operator strategies in m2m - at&t

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Pauline Trotter

Evan Kirchheimer

Jeremy Green

July 2010

Operator strategies in M2M: AT&T


Operator strategies in M2M: AT&T

This is part of a series, which includes:

a report: Operator strategies in M2M

separate profiles of a number of operators from North America, Europe, and Asia-Pacific.


Ovum viewSummary

AT&T’s M2M strategy rests on the strength of its network (its adoption of GSM enables US clients to deploy M2M services globally), its well-established Enterprise On-Demand (EOD) and Control Center (Jasper) platforms, and its investment in fostering a partner ecosystem, from the hardware level through to applications and services.

Ovum view

Like Orange, AT&T has focused initially on M2M projects involving connectivity in areas such as fleet management and alarm monitoring, and we believe it has built up a good stable of customers in those areas.

AT&T is now moving on to smart grid and, increasingly, retail industry opportunities.

It has the most developed partner program in M2M, and uses an industry-leading M2M platform. Moreover, we believe that the focus on enabling developer partners to innovate across multiple devices and environments is a good strategy in a market where expertise is rare and expensive.

Outlook

Expect to see AT&T involved in more M2M projects that are not solely focused on cost/resource optimization. We believe partnership announcements will continue apace, as AT&T sees partnering as critical to success in

the M2M space. AT&T’s investment in its sales teams and the evolution of the market means that it is in a good position to win

US-based smart grid deals, as well as deals in emerging sectors.


Positioning in M2M

AT&T responsibility Connectivity

Billing and reporting

Hardware manufacture

Customer care

Hardware customisation and testing

Consulting and technical sales

Applications development

Connectivity support Applications support

Solution monitoring/reporting Device provisioning and installation

Integration of M2M solution

Mixed responsibility

Partner responsibility


M2M vision and strategy (part 1)

AT&T bases its approach to M2M on the following three “foundations” which it has built over the past decade:

Global GSM network – a differentiator in the US market. High speed.

Global roaming.

Cheaper M2M modules because of volumes (NB module prices are declining rapidly).

Innovative service platforms. EOD legacy platform launched eight years ago; this allowed customers to manage large M2M

deployments with good operational efficiency – no need to recreate their own service platform.

AT&T now leads with the AT&T Control Center, a Jasper Wireless platform.

The operator believes this is the best SDP in the world.

Expertise and ecosystem – AT&T believes this is the most important element. Many customers and millions of endpoints – expertise in addressing a range of customer needs.

Solutions teams include mobile applications consultants and industry vertical teams.

Tech support well versed in EOD and Control Center (Jasper) platforms.

Certification of a wide range and number of devices.



AT&T’s sales approach is partnership-focused.

Two types of customer: wholesale type – sells to Amazon and Amazon does its own distribution strategy

also sells M2M to enterprise buyers.

Claims a strong alliance ecosystem: this enables clients to choose the right piece of hardware for the endpoint or select from already certified

devices

it also allows them to develop their own devices, by introducing customers to companies that will engineer and manufacture specialized devices geared towards specific vertical applications.

AT&T is increasingly taking the prime contractor role for solutions: the past quarter has seen more companies coming to AT&T to be prime contractor, and source device

manufacturers to do the job

AT&T has begun to issue proposals based on that principle

however, currently AT&T is predominantly not the prime.

Partnership management is key: within the sales team, it has a business alliance channel responsible for co-sell relationships

commissioned salespeople help ensure those co-sell relationships are successful, and are incentivized to generate success with the partners.



AT&T has strong, established relationships with a number of partners and we view this as a particular strength.

Relationships with close to 200 value-added resellers (VARs): These relationships can evolve over time. For example, the partnership with SmartSynch (for smart

grid) evolved from VAR to co-selling, with sales teams working closely together. They approach utilities together to sell smart grid.

In contrast, fleet management seems to be more productized, and therefore VAR relationships are more traditional in that sector.

AT&T has significantly fewer co-sell partners than VARs – probably less than 100 co-sell partners in the M2M space. (Note: it has many more co-sell partners, but not all are M2M).

AT&T also white-labels technology; we estimate that it maintains 12–24 such relationships in the M2M space.

It also has partnerships with device vendors; for example, Motorola for its Symbol devices.


M2M partnerships Trimble (mobile resource management solutions): on-demand fleet and mobile asset management

combining GPS, wireless data comms, and a web browser interface using the Trimble GeoManager.

SmartSynch (smart grid infrastructure): point-to-point configuration model in which each meter communicates directly with the utility over the AT&T wireless network.

Silver Spring Networks (utility specialist): aggregation of data collection and transport of smart grid information to the Silver Spring’s UtilityIQ back-office application suite over AT&T’s 3G network.

Numerex (M2M products and services): integrated services for M2M enterprise markets such as energy, healthcare, and security companies, including access to AT&T Control Center.

Mednet (cardiac monitoring products and surveillance services): wireless heart monitoring using Mednet's HEARTRAK External Cardiac Ambulatory Telemetry (ECAT) solution for wireless monitoring of patient devices via bluetooth-enabled devices across AT&T's 3G and EDGE data footprint.

