Saturday, 1 December 2012

M2M connections to reach 18bn in 2022, generating USD1.2 trillion - latest Machina Research global M2M analysis

Here at Machina Research we published our latest review of the global M2M market. Connections will grow from 2bn in 2011 to 18bn in 2022. Revenue will climb from USD200bn to USD1.2tn. For more details, take a look here.

Friday, 23 November 2012

Machina Research provides top 10 tips for companies looking to buy M2M

Earlier this week Machina Research put out a White Paper entitled "Connecting your business: The top 10 things to consider when procuring M2M services".

Over the years we've helped many companies to navigate the procurement process for M2M, from identifying their business need through to managing the RFP process and selecting suppliers. With this White Paper we summarise the key things potential buyers of M2M must look out for when engaging in an M2M procurement process.

Find it here.

Thursday, 22 November 2012

Re-run of Machina Research's M2M Webinar

I did post a bit of a promo for the event on here a few weeks ago, but just thought I'd let everyone know that the M2M webinar that we at Machina Research ran on the 8th November is available to download here. It really is rather good. It includes our top level forecasts for connections, technology, traffic and revenue, with a very detailed breakdown of where the M2M revenue is going to go.

For information, this is just the tip of the iceberg of what we have. Our current forecasts cover 54 countries (soon expanding to pretty much every country) and lots and lots of detail. For more information about our M2M Forecast Database, or to talk about our advisory services, drop me a line here.

Friday, 19 October 2012

Do not miss the Machina Research webinar on 8th November

Machina Research is running a free webinar on the 8th November at 9am GMT and 5pm GMT to provide a spotlight for our updated view of the global M2M market opportunity. This will be the first outing for our new improved forecast methodology including more countries and greater insight into the value chain dynamics (showing off more granularity in terms of where revenue is generated in M2M). We sincerely hope you can join us. Follow the link from our website here.

Thursday, 11 October 2012

Implications for M2M of Huawei and ZTE ban from the US

On Sunday a draft of the US House Intelligence Committee report on Chinese telecoms vendors became public reporting that they "cannot be trusted" to be free from state interference and so could be used to undermine US security. Story here.It also said that Huawei and ZTE kit, even components, should not be used in government systems or by contractors supplying the US government.

The prime implications of this clearly relate to core network infrastructure. However, extending the logic, if telecoms infrastructure can not be provided by Chinese vendors because the telecoms network is a key national asset, then the same must apply to some M2M. Smart grid implementations are clearly critical national infrastructure, but so too are connections related to healthcare, transportation and supply chain. Other than consumer electronics most of M2M could be considered in some way critical. With that in mind, will companies looking to buy M2M modules be willing to buy from either Huawei or ZTE? It will certainly be a difficult sell for the Chinese giants.

The impact of this is to strengthen the hand of Cinterion, Sierra and Telit in the US market. And it's also to guarantee that modules in the US will be more expensive than elsewhere in the world.

This is all slightly speculative but I can't believe it won't impact on Huawei and ZTE's ability to do business in the module space in the US.

Telefonica sets up for data analytics...and the expected headlines ensue

Telefonica launched a data analytics division this week. All the details are here. I don't think there's much doubt that making use of all the 'exhaust data' that MNOs have access to is going to be a key revenue generator. The way in which this might manifest itself for M2M is an area where we're focusing an increasing amount of attention. Doubtless this is a potential gold mine for operators and other players. NEC's Connexive platform for instance is specifically focused on supporting this kind of analysis.

The big concern is, of course, around privacy. There have been numerous examples of service providers getting into trouble for reselling users' data (usually to the police) even in aggregated and anonymised format. And there is the potential for negative publicity. I already saw one emotive headline on the topic along the lines of "Telefonica to resell user's data". Not exactly accurate, but that is how it might be perceived.

This kind of analytics is an important revenue stream and Machina Research believes that it will actually be a driving force for M2M, but Telefonica and others that follow them have to be very careful indeed about how it is handled. More to come from us at Machina Research on this topic.

Verizon to switch off 2G AND 3G by 2021...wow!

I saw this news article today stating that Verizon Wireless will turn off their entire CDMA network by 2021, leaving it as a 100% LTE operator. This was quite a surprise. I'm not entirely sure I believe it, but let's have a look at the implications for M2M.

***UPDATE: This was apparently just a "guideline" with Verizon spokesperson Brenda Raney stating on Thursday that "The Verizon Wireless 2G and 3G networks will be available as long as necessary to support customers who may have mission critical projects on those networks. We haven't made a sunset decision like our competitors."***

First thing to say is that we ask for clarity from operators about roadmaps and this is definitely clarity.

Second is the question of cost. Today LTE modules are 3-4x the price of CDMA. But that doesn't mean that will be the case in 2021. Much of the price premium is a function of scale. By making this decision Verizon has guaranteed a certain scale for LTE modules which by itself will reduce the cost. Conceptually, LTE production at scale could bring the price down dramatically (particularly as this will be a single mode LTE device, rather than including CDMA too). How far it can bring down cost is the big question.

In a way the cost of buying LTE modules in 2021 is not really the issue, however. The issue is the cost of modules for devices that will be in the field in 2021, i.e. devices that are being bought between now and then. AT&T set itself up for a few problems with acquiring M2M customers 4 years + from when it plans to sunset GSM/GPRS (1st Jan 2017). Basically, as soon as it announced the sunsetting in the summer of 2012 its competitors, RACO Wireless in particular, rubbed their hands with glee at all the customers that would shift their business. At a minimum Verizon will start to have problems from about 2016, but possibly earlier, as users start thinking about putting devices in the field that they will need to futureproof through their lifespan.

