Running Out of Coffee is So Last Year: How to Monetize M2M Technology

Machine-to-machine (M2M) communications is making life easy. Our coffee machines, washing machines and printers now have the ability to sense when we’re running low on coffee beans, detergent and ink – and re-order what we need automatically. Automotive companies like Mercedes-Benz have already showcased their self-driving cars at this year’s Consumer Electronics Show – complete with self-route capabilities, automatic detection/ prevention of hazardous driving conditions, and voice/video calling technology directly from the vehicle.

From the business side, M2M is transforming billing systems and big data collection capabilities. For example, beverage companies like Coca-Cola have installed “smart vending machines” allowing them to diversify their payment options, automatically conduct purchase analytics in real time and know exactly when and what to restock.

This, however, is only the beginning, and the future will look much different thanks to M2M. Within the next few years, M2M technology is expected to move from smart devices to smart homes, and eventually to smart cities.

The connected world of the not-too-distant tomorrow will move beyond the mobile smartphone and expand into virtually every industry:

For healthcare: The healthcare industry is using M2M technology to offer innovative applications to customers and useful analytics for businesses. Self-monitoring automatically analyzes both general and detailed data, giving users complete insight on heartrate, calories burned, and even sleep cycles. Currently, M2M connections are moving from mobile devices to once mundane, everyday wearables. For example, diabetic patients will no longer have to manually monitor their blood sugar levels, with Google’s new contact lenses currently in development.

For appliances: Big home appliance companies are starting to dive into connected technology as well. Sensors in everyday “dumb” gadgets will be able to “know” exactly what is needed before even you do. For example, connected kitchen appliances such as Samsung’s smart refrigerator will be able to automatically generate shopping lists based on inventory.

For cities: Connected devices will move beyond the house and are expected to soon connect entire communities. Street lights, electricity, traffic, and environmental resources will all be able to monitor each other through M2M technologies. By 2025, Masdar City in Abu Dhabi will provide self-driving mini cars for public transportation that run on multiple sources of clean energy –automatically adjusting based on weather conditions and variables.

For communication and media: Unsurprisingly, the Communications and Media industry have the potential to own the M2M ecosystem. Networks will be needed in order to supply the broadband power to support all of the data being transmitted through the smart devices. In addition, smartphones – which are almost always on – will hold the key to non-stop, real-time data collection and analytics: optimizing the customer experience, security, and every step from order confirmation to installation will be optimized and automatically monitored.

That is the power of M2M

While M2M technologies have the potential to reach a trillion dollar market value, business and technology challenges for implementation should not be overlooked. For business, it’s important to consider how to:

The M2M’s growth rate will be exponential. According to Gartner, it’s expected that over 25 billion devices will be connected by 2020. This rapid growth has opened numerous opportunities for businesses in almost every industry, including real estate, automotive, wearables, health care, and especially the communications and media industry.

Manage the diversity of M2M devices - With almost every type of industry looking to stay ahead of the curve with M2M, the variety of products and offerings will be astronomical – and always increasing. Information will have to be able to be sent, received and analyzed at optimal speeds from a large assortment of device types. For business leaders, it is crucial to ensure how variety plays a role in analytical figures when devising a marketing or product offering strategy.

Manage trillions of transactions in real time - The real-time micro transactions associated with an efficient M2M connection can cause errors in understanding analytical patterns, especially if systems need to be updated to match capacity needs.  Elements such as a capable workforce and a strong project management strategy will be needed.

In addition to business challenges, technology considerations include:

Modify existing pricing models, service catalogues and the operation support process needed for M2M delivery - The technological infrastructure needed to support M2M connections is greatly underprepared, and existing processing models, service catalogues and operation support processes are not optimized for efficient M2M service delivery. The new backend systems for connected devices must be able to process large amounts of information and deliver predictive analytics.

Delivering the necessary bandwidth - The channels needed to support the exponentially increasing volume of data from M2M connected devices.  Current 4G LTE networks will not be enough, and companies will need to support the needed research and development of alternate and faster network connections, i.e. 5G connections.  

Is tackling these challenges worth the price of owning M2M? Absolutely. The real question is how communications and media providers monetize and take advantage of the M2M evolution. Through our research, we have found that businesses can capitalize on these technologies through: 

Generating new revenue streams and reducing costs - M2M connections will be the key to connecting the business to the consumer in ways never before thought possible. With insight into activity patterns, preferences, location and individual and network service issues, companies will be able to personalize services and campaigns that will directly benefit the consumer, as well as solve any service outages as quickly as possible. Costs will also be reduced through the automated and virtualized technology associated with M2M.

Improving penetration in residential, small business and enterprise markets - M2M capabilities will be able to give the communications and media industry complete control over every aspect of business in residential, small business and enterprise sectors. Benefits can be found in business operations including transportation and fleet management, retail, manufacturing, utilities, healthcare, security, consumer services and more.

Innovative positioning within the M2M market - Today, the market is fragmented, and there is no distinct leader over the M2M ecosystem. However, by overcoming the key challenges in M2M implementation, the communications and media industry will be able to develop new technologies, new network opportunities and key partnerships with other major industry players.

M2M is one of the fastest-growing global market segments. Communications and media providers need to be ready, and implement a solid business strategy and technical and operational plan to seize the opportunities provided by M2M.

Yossi Abraham is Chief Marketing Officer at Excelacom. As Chief Marketing Officer, he is responsible for the global strategy, planning and execution of all aspects of Excelacom’s marketing efforts and the Century product suite.

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