Location Based M2M OpportunitiesLocation Based M2M Opportunities
Michael Grossi, Director,Altman Vilandrie & Co.
M2M and “The Internet of Things” describe the connection of machines and sensors
Fixed (Wireline) Technologies Wireless Technologies
M2M and “The Internet of Things” describe the connection of machines and sensors through any means to the Internet
Industrial EthernetPowerlineBroadband
CellularGSM/GPRS/EDGECDMA/1xEV-DO3GSatelliteWireless LANWireless LANBluetoothZigBeeOther 802.15.4 and related technologies
M2M offers opportunities in many service sectors
Buildings/FacilitiesOffice Equipment
EnergyMeters
Medical/HealthcareMedical Devices
TransportationVehiclesOffice Equipment
HVAC/EnvironmentalSystemsAccess Controls
Consumer/ProfessionalWhite Goods/AppliancesGame Systems
MetersDistributed GeneratorsElectricity GridPipelines
IndustrialAutomation & ControlEquipment
Medical DevicesRetail
Scanners & RegistersLighting & Refrigeration Systems
Security/Public SafetyHomeland Security
VehiclesAirplanesTransport Systems
IT & NetworksEnterprise: IT/Data Center, OfficePublic: ServicesGame Systems
Consumer ElectronicsEquipmentCapital Equipment
Homeland Security Public: Services, E-Commerce, etc.
The M2M market is highl fragmented in each component of the al e chain no singleThe M2M market is highly fragmented in each component of the value chain – no single market leader has been established
Hardware Enablement Network Services Managed Services
EndUsersChip Vendors M2M Modules/
Devices
Aggregators/Platform Software
Comm ServicesValue-Added
Services / Applications
Machine to Machine Market Opportunitypp yM2M devices are poised for rapid growth, exceeding 600 million devices by 2015 and accounting for $24B in service revenues
Worldwide M2M Devices(Millions) CAGR%
92
25
473
615Middle East & Africa
Asia-Pacific
Latin America
North America
Central Europe
40%
42%
40%M2M – devices that communicate data wirelessly to other devices for the purpose of automating data collection and monitoring of large
102
13428
38
53
69
12
17
365
473p
Western Europe
40%
38%and monitoring of large complex systems/networks
26023
34
47
66
39
56
78
102
11
15
21
27
38
119
182
267
34%
40%
UtilityMeters
24 32 5083
124167
209
1116
1927
39
131981
14
59
2008 2009 2010 2011 2012 2013 2014 2015
Source: Strategy Analytics, AV&Co analysis
Revenue ($B) 7.6 8.5 10.1 12.9 15.9 18.5 20.9 24.2
Mobile Internet Devices (MIDs)Emerging MIDs and especially netbooks are gaining popularity worldwide, and will be a key driver of traffic growth within 3 to 5 years
W ld id M bil I t t D i W ld id N t b k/N tb k Shi t
633.2
Worldwide Mobile Internet Devices(Millions)
Worldwide Notebook/Netbook Shipments(Millions)
Netbooks/UMPCs
Notebooks
Netbooks/UMPCs Share %
416CAGR%
36%
51.7248.7
282.314.2%
17.6% 18.0%18.6% 18.3% CAGR%
25.8%
18.1%
MIDs cover a wide range of devices:
SmartphonesUMPCsNetbooksP t bl i ti d i
230.620.6
32.0
39.0
46.3
145.3
181.6
216.9
16.6%
Portable navigation devicesE-book readersPortable media/MP3 playersHandheld gaming devices
MIDs have Internet access via WLAN (WiFi) or WWAN
54
2007 2012 2015
124.7149.6
177.9202.4
2008 2009 2010 2011 2012
via WLAN (WiFi) or WWAN (3G or better)
2007 2012 2015 2008 2009 2010 2011 2012