Another possibility is that Verizon could bring down the cost by subsiding LTE devices. Taking a chunk of the cost savings that come from network rationalisation and pouring it into subsidising LTE M2M devices would mitigate the problems caused by switching off CDMA.

Of course none of the decision is due to M2M. It's a small fraction of revenue and key strategic decisions about network roadmap are made with virtually no reference to impact on M2M. For Verizon it strikes me as a bold move and I give it the thumbs up (if it's right). The M2M unit just has to live with whatever technology choices the parent company makes.

Tuesday, 9 October 2012

Telit Developers Conference - Ian Paice's drums and a bucket of hubris

I spent yesterday at the Telit Developers Conference in San Diego*. It was an interesting day and I thought I'd put out a quick blog post on my views on Telit.

During the introductory keynotes from CEO Oozi Cats and the rest of the senior management team the word that came to mind more than any other was 'hubris'. I recognise, of course, that Telit has done a great job in the M2M modules market. In particular I'd applaud a strong portfolio and I think the way they've embraced a wide range of different technologies (e.g. Zigbee, GPS) is to be applauded.

But I was surprised by the lack of concern about the threats posed in their market.

Their legacy modules business is heavily threatened by cheaper rivals. The fact that the sector has consolidated massively recently points to a lot of competitive pressure, as does a constant pressure on ASPs. At one point Mr Cats put up a chart showing growth in their module sales from 2007 through to 2016. The historical numbers look good but the assumption presented in the chart that Telit will see growth tracking the market growth rate (as estimated by an analyst firm) of 24.1% is, I think, highly ambitious.

I'm put in mind of two things: the expression "historical performance is no indicator of future performance" (or words to that effect), and the experience of companies such as Option. They could have made a similar analysis in around 2006 of the datacard/modem mobile broadband market. Their growth had been good and market growth was set to explode, which they would have assumed would have benefited them. Actually it didn't, all the growth went to Huawei and ZTE. Ditto Nokia with the Smartphone market. They were Johnny-On-The-Spot to take advantage of the boom in smartphone sales but all of the growth went in the direction of Apple and Samsung.

I also see no guarantees at all that their move into the services market will pay dividends. That is a very competitive market too and one that our research indicates will soon turn into a bit of a bloodbath.

So in conclusion, Telit is a company that is very pleased with itself. I would prefer to see a little bit of humility if they aren't going to encounter hubris's old friend nemesis.

*At the Hard Rock Hotel, I got to see a signed set of Ian Paice's old drums.

America Movil wants more synergies between Telekom Austria and KPN. In M2M?

In the last few months America Movil has been on the acquisition trail in Europe. It now has a 27.7% stake in KPN and 23% of Telekom Austria, and with a view to taking larger stakes. With that in mind I began to wonder what the implications might be for M2M. Clearly the main impetus for the acquisitions was not M2M. However, America Movil has stated that it is looking for synergies between the groups (link here). Is there potential for synergies in M2M?

Initially it seems not. KPN has tied itself in to the emerging grouping based on the Jasper platform, whereas Telekom Austria is using its own in-house platform and does not seem likely to make the shift to Jasper. However, I understand that there is no specific bar to non-Jasper operators joining the grouping. That said, America Movil was not one of the founder members of the grouping despite being a Jasper operator. Possibly this is due to Telefonica being such a prominent member of the grouping.

Of course the situation is completely up in the air today and there is little clarity in how things will develop. Possible that Telekom Austria and KPN could be working much more closely in M2M though.

Thursday, 4 October 2012

T-Mobile USA merger with Metro PCS - the implications for M2M

So the big news in the wonderful world of mobile this week was the announcement of a merger between T-Mobile USA and Metro PCS. So I've mulled over the implications for M2M and come to the following conclusions...

When looking at T-Mobile it’s impossible to ignore the fact that the implications for M2M are all tied up with the abortive AT&T merger. All of T-Mobile's M2M capability was effectively farmed out to RACO Wireless in expectation that T-Mobile USA would cease to exist. At that point T-Mobile and M2M virtually parted ways in the US. In the near future one of two things will happen. Either this move will be reversed and RACO will be brought in-house, or T-Mobile USA will have to build its capabilities back up again. It's certainly something that the group is looking at right now. That all needs resolving before we can even think about what the Metro deal might mean for M2M.

That aside, the deal will leave us with a bigger, stronger T-Mobile. The ideal scenario for T-Mobile would have been a merger with another 3GPP player, which would have given it a further boost in differentiating from AT&T’s sunsetting 2G network. 2G is fine for much M2M and AT&T’s decision to switch off GSM in 2017 would have left T-Mobile as the sole major GSM/GPRS/EDGE operator in the US. A robust set of roadmap guarantees around continued support for 2G can help T-Mobile differentiate. A bigger T-Mobile with those guarantees and a reduced requirement for national roaming (and thus dependence on other operators’ roadmaps) would have been a better outcome. As it is, the benefits of scale across this CDMA/GSM marriage are all about LTE and for the most part M2M does not need LTE, other than for high bandwidth applications such as digital signage and CCTV. Some automotive OEMs are also building in LTE simply because of the long development cycle for cars. So as far as the nitty-gritty of delivering M2M is concerned, the announcement doesn’t mean a great deal. No-one has really had serious cause to deploy multimode GPRS/CDMA devices (although Sprint and Orange started flirting with the idea this year) and I don’t anticipate a big rush to do so from the new T-Mobile/Metro entity.

