripheral devices or assets located at multiple sites connecting to centralized application servers at a head office.
Figure 1. Cisco ISR 819 M2M Gateway: Extending the Enterprise Network to the "Internet of Things"
The Cisco ISR 819 Integrated Services Router is the smallest Cisco IOS® Software router with support for integrated third-generation (3G) wireless WAN capabilities. A fourth-generation (4G) Long-Term Evolution (LTE) version is planned. The platform delivers fast deployment and low-cost administration of M2M network services for managed service providers. To date, it is the industry's most compact hardened and nonhardened, M2M gateway and comes with dual Subscriber Identity Module (SIM) cards. Built to withstand humidity, broad temperature ranges, dust, vibration, and other environmental factors, the secure native Short Message Service (SMS) gateway runs on Cisco IOS Software and features Global Positioning System (GPS) support.
According to the Cisco Visual Networking Index 2010-2015, a growing amount of Internet traffic is originating with non-PC devices. In 2010, only 3 percent of consumer Internet traffic originated with non-PC devices, but by 2015 the non-PC share of consumer Internet traffic will grow to 13 percent. PC-originated traffic will grow at a compound annual growth rate (CAGR) of 33 percent, while TVs, tablets, smartphones, and M2M modules, such as telemetry sensors, will have traffic growth rates of 101 percent, 216 percent, 144 percent, and 258 percent, respectively.
M2M represents a broad market with a variety of network-accessible devices (referred to as an "Internet of Things") that communicate with remote application infrastructures for monitoring and control purposes. The market is growing due to a number of factors, including expanded cellular network coverage worldwide, the proven operational improvements and revenue potential of both major facets of M2M - telematics and telemetry - and energy efficiency initiatives.
• Telematics applications involve the integration of telecommunications with information and communications technology (for example, global positioning systems in cars and trucks).
• Telemetry applications include technology that supports the remote measurement and reporting of information (for example, sensors that monitor water or electricity usage).
Challenges to M2M market growth include limited experience with these applications among organizations, the lack of IT and business integration of M2M services, the cost of cellular modules, and inadequate multimedia capabilities for some applications due to the limitations of 3G technology. Increasingly, however, the cost of cellular modules used in M2M applications is declining. And with 4G, connectivity to M2M devices will provide comprehensive, low-latency broadband sufficient for the most demanding multimedia applications.
According to a 2010 research report by ABI Research, the market for managed mobile M2M services is expected to grow to $20 billion by 2014. The number of M2M devices connected to managed network services is expected to grow from approximately 71 million cumulative connections globally in 2009 to roughly 225 million connections by 2014. Beyond connectivity, an additional 10 to 15 percent of revenues are expected to come from other value-added services as the price of cellular modules continues to decrease. These services include advanced metering infrastructure (AMI), which involves two-way communications with energy management meters, remote surveillance, and telehealth.
Figure 2 shows different M2M applications and their expected growth through 2015.
Figure 2. M2M Market by Application Type
Source: ABI Research, 2010
The ABI Research study found that beyond paying for the connectivity of their M2M devices, customers are willing to pay an additional amount for management of their M2M networks. Because no human is involved, this is much less expensive for both customer and provider than other managed services. Once a policy is established, no changes are typically necessary. There is no administration on the customer side. After setup, an occasional ping for a healthcare check is the only ongoing monitoring necessary to determine that the M2M application is fully up and running.
A variety of industries are already using M2M applications to increase efficiency and lower costs. A 2011 study by Nemertes Research forecasts industry increases in the use of M2M by 2012 totaling 4 percent for financial services, 5.5 percent by government, 7.5 percent by industry, and 6 percent by healthcare organizations. Figure 3 shows a few of the many M2M use cases.
Figure 3. Use Cases Across Industries for M2M Services
M2M service use cases include the following.
