Navigating M2M

Thanks for joining me with the first installment of my column in this, the inaugural issue of M2M Evolution magazine. If you’ve ever met me or seen me speak at a conference, you already know what those whom I haven’t yet met will soon know. While I try to utilize empirical information in my decision making process, I can be fairly opinionated at times and sometimes have trouble holding my tongue. But there’s never any malice in my utterances. I’m just a call it like you see it kind of guy.

I’ve been working with the TMC (News - Alert) team as a speaker, moderator, and conference chair of the M2M Evolution conference for a few years now and have been looking at M2M and associated areas for nearly a decade. In that time, I’ve witnessed best practices, seen my share of deployment disasters and even been privy to some remarkable behind-the-scenes information. With that in mind, my goal for this column is to inform, enlighten, engage, enrage (where appropriate), entertain and educate readers on M2M, the Internet of things, and all things connected as I see it.

State of the Market

How big is the market? Well, that’s a loaded question. If you were to poll the top 10 industry analysts covering the M2M market and ask the questions “how big is the market today?” and “how big is the market poised to get?”, you’d end up with 10 different answers on market size. Not only that, you’d end up with 10 different answers on market potential, 10 different answers on how fast the market is growing, and 10 different definitions for what’s being counted. The only consensus you’d receive is around the fact that the market is maturing, has a huge TAM (total addressable market) and is growing rapidly. Plotting those numbers on charts would yield hockey sticks of differing angles – all pointing upward and to the right.

Market Size

Compass (News - Alert) Intelligence believes the U.S. M2M and connected device market will end 2012 with approximately 33 million connections, growing at 20 percent per year and that the U.S. represents just shy of one-third of the global market. 

But what does that mean? The truth of the matter is that our numbers, and those of every other firm out there, are wrong. They're estimates and forecasts and by definition they're wrong. What’s more, I made some sweeping M2M generalizations that have no business being made. You see, what I did there was lump together multiple vertical and application solutions and name them machine-to-machine communication. But M2M is not a singular market, it's a market of markets. From the connected car to m-health, the smart grid to connected home automation and security solutions, each individual application area has unique needs and requirements – its own drivers, restraints, challenges and opportunities. What’s most important in getting accurate numbers is in making good assumptions. And when you make hard decisions with inaccurate numbers – well, bad numbers lead to bad decisions.

So now that I’ve set a baseline that the numbers are wrong and that it’s what goes into coming up with these numbers that matters, let’s just all agree the market is big and its potential is huge, O.K.? Let’s not really worry about what the number is; too much time is spent on determining exactly what the total market size is and who’s got market share today. Let’s just assume it’s going to move upward and to the right over time. Because the only problem we have is that with numbers like these, how in the world are we going to get to M2M nirvana? How are we going to reach Ericsson’s (News - Alert) 50 billion device prediction? And more importantly, since telemetry applications have been around for over a decade, why is everything moving so slow?

Numbers that Really Matter

Earlier this year, Compass Intelligence did some survey work to delve into these problems, and we found some interesting things. In a survey of more than 7,000 IT decision makers, with all the hype surrounding the term (a recent Google (News - Alert) search using the term M2M yielded 21.3 million results), fewer than 20 percent could identify what the term M2M meant. Wow!  

What’s more, just 6 percent of IT decision makers say they'd deployed M2M, but when we asked the question another way, we found out more than 18 percent had actually deployed some form of M2M. And while more than 50 percent were interested in M2M as a way to decrease costs or drive new revenue streams, most didn't know what the real payoff was or have the faintest idea of how to calculate ROI.

But perhaps the most telling statistic we found was when we talked to members of the M2M ecosystem. More than 80 percent of M2M planned projects that are initiated fail somewhere along the way.

Is the problem awareness, lack of standards, process issues, lengthy deployment cycles, channel problems, definitional issues, training, technology, a bad taxonomy? It’s all of these things and more.

We’ll explore these things more as we journey down this path together in future issues and at the M2M Evolution conference. Thanks for letting me rant,and if you’ve got solutions to any of the issues above and want to talk about it, just let me know. See you next quarter!

James Brehm is senior strategist at Compass Intelligence (www.compassintelligence.com).