However, a bigger stronger T-Mobile USA does mean that the company is likely to be around for a long time. It indicates that the German parent company is not looking for a quick exit. Deutsche Telekom is in the US, in the form of T-Mobile, for the duration. That being the case, the deal has the potential to reinvigorate the wider group’s pursuit of the M2M opportunity in the US, which has been largely on hold (or farmed out to RACO Wireless) since the AT&T merger was announced. It also spurs the DT M2M team on to taking advantage of the asset that it has in its North American operation. Other than Vodafone/Verizon there are no other groups that span the two regions. Between them, Europe and North America account for more than 55% of the global opportunity for M2M. The ability to address both markets is critical. It is this potential in Deutsche Telekom, through the T-Mobile USA ownership, that is part of the reason why DT ranks number 2 in Machina Research's M2M Leaderboard.


Saturday, 29 September 2012

New report from Machina Research on Intelligent Buildings

If you're interested in the smart home, home automation, AT&T's Digital Life, or any similar things, you need to check out the latest report from Machina Research on M2M in Intelligent Buildings. Follow the link here.

Tuesday, 11 September 2012

White Paper with Jasper Wireless on the benefits of cloud platforms in M2M

A busy day for Machina Research today. As well as some great coverage in the Financial Times for a study we did for the GSMA (more on that tomorrow) we also published a White Paper in conjuction with Jasper Wireless looking the best strategies that MNOs should pursue in order to succeed in M2M.

In particular the White Paper focused on the use of cloud platforms. Our key findings were that MNOs need to address M2M in a different way from usual connections if they want to make any profit and if they opt to use a cloud based management platform they can increase profit five-fold vs just supporting M2M through their old systems.

Rather than simply reproduce the whole of the White Paper or its associated press release I will instead direct you to the Machina Research website where you can download either of these.

Friday, 7 September 2012

Huawei launches M2M business in Europe...challenging times for Sierra, Telit, Cinterion et al

I was over at the M2M Alliance event in Dusseldorf on Wednesday. A great event (if a tiring day trip from London!). On the same day there was a very important, but not much heralded, announcement that Huawei was launching its M2M business in Europe. More details here. While, of course, Huawei modules have been finding their way into "M2M" devices for ages, this demonstrates a new intent from the manufacturer.

Of course what everyone fears is that Huawei (and ZTE) will completely dominate the M2M market in the same way that they did with the USB modem market, obliterating competition from the traditional vendors such as Option. That is certain the threat. However, neither of the Chinese players is in the same position to apply the same degree of scale to M2M as it has to mobile broadband. The M2M market is so fragmented and requirements so diverse that, to an extent, the benefits of scale will be somewhat hard to realise.

The traditional vendors (e.g. Cinterion, Sierra and Telit) have a role to play, but it is an inescapable fact that they will be challenged massively by Huawei on price. And let's not forget this is a market where ASPs are dropping already. How do they compete with Huawei? The simple answer is flexibility and customisation. The more complicated answer will wait for the upcoming reports that we at Machina Research are planning on the module market for October.

Wednesday, 8 August 2012

AT&T confirms 2G switch-off plans

This week AT&T confirmed that it would be shutting down 2G by 1st January 2017. Story here if you're interested. This is no big surprise. They've been moving in the direction of sunsetting for a while now, for instance only effectively accepting 3G devices for M2M. Our view is well known. We think AT&T will lose out in M2M as a result of having no 2G. Don't get me wrong, the future of M2M is 3G, but there is a solid chunk of it that doesn't need high bandwidth and AT&T will lose out to its customers there. For this reason we dinged AT&T in our M2M Leaderboard back in March. That said, we don't necessarily think it's a bad idea for AT&T as a whole. Network rationalisation is necessary and if the savings are greater than the lost revenue (or greater costs to support the same devices on 3G) then AT&T as a whole is up. I'd be very surprised if that weren't the case. So in M2M terms this means a reduced market share for AT&T but it's good news for the overall health of the company.

Thursday, 2 August 2012

If you've ever wondered about the history of Vodafone...

Check this out. A very interesting piece on the early days of GSM, and why it's Vodafone, not Vodaphone.

Wednesday, 1 August 2012

M2M Leaderboard update from Machina Research: no change at top but Telefonica, China Unicom and NTT DoCoMo perform well

Yesterday we updated our M2M Leaderboard based on our assessment of operator performances since March. The main findings were that there is no change at the top, with Vodafone, Deutsche Telekom and AT&T taking the top 3 spots. Telefonica had a strong few months and closed the gap with the top 3. Other strong performers were China Unicom and NTT DoCoMo, the latter replacing Telenor Connexion in the  top 10. Click here for more details.

Thursday, 26 July 2012

OneM2M finally launches. I've nothing to add to my views from 6 months ago...

I just got back from a couple of weeks holiday yesterday to find that the official announcement of OneM2M had been made. For those not in the know, the OneM2M Partner Project was established by a group of seven standards development organisations: Japan’s Association of Radio Industries and Businesses (ARIB) and Telecommunication Technology Committee (TTC), the Alliance for Telecommunications Industry Solutions (ATIS) and the Telecommunications Industry Association (TIA) from the US, the China Communications Standards Association (CCSA), the European Telecommunications Standards Institute (ETSI), and the Telecommunications Technology Association (TTA) of Korea. The aim is to provide a common set of standards across M2M.

