|Issue:||Europe II 2013|
|Topic:||Putting M2M in perspective|
|Title:||Director & co-founder|
Jim Morrish is a Director and co-founder of Machina Research, a specialist telecoms research and consulting firm focusing principally on the emerging opportunity associated with new forms of connected wireless devices. Mr Morrish has over 20 years experience of strategy consulting, operations management and telecoms research in more than 25 countries worldwide.
Mr Morrish’s previous experience includes strategy consulting for Booz & Co, project management and board membership at Cable & Wireless, Head of Department at the BBC and also work as a freelance consultant.
Jim Morrish holds an MA in mathematics from Oxford University.
Most device s used by businesses, industries and individuals are stand-alone mechanisms that cannot be accessed over a network or the Internet. M2M promotes an environment where devices connected through the Internet can share virtually any type of information. This also provides an incredible amount of information, Big Data, that if ‘mined’ or ‘harvested’ could fundamentally change the way companies and individuals conduct business. M2M with near field communications can help get information to the right place at the right time.
M2M is going to be huge
Over the coming decades, Machine-to-Machine connected devices are set to pervade all aspects of our daily lives. Exactly how many connections there will be and when is the matter of some debate, but without exception all forecasts of M2M anticipate extremely rapid growth.
A significant element of the variation in M2M market forecasts is due to the fact that there is no agreed definition for M2M. The most useful technical definition of M2M is “Connections to remote sensing, monitoring and actuating devices, together with associated aggregation devices”.
Based on this definition, M2M connections worldwide will grow from 2.4 billion in 2012 to 18 billion in 2022. In 2022, the Intelligent Buildings sector will represent 37 per cent of connections, Consumer Electronics 32 per cent, Utilities (particularly smart metering) ten per cent and Automotive eight per cent. Healthcare will represent a further five per cent of connections, and Smart Cities and Public Transport another four per cent. In revenue terms, M2M represents a US$1.25 trillion opportunity in 2022, of which US$780 billion relates to device sales, US$60 billion relates to installation and US$400 billion relates to services.
Some M2M sectors are already mature, others will grow rapidly in the next few years and many are still in their infancy and will not truly take off for decades. It is clear that M2M connections will continue to grow strongly for many years.
It is also worth noting that not all M2M connections are equal. It’s not just the number of connections that will be increasing over time, but the level of sophistication of those connections. The most basic M2M connections will be device-centric and may only provide basic information on a reactive basis. It is only the most sophisticated and advanced M2M connections that really have the qualities that are often associated with our ‘connected’ future. That ‘connected’ future is discussed in more depth later in this article, but it may be useful to introduce here our hierarchy of M2M .
Stage Description Comments
1 Reactive information • Devices can be polled for information, or provide information according to a set timetable
2 Proactive information • Devices communicate information as necessary
3 Remotely controllable • Devices can respond to instructions received from remote systems
4 Remotely serviceable • Software upgrades and patches can be remotely applied
5 Intelligent processes • Devices built into intelligent processes
6 Optimised propositions • Use of information to design new products
7 New business models • New revenue streams and changed concept of ‘ownership’
8 The Internet of Things • Publishing information for third parties to incorporate in applications
So, whilst we are not expecting quite so many connections as some market observers, we do expect that both the number of connections and the sophistication of those connections will be growing strongly for decades to come. In 2020, the market for M2M will still be young. By 2050 it may be mature. In many ways the debate around how many M2M connections there will be in the coming decade distracts from the fundamental changes that M2M will usher in over the coming several decades.
It is worth noting the technology skew present in the connected future: 73 per cent of M2M connections in 2022 will be short range in nature (including WiFi, Ethernet, in-building powerline, ZigBee and a range of other standards). Cellular will account for 2.6 billion M2M connections in 2022. Although an impressive number, this figure represents only 14 per cent of M2M connections. In turn, cellular M2M connections will represent 22 per cent of all cellular connections in 2022.
While the figure of 2.6 billion is the expected cellular M2M market size for 2022, we recognise that there are bigger opportunities for wireless operators: by 2022 there will be four billion non-cellular connections for which wireless wide area technology could add value to applications, and a further one billion connections for which wireless wide area technologies could compete on the basis of price. So the actual number of wireless wide area M2M connections in 2022 could be over 7 billion, or 40 per cent of all cellular connections.
