capitalizing on the m2m opportunity and establishing how...
TRANSCRIPT
ABC – Application platforms, Big Data and Collaborations:
Opportunities in emerging M2M/IoT markets Emil Berthelsen, Principal Consultant
November 5, 2013
Machina Research
• Short introduction
• M2M market – a changing market
• New business opportunities in M2M
Machina Research
Machina Research
The leading research/consulting firm focusing on the emerging opportunity for new connected devices and applications, i.e. M2M, Big Data and IoT
• Support our clients through • Machina Research Advisory Service – our multi-client
annual subscription service comprising forecasts, reports and access to the analysts (see below)
• Custom Research & Consulting – client-specific research
• We have the most focused research on the M2M field of any analyst firm in the world: we provide the most granular forecasts for the global M2M opportunity, supported by the most robust analysis of market issues and dynamics
• Machina Research was founded in 2010, and brings to its clients a professional team of industry analysts with many years of experience in M2M research and consulting
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Our research falls in two main categories
• Quantifying the opportunity for M2M
– Forecast Database providing 10 year forecasts across 201 countries for 61 application groups
– Sector Reports annually updated reports on our 13 sectors (including Automotive, Healthcare and Utilities)
• Addressing the issues that determine success
– Research Notes - 3 per month on major qualitative issues such as platforms, value chain roles, big data, NFC, and security
– Strategy Reports - 4 in 2013 covering four areas: Big Data, platforms, modules/devices and our CSP Benchmarking Report
Custom Research
Market/demand side Provider/supply side
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The Machina Research Forecast Database
• We recognise that M2M is a very diverse market that requires a granular approach
• We have developed detailed M2M forecasts based on our thirteen focus sectors (see left)
• Within each sector there are very different dynamics for each application, so we forecast each of 61 application groups and hundreds of applications separately
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Machina Research clients
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• Short introduction
• M2M market – a changing market
• New business opportunities in M2M
Machina Research
M2M connected devices world-wide will grow from 3.2 billion in 2013 to 18.5 billion in 2022
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bill
ion
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Global machine-to-machine connections 2013-22 Source: Machina Research 2013
• Machina Research defines M2M as “Connections to remote sensing, monitoring and actuating devices, together with associated aggregation devices”
• Based on this definition there will be 3.2 billion M2M connections at the end of 2013 and this will grow to 18.5 billion in 2022, a CAGR of 21.5%
• Machina Research forecasts an additional 11.7 billion connected PCs, tablets and handset data devices by 2022, all generating data for Big Data models
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M2M connected devices in Scandinavia will grow from 50 million in 2013 to 219 million in 2022
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200
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mill
ion
Denmark Finland
Norway Sweden
Machine-to-machine connections in Scandinavia 2013-22 Source: Machina Research 2013
• Machina Research defines M2M as “Connections to remote sensing, monitoring and actuating devices, together with associated aggregation devices”
• Based on this definition there will be 49 million M2M connections at the end of 2013 and this will grow to 219 million in 2022, a CAGR of 17.9%
• Machina Research forecasts an additional 78 million connected PCs, tablets and handset data devices by the end of 2022, all generating data for Big Data models
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0
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600
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Device Installation Device andinstallation
Service(connectivity)
Service(service
enablement)
Service(wrap)
Service Total
An
nu
al r
even
ue
(USD
bill
ion
) Service wrap delivers significant opportunities globally in a USD397 billion market in 2022
Breakdown of Global M2M revenues in 2022 Source: Machina Research 2013
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M2M and IoT requirements have started to change the market, driving applications’ growth
M2M and IoT M2M
Traditional “stovepipe” solutions, focused on stand-alone applications
Managing multiple estates of devices, applications and systems across
multiple verticals
Complex application development Abstraction with application
development modules and APIs, accelerating application development
Limited in terms of scale with a greater focus on enterprises
Significant scale in deployments with an increased focus on consumers
Connectivity and device driven solutions
Applications and data driven solutions (continued connectivity and device
requirements)
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M2M will become the largest contributor of data for enterprises and Big Data initiatives
Machine-to-Machine
Business-to-Business Transactions
People-to-People
Interactions
Within the
enterprise
• Data is being generated at an accelerated pace with some estimates quoting that 90% of existing (digital) data today was created within the last two years
• From Facebook, Twitter and SnapChat, to text messages, to astronomical surveys, to financial transactions, to retail data, to hospital imaging and CCTV data, and to building information and traffic management systems, data is being increasingly generated from social, mobile and M2M solutions and this accelerated growth is set to continue
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Friction caused by fragmentation in M2M needs to be overcome in the Internet of Things
Sectors (with individual drivers)
Providers
Module & Chipset
Connection
Data & Control
Devices & Solutions
Integration
Telit, Digi International, Sierra Wireless, Cinterion (Gemalto), etc.
Telia Sonera, Telenor, Tele2, Elisa, Netcom, DNA, Orbcomm, etc.
Ericsson, Maingate, Telenor Connexion, Concirrus, Wireless Logic
Schneider Electric (Telvent), Honeywell, Prevas, Faltcom, STT Condigi, Phonior, Relacom, etc.