Having seen the announcement I immediately thought I ought to pen a Research Note for our clients. Until I realised that everything interesting to say about it, I'd already included in a piece I published back in January when the initial announcement was made. So, other than announcing a few things related to structure and process I can't honestly see where any progress has really been made in the last 6 months. OK, so I know things take a while to get organised, but this is a very fast moving and diverse field.

The fundamental challenges are the same, including definition (what that hell is M2M anyway?), diversity of application requirements, fragmented existing standards, a diverse range of bearer technologies, backward compatibility with existing deployments, and numerous other things. None of that has been resolved. Establishing a standards body doesn't equal a set of standards. This will only be a great leap forward if OneM2M can overcome these big challenges.

Monday, 25 June 2012

New report from Machina Research on Smart Cities

More exciting stuff from Machina Research this week. We just published our latest report looking at M2M in Smart Cities & Public Transport. 500 million connections and revenue of EUR14.5 billion in 2020. More details here. If you want a sample email me.

Wednesday, 30 May 2012

Open Mobile Summit - connected car and home panels

I was chairing a couple of sessions at the Open Mobile Summit yesterday on the connected home and the connected car, or, as I put it, connecting the most and second most expensive things most of us will ever buy. There were many interesting topics for discussion, but a few in particular stuck with me:
  • There was no issue with 2G switch-off for either segment. Clearly for connected home cellular is not really a big issue (unless we're counting smart meters) and for automotive they're already very much in a 3G (and increasingly 4G) mindset already. This is interesting because automotive accounts for 1.4 out of 2.4 billion cellular M2M connections in 2020 (see here for more details). If automotive doesn't really care about 2G switch-off, perhaps it's not that big a deal after all.
  • Roaming charges was the big bugbear for the automotive OEMs. They are correct, of course, that the current set up is not fit for purpose. Stephane Lagresle of TomTom refered to the fact that people from Switzerland often come across the border into France to buy cars but once they get them home they find that the navigation system doesn't work because it is not in the 'home' territory. Clearly not acceptable. The recent European Commission decision on roaming rates will obviously bring prices down substantially by 2014. As I commented in a recent Machina Research report, the roaming fee reduction goes a long way towards the creation of a pan-European M2M market. It will certainly happen a lot faster for M2M than it does for anything else.
  • In the connected home it was price overall that was the biggest limiting factor for adoption. This is completely understandable. For the applications that we are talking about (white goods, HVAC, home automation etc), to simply "put a SIM in it" as Vodafone Kim Bybjerg recommended has some significant cost implications. Even for smart metering, British Gas's Dean Keeling commented that lowering prices would help enormously. No big surprise there one might say. However, it remains true that cellular is not truly optimised for M2M in terms of price of services or devices.
  • The vehicle platform won't really be an open application development platform for in-vehicle entertainment. It will be driven by and controlled by the auto OEMs. Initially there will be so few 'devices' on the market that it will represent only a limited opportunity for 3rd party developers. Secondly there needs to be a huge amount of attention paid to quality control.
Just a few nuggets from the sessions.

Friday, 11 May 2012

Across Supply Chain and Smart Cities M2M the challenge is integrating vertical solutions

Last month we at Machina Research published a new Sector Report looking at the Manufacturing & Supply Chain sector. It incorporates industrial automation, transport & distribution, extractive industries and a few other things too. A very interesting sector and one that is already making substantial use of M2M.

The challenge with this sector is not so much connecting it, although there are lots of trucks and pallets and pieces of industrial equipment that are not already connected. The challenge is to stitch it all together in a meaningful way so that the whole of the supply chain is integrated. It's a similar challenge to that faced by Smart Cities (stand by for our Smart Cities report which will be published in the next few weeks). There are lots of vertical applications but the real benefit will be reaped by integrating all of the elements onto a single horizontal platform. I was talking to a major European MNO about this only yesterday and they have a very progressive approach to this, anticipating a shift from the vertical to the horizontal over the next 12 months.

In the Smart Cities sector things are a bit different from in the supply chain. With Smart Cities there tends to be a single overarching authority with the will and muscle to push through integration. Although in many cases, jurisdictional issues (e.g. some applications are the responsibility of local government, some of national government and some private organisations) might mitigate this. In the Supply Chain sector, there is no organisation that can really stitch that together, other than perhaps very large MNCs who have a largely integrated internal supply chain. That's quite rare though.

