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Machine-to-Machine Solution
Machine-to-Machine Solution
M2M Value Chain »
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Solution The Value, Volubill Adds »
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An M2M solution is a two-way communication channel set up between machines which are networked using wireless, wired or a hybrid network for remote monitoring, management or marketing. For a long time, only standalone devices were used, but due to reducing communication and M2M module costs, now many more devices, homes and machines are connected. Mostly, these solutions are being used in the verticals of automotive, energy, digital home and health care but these solutions will soon expand into new domains like finance.
Some researchers suggest that the telecom industry is poised to carry a staggering 1000 times more data in the next decade than in the past ten years due to the increased adoption of M2M solution and the number of connected devices will grow to 1 trillion, which is 250 times more than the number of mobile phones currently in the world!
To deliver an M2M solution, various elements run from concept development: M2M module and hardware manufacturing, hardware customisation, application development and support, system integration, network connectivity, provisioning, billing to solution monitoring and reporting. It involves many different providers, including mobile network operators, application and middleware vendors, device manufacturers and in some cases retailers, to support it. As M2M is an evolving space, there are mixed roles and responsibilities assigned to different elements of the value chain. Following is a simplistic view of the value chain, for an M2M solution, with key functions listed under each of these elements. The black boxes depict the role which is unique to that element in the chain, like device manufacturing or network connectivity; the green boxes highlight the roles which can be carried out either by an MNO, MVNO or application provider and; the yellow boxes show that any of the four elements can be sold directly to the end-user of M2M solution.
Figure 1 – M2M Value Chain (Click to view)
There may be some scenarios in which, the network operator enables an end-to-end solution but, there is a strong business case for the MNO to partner with third parties to deliver the solution, as many M2M solution aspects do not fall under its domain expertise. The role of each element depends on the criticality of purpose, business model and the market segment the service provider is targeting.
There is growing consensus in the industry that M2M holds promise and the primary reason for that is that it drives penetration further and opens up new value added revenue streams for carriers in competitive and saturated markets. Though, the usage fee from M2M transactions will typically be low, it will still be a promising vertical due to its huge volume of transactions. Also, M2M solutions typically have long term contracts and low churn so will have higher value for an MNO.
Some researchers suggest that the telecom industry is poised to carry a staggering 1000 times more data in the next decade than in the past ten years due to the increased adoption of M2M solution and the number of connected devices will grow to 1 trillion, which is 250 times more than the number of mobile phones currently in the world!
To deliver an M2M solution, various elements run from concept development: M2M module and hardware manufacturing, hardware customisation, application development and support, system integration, network connectivity, provisioning, billing to solution monitoring and reporting. It involves many different providers, including mobile network operators, application and middleware vendors, device manufacturers and in some cases retailers, to support it. As M2M is an evolving space, there are mixed roles and responsibilities assigned to different elements of the value chain. Following is a simplistic view of the value chain, for an M2M solution, with key functions listed under each of these elements. The black boxes depict the role which is unique to that element in the chain, like device manufacturing or network connectivity; the green boxes highlight the roles which can be carried out either by an MNO, MVNO or application provider and; the yellow boxes show that any of the four elements can be sold directly to the end-user of M2M solution.
Figure 1 – M2M Value Chain (Click to view)
There may be some scenarios in which, the network operator enables an end-to-end solution but, there is a strong business case for the MNO to partner with third parties to deliver the solution, as many M2M solution aspects do not fall under its domain expertise. The role of each element depends on the criticality of purpose, business model and the market segment the service provider is targeting.
There is growing consensus in the industry that M2M holds promise and the primary reason for that is that it drives penetration further and opens up new value added revenue streams for carriers in competitive and saturated markets. Though, the usage fee from M2M transactions will typically be low, it will still be a promising vertical due to its huge volume of transactions. Also, M2M solutions typically have long term contracts and low churn so will have higher value for an MNO.
Challenges »
Solution The Value, Volubill Adds »
Benefits »