• Healthcare: Medical providers can use M2M for the remote monitoring of patients in their homes. This is more efficient and cost effective than having patients repeatedly visit healthcare facilities. It also makes healthcare accessible to patients who are unable to travel easily. Another application is the automatic transmission of data from patient monitoring devices in an ambulance to a hospital emergency room while a patient is in transit, along with transmission of the patient's complete electronic medical records.
Figure 4. Telehealth and Telematics: Emergency Patient Care in an Ambulance
• Security: M2M technology allows people to wirelessly monitor the security of their homes and businesses. It can also be used to provide video surveillance within retail stores, public outdoor areas in cities, venues such as sports stadiums, and any other area requiring security monitoring.
• Transportation: M2M communication works with GPS and high-speed mobile broadband technologies to track vehicles such as fleets of trucks. Applications can keep track of where each asset is located for reporting and planning and perform remote diagnostics, resulting in more efficient and cost-effective delivery turnaround.
Figure 5. Transportation: Fleet and Asset Management with GPS
• Utilities: M2M technology can help improve energy efficiency by remotely monitoring equipment such as electrical meters and tracking usage for billing and reporting.
Standards-based, converged M2M network and management solutions help service providers standardize and simplify operations. Managed M2M services based on deployment of the Cisco 819 ISR M2M Gateway are an opportunity for managed service providers to quickly extend their role beyond providing bit transport, helping them to address the telemetry and telematics needs of businesses and smart-connected homes. For some business customers these applications are increasingly viewed as methods for increasing operational efficiency and gaining incremental revenue. For example, an apartment owner can track electricity usage within a building and charge tenants based on their usage. A car manufacturer or car rental agency can provide in-vehicle infotainment. A manufacturer that provides connectivity of remote equipment can remotely respond with offers of after-sale service and support.
Managed M2M services based on the Cisco ISR 819 M2M Gateway can provide customers with:
• Increased revenue opportunities, due to the affordable extension of services to new locations
• Improved operational efficiency, based on outsourcing the management of remote assets to minimize downtime and improve the operation of the assets
• Reduced costs, based on remote management and monitoring of assets
• Reduced environmental impact, through more efficient use of fleets or through simplifying monitoring processes
Benefits for service providers include:
• Increased revenue with the introduction of new M2M network services
• Greater efficiency of remote, real-time monitoring that integrates with existing management solutions
• Ease of installation and service activation and a flexible operational model that lowers total cost of ownership
The managed M2M services solution is based on:
• The Cisco ISR 819 M2M Gateway, which comes in hardened and nonhardened versions and provides highly secure data, voice, and video communications to stationary and mobile network nodes across wired and wireless links; the gateway supports up to 3.7G wireless WAN speeds and offers a cost-effective, rapidly deployable, reliable, and secure primary connection solution
• A scalable service management platform to manage M2M devices and the Internet of Things, encompassing not only mobile M2M, but also M2M applications based on wireless sensor networking technologies, items with radio frequency ID (RFID) tags, and other wired and wireless technologies
• The external M2M endpoints, such as sensors and RFID tags that collect data and monitor the status of environments
• M2M application software and infrastructure to address the specific needs of vertical markets, which service providers can obtain through partnerships with these vendors
M2M managed services require deployment of the Cisco ISR 819 M2M Gateway, which functions as a wireless gateway connecting dispersed assets to the cellular network (Figure 6). Some M2M endpoints can also be connected through wireline, if this is possible.
Figure 6. M2M Managed Service Topology
In addition to generation 3.5 and 3.7 (3.5G and 3.7G) wireless WAN, the Cisco ISR 819 M2M Gateway offers additional WAN options, such as Serial and Gigabit Ethernet WAN interfaces and a 4-port 10/100 Fast Ethernet managed switch for LAN connectivity. The gateway supports a 12-in-1 serial port, which can be attached to synchronous, asynchronous, and bisynchronous interfaces. It can connect to a DSL modem, or to T1 or E1 leased lines. The gateway provides the performance required for concurrent services, including firewall, intrusion prevention, content filtering, and encryption for VPNs, and quality of service (QoS) features for optimizing voice and video applications.