As I haven't talked much on the blog about the Manufacturing & Supply Chain report, here are a few of the key findings:
  • Transport & Distribution – The fleet management sector is by no means a new one, but still boasts a huge amount of opportunity. Many MNOs are eyeing it with interest, particularly in emerging markets where there are few, if any, established fleet management specialists. In more developed markets MNOs are typically partnering with fleet management specialists, such as Telefonica’s high profile deal with Masternaut.
  • Manufacturing – This sector includes asset tracking of large industrial equipment and the monitoring and control of factory assets, e.g. for consumables replenishment, remote diagnostics and maintenance or process control. There is increasing pressure to improve efficiencies within manufacturing and M2M has a strong role to play, albeit typically through short-range connections.
  • Extractive industries – M2M offers a great opportunity to make certain extractive processes more cost-effective, in particular through the remote monitoring of otherwise unprofitable unmanned oil and gas sites.
  • Warehousing and Storage – This is largely a mature sector and with comparatively little direct revenue opportunity for M2M solutions, although they will be critical for increasing supply chain efficiency. Passive RFID solutions, which Machina Research does not consider as M2M, dominate along with barcodes.
  • Vending Machines – Vending machines are an ideal candidate for M2M connectivity. By definition they are remote devices that benefit substantially from constant or frequent monitoring to allow the monitoring of stock levels and quality, reduce unnecessary restocking visits, and handle payments.
As I said in the press release: "This is a diverse sector with a wide range of different applications, many of which can substantially benefit from M2M, in particular through driving efficiency savings. The reason we have grouped them together is that ultimately we can envisage a situation where all of these elements are combined into an transparent supply chain. The benefits of such transparency would be phenomenal. Today, and for the foreseeable future, however, we expect them to remain largely as point solutions, but in the long-term there are huge gains to be made from stitching together all of these diverse applications. And, indeed, linking up with other sectors such as retail which we will be covering in a report to be published later on in 2012.”
Overall, the five application sectors above combine to form Machina Research’s Manufacturing & Supply Chain sector. Combined, the sector had 71 million connections at the end of 2011. This is set to increase to 175 million by the end of 2020. The sector will generate EUR13.5 billion in revenue in 2020, up from EUR3.8 billion in 2011. The Transport & Distribution application group will account for the lion’s share of wide area connections and revenue.
Another press release quote from me: “For the most part M2M in this sector is relatively mature and there are a lot of well-established companies such as Axeda, Redline Communications and Trimble selling into the space. It is also a highly fragmented sector with large numbers of relatively small clients. For the most part MNOs will need to partner with best-in-class service providers to effectively address the opportunity.”

About the report

Machina Research is a UK-based telecoms research and consulting firm focusing principally on the emerging opportunity associated with new forms of connected wireless device, specifically machine-to-machine (M2M) and mobile broadband.

Machine-to-Machine (M2M) Communication in the Manufacturing & Supply Chain Sector 2010-20 provides invaluable qualitative and quantitative analysis of the emerging opportunity for machine-to-machine communications in five key areas: extractive industries (e.g. oil & gas), transport and distribution, warehousing and storage, manufacturing and vending machines. The report reviews the major drivers and barriers for growth of M2M in the sector and analyses the key market dynamics, including how MNOs, fixed operators, service providers and vendors might go about identifying and realising addressable opportunities.

The forecast excel data sheet includes very granular 10 year market forecasts for 54 countries and 6 regions. The forecast covers numbers of connections, traffic and revenue for each of the identified application groups with splits by technology (short range, 2G, 3G, 4G, MAN, fixed line and satellite) and a break-out of mobile traffic revenue.

For a copy of the executive summary, table of contents and a blank sample data sheet, or to order your copy, find out more about the report or discuss annual subscriptions please contact us.

Thursday, 10 May 2012

In-car entertainment at the Open Mobile Summit

On the 29th May I'll be chairing a session at the ever-excellent Open Mobile Summit. It will focus on in-car infotainment and feature such illustrious companies as Audi, BMW, Qualcomm and TomTom. It should be an excellent session. If you want more details on the event, click here. This year the theme is "Connecting Everything" which is music to my ears. Should be a great event.

Tuesday, 10 April 2012

Redline wins contract for Omani oil wells

It's always nice to see a timely piece of news. Over the weekend I noticed this piece of news from Redline Communications. They're to wirelessly connect 2,000 oil wells in Oman.

I say timely because I have just put the finishing touches to Machina Research's report on M2M in the Manufacturing & Supply Chain sector. In our definition extractive industries (oil & gas, minerals, etc.) are included in this sector.

Our view is that there are around 400,000 connected sites in this sector worldwide as of the end of 2011 and this will grow to over 1 million by 2020. There are huge benefits associated with connecting wells in particular. In many cases they're remote and unmanned. The cost associated with remotely monitoring is a fraction of the cost of sending people to check production on a regular basis, and there are substantial efficiency savings to be gained from only sending a tanker when the storage capacity has been reached. This increasing efficiency means that previously uneconomic wells can continue to produce.

If you're interested in M2M in the extractive sector, then the report Machine-to-Machine (M2M) Communication in Manufacturing & Supply Chain will be available from later on this month as part of the Machina Research Advisory Service.

Monday, 19 March 2012

Audi Urban Future Initiative

Every now and then I just like to steer people towards something that I've seen which is interesting. At CeBIT two weeks ago there was a huge amount of M2M-related stuff. It was certainly one of the stars of the show. Aside from some very interesting discussions at my session in the M2M Zone, in particular with Iridium and Globalcomm about the role of satellite operators and with lots of others about standardisation and privacy. Anyway, that aside, while wandering the floors I came across a big area dedicated to the Audi Urban Future Initiative. Some really interesting stuff for anyone keen on smart cities. I'll be publishing Machina Research's take on the Smart City in the next couple of months, so keep 'em peeled for that.

Tuesday, 13 March 2012

MDA M2M Event on 20th March in London

I'll be attending (and doing a bit of moderating at) the Mobile Data Association event on the 20th March here in London. It should be a great event. Critically there will be a lot of people from vertical industries such as Clear Channel and Docobo, giving their views. Other speakers include IBM, Freescale, Qualcomm and Everything Everywhere. Kicking off at 9.30 in Baker Street. Full details can be found here. Hope to see you there.

Friday, 24 February 2012

Machina Research's ten predictions for M2M in 2012

Ahead of Mobile World Congress, Machina Research’s Directors have gazed into their crystal balls and have made the following predictions for what will happen in the world of M2M in 2012. We will score these forecasts and provide another ten in time for Mobile World Congress 2013. More details on our predictions is available on our website.


