subject: Machine-to-machine Communications: Are We Reaching A Tipping Point? [print this page] The world of machine-to-machine (M2M) communication promises a new revolution in IT sophistication. Although, whether we are ready for this is another matter, as we struggle with Bring-Your-Own-Device (BYOD), the increasing number of IT staff who want to use open source software and the rise of Big Data and all its resultant problems. We are drowning in the huge amount of information we are producing.
However, as is not unusual in the world of IT, it doesn't look as though we'll have any option because it will happen by stealth. The rise of the machines is being led through a combination of improved network communication, smaller and lower-cost embedded devices and the final promise of the application of common standards.
A new report on M2M communication from the Economist Intelligence Unit (EIU), entitled Rise of the Machines, takes some intelligent guesses at what we can expect from even more automation. Based on interviews with leading technologists across a range of industries including energy, insurance, mobile and more, the report details a number of areas in which, if businesses do not do something soon, they will be overtaken by events and those far nimbler than they are.
The report makes grim reading for the non-technically aware. It takes as its premise, the promise of a new world of connected devices in which machines of all types and sizes can autonomously communicate with each other. As the Economist points out, this world has long been imagined and features in much science fiction about the end of the world. However, as the report highlights, the past year has seen a huge surge of interest around the core enabling technology of the connected world - M2M communication.
Much of this resurgence of interest originates from the mobile operators who are eagerly awaiting the possibility of connected cars, homes, cookers, microwaves, heart sensors and every manner of device which they could conceivably plug into their networks, to provide new revenue streams. Another reason for the current surge in interest is that the cost of the underlying technology, particularly the sensors, processors and wireless connectivity that form the core of any such system, has fallen to a crucial milestone - into single digit euros or dollars.
The figures are impressive. Informed forecasts say that anything from 12bn to 50bn devices will be connected by 2020, up from just 1 bn in 2010. It is estimated that revenue of "'714 billion will be generated by 2020. As the Economist suggests, although such forecasts can sometimes prove to be overly optimistic they are whetting the appetite of many eager participants.
So what is M2M communication (M2M)? A common definition is a connection to remote sensing, monitoring and actuating devices. Another is simply communications technology that allows machines to speak to one another. These connections often happen via mobile networks but can also simply be via wireless or other networks. So the bathroom scales on which you weigh yourself at night could automatically tell your doctor's surgery how overweight you are. Your blood pressure monitor could allow the doctor to deduce that you have stopped taking your medicine. It could be a forklift truck in a warehouse which is told where to collect its cargo. It could be the oven which alerts you to the fact that your roast dinner has just burned to a crisp. It is already in use by the food giant Nestl, an early adopter of this technology, which has installed sensors in hundreds of ice cream and vending machines to monitor stock levels.
As The Economist report points out, much of what used to be M2M concepts can now be found in the field. The Fonterra Co-operative Group, a New Zealand-based dairy company, has set up autonomous forklifts within a warehouse that can work around the clock, with far fewer accidents and reduced wear and tear. US-based Progressive Insurance, one of several insurers providing usage-based insurance packages to drivers, sets rates based on actual driving habits. The OnStar system of General Motors (GM), which provides services ranging from automatic collision notification to remote door unlocking, now has 6m active subscribers. The latest devices from TomTom, a satellite navigation provider, automatically tally traffic information from millions of users to set better routes for other drivers. Logistics firms such as UPS use M2M in their vehicle fleets not only to optimise driving routes, but also to provide live package tracking information for customers."
Like most new technologies, breakthroughs will come through far-sighted entrepreneurs using the technology to create wholly new products and services, such as Apple has done with the iPad or iPhone and looks set to do with television. However, a recent poll of businesses by Gartner found that many had no plans to adopt M2M, mostly due to lingering doubts over its ability to provide measurable business value. They also saw a challenge in the relatively limited awareness of M2M technology. The Economist report points out that in the coming decade telecommunications operators will need to standardise platforms, explore new partnerships and advance the sophistication of their offerings. Operators and systems integrators will also have to standardise technology platforms to develop open protocols which allow for integration between sensors, devices and other hardware, so partnerships with competitors will often be key to achieving this goal - something at which (with very few exceptions) the telecommunications industry has never been particularly good.
Telecommunications firms will therefore have to become very agile and experiment with different business models - moving away from selling air-time, for example and instead providing managed services from transaction platforms through to back-end data analytics. It is a sad fact that many telecommunications companies use their dominance in the market, their monopoly of bandwidth and their dwindling dominance in the supply of smart phones to push up the prices of their offerings. As M2M communication increases, bandwidth will be increasingly squeezed and governments will be forced to take account of this. Rather than drain the last ounce of profitability from the system as it stands and leave it gasping by the side of the road, telecommunications companies would be well advised to begin widening their offerings and making their pricing and billing structures more transparent.
If they do not do this, then - as the number of embedded devices rockets and the number of machines talking to each other dramatically increases - they will be left behind, as organisations decide to take the management of mobile devices into their own hands. The days when organisations were fat enough not to worry about the size of their telecommunications bills are far gone and will never return, and growing numbers are making good use of Telecom Expense Management systems to identify discrepancies and areas for further savings. As the slimming down process speeds up, the telecommunications industry will either learn its lesson or die - it cannot carry on selling inflated data charges and grossly expensive smartphones for ever. It will be interesting to see whether many more manufacturers follow the example of Amazon, whose 3G Kindle e-book reader ships with free connectivity anywhere in the world - a cost which Amazon incorporates into the price of the device itself. This act alone will have given the telcos nightmares.
The introduction of new high-speed networks such as fourth-generation mobile networks will allow new types of high bandwidth applications to grow; meanwhile, the spread of smartphones and tablets has also generated a completely separate industry with hundreds of thousands of applications. The Economist report says, this has driven user awareness and demand for apps which allow people to monitor and control whole new aspects of their lives or businesses, from the temperature of their home to the system up-time of their production equipment.
It is clear that M2M communications is a shiny new technology Lego block for us to play with. Whether we can build anything elegant, robust and useful with it remains to be seen.