KORE Telematics (VAR): streamlined network certification flow for inbound non-stocked M2M devices from device manufacturers wishing to receive product approval for the AT&T network. KORE will also manage customer access to AT&T Control Center diagnostic tools.

Ericsson (M2M module supplier): AT&T Connection Kit for Device Developers, which consists of tools to integrate the AT&T network with emerging and M2M devices using Ericsson’s hardware technology and Software Developer Kit (SDK).

Networkfleet: vehicle management and tracking.


Future of M2M

AT&T sees a bright future in M2M, and sees it moving from a cost-reduction sell to a useful differentiator for enterprises.

Until now it has been driven by a cost-reduction agenda. Deployments are primarily low-usage and in a single country.

Increasingly, customers are looking to use M2M to differentiate products. AT&T sees a wider range of usage cases, data volumes, and multi-country deployments.

But a major inhibitor in AT&T’s view is the lack of standardization.

Standardization is still very limited, especially in application development.

But the standard for the “solderable” SIM was a welcome development – some AT&T customers have wanted this for a while, but would only adopt such SIMs if they were standards-based.


M2M organization and sales

M2M organization

AT&T employs a dedicated M2M product team along with members of the EDO and members of the broader ABS product team focused on supporting the M2M market.

In terms of sales, AT&T leverages the general AT&T sales team, which is among the largest in the industry.

Within this large team, there are several hundred solution sales specialists, including an M2M “center of excellence” – a sales overlay team that supports the general sellers.

All sales specialists sell further down the chain – not just to MNCs.

All M2M specialists are US-based at this time.

AT&T emphasizes that it does have salespeople focused on global opportunities, but they leverage the same US-based M2M center of excellence.

Overall, the strategy is to follow US enterprise customers as they seek to do global deployments.

Approach

Starting to talk to more product managers at companies it is targeting, instead of operations/efficiency staff.

AT&T believes product managers are getting involved because many of them see M2M as an opportunity to differentiate their products and services.

This might lead to more innovative projects and also more data volumes for M2M.


Portfolio (part 1)

Platform

AT&T has two separate “platforms” for M2M: Enterprise On-Demand (EOD) AT&T Control Center, powered by Jasper – a third-party supplier.

As with other operators, “platform” is a vague term to group together a disparate set of functions including SIMs, tariff plans, provisioning gateway, analytics and reporting software, billing, and APIs for application development.

The AT&T Control Center (Jasper) has stronger analytics and better custom alerting than EOD. AT&T believes “Jasper is the best SDP to manage M2M and emerging devices” and that it considerably exceeds other operators’ platforms. AT&T highlights the importance, for example, of alerts for unusual usage platforms.

However: EOD recently developed custom alerting AT&T stresses that many existing clients want to stay on EOD and not move to Control Center

(Jasper).

AT&T leads with Control Center (Jasper) for new customers, although it is committed to maintaining EOD for existing customers.


Portfolio (part 2)

M2M developer kit

Developed with Jasper, aimed at aspiring resellers. A “very low price” to trial and test applications. AT&T sells customers access to this kit to clients who then test out ideas on it, get

some basic support, and can “see what success looks like”. It therefore acts as a “sandbox” environment, so that prospective clients can win

approval from their corporate leadership for further investment in M2M projects. Customers buy the kit from AT&T, but it is essentially packaged access to the

Jasper Control Center. AT&T provides three SIMs licensed for six months. It provides online developer support (but not phone support) so that developers can help developers.

Product set includes a “secure SIM” which only works in a specific device.

This blocks service if inserted into another device. It also sends a notification should service be interrupted or in the case of any

security issue.


Portfolio (part 3) Applications focus

Telematics, both OEM and after-market – this has been a long-time success story for AT&T in M2M.

“Connecting cars and connecting houses” is still key in M2M according to AT&T. Hertz is a valuable customer. Increasingly, heavy equipment manufacturers are looking to cellular as their asset management

technology of choice to do both deployments in the US and also abroad (including developing countries).

Alarm monitoring – primary and backup solutions for residential and commercial solutions.

Increasing interest in: smart grid – AT&T is making significant investments in sales teams to target SG opportunities

the US is behind some of the developments in Europe stimulus money from last year now in trial, and utilities will make cases to regulators to go ahead in the next year.

retail – seeing some PoS solutions AT&T sees some interest from the industrial product sector, but these are smaller opportunities in

nature and not broad sales successes yet.

Vertical focus – utilities, transport, retail (AT&T expects more opportunity from the retail sector in the future).


Deployment model and customers

AT&T deploys a four-stage process for application rollouts to enterprise buyers:

define – requirements capture design – vendor introduction, solution design, pilot deploy – troubleshoot, project management, deployment tools support – including tracking, RoI metrics, further rollout.

RoI plays an important role in sales support and investment justification.

AT&T has prepared vertical and horizontal IP/materials to support the justification for investment in M2M services for particular business applications.

It has also prepared RoI tools called “mobility value frameworks”.

Alliance vendors are often brought in at an early stage to design the architecture.

Key customers include:

Hertz, BMW, and USA Technology.


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operator strategies in m2m - at&t

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