  1. A clear top tier of operator alliances will emerge

  2. Satellite operators and Systems Integrators will join global M2M alliances

  3. Android @home products will hit the marketplace

  4. 2G will become accepted as a long term technology option

  5. Some M2M platforms that currently partner with CSPs may begin to look like competitors to CSPs

  6. Huawei will launch an M2M platform

  7. There will be further restructuring in the module/chipset market

  8. MNOs will position themselves to take advantage of the growth in connected CE devices

  9. True standardisation proves harder than expected

  10. The mobile industry will agree on a definition of M2M, and start counting

Wednesday, 22 February 2012

Machina Research publishes its inaugural M2M Leaderboard: Vodafone, DT and AT&T top the list

We at Machina Research made a very exciting announcement today. We've launched our inaugural M2M Leaderboard, a ranking of the top 20 global mobile network operators (MNOs) based on their expected revenue from mobile M2M in 2020. Between them, these top 20 global MNOs will secure approaching EUR25billion in revenue from M2M applications in 2020.

Vodafone, Deutsche Telekom and AT&T were the top 3 players. Click here to find the press release and the complete top 20 ranking.

Wednesday, 8 February 2012

Sprint partners with Orange...another member for the emerging DT/Orange/Telia alliance?

Sprint yesterday announced that it was partnering with Orange Business Services to extend its reach beyond the US market for M2M. Press release here. The aim is to offer global connectivity to Sprint's US clients looking to expand geographically. This is more than just a footprint agreement though. Orange will provide SIM cards for Sprint's M2M devices, it will also provide the SIM management platform.

So, effectively, Sprint is launching a dual mode 3GPP/3GPP2 M2M offering in conjunction with Orange. This makes sense as Sprint is rather hamstrung in offering cross-border services as CDMA networks are barely deployed anywhere outside of the US. Having a single GSM partner whose expertise and network of alliances they can tap into is also sensible.

This is just another example of the patchwork of alliances and agreements that we can expect for M2M over the next few years. These will have different levels of obligation from roaming through to complete intra-network transparency and the ability to offer SLAs. Orange has already committed to an alliance with Deutsche Telekom and Telia Sonera. Based on these developments Sprint is an affiliate member of that grouping.

I have covered CSP alliances in various Research Notes published by Machina Research. To access them a subscription is required to our Advisory Service. OBS is one of the CSPs profiled in our M2M CSP Benchmarking Report 2012.

It's impossible to gauge the importance of this announcement without clarifying a few details. I'm hoping to chat with the relevant parties over the next day or two about the implications. I'll be sure to update this when I do.

Sunday, 5 February 2012

Swisscom selects Ericsson's DCP as M2M platform

Remember this blogpost from December where I complained that Swisscom had not told us their big piece of M2M news? Well, that big piece of news was this. They've selected the Ericsson Device Connection Platform, making them the second operator running the platform after Telenor Connexion which developed it before selling it to Ericsson.

The first trials will be in February 2012 and commercial deployment in the summer.

Good news this for Ericsson, which really needed a second reference customer. Swisscom isn't exactly a global player, as its facilities-based footprint only covers Switzerland. But it is the dominant player in both the Swiss fixed and mobile markets by quite some way. It also has a strong brand and established reputation with multinational companies. As a result it might hope to pick up some global deals for enterprise M2M implementations, for instance for supply chain management.

Also it's good news for Telenor, which must be hoping for more potential partners to migrate onto the platform. Currently it's struggling with issues of scale against Vodafone and the emerging alliance between DT, Orange of Telia Sonera. Building up a bit of global scale will help. Having Ericsson clearly gives them that to a certain extent but basically, the more partners the better. Swisscom is just a small step in the right direction for Telenor.

For Swisscom it's also a good move. The DCP is a great platform and will help with efficiently addressing the M2M opportunity. In terms of future-proofing and ensuring the requisite M2M feature-sets Swisscom has made a good choice.

Although Swisscom wasn't one of the CSPs that featured in our inaugural M2M CSP Benchmarking Report, we do profile Telenor Connexion and one of the criteria upon which we judged CSPs was platforms, so we run the rule over the DCP. Further Reports and Research Notes are planned on the theme of platforms over the course of the next few months. Contact me for more details.

Machina Research estimates that there will be about 46 million M2M devices, including 10 million cellular, in Switzerland by 2020, up from about 4 million at the end of 2010 (Source: Machina Research's Connected Intelligence Forecast Database, 2012).

Wednesday, 1 February 2012

Is this the right approach from Everything Everywhere...

I was in East Grinstead the other week. You don't need to know why. They had a fresh and brand-spanking Everything Everywhere store (picture on the left courtesy of www.thisissussex.co.uk, my third favourite "this is" site in the South East). For those not from the UK or familiar with such things EE is a 50/50 joint venture between T-Mobile and Orange which has combined the two company's UK mobile assets. As well as their own stores they're also rolling out combined EE stores.

I can't help but think that this is crazy. I understand, of course, that it's good to reduce costs. One store in EG instead of two, for instance. But surely by using EE as a consumer brand they're throwing away a big opportunity. In lots of industries the same company tries to sell more-or-less the same product to different people at different prices. Basic segmentation. VW/Skoda/Seat for instance. Or PC World/Dixons/Currys. Surely it would be more sensible to hide the EE brand and use the Orange and T-Mobile brands to address different market segments.

