Why operators need to gear up fast for the new machine-to-machine age

Today, the machine-to-machine (M2M) market remains small. According to research company, Analysys Mason, the number of device connections worldwide was just 62 million in 2010. Underlining the point, at the recent International CTIA Wireless® 2011® show, I met one director of an M2M company that was happy to describe his business as the “tallest pygmy in the village.”

Yet all the market research indicates that the sector will show dynamic growth in the near future. Analysys Mason is projecting that the number of M2M connections worldwide will reach 2.1 billion by 2020, with year-on-year growth rates of between 36% and 52%.

So, wireless operators that have built out platforms for a few tens of thousands of M2M connections need now to be rapidly scaling up their operations to cater for millions and even tens of millions of connections.

Managing this rapid growth represents a major challenge for operators. If the projected market expansion is to become a reality then they will need to cope with an extraordinarily diverse market. The M2M market is already highly fragmented and is likely to become more so over time. It will involve hundreds of industries, thousands of companies and tens of thousands of different types of device. And each one of these different entities is likely to have unique requirements.

So the challenge for operators is not just about achieving scalability, important though that is, it is just as much about having the flexibility and openness to support the vast range of industry requirements that are currently emerging.

The fragmented nature of the market means that operators need to offer a M2M platform that supports a variety of use cases and applications. In particular, the connectivity requirements of M2M devices and applications can be completely different to those of traditional mobile phones and mobile data devices.

Yet, while dealing with fragmentation is important, operators also need to be able to manage the level of detail required to efficiently support this nascent market. In short, scalability needs to be accompanied by the ability to deliver granularity.

Many M2M devices are ‘infrequent transmitters’ – this means they need to connect to the wireless network a few times a day, week or month, will often connect for a short time, and may only send small amounts of data. Treating these devices the same way as mobile phones – which are mostly always-on, sending and receiving data frequently and spontaneously – is inefficient and ineffective. Instead, operators need to deploy a M2M platform that adapts to varying requirements for managing and communicating with M2M devices.

For example, they need to have the capability to track expected usage patterns, in much the same way as they might monitor expected usage of a smartphone or tablet, for example, to alert owners of any unexpected usage patterns – if a reasonable threshold is exceeded – and potentially even put a temporary stop on the service altogether.

This will require the ability to support a fine level of granularity because most M2M application providers will be using a broad range of devices, with completely different requirements, all of which will require different levels of detail in terms of the way they are managed.

So while the projected growth in the M2M market represents a great opportunity for operators, it also presents many challenges. If they want to support this growth rather than hinder it, operators need to act fast and embrace new business and technological approaches to deliver the scalability flexibility and level of granularity that this exciting new sector needs to transform itself from vision into reality.

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