Whilst much has been written of the revolutionary impact of IoT and M2M connectivity, unleashing the true benefits of a world full of sensors will require significant skills to integrate and extract intelligence from multiple different components including: sensors, communications modules and networks. The true black art will be in interpreting and analysing the avalanche of data collected and transmitted from the sensors in a multiplicity of formats and turning it into actionable intelligence. Achieving this aim will require a variety of skill sets and innovative techniques to marry together cloud computing, analytics and integration with core systems and processes to reveal the true underlying value.
Initial forays made by service providers into the world of IoT have focused on driving cost reductions, monitoring critical systems or improving maintenance regimes. As we move forward the Holy Grail on the horizon involves creating compelling real-time services and differentiated products and services for businesses and consumers. A key challenge will also be the importance of developing such services without compromising privacy or breaching compliancy mandates.
Given the evident market potential it may come as a surprise to learn that the majority of CSPs have no IoT strategy – a fact which reflects the relative immaturity of the sector. We need only examine the industry predictions to see the magnitude of the opportunity at stake: Gartner expects M2M solutions to grow at a CAGR of 23% between 2011 and 2016. ABI Research anticipates a $5.7 billion industry in 2015 for the M2M/IoT analytics industry – accounting for nearly one third of the total big data and analytics revenue by 2020.
Some operators are actively considering ways to expand the number of markets for their M2M deployments e.g. AT&T and Verizon’s acquisition of nPhase and the agreement between Sprint and Orange to shared roaming agreements. Forward thinking organisations are shifting their focus from selling products to selling services. They are investing in cross platform technologies for billing, settlement systems and analytics and extending their reach beyond the traditional network to incorporate the network of unattended devices. Smart CSPs are supplementing their own digital assets with shared digital platforms which in turn require they take into account the additional regulatory and security responsibility for that shared infrastructure. And lastly they are exposing their IT assets to developers and encouraging the development community to create innovative new revenue stream opportunities.
So what are the key challenges facing operators wishing to grab a share of this lucrative market? The first relates to their ability to gain access to the data which is widely distributed across disparate systems, devices and network boundaries
The Road Ahead
So what are the key challenges facing operators wishing to grab a share of this lucrative market? The first relates to their ability to gain access to the data which is widely distributed across disparate systems, devices and network boundaries. The second is the sheer volume and the diverse nature and format of the data, making it extremely difficult to transform the data into intelligence that can be monetised. The next challenge is the lack of standards, resulting in different parameters being used for different devices, impacting the ability to harness the information by linking the data to customer needs and behaviour. There are other industry-wide challenges that will also need to be resolved, such as the deployment of IPv6, as the billions of new sensors will require unique IP addresses. Another factor is the need to reduce the amount of energy required to power sensors so that they can be self-sustaining.
Example Use Cases
Nonetheless the scale and scope of the business cases that will be enabled by this technology means that a way will be found to overcome these barriers. There are a myriad of ways in which M2M Analytics can be deployed, many which are as yet unimagined. Some such examples of use cases include helping enterprises improve their overall equipment effectiveness (OEE) using intelligence delivered by real-time sensors and devices on equipment for diagnostic and maintenance purposes. M2M data can also play a pivotal role in identifying, predicting and minimising the impact of fraud and could be instrumental in insurance claims to validate the accuracy and consistency of network data. Other promising areas include that of supply chain management, where the interdependencies of different parties can be mapped and location tracked and the remote health of inventory monitored to reduce wastage as exemplified by Tech Mahindra’s own Fork to Farm programme.
For CSPs the opportunities are there for the taking. What’s vital is that they take steps soon to develop strategies to take advantage of the brave new world
Other areas that offer huge potential for monetisation include the area of e-health with the possibility of remote patient monitoring by securely capturing patient health data from a variety of different sensors, analysing the data and then sharing it with medical professionals to make appropriate diagnoses. In the retail environment the increasing deployment of in-store beacons offering real-time, contextual offers to shoppers based on their purchase history, profile and location is already a growing reality. As too is the idea of connected vehicles with the opportunity for remote monitoring, engine diagnostics and the automated scheduling of services and repairs, which means that smart automobiles on our roads will soon be able to book themselves in for a service. Other areas worthy of mention include energy management of smart buildings using aggregated sources of data to improve the accuracy and performance of climate control, lighting, and CCTV systems both in the home and in the smart cities of tomorrow.
In short the opportunities are endless and the potential immense. As with any major technological disruption, the opportunity exists for new innovative technology players to emerge and others to reinvent themselves. For CSPs the opportunities are there for the taking. What’s vital is that they take steps soon to develop strategies to take advantage of the brave new world that’s evolving and don’t get left looking in the rear view mirror as other faster, more agile players grasp the initiative.