The key to unlocking this potential lies in the level of pro-activity that mobile operators bring to bear when targeting M2M applications, potentially extending to developing a recognised sector expertise, such as in the fields of healthcare or security. Other tactics open to communications service providers include leveraging existing distribution channels (particularly high street shops for consumer M2M applications) and enabling the cellular M2M modules industry to gain scale through standardisation or investing in new wide-area wireless technologies.
Big Data: ‘Subnets of Things’ will trump the ‘Internet of Things’
Another area where we need to look beyond the hype is Big Data and the Internet of Things. I group the two concepts together, since Big Data analytics within M2M really only exists within the context of heterogeneous information sources which can be combined for analysis. And, in many ways, the ‘Internet of Things’ is exactly definable as a network of heterogeneous devices.
Right now, the world of connected devices could best be characterised as multiple ‘Intranets of Things’. For example there are increasing numbers of connected smart meters, but the data that these produce is generally used for a single purpose (analysing, pricing and billing for power consumption).
The next step must be to integrate ‘islands’ of connected devices to create a ’Subnets of Things’. These would typically be driven either by a single point of control, single point of data aggregation, or potentially a common cause. For example, it is not hard to envisage an emerging subnet of things around a smart city: local authorities would often have access to data relating to congestion charging, public transport, parking space availability, air pollution and potentially a whole range of other data sources.
Healthcare is another front-running candidate for emerging ‘Subnets of Things’ and where the Continua Health Alliance standards and Qualcomm’s 2Net are both candidates for forming the kernels of connected device ecosystems.
The potential benefits of such ‘Subnets of Things’ are immeasurable, including (and by no means limited to): streamlining public services; reducing carbon footprints, and; massively improving healthcare provision.
To move from these ‘Subnets of Things’ to a full ‘Internet of Things’ environment will be a difficult step. It will involve aligning data points from a huge range of disparate device types, ideally at an individual user, or individual device level. Cue all manner of privacy and standardisation issues. Establishing a fully-fledged ‘Internet of Things’ will be far harder than establishing simple ‘Subnets of Things’. And it’s not clear that a fully-fledged ‘Internet of Things’ is really much more useful than a limited number of ‘Subnets of Things’?
Near field communications need rather more hype
Right now, the overwhelming focus in the area of near field communications is around payments solutions and NFC as a technology, but that’s missing the point. There are many, many, more things that can be done with near field communications technologies, not least bootstrapping for higher level technologies such as WiFi and Bluetooth. An example of such a system is Sony’s One Touch, and Qualcomm are working to bring an equivalent ‘open’ (manufacturer agnostic) standard to market. And there is a wide range of technologies that can support near field communications applications, even including, and for some applications, printed codes.
Ultimately, it is a range of near field communications technologies that will lead to connectivity engrained in our daily lives. Wide area technologies will, of course, play a strong supporting role, particularly wireless technologies. But, ultimately, it is an individual’s interaction with their local environment and the way in which that local environment reacts to the presence of that individual that will characterise our ‘connected’ future. And the essentially local interactions that are required to bring about that future ‘connected’ experience will, in the main, be supported by various kinds of near field communications technologies.
Clearly, then, the opportunity for near field communications, (the concept) needs to be analysed in the context of an understanding of the range of technologies that can substitute for NFC (the technology) in different situations, and also an understanding of all of the things that can be done with near field communications type technologies.
This is not a simple analysis to undertake. For example, it is clear that functionally similar applications using a (true) NFC solution and a QR-code based near field communications solution can have vastly different ‘cloud’ and supporting infrastructure needs, and will have vastly different attendant security and privacy issues.
Even within the NFC’s commonly recognised domain (i.e. payments of different types), current thinking needs to be pushed further. There is the real prospect of NFC-type solutions ultimately leading to a (near) cashless society. Of course, this vision of a cashless society lies a long way in the future, but now is an appropriate time to start considering the dynamics and implications of that future environment. And also the potential of near field communications as a concept, rather than NFC as a technology standard.