|Europe II 2013
|M2M in three phases
|Vice President for M2M and Internet of Things
|Orange Business Services
Hugues Sévérac is the Vice President for M2M and Internet of Things at Orange Business Services; he has had extensive experience launching innovative services on the Internet and in multi-national e-commerce. Mr Sévérac has occupied various managing positions in high growth startups, pioneered e-commerce at the L’Oréal Group, and launched VoIP for France Telecom.
Hugues Sévérac graduated from Ecole Polytechnique, IEP Paris and ENSAE.
M2M seems likely to evolve through three phases. Today, the first phase is characterised M2M improving existing processes, in fields such as equipment asset tracking, remote monitoring and fleet management and smart meters. Next, the ‘connected society’, will bring more intense connections between people and machines in healthcare and in the automotive sector where ‘black boxes’ will be required by law on all new European automotive vehicles. The third M2M phase, ‘virtual things’, will help us interact with everyday objects.
In recent years, Machine-to-Machine (M2M) has attracted a lot of hype due to the new opportunities it promises to offer businesses, as well as its potential to change the way we live our lives. Much of the pre-requisite infrastructure required for M2M to proliferate is already here. The McKinsey consultancy suggested in 2010 that every object, from our cars to washing machines, should have microprocessors with the ability to communicate embedded.
Despite this, there has recently been a debate as to whether M2M has truly moved beyond the hype. Yet there have been a myriad of applications suggesting that M2M is very much alive.
The global M2M market as a whole, is nascent, but expanding rapidly. According to Berg Insight, a M2M dedicated research house, 140 million cellular M2M devices were active globally in 2012. The GSMA estimates that global M2M revenue will increase at a compound annual growth rate of 23 per cent from 2010 to 2020, reaching 714 billion Euros. We have characterised this evolutionary process in three distinct phases. The first phase is characterised by organisations using M2M to improve existing processes, reduce inefficiencies and enable some vertical offerings in fields such as equipment, asset tracking, remote monitoring and fleet management.
There are already a number of organisations, particularly in B2B sectors, which are already realising the benefits of M2M. Openmatics, a manufacturer of an open telematics platform already delivers a service that lets transport companies track their trucks and buses remotely via an on-board unit embedded with M2M connectivity services.
Data recorded and received by the on-board unit is transmitted over a network between the vehicles and a Web-supported portal. With this service, the location and status of trucks and busses can be monitored anywhere, apps, configurations and media files can be sent to the vehicles anytime.
Whilst enabling fleet operators to plan and manage their businesses more efficiently proved to offer direct benefits, M2M now becomes a catalyst for innovation. Openmatics’ open platform ambition is to enable third party companies and vehicle manufacturers to develop their own software applications to further leverage the connectivity within the units.
Whilst asset management for vehicles may seem an obvious application for M2M, it has also found itself in the most unlikely of places. Last year the coffee brand, Nespresso launched two coffee machines for the hospitality sector, which would become the world’s first connected coffee machines. These models use embedded SIM cards that enabled the machines to communicate with the Nespresso Customer Relationship Centres, enabling remote machine diagnostics and preventative maintenance visits. Through this, Nespresso benefitted from cost-savings by minimising the need for visits by engineers as well as the ability to offer a value-added service.
Whilst these implementations demonstrate that M2M can be readily integrated to improve a certain aspect of an existing operation, some organisations are still struggling to recognise the benefits and tackle some of the perceived complexities of M2M implementation.
M2M has very broad potential and organisations must recognise the importance of evaluating proposed projects against their overall organisational objectives. One approach is to identify key areas of a business where an M2M implementation is both feasible and will deliver a good return on investment.
The next phase of the M2M evolutionary timeline is the ‘connected society’, a scenario where the connections between people and machines are more intense than ever before. To some extent we are seeing the first green shoots of this phase in key verticals; this suggests that we are already at an early stage of this phase. We see this in the healthcare sector, which we foresee will roll out a great variety of M2M services in the coming decade.
A case in point is the Italian medical products producer, the Sorin Group that recently launched a remote monitoring solution in Europe for patients with implanted cardiac devices. This service sends essential cardiac data to healthcare providers in real-time. Similarly, QualcommLife is leveraging using networks to offer health care providers and their millions of patients, secure, holistic remote monitoring of chronic diseases. In both cases, connected M2M services have removed some of the geographic and labour barriers associated with delivering quality healthcare.
The second vertical where we envisage growth is that of the transportation industry with the rise of the connected vehicle. Black boxes, once the preserve of the aerospace industry, will be installed on all new European automotive vehicles starting in 2015 as a result of new European Union legislation.
To support such applications, network providers have traditionally offered backbone technologies such as IPv6 IP VPN, a reliable mobile network and global roaming capabilities. However today we are building more sophisticated M2M applications that, in some cases, are at the heart of entire business models. Organisations must therefore ensure that their network providers have the capability and understanding to work end-to-end throughout their service infrastructure as opposed to providing backbone services only.
The third phase of M2M’s evolution is that of ‘virtual things’; these will let us interact with the everyday objects in our lives, and open the way to information-driven services based on information stored in the cloud. The main bearer of the service will be the smartphone interacting with digital tags identifying the objects.
Certainly within the next decade, we predict that there will be a paradigm shift towards this phase where the Internet of things, indeed more a collection of intranets of people, things and machines, will bring simplicity and ultimate comfort to everyday life. Consider holistically connected media appliances in the home, monitoring devices in health and RFID tags as standard on consumer products.
In some respects, the vision of smart cities has helped create the impetus for innovations that can be potentially service entire communities. In recent years, we have seen utility companies leveraging M2M to control and monitor energy consumption through smart metering. For instance, in 2011, ‘M20 City’ in Le Havre, Veolia Water launched a city-wide smart metering offering, allowing the utility firm to automatically read over 100,000 water meters from a single platform. For Veolia, this delivered cost savings as well as better service, but for the customers, this delivered an overall, convenient, empowering experience by enabling them to monitor their usage.
In 2010, Plastic Omnium developed a next generation waste collection service, based upon a highly secure M2M solution, utilising geo-location, analytics and telemetry technologies which maximised the efficiency of refuse collection.
Inevitably, there was a need for a M2M device on the waste truck, as well as an ecosystem to support it. For instance solutions to gather information on road traffic conditions, weather and population growth patterns. So as we move towards M2M applications that span cities and indeed society, the focus for network providers will shift towards key partnerships with infrastructure providers in delivering this ecosystem.
Today, network providers are already providing the pre-requisite infrastructure required for a number of M2M applications. However the key challenge is in educating the market, providing standards to enable its proliferation and securing its confidence.
For M2M to be truly holistic for all businesses, it is essential to define standards through cross-vertical collaboration and partnerships. Network providers play a crucial role bringing together this ecosystem to drive innovations and co-design services with players from other industries.
As an example, Orange Business Services chairs some of the key technical committees at the European Telecommunications Standards Institute, which are developing the future standards for M2M. Through this, we are in a multilateral roaming agreement with Deutsche Telekom and Telesonera with an aim to secure the availability and reliability of M2M roaming services at a global scale. Furthermore, Orange’s International M2M Center of Excellence (IMC) in Brussels is yet another reflection of the importance network providers are placing on the technology.
It would be certainly be lack of judgement not to recognize that M2M has progressed beyond the hype at this relatively early stage and, indeed, some of its applications are testament to its potential for businesses, for society and for more connected lives.
Whilst we need to be cautious and consider the practicalities of M2M implementation, as well as its technical limitations, it is essential that we do not lose sight of the endless possibilities it can offer as the technology evolves.