The hype surrounding machine-to-machine communications — known by the acronym M2M — is surpassed only by the expense of network transport and the “exorbitant process” of integrating M2M modules into the machines they will monitor.
Cellular networks are the most likely the M2M enabler, according to a new report from Boston-based Strategy Analytics called “US$40 Billion Cellular M2M Opportunity Hinges on Bluetooth & Zigbee Sensors.”
These networks have become more reliable, widespread and secure than ever. However, even the lowest achievable per-sensor price points will prove to be “prohibitively costly” for many machine communications applications, the report stresses. Only if short-range radio frequency and mesh topologies are brought online will M2M expand beyond niche vertical markets.
Millions of Machines
By 2011, as many as 110 million machines will directly or indirectly use a cellular connection for M2M, according to Cliff Raskind, director of Strategy Analytics’ global wireless practice. “Despite the staggering theoretical potential of M2M across many verticals, cellular M2M will continue to demonstrate the best payback in utilities, retail, transport/logistics, property management and healthcare in the short-to-medium term,” Raskind told TechNewsWorld.
Linking the disparate wireless networks and fragmented vertical software solutions are M2M specialists, such as Airdesk and Aeris in the U.S. and Wyless and Netsize in Europe, which will play a key catalyzing role in orchestrating M2M solutions and spurring the next phase of adoption.
The potential major M2M snag is the lack of broad inter-industry cooperation between manufacturers of sensors, RF modules and the machines they will reside in, however. Without this, hardware integration and development will remain a prohibitively costly sticking point for M2M, says Strategy Analytics.
“Tariffs have become more conducive to M2M as operators like Orange, T-Mobile, Sprint and Verizon (NYSE: V) now view a cellular M2M module in terms of its lifetime value, often spanning five years or more. Still, pay-as-you-go pricing and multimodal RF options for module pooling are notably absent,” said Antoine Mathiaud, senior analyst, Strategy Analytics. “This rules out many ‘exception reporting’ scenarios where a machine would report in only when it is in need of attention.”
Living Up to Hype
For years, computer industry gurus have looked to machine-to-machine communications as a potential facilitator of e-commerce and Internet for machines, so to speak.
Extensible markup language (XML) has been used to communicate from machine-to-machine, supported by technologies like Simple Object Access Protocol (SOAP), Universal Description, Discovery and Integration (UDDI), and Web Services Description Language (WSDL), according to research by Franz Kurfess, of the computer science department at California Polytechnic State University.
The biggest issue, though, is semantic: How can computers or machines properly interpret the contents of documents sufficiently well to perform the activities required for business processes?
Examples of machine-to-machine communications include linking the electric meter in one’s home or condo to the electric company’s computers and generating bills automatically.
The promise of the technology has not yet matched the hype, however. Back in 2004, experts at the FocalPointGroup in San Francisco were predicting that machine-to-machine communications could be a $180 billion business by 2008. That’s been scaled back radically — and the industry is only around $40 billion today.
Still, equipment makers for the telecom sector, like Nokia, Ericsson and others, have been making tiny radio transmitters, which they hope to sell for cars or at-home heart monitors. In Europe, the chocolate maker Nestle has outfitted ice cream vending machines with M2M technology, which transmits reports on which machines need to be refilled and with what products.
“The global ecosystem of cellular M2M revenues is poised to grow from $6 billion in 2005 to as much as $40 billion in 2011,” said Raskind.
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