m2m presentation at telecom council of silicon valley
TRANSCRIPT
We make ICT strategies work
Daniel Kellmereit,
CEO, Detecon Inc.
May 2nd, 2013
M2M in the Mobile Industry
Introduction
The application of M2M technology leads to improvements in productivity, efficiency
and transparency across industries; however so far we only see a fraction of what is
possible.
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Medicine & health
Agriculture/ farming
Smart home
Connected car
Smart metering
Consumer electronics
Logistics
Public transportation ePayment
The promise of M2M
The Limited Application of M2M
– 2 –
Security Industrial Automation
Challenges
A number of challenges have slowed down a more exponential growth of m2m solutions
and the m2m market in general.
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Challenges in M2M Adoption
Regulation
Complex value chain
Cost
Technology maturity
Fragmented Solutions
Technical issues
Customized solutions
Vertical specific Complex, industry-
specific charging
Inflexible SIM/module setup
Custom devices for individual applications
Network coverage and performance
Privacy/security in certain sectors
Prolonged certification process
Roaming Regulation
Standards, architecture & interoperability,
Security and device management
High level of customization
Lack of scalability & modularity
Pricing models
standardization Multiple industries and
competitive players; Information not readily
shared or available
Factors M2M Growth Drivers
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M2M Growth
Drivers
Rise of Cloud
Falling Hardware
costs
Diverse
business
applications
Big Data/BI
Ubiquitous
network
access
Maturing provider
ecosystem
Today we are on the verge of mass market adoption across industries; this change is
fuelled by several factors like falling hardware & connectivity costs and ubiquitous
network access.
Multiple options for high-
performing wireless networks
Drop in mobile data costs
Ease of adding wireless
technology to devices
Cloud becomes a mass market
Costs for developing and delivery
of applications is reduced
significantly
Devices store more and more
information in the cloud
Drop in memory, processor & sensor prices
Growth of mobile device market
Large amounts of
unstructured data
Rise of new technology to
process and manage and
store data
Improvements in analytics
platforms Ecosystems of providers is
becoming more efficient
Packaged services
Emergence of open
platforms
Growing developer
communities
Market Opportunity
The M2M market will grow exponentially in the coming years, Building Infrastructure,
Telematics and Healthcare are expected to be the largest verticals.
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Sources: Machina Research, Detecon Research
2021 2020 2019 2018 2017 2016 2015 2014 2013 2022
600
700
500
400
300
200
100
0
USD B
8%
5%
3%
12%
3%
34%
35%
Rest (8 %)
(4) Utilities (5 %)
(6) Industrial Automation (3 %)
(3) Healthcare (12 %)
(5) Smart Cities (3 %)
(2) Telematics (34 %)
(1) Intelligent Buildings (35 %)
In 2022, Intelligent Buildings will be the biggest area for M2M applications, followed by Telematics and Healthcare.
The fastest growing area will be Telematics with a CAGR of 24%.
M2M Size and Growth Areas of Growth
Connectivity Related
Revenues
M2M Platform
Revenues
Installation Revenues
Device
Service Wrap (Revenues wrapped around connectivity)
Frame Template M2M Value Chain
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The M2M value chain is highly fragmented and complex; end-to-end solution
development requires standardization and horizontal platforms.
Chipset/SIMs Modem/Module Equipment
Application Business
Intelligence
Connectivity Device
Platform
Application
Platform
Core chipset, unique identity for each M2M device
modems & modules, provide reception capability
Customer equipment such
as smart meters or vending machine
Data connectivity, mostly provided by telecom carriers
System Integration & IT Services
Operations and business
support platform
Platform to manage and analyze data
Runs the core business processes
Planning, implementation, integration and management of solutions and add-on consulting services
Data analytics and business performance
management
BI/ Software
M2M Value Chain Hardware
Connectivity
Frame Template New Growth Areas
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Success in M2M requires the capability to profitably serve a very large number of low
traffic data subscriptions while moving beyond connectivity services.
revenue per application type
application type
M2M - mobile long tail business?
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Cloud Computing
$55b
Business Intelligence
$13.8b Big Data
$11.7b
Leverage connectivity footprint to move into higher margin services:
Cloud Services
Business Intelligence
Big Data
by either partnering and/or building own platforms.
Possible Positioning Strategies
2015 non-connectivity services forecast
Sources: Detecon Research, IDC, GSMA
Frame Template High Margin often equals High Process Complexity
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The most attractive new services also tend to have high process complexity. Carriers
should try to leverage core competence areas to be able to compete. M
arg
ins
Customization (process complexity)
SIM/Chipsets
Biz application
Managed services
low high
low
high
Professional services IT Integration
Modem/Module
Equipment
Connectivity
Device platform
Application platform
BI
Hardware
Connectivity
BI/Software
IT services
Current carrier/alliance offerings
Future potential – extended offerings
Sources: Detecon Research
Connectivity
Verticals / Applications
M2M Devices
Middleware Platform
Standardized M2M devices
M2M Standards
M2M Standardization
While standardization efforts will accelerate market growth, the real breakthrough could
be a clearing effect on platform and device level as seen in the mobile industry.