All four U.S. carriers have made significant investments in strategic relationships or network improvements to capitalize on this emerging market
AT&T signed an exclusive deal with Jasper Wireless to facilitate
T-Mobile and Sierra Wireless agreed to k t th d t d l tJasper Wireless to facilitate
connection of consumer and M2M devices to their network (May 2009)KPN became Jasper’s preferred European network operator and exclusive operator in Belgium, G d th N th l d KPN
work together on product development, marketing, sales, and deployment of M2M solutions, starting in Germany (September 2009)
Germany, and the Netherlands. KPN has also made an equity investment in Jasper (Q1 2010)AT&T announced a developer connection kit to facilitate deployment of new M2M devices on
Cadec Global, provider of fleet management solutions, began an M2M partnership initiative with Aeris in February 2010
GE developed Wi-MAX-based smart meters that were available as of 2009GE Healthcare signed an agreement with Sprint for wireless networks, services, and software at six Texas hospitals (April 2009)
their network (March 2010)
Vodafone, Verizon, and nPhase 2009)
Sprint and M2M DataSmart have a multi-year agreement to facilitate the deployment of M2M devices on
, ,announced a strategic alliance to accelerate adoption of M2M technologies (February 2010)Verizon reported in Q1 2010 that 7.3% of 101 million wireless connections are M2M deployment of M2M devices on
Sprint’s network (September 2009)M2M
Diverse rate plan needs of different M2M devices and services means increased complexity on the part of wireless carriers
Supply Side Challenges
Operation/running cost was by far the highest concern of adopters surveyedData integration/ interoperability, initial/ installation
Demand Side Challenges
Evolving network technologies (GSM vs. CDMA, LTE vs. WiMAX) create complex choices for device manufacturers
g p y,cost, and development of new support structure followed in importance, but were still considered critical challenges
O i C /R i41%Ed ti th k t
Development of Support Structure
Initial Cost/ Installation
Data Integration/Interoperability
Operation Cost/Running
23%
24%
25%
26%
41%
Forming partnerships between operators and HDW vendors
Supporting open access network policies
Reducing M2M industry value chain complexity
Improving device certification process
Educating the market
Regulation &/or Liability
Gaining Successful Adoption
Complexity/ Risk Assessment
17%
17%
19%
21%
Establishing cooperation between carriers
Overcoming market fragmentation
Reducing sales cycle time
Identifying business models
operators and HDW vendors
0 20 40 60 80 100 120
Privacy & Security Issues
Reliability of Technology
Choosing Right Partner/ Supplier
4%
8%
10%
14%
Changing the M2M acronym
Eliminating channel conflict
Creating app. Developer awareness and interest
Forming partnerships with "machine" manufacturers (OEMs)
Sources: Wireless Week Magazine “A Web of Challenges, Connections: M2M,” 2/1/2010; Beecham 2008 M2M Adopter Survey
0 20 40 60 80 100 1200% 10% 20% 30% 40% 50%
GPS tracking and security are the most likely uses of M2M communication for SMBs based upon our survey
What are the most likely uses for M2M communications at your location? (select all that apply)Do you have any ideas concerning M2M that you would like to see developed?
