Internet of Things: Opportunities in Machine-to-Machine Communications

Next Generation Communications Blog

Internet of Things: Opportunities in Machine-to-Machine Communications

By Mae Kowalke

All signs point to continued growth in the machine-to-machine (M2M) communications sector. M2M, technologies that allow both wireless and wired systems to communicate with other devices of the same ability, helps companies be more efficient by automating tasks, but it also has applications in the consumer market.

In the language of M2M, devices capture events and relay that data through a network to an application, which translates the event into meaningful information. For example, in retail a sensor may be triggered when a particular item is out of stock, and someone who monitors inventory is alerted that the item needs reordering or refilling.

In a recently published white paper, The Internet of Things, Alcatel-Lucent predicts that this technology will connect 15 billion devices by 2015. The Internet of Things includes both traditional M2M, and machine-to-machine-to-human (M2M2M) systems where there is much potential to connect machines, devices and systems with people.

“The Internet of Things requires a new approach to communications business models, operations, processes and technologies,” Alcatel-Lucent said in the white paper.

In traditional M2M communications, service providers supplied wholesale account access with a SIM card, tied to a specific billing plan and data rate. With this arrangement, the provider could only track how much data was consumed. This arrangement is beginning to go by the wayside in favor of deeper, broader M2M service opportunities.

“Lower-cost M2M devices, widespread connectivity and the rapidly evolving applications market are creating opportunities for service providers to improve their role in the M2M value chain,” Alcatel-Lucent predicted. “Businesses and consumers will be able to encode any object and follow its movement anywhere on the planet. Communications-enabled devices for automobile tracking, people and child tracking and GPS tracking, are already reaching the consumer market.”

For service providers, The Internet of Things represents both an opportunity and a challenge. Capitalizing on the opportunity requires a lot of bandwidth to keep up with traffic growth, robust security, and a commitment to reliability even in remote locations. Successful uses of M2M will add personal value for consumers by making it easier to interact with one another.

All M2M services will generate transactions vying for priority and bandwidth.

M2M services can be divided into several categories: services in use now, services in active development, pilots slated for availability in the near future, and applications that will enter the marketplace in the medium- to long-term.

“Now” M2M service sectors include security, industrial, point-of-site and transportation fleet management. “In development” sectors include consumer electronics, vending, energy management, and advanced telematics.

Longer-term, “pilot” M2M service sectors include supply chain, healthcare, building management, and industrial asset management/maintenance. Eventually, M2M will play a role in near field communications, environmental, intelligent transport, office equipment, car insurance, and law and regulation enforcement. 

Because they have expertise in device management and related services, service providers are well positioned to leverage opportunities in M2M communications. This expertise can be used to recognize opportunities, select appropriate partners, and generate new revenue streams.

All of this will take attention to detail and careful planning.

“M2M encompasses many different vertical markets, ranging from transportation and utilities to public safety and retail,” Alcatel-Lucent noted in the white paper. “Each vertical market has its own value chain and requirements. Service providers need to focus on the right vertical markets and determine the best way to work with application and content providers.”

Although complex, the market is still compelling. Successful M2M strategies will result in nothing short of a customer experience transformation, and a significantly positive impact on the bottom line.


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