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Sources: Detecon, European Telecommunications Standards Institute (ETSI)
Log
istics,
Tra
nsp
ort
eH
ealth
Utilit
ies,
S
ma
rt G
rid
Ve
hic
les
Me
dic
al
eq
uip
me
nt
Sm
art
m
ete
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Connec-tivity
Connec-tivity
Connec-tivity
M2M Platform
M2M Platform
M2M Platform
Log
istics,
Tra
nsp
ort
eH
ealth
Utilit
ies,
S
ma
rt G
rid
M2M platform
Horizontal scaling across platform, architecture, application frameworks global
communication standards
Current – Vertical Standardization
Future – Horizontal and Vertical Standardization
hundreds
few
hundreds
few
Connectivity Connec-
tivity
Vehic
les
Medic
al
equip
ment
Sm
art
m
ete
rs
Developer community
Carriers - Way Forward
While standardization initiatives are ongoing, Carriers should not wait and continue to
orchestrate vertical and horizontal solutions through partnerships for platform building.
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Sources: Detecon Research
Standardization efforts will accomplish limited all-encompassing
set of M2M standards
Carriers may miss the boat if waiting for standards; consumer needs will
drive market forward
Carrier Best Practices
SI Strategy
Delivery Hardware
Horizontal
Partnerships
Vertical
Partnerships
Carriers should orchestrate partnerships and develop managed
services capabilities
Orchestrate vertical partnerships to develop level of expertise in key verticals and offer both packaged reseller and partner- provided application
Enhance vertical offerings through a developer community
Orchestrate partnerships across value chains provide device management and application platforms
Horizontal solutions should feature pre-integration of common business platforms (such as SAP)
Transform from utility capacity-based model to managed services model with end-to-end responsibility
Ensure global coverage through global roaming arrangements and common service levels
Develop SI expertise; provide application and solution development, integration, and deployment
Position in-house integration department as a central component of the M2M offering
Position as an end-to-end solutions provider
Offer supplementary consulting services with specialized partners on strategy, business case, application roadmap and the development of reference architectures
Implement rapid device certification process, customer support and developer module kits
Provide support services such as helpdesk, warranty management, device refresh and reporting
High ROI Use Cases
Expensive assets with high utilization and high cost of downtime provide some of the
most profitable business cases today, as the industry matures, we will see very different
use-cases.
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Sources: Detecon Research
Use case UK Rail Use case Rolls Royce
Situation In UK, train leasing contracts based on a metric of train
movement (decoupled from the number of physical trains) Opportunity for leasing company: Maximize train utilization
time Solution: Collect live data with cellular M2M from instruments on the
trains to bring trains in for maintenance on an as-needed or predictive basis, rather than on a schedule
Benefit: Improved operational efficiency Reduced number of trains needed– lower CAPEX/OPEX)
Situation: Aircraft downtime is very expensive Many maintenance issues come up on short-term basis Solution: Collect live data from the jet engine with satellite-based
technology to schedule maintenance on a predictive basis Remote real-time detection and diagnostics of engine
failures
Benefit: Improved operational efficiency Real-time engine data for instant countermeasures Improved safety through remote diagnostics
M2M in Automotive
The automotive industry can leverage M2M technologies in multiple ways, therefore we
currently see a number of large strategic initiatives in this field.
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Components & Features:
M2M SIM
Telematic Box
Provides:
In Car Wifi & OTT Services
Remote Car Diagnostics
eCall
Car (Driver)
Components & Features:
CRM with Customer M2M Integration
Stock Management M2M supported
Provides:
Remote Car Diagnostics
Marketing & Sales Support
Real Time Inventory Management
Workshop
Diagnosis Data
Car & Driver Profile
• Prevention [Trigger: Low Battery] • Planned Maintenance (Calendar Integration) • Marketing & Sales Campaigns [Trigger: Car Profile]
M2M
M2M
BI
BI
Low Battery Life
Route in GPS System
Meetings (Outlook)
Unstructured Data Structured Data
Components & Features
CRM with Customer M2M Integration
Provides:
Proposal for Car Renewal
Campaigns
Dealer
Push Message: Caution – Black ice in approx. 25 miles.
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Sources: Detecon Research
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Case for Big Data
2
BI
3
Proposal for Car Renewal based on Driver Profile
3
Low Battery Alert Change Battery before Travelling
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Contact Information
DETECON, Inc. 33 New Montgomery 20th Floor San Francisco, CA 94105 U.S.A. Phone: +1 (415) 904-7919 Email: [email protected]
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