I know the arguments about neither MNO wanting to devalue their brand by having theirs as the 'value' brand while the other is the premium. Fine. Don't. Do something more interesting. Use Orange as the business brand and T-Mobile as the youth brand or something like that. Either way, it would be a crying shame if EE threw away a set of perfectly serviceable brands with certain characteristics attached that could be used for segmentation.

Tuesday, 31 January 2012

MNOs will have to charge for signalling for some M2M applications

A very brief post this, in fact more of a musing. It has struck me over the last few weeks that MNOs will have to charge for signalling when it comes to M2M. I remember many years ago when I needed to call my parents to come and pick me up from somewhere we'd arrange that I'd dial the phone, let it ring three times and then put it down. They'd know what that meant, I'd get collected. It didn't cost anything. If I actually needed to speak with them, I'd just let it ring longer.

With some M2M applications it's potentially the same. Routine reporting can be done through signalling. Only exceptions need the actual transfer of packets of data. Simply charging for traffic does not reflect the network 'load'. In fact in some instances, e.g. an alarm, it may get to the point where a service provider can build an application that simply works on signalling. Anything where you're simply engaging in switching a device on/off or polling the network or doing binary alerts (e.g. something has happened to me), can be done just with signalling.

MNOs need to commercialise signalling. There is an awareness about this and I wait with interest to see who does something about it first.

Monday, 30 January 2012

North Korea bans mobiles for 100 days. Probably not, just shoddy journalism.

I'm no apologist for the regime in Pyongyang but I have to do a bit of rumour control. The Times of India, The Telegraph and various other sources are reporting that North Korea has banned the use of mobile phones for the next 100 days. None of them seem to quote any sources other than each other.

My suspicion is it's utter nonsense. Remember this story about Kim Jong Il scoring 5 holes in one on his first round of golf? Nonsense. It was never reported in the DPRK. I was there 18 months ago and no-one knew what I was talking about when I mentioned it. It was just made up by someone and no-one else checked facts. To be fair, who were they going to check them with?

I'd put money on this being the same. For one thing, why would the DPRK government bother? If the aim is to ensure that there is no Arab Spring type uprising then mobile phone owners probably aren't the people to worry about. All mobile phones are owned by the elite. At least legal ones. I'd imagine quite a few illegal Chinese phones using Chinese networks will have found their way across the border from Dandong. But those will only work along the border anyway as they won't register to the N Korean network. And using them would have been illegal anyway.

And what's more, why wouldn't they just tell Orascom to switch the network off?

Friday, 27 January 2012

Deutsche Telekom Trend Forum: embrace disruption and build a platform for innovative partners

I've spent most of the week in Germany. First stop was Bonn for Deutsche Telekom's Trend Forum where I (and the great and good of the analyst world) spent the day listening to their execs talking about DT's strategy. And a very interesting day it was too. Chief Product & Innovation Officer Thomas Kiessling and CTO Olivier Baujard took to the stage in the morning to tell us about their overarching strategy.

Essentially the approach, as outlined by Kiessling, is to embrace disruption and become a platform for innovation, in particular embracing partners. To achieve this DT is looking to get the most "broadband for your buck" to use a phrase from Baujard. The aim being to reduce the cost of providing connectivity. To do this they plan to simplify and scale.

I spent the afternoon talking to the M2M-related folks, Jurgen Hase, VP M2M Competence Center and Holger Knoepke, VP Connected Home. The macro approach given by Kiessling and Baujard in the morning is being neatly replicated within the BUs: providing a platform for partners to shine.

If this blog post seems a bit brief, that's deliberate. I've written up my thoughts in more detail and with rather more incisive analysis as a Research Note available as part of the Machina Research Advisory Service. If you'd like to know more, you'll need to become a subscriber. Mail me to find out more. If you're already a subscriber, the full Note will be published in a day or two.

Friday, 20 January 2012

A plug for the Embedded Mobile: State of the Market session (Weds 15.45) at Mobile World Congress

I'm just about starting to get geared up for Mobile World Congress. I'll be chairing the Embedded Mobile: State of the Market congress session. The speaker line-up is great, spanning a whole host of verticals. I'm hoping to hear about AT&T's success in the consumer electronics space from Glenn Lurie, President Emerging Devices. We also have Dr. Michael W├╝rtenberger, VP ConnectedDrive at BMW, and Chris Chung, Head of Emerging Technologies at British Gas to give us the Automotive and Utilities perspectives. Between those three we're covering off probably the three most exciting sectors in M2M. The final speaker is Amir Lahat, Head of Business Ventures at Nokia Siemens Networks. I once described him as having the best job in telecoms. If you want to know more, you'll have to come along. He'll be pulling all the strands together and talking about how MNOs can make money, which is why we're all here.

The session is 3.45-5.15 on Wednesday in Hall 5, Room 5. It should be an absolute corker and I recommend you come along.

The other big thing we have going on at MWC...I can't talk about right now. Watch out for at least one very interesting announcement from us.

Yesterday I saw a tweet that it was "only 38 days to go" until MWC, which I guess means that today it's 37 days. Which seems about right. Shifting it back a couple of weeks seems helpful until I remember that I'm also off to CeBIT to speak at M2M Zone's half day M2M session the following week.

Thursday, 19 January 2012

Two announcements on M2M standardisation in a week

This week there have been been two announcements about M2M standardisation from august and highly respected bodies.