34%Tracking and
Most likely uses for M2M communications Selected Comments from the interviewees
• “The current M2M applications would provide the resources that we are looking
32%
34%
Safety andsecurity
Tracking andnavigation
p ginto at this time such as tracking fleet vehicles”
• “Implantable chip to allow tracking access to sales reps. Make sure they work a full day”
17%Assetmanagement
y• “Read tanks remotely”• “Not familiar with the applications. Am
taking a seminar on this right now”• “Able to incorporate with in store computer
systems. Such as Open Table or Hot
17%Machinecontrol
systems. Such as Open Table or Hot Schedules”
• “Up - to - the minute information regarding wine barrel system pressure after harvest transmitted from remote location (i.e. form California to France or vise versa)”
0% 10% 20% 30% 40%California to France or vise versa)
• “Automation of commercial food production equipment, room temperature control”
Source: AV&CO primary research survey, n=500
Location based messaging and monitoring has many potential applicationsLocation-based messaging and monitoring has many potential applications
Customer Select Applications
• Key features across all applications include two-way, location-specific communication and monitoring• Opt-in and Opt-out models are available and have significant impacts on specific applications
Customer Select Applications
Government
• Natural disaster/crime/safety alerts• Crowd monitoring/management• Terrorist tracking and monitoring• Amber Alerts (improved response with tracking abducted child)• Monitoring of Check Points (e g borders battleground check points)• Monitoring of Check Points (e.g., borders, battleground check points)• Communication for military personnel family (e.g., birth announcements)
C i l
• Mobile device management• Monitoring foot traffic at major events• Customer notifications and communication
Commercial • Healthcare applications (monitoring, emergency response locating, messaging)• Order completion• Weather/safety alerts
• Weather Response: school closuresSt d t/ f lt tifi ti f h l l ll ti / b ildi hEducation
(select vertical)
• Student/ faculty notification of school class cancellation, room/ building changes• Communication of registrar and student finance deadline requirements• Tracking school buses/traveling teams• Crime/ safety alert
Parents • Family member locationParents y• Controls on Illicit text messages, emails, instant messages or voicemails received by children
Mobile Resource Management (MRM)
Types of MRM Solutions
Mobile Resource Management (MRM)MRM is a category of business solutions that enables companies to more effectively manage mobile workers, mobile tasks and mobile assets
Industry Drivers Key Purchase CriteriaTypes of MRM SolutionsField Force Management• Business need: to manage the field
workforce in order to reduce business costs and maximize ROI
Industry DriversAttractive, hard dollar ROI• Benefits include reduced overtime, fuel
and labor costs due to increased dispatch and scheduling efficiencies,
Key Purchase CriteriaFeatures and Functionality• GPS location, tracking, monitoring• GPS navigation and optimized
routingTi d di d tiField Service Management
• Business need: to manage the delivery of products and services to customers in order to maintain strong customer service while keeping business costs to a minimum
improved job completion rates, tighter control over spare parts inventory, and higher insurance policy discounts
Affordable entry points• The ability to monitor and track
employees and assets from IP-
• Timecard recording and reporting• Work order management• Alerts and geo-fencing• Data collection and reportsIntegration and Customization
OptionsField Asset Management• Business need: to manage fixed and
mobile assets in order to ensure utilization is maximized and therefore minimize costs
p yconnected devices and the growth of low-cost GPS-enabled mobile devices has increased affordability and flexibility
Competitive advantage with customersMRM iti l i t ’
p• Simple configurations: back-office
integration not required• Configurations and integration:
MRM software is configured with back-end systems
• Complete customization: open• MRM can positively impact a company’s customer satisfaction and customer retention metrics through more timely and prepared technicians and increased first call resolution rates
Complete customization: open developer tools and APIs for customized development
Cost Components• Mobile devices• Monthly carrier data subscription
MRM li ti ft• MRM application software• Systems integration work
Strategic Implications in the M2M Ecosystem
•Given the industry fragmentation – how will industry evolve?
•Reliance on carriers and other third parties to provide network access – how can carriers play a larger role?
•Who is positioned to win in the space?
Contact DetailsContact Details
Michael GrossiMichael GrossiDirect 617.753.7209Mobile [email protected]
Altman Vilandrie & Co.53 State Street37th FloorBoston, MA 02109Telephone 617 753 7200Fax 617 439 4290www.altvil.com
Michael Grossi, Director
Michael is a Director with Altman Vilandrie and Company and focuses on wireless and digital media sectors. Prior to AV&Co, Michael was an SVP & GM with Helio, a highly innovative MVNO
in the U.S. While at Helio, Michael led all Strategy, Business/Corporate Development and was GM of the Mobile Data Services team responsible for both the data P&L and product
development.
Prior to AV&Co, Michael was a Vice President with Adventis, a strategy consultancy, and a leader in the wireless practice and has 10 years consulting experience. Michael has led many strategy engagements for his clients spanning all facets of the wireless value chain including equipment
manufacturers, service providers and content providers.