Cisco Smart Operate Services for CPE
Various professional service organizations are developing practices that transparently integrate the disparate M2M components into an efficient solution. As part of Cisco's vision of "any device, anywhere, any place" across all industries, Cisco has created Cisco Smart Operate Services for CPE, which offers managed service providers a white label (rebranded) managed M2M service that includes operations and management of low-end Cisco customer premises equipment (CPE) devices. Cisco is using its global data centers to provide this service to managed service providers, who benefit from being able to rapidly roll out to their customers new and differentiated services, such as M2M managed services. Cisco Smart Operate Services for CPE helps to minimize upfront capital expenditures, using a pay-as-you-grow model. It also helps lower operational costs while giving end customers a quality experience with M2M applications through Cisco Smart Service capabilities, such as realtime tools, automation, and analytics.
Designed specifically for managed service providers, Cisco Smart Operate Services for CPE smoothly integrates with a managed service provider's existing processes and environment. The provider retains a close relationship with customers and is responsible for Level 1 issues along with marketing, selling, and customer billing. If a network issue arises, customers continue to call their trusted provider, who will perform an initial diagnosis.
Cisco Smart Operate Services for CPE services include:
• Remote activation, provisioning, and change management for M2M devices and applications
• Remote license management
• Software recommendation, test, and validation services
• Continuous remote fault and performance monitoring
• Problem management and root cause analysis
Cisco Smart Operate Services for CPE lowers the barrier of entry for managed service providers in the M2M market. It is an efficient managed service that can be branded by the provider and marketed to a wide variety of vertical industries, including banking, retail, healthcare, manufacturing, hospitality, and government. It also provides the ability to extend networks to small branch offices with a relatively low incremental investment and to deliver other managed service offerings based on the same architecture. A shared-risk commercial model allows providers to replace upfront costs with a pay-as-you-grow model.
Figure 7. Cisco Smart Operate Services: M2M Cloud Assisted Management Solution for the Cisco ISR 819 M2M Gateway
Other Cisco Smart Operate Services for CPE benefits include the following.
• Development of a dedicated portal to construct and keep track of service-level agreements (SLAs): Managed service providers can use the portal for a variety of activities, including purchasing additional services, ordering SIM cards, and monitoring data on devices. Such portals provide automation of various processes, while controlling operational expenditures (OpEx). Additionally, a high degree of customization for asset management and remote infrastructure management can be accomplished by creating custom device subscriptions through the portal, such as data caps for M2M devices.
• Remote infrastructure management: Cisco Smart Operate Services can help establish a Network Operations Center (NOC), a catch and dispatch monitoring capability, or a global management center with different sets of capabilities, as needed. These may include remote monitoring and management of each Cisco 819 ISR M2M Gateway at various levels of detail (for example, OS, CPU, disk, and memory). In addition, separate agents can be installed to monitor specific applications, such as databases and end-user applications (for example, telematics and healthcare). This captures issues with more granular detail for faster resolution and increased application availability.
Figure 8. Cisco Smart Operate Services for CPE Benefits
The business value of infrastructure management processes for M2M services can be calculated by counting the improvements in crucial metrics such as application availability, IT productivity, flexibility, and scalability.
At a time of tremendous growth and changes in networking, service providers have many opportunities to capture new revenue based on delivery of new services, architectures, and products. Among the exciting new markets is M2M, and with the Cisco 819 ISR M2M Gateway, service providers can take advantage of a compact platform in hardened and nonhardened versions that provides customers with 3G broadband connectivity to distributed sensors and devices with centralized management and control.
Cisco has the comprehensive architecture, platforms, and technologies that service providers need to add intelligence, performance, flexibility, and access independence to their offerings. The Cisco Smart Operate Services for CPE service helps managed service providers to quickly package M2M managed services for the most opportune markets with a low barrier to entry and all of the necessary expertise and infrastructure support.