On Monday the ITU announced that it was setting up a Focus Group on the M2M service layer. It will "study and evaluate the M2M landscape and M2M work currently being undertaken by regional and national standards development organizations (SDOs), with a view to identifying a common set of requirements". All of the details of what they're planning to do can be found through the link.

Then on Wednesday there was this joint announcement from a gaggle* of Standards Developments Organisations (SDOs) including ETSI and TIA that they would also be developing a common set of standards for M2M. Again, you can see all the details of what they're doing by following the link.

There doesn't appear to be any reference between the two other than the fact that the ITU talks about how it will work closely with SDOs. Not, apparently, that closely given that the European, Chinese, Japanese, Korean and US SDOs all have a separate initiative going. It's also unclear how these initiatives relate to the GSC MSTF which has been carrying out some exploratory standardisation work up until now.

Of course I should also be praising these initiatives for attempting to introduce some much-needed standardisation. Given the diversity of this thing we call "M2M" it's going to be a painful task. I've rambled on in the past about how open APIs is not really that useful without having standardised APIs. With that in mind, wouldn't it be good if we just did it once? As the old adage goes: "the great thing about standards is that there are so many of them".

*I'm not sure what the collective noun for SDOs is. Perhaps 'contemplation'. I'd be interested to hear any suggestions.

Despite a well-deserved reputation for innovation, Telia is not at the top table for M2M

It seems that Telia has performed something of a revamp on its M2M offering with a new website and new partner programme.

This set me thinking about their strategy. Given that they're a company well known for innovation it is perhaps a little surprising that they're not at the forefront of the M2M revolution. However, they've always been rather stymied by a couple of factors.

Firstly Telenor Connexion has been on their doorstep in Stockholm for 4 years hoovering up all the M2M opportunities across the Nordic region. Telia struggles to compete either at home or within its regional footprint. The two companies' footprints overlap quite considerably. Secondly, they've lost out in Sweden, their main home territory, to service providers of the likes of Maingate.

All this has meant that M2M innovation in Sweden (and the rest of the Nordic region) has been done predominantly by other players and that Telia is not at the top table when it comes to M2M despite being a highly innovative company. For this reason the company doesn't make it into our ranking of Tier-1 CSPs that was announced earlier this week: click here for more details.
One of the issues I'll be looking at as part of the Machina Research Advisory Service over the next few months is how tier-2 CSPs can compete with the big boys like Vodafone and Orange. There are ways and if you're a tier-2 CSP looking at expanding in M2M, drop me a line.

Tuesday, 17 January 2012

Vodafone is (or rather will be) top dog in M2M according to Machina Research's new CSP Benchmarking Report

This week we published our M2M Communication Service Provider Benchmarking Report. If you want to download the press release as a PDF, you can find it here. Here it is in all its glory:

Vodafone takes top spot in Machina Research’s 2012 M2M CSP Benchmarking Study
Vodafone is the CSP best positioned to take advantage of the global M2M market opportunity between now and 2020 according to a new study from Machina Research.
[London, UK 18th January 2012]

Specialist M2M research firm Machina Research today revealed the results of its 2012 M2M Benchmarking Study, which found that Vodafone was the communications service provider (CSP) best placed to take advantage of the EUR714 billion global opportunity[1] presented by machine-to-machine communication. In compiling the study Machina Research rated major M2M CSPs in six key areas that will determine their future success: Pedigree, Platform, Place, Partnerships, Process and People. Based on ratings across each of these six ‘P’s, Vodafone was the top-ranked CSP.

Commenting on the result, the study’s author Matt Hatton said: “Machina Research rates Vodafone as the CSP with the best potential to exploit the massive opportunities presented by machine-to-machine. In particular, its global scale gives it a substantial competitive differentiator. While I wouldn’t say that they are streets ahead of the competition, Vodafone was our clear winner. However, the race for second spot was very hotly contested between AT&T, Deutsche Telekom, Orange, Telefonica, Telenor and Verizon, with little to choose between them. Each has strengths and weaknesses”.

Ultimately second place went to Deutsche Telekom which was praised for its partnership strategy, has a natural advantage in the M2M world with an in-house systems integrator in T-Systems, has good geographical coverage courtesy of last year’s alliances with Orange and Telia Sonera and its US presence, plus the group is focusing a lot of attention on building up M2M capability.

The aim of the study is to identify which CSPs are set to prosper in the future, rather than simply identify those which are succeeding today. AT&T and Verizon both have M2M installed bases significantly bigger than Vodafone: 12 million and 9 million respectively. As Hatton explains: “It is important to note that Machina Research’s ranking is forward-looking. It’s an indicator of who we believe is best set for future success. Of course we take account of historic experience and success by AT&T, Telenor, Verizon and the like in our “Pedigree” category, but it is only one element in this most nascent of markets”.

Vodafone’s future success will owe much to its scale and geographical coverage: by 2020 its own footprint will cover 600 million addressable cellular M2M connections[2], second only to Deutsche Telekom, courtesy of its continuing presence in the US. The Vodafone figure grows to 1.8 billion when we include partner operators such as Verizon Wireless, whereas the comparable figure for DT is just 1.1 billion. As a result, Vodafone achieves comfortably the highest ranking in the “Place” category.

Machina Research’s overall ranking is far from simply an analysis of longevity and geographical footprint. It also involves critical evaluation in a number of other areas. It includes an appraisal of the CSPs’ software “Platforms” in effectively managing large numbers of M2M connections. It also assesses the success of each of the CSPs in building “Partnerships”, a critical factor for success in M2M. Vodafone and Deutsche Telekom have