Logica, Fujitsu, Wipro, Accenture, IBM, SAP, Oracle, etc.
Geographies
Automotive
Utilities
Retail & Leisure
Construction
Manufacturing
Intelligent Buildings
Agriculture & Environment
Smart Cities & Transportation
Healthcare
Smart Enterprise Management
Consumer Electronics
Connectivity Technologies
Devices Solution Providers
Integration
Regulatory Frameworks
Standards (interoperability)
Technology
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• Short introduction
• M2M market – a changing market
• New business opportunities in M2M
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Beyond connectivity and devices, M2M opens significant opportunity areas
• Global M2M Services will generate revenue opportunities of USD437.5 billion by the end of 2022
• 90% of these revenues will be generated from service wrap, i.e. the services that are “wrapped” around an M2M connection
• Two areas have been identified as immediate opportunity areas for service providers in M2M:
• Vertical application development
• Horizontal application platform development and M2M Application stores
Vertical Application Development
M2M/IoT Application Platforms
• Logistics and Supply Chain Management • Electric Vehicles • Mobile payments and points of sale • Digital advertising • Vehicle Security and Tracking • Construction Site Equipment Monitoring
• Maturing M2M markets are witnessing the increasing use of Service Enablement Platforms (for solution support, reporting and provisioning of a software environment and APIs to facilitate solution development) which in turn have created new opportunities for application platforms and application stores (e.g. Abo Data, ThingWorx)
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M2M/IoT Application Platforms provide the “glue” across emerging infrastructures
The role of M2M Application Platforms Source: Machina Research 2013
M2
M/I
oT
Ap
plic
atio
n P
latf
orm
s
The Internet of Things
Solution Provider Data
Control
Application Support platform
Data
Control
Device Management platform
Data
Control
Service Enablement platform
Data
Control
Connectivity Support platform
Data
Control
Open application development environment
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Shift from M2M to Internet of Things will be establish a new set of platform priorities
Carrier & Comms
Integration
Device Management
Application Development
Application Management
Operations Environment Scalability
IOT ENABLING CAPABILITIES
SDKs for drivers & driver libraries, gateway (openness of hardware, autonomy)
UI, BRM, BPM, EAI, Device data, Big Data, Complex Event Processing
Complete support for software/ firmware updates
Security, Multi-tenancy, and Cloud
Potentially extreme scalability
Efficient integration with carrier connectivity platforms
SUPPORTING CAPABILITIES
• IoT Enabling Capabilities will be key, allowing the developer free reign to develop applications to match sophisticated design requirements
• Supporting Capabilities will be prerequisite: a hygiene factor rather than a competitive differentiator
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Data becomes a value asset for enterprises, generated more and more by M2M solutions
• “Big Data” has emerged as a significant area of opportunity for service providers
• Whether it is 5S’s (size, speed, structure, situation and significance) or 4-5Vs (volume, velocity, variety, veracity and value), Big Data refers to data analytics and the business process by which significance and value are derived from data assets
• Big Data alters the focus in M2M from connectivity and enterprise oriented applications to using that data in new business processes and opportunity areas actively
Big Data opportunities
• Real time data exchanges & integrations
• Power management and distribution
• Smart traffic and parking management schemes
• Retail customer flows • Personal monitoring devices • Retail Points of Sale • Self driving vehicles
• Predictive analytics • Fraud detection • Preventive maintenance
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Data including M2M data is not uniform and will reflect different requirements
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The question remains – how is value created from data?
Dat
a so
urc
es
Machine generated data
(M2M)
Real-time remote monitoring and
actuating - to improve the
management of operations
Real-time data analysis
- to minimise losses and fraud
New proposition and business models
- to generate new revenues and customer experiences
Interaction Data (B2B & P2P)
Transactions - to improve process
efficiency (manage volumes and time)
Communications - to enable financial
settlements and achieve improved resource and time
utilisation
Channels - to create new ways to
approach customers and manage suppliers
Traditional Enterprise Data
Productivity measurement
- to measure operational performance
Performance monitoring
- to measure financial performance
Quality measurement and
market analysis - to measure quality and
markets
Operational Financial Products & Services
Business Objectives
Predictive analytics + real time action
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Three business models emerge as new opportunity areas from Big Data and M2M
Deliver a new service to improve customer experience
Generate insights from data communities which may be sold to other data communities or entities
Optimising business and operational processes and creating
new services for customers
Processing data and managing the asset as a data broker & reseller
Change the marketplace by turning data assets into distinct competitive
advantages for the group
Limiting the share of data insights to the group to gain distinct market
advantages in terms of sales, marketing and operations
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Similar to M2M market fragmentation, creating value from data has its own challenges
MANAGING DATA
Privacy issues
Security issues
Infrastructure impacts
Storage and processing costs, new technologies (visualisations)
Secure data transfers, data storage, real-time/integrated solution impacts
Consent & Choice, Notice & Awareness, Anonymisation & De-identification
Legal implications “Privacy by accountability,” Fair Use,
personal information
Enterprise readiness Data sharing, analytical skills (business
