Deborah Strickland

With the cost of access to wireless networks declining and network capabilities and intelligence increasing, many industry watchers believe that an avalanche of machine-to-machine (M2M) network applications are on the way. M2M represents the "Internet of things", where network-addressable devices from meters and thermostats to refrigerators and automobiles communicate over intelligent IP networks.

The M2M industry is projected to grow exponentially in the coming years, from approximately $16 billion in 2008 to more than $57 billion by 2014, according to a 2008 report by Strategy Analytics. The report assumes several things: increasing consolidation, falling technology costs, lower network charges, and regulatory compliance.

Operators See Potential

This year, operators are starting to get excited. In April, CEO Ivan Seidenberg of Verizon Communications, now the largest mobile operator in the U.S., said that with the next generation of wireless there will be "literally no limit on the number of connections that can be part of the mobile grid: cars, appliances, buildings, roads, sensors, medical monitors and some day even inventories on supermarket shelves.  All of these have the potential to become inherently intelligent -- perpetually connected nodes on the mobile Web."

Billions and billions of devices. Okay, you’ve got our attention. Now what M2M applications will be hot sooner rather than later and how does the mobile operator monetize them?

Making M2M Pay

Yes, there are some important deployment considerations with M2M applications, including providing online access to multitudes of devices which need only occasional and low volume connectivity. Oh, and don’t forget the shortage of public IP addresses for the anticipated billions of new devices with embedded SIM cards. But that’s a topic for a separate blog.

Let's focus here on the applications themselves to see what customers are willing to pay for today. Developers at Telenor Connexion, a leading mobile operator headquartered in Sweden, have been working on M2M solutions since the late 1990s. Among the hottest applications they’re focusing on are:

• Automotive. Mobile operators can connect mobile end points in trucks to provide fleet management applications, remote vehicle diagnostics, etc. for  transport companies. Cars can be equipped with mobile endpoints alerting drivers to recalls from manufacturers, providing details to insurers for "pay as you drive" policies, and sending out post-crash data that can be used to settle claims and assign liabilities.
• Remote Healthcare. Companies like MedApps provide patients with M2M devices that are used to automatically collect data from glucose readers, blood pressure monitors, scales, and pulse oximeters and transmit the data over mobile networks to a centralized system for access by care providers. This type of M2M application can provide an efficient, cost-effective way to remotely monitor patients afflicted with chronic diseases.
• Equipment Monitoring. From parking and utility meters to water pumps and office equipment, units with embedded SIM cards can communicate over the mobile network with measurement readings or alert administrators to equipment malfunctions or assets in need of servicing.
  
• Security and Surveillance. Wireless surveillance and security solutions are already growing dramatically and with M2M these will be less expensive, no longer dependent on proprietary networks and equipment but available as IP applications.

Why Act Now?

M2M is ready for prime time because "network intelligence is what really makes it seamless" said Kittur Nagesh, Director of Service Provider Marketing at Cisco, on a recent interview on M2M Radio. The IP network will provide the scale, take out the grunt work, and move the industry towards open, interoperable APIs, he believes. Some M2M applications on the intelligent IP network will even be a boon to mobile operators themselves by helping to decrease OpEx and CapEx with internal efficiencies.

Mobile operators who haven't yet started to explore M2M services opportunities need to get on the M2M bandwagon. M2M applications will provide new revenue streams and new partnerships for mobile operators and allow for the cross-selling and up-selling of complementary services - and provide a new way to drive customer stickiness. With an intelligent IP infrastructure, you’re already on your way to satisfy new customer requirements they never even realized they had.