July 9, 2015
Written by Special Guest Blogger Saverio Romeo, Beecham ResearchThe M2M market is gaining the momentum that it has deserved for a long time. The use of machine-to-machine technologies is spreading in many sectors, transforming the way different organizations operate and showing real flow of revenues. M2M products and solutions are no longer “nice to have” but strategic to organisations. Business models are moving beyond connectivity, increasingly becoming service-led and data-rich. The market is also moving from an application-centric approach – one business problem and one set of data – towards an environment-centric approach (the Internet of Things) in which different data come different sources and devices. Therefore, we start talking about smart spaces and wearable devices as interfaces between smart spaces and people. This article will explore that evolution.
Development Trajectories of the M2M Market
Initially, the M2M market was driven by the so-called “after-market applications”. The After-market category of applications usually involve retrofitting connectivity to products already installed and working in the field. But, soon after, another route started to develop in parallel. Policy makers and regulators began to appreciate the importance of M2M for the modernization of certain sectors. In Europe especially, they started legislating in order to promote the use of M2M. The European Union has had a pivotal role, promoting directives such as eCall for the automotive sector as well as initiatives around smart metering. Successful Regulatory applications are road pricing for Heavy Goods Vehicles in Germany and congestion charging in London. The growth of the “after-market applications” route and the “regulatory” route had the positive effect of increasing awareness of machine to machine communications. Line Fit/OEM-based applications started to emerge. They are most often driven by product manufacturers, acting either in concert with partners or on their own, to create new services opportunities related to their products There was a need for a service-led kind of development. Connectivity is designed-in to minimize unit costs for high volumes. These applications can apply to almost any product in any sector, so the opportunities are particular broad.Today, the three routes, “after-applications”, “regulatory” and “Line fit/OEM” of development for the M2M market are moving in parallel. However, the “Line fit/OEM” route is where the future lies and where the Internet of Things (IoT) will take place [See Chart 1].Chart 1. The Evolution of the M2M Market
Source: Beecham Research
Along this journey from After-market to Line Fit, every industry has adopted M2M technologies as showed in the Beecham Research M2M/IoT Sector Map in Chart 2.Chart 2. Beecham Research M2M/IoT Sector Map
Source: Beecham Research
While the M2M products and solutions are strongly sector-specific focussing on a specific application, in the Internet of Things, we consider spaces in which there are different sources of data coming from different applications providing an integrate view of the space. In the case of mobile asset tracking, the application used to be about monitoring the location of the truck. Today, we have different sensors sensing different parts of the truck – including the driver – and providing different sources of data. We are moving from an application-specific solution or product (M2M) towards a cross-sector solution or product (the IoT). Smart city projects are interesting examples of IoT projects. The city is seen as a system of systems (transport, water, energy and so on). Data from these systems are integrated in order to offer a holistic view of the city and develop applications that can be used different sources of data.
Wearable devices are enhanced interfaces between people and smart spaces. They are present in various consumer and business sectors as showed in Beecham Research Wearable Application Map.
Chart 3. Beecham Research Wearable Application Map
Source: Beecham Research
Wellness, Sport/Fitness, Lifestyle Computing, Communication and Glamor represent the B2C segment of wearable devices. Business Operations, Security/Safety and Medical represent the B2B markets for wearable devices.
About the Author
As Principal Analyst at Beecham Research, Saverio Romeo runs research in the areas of M2M, Internet of Things, wearable technologies and smart solutions for vertical sectors. During the last six years, Saverio has focused his technology and market research on the evolution of the mobile industry, primarily looking at European mobile network operators. He has done extensive research and published in areas such as mobile healthcare, smart cities, mobile and wireless innovative services, and data analytics in the mobile industry. He has recently worked extensively on wearable technologies for consumers and enterprises, but also on the evolution of M2M/IoT and their impact on vertical markets. Beecham Research is an official partner of EWTS ’15.