analysts & data scientists)
Enterprise & Customers
Enterprise & Service Providers
Enterprise & Service Provide
Enterprise & Customers
Enterprise
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Partnership collaborations on standards, platforms, and development tools will be crucial
• As connected devices being to “talk” to other things, people and systems, these fragmentations caused by multiple markets, geographies, technologies and a lack of standards will need to be overcome
• Early collaborative initiatives - sharing e.g. application programming interfaces as well as work towards standards by ETSI, OMA, EclipseM2M Working Group (for open source application development) will develop
• Operators have been very active and successful in building these collaborations (e.g. Deutsche Telekom and its Partner Portal), and Machina Research expects continued developments from these players
Freescale Semiconductor and Oracle collaboration to evolve a new, secure “one-box” service platform to standardize the delivery and management of M2M and IoT services
EnOcean Alliance is a consortium of companies working to develop and promote self-powered
wireless monitoring and control systems for sustainable buildings by formalising the
interoperable wireless standard
EclipseM2M Working Group leads three open-source projects for M2M application development
– Koneki, Mihini and Paho
Continua Health Alliance and 2Net (Qualcomm) is the international not-for-profit industry
organization enabling end-to-end, plug-and-play connectivity of personal health devices and
service
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CSPs, ASPs and SIs need to work in partnerships to deliver end-to-end requirements of customers
• CSPs looking beyond connectivity have the opportunity to enhance M2M solutions with i) abstracted service enablement platforms, managing multiple devices, applications and connectivity technologies and ii) mobile network API assets in particular (e.g. location)
• ASPs with detailed knowledge of the sectors maintain significant opportunities in traditional point-to-point and enterprise grade M2M solutions
• For ASPs, areas of rapid application development and scalability of any application will be crucial in the future
• Finally, SIs face significant opportunities in bringing together end-to-end M2M solutions for enterprise customers as part of their business processes but also as part of the growing interest in data usage
Break the jargon: CSPs are Communications Service Providers (e.g. mobile, fixed line and cable operators), ASPs are Application Solution Providers, and SIs are System Integrators (back-end integration, storage, etc.)
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In summary
• M2M is set to continue growth at significant rates, generating sizeable opportunities for service providers
• Enterprises will explore emerging business models from applications as well as new data assets which will drive M2M growth
• Collaborations between service providers will be uniquely positioned and called upon to assist enterprises with the continued support in implementing M2M solutions, the management of data, and the development and extension of end-to-end business applications and solutions
• Enterprises and Service providers engaging in Big Data will need to keep a watchful eye and play an active role in developments concerning privacy and security
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Thank You !!!
Machina Research
Machina Research
Jim Morrish Director & Founder [email protected] Mobile: +44 7747 632428 Skype: jim.morrish Twitter: @jimmorrish Blog: jim-morrish.blogspot.com
Matt Hatton Director & Founder
[email protected] Mobile: +44 7787 577886
Skype: mattyhatton Twitter: @MattyHatton
Blog: wirelessnoodle.blogspot.com
Emil Berthelsen Principal Consultant
[email protected] Mobile: +44 7714 671539
Skype: embe-machinaresearch
Emma Buckland Principal Analyst [email protected] Mobile: +44 7950 887505 Skype: elab1972
Michele Mackenzie Principal Analyst
Mobile: +44 7888 846098 Skype: michelemackenzie1
Andy Castonguay Principal Analyst [email protected] Mobile: +1 619-888-1397 Skype: castonga
What is Big Data? Isn’t it just a whole load more data to be analysed?
• Different types and
structures of data accessed
• Context within which data is created and managed
• Rate at which data is
delivered & consumed
• Amount of data that requires processing
Size Speed
Structure Situation
Machina Research’s Five S’s of Big Data Source: Machina Research 2013
Significance
• No. Big Data is the interplay of all five factors of size, speed, structure, situation and significance where ‘significance’ is derived from data through analytics
• What distinguishes Big Data from traditional Business Intelligence (BI) analysis is the sheer scale and complexity of the data (structured and unstructured) as well as the highlighted immediacy (speed) of using the data for further action and/or decision-making
• Big Data is more of a process of analysing data than the huge collection of data stored in a library
Analytics Analytics
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Developments in data management and data processing technologies enable a change in M2M
4G Improvements in network coverage, connectivity quality and speeds, as well as reduced costs in cellular data plans (and DSL) have enabled greater adoption of M2M and transfer of data
Hadoop data management approaches (HFDS) and Map Reduce (as opposed to traditional and expensive RDBMS) has allowed for real-time, unstructured data processing
Scalable and cost efficient cloud solutions have not only enabled more efficient storage but also provided greater data management flexibility
Developments in M2M platform technologies – from traditional, siloed solutions to open and highly scalable platforms for devices and applications enables M2M to IoT
LTE
Connectivity platform
Device management platform
Service Enablement platform
Application platform
Solution Provider platform
NoSQL
NRTDE speed
CEP speed
structure
Storage size
structure
Scale size
situation
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Data analytics in M2M will deliver the greatest benefits with data communities (partnerships)
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