Amidst a strong current of newly announced cool mobile gadgets at the 2013 Mobile World Congress (MWC) - which tend to dominate the MWC highlight reels, this year there are also many M2M solutions and products making the rounds. They may not generate the noise that the gadgets generate, but there are vital M2M announcements taking place throughout the huge event.
Among the first we've heard today is that SAP and Ericsson - two likely giants of the M2M space - are joining forces to deliver a new range of M2M solutions. We say "likely" here because both are still only really getting their M2M feet wet - at least from our perspective. The two companies have inked a new agreement that will see the two businesses work together to market and sell several enterprise-grade, cloud-based machine to machine (M2M) solutions and services.
The key to the new solutions will be the creation of a combined SaaS-based offering that will bring together a set of Ericsson services powered by the Ericsson Device Connection Platform & Service Enablement Platform in combination with a set of SAP enterprise business solutions which can be powered as needed - and not surprisingly - by the SAP HANA in-memory database platform and technology. In addition to solutions and technology, Ericsson will also put its consulting, systems integration and managed services, and complementary device and applications testing, as well as verification services on the table as part of the overall offering.
Further to the general solution set, each solution will also be customizable for specific verticals, enhancing flexibility. The goal is for SAP and Ericsson to work with the wireless operators on a global basis to market and sell these flexible solution sets. In fact, working through the carriers is a key component of the entire partnership effort. These wireless operators are either already providing or are now looking to provide M2M connectivity services - the goal is to offer them, depending on how deep they want to go with M2M, different levels of participation that range from full enterprise M2M prime supplier to an ecosystem partner.
The joint M2M infrastructure and industry specific solutions will be provided by operators as a service to enterprises - this is where the pedal meets the metal as far as how the solutions and services actually find their way into the enterprise. Ericsson and SAP are already discussing the model with operators. It is well worth noting that the Ericsson Device Connection Platform and Service Enablement Platform already has an established and growing operator community - recent additions include 3UK, Megafon, Swisscom, TeliaSonera and XL Axiata.
Jim Hagemann Snabe, Co-CEO of SAP AG says, "Today's announcement is a first step toward delivering on a shared vision that SAP and Ericsson have for co-innovating with our customers worldwide to help them deliver on the promise of M2M. Together, we will break down the barriers that prevent customer adoption of M2M solutions by delivering a simple, affordable and fast-to-implement solution. Enterprises will benefit from an offering that provides them with everything they need to connect to machines, and helps turn high volumes of data into real-time knowledge and decision-making."
The SaaS M2M Model is Key
There are a number of specific issues that SAP and Ericsson believe they will be able to address with their joint approach. The two companies believe that businesses face certain barriers in their efforts to deploy M2M solutions. In particular, the two are looking to help circumvent problems such as a lack of complete multi-industry end-to-end offerings, as well as the need to be able to easily access suitable global connectivity solutions that multinational enterprises more often than not require.
Ericsson and SAP believe that the combination of assembling a jointly designed and inherently connected cloud-based offering, and then adding the global wireless carrier component, will remove those barriers. Without having to worry about these issues, businesses will be free to focus on the business problems they need to solve. Yes, it is of course the classic SaaS argument, but in fact it makes a great deal of sense for enterprises of sufficient scale - that more likely than not already deal with SAP and Ericsson - to look to solve emerging M2M issues.
These issues include dealing with key business processes such as maintenance, remote service, inventory, logistics and road transport management, vending and customer experience management, to name but a few. The other typical arguments for going to a SaaS model - the benefits of minimal up-front investment and faster deployments and time-to-market - are all valid here as well.
The joint go-to-market model makes a great deal of sense for the global wireless operators as well. Per Simonsen, CEO of Telenor Connexion, notes for example that, "At Telenor Connexion we see that M2M is becoming an increasingly strategic and integral part of our customers' operations and products. It is clear that a joint collaboration between SAP and Ericsson will facilitate customers' implementations of M2M, increasing the value proposition and enhancing the customer experience. In addition, this will provide great opportunities to reach new customers in different industries and markets."
Lynda Burton, director of wholesale at Three UK adds, "We are seeing a growing demand for turnkey M2M solutions. This partnership, combined with Three's market leadership and experience in mobile data, delivers a powerful solution to enterprise customers."
Ultimately, of course, it's all about the money.
M2M represents a lot of it, and SAP and Ericsson see the partnership as a key means to tapping into it. As Hans Vestberg, president and CEO of Ericsson puts it this way: "The global M2M service revenue is estimated to reach more than $200 billion by 2017. This partnership gives us a chance to unlock some of that potential. By accessing services and controlling devices with solutions leveraging Ericsson experience from the communications industry and SAP from the enterprise segment, businesses will find better and more innovative ways to respond to customer needs more quickly. Building an ecosystem also allows our operator customers a new way to address new markets and enterprise needs."
Edited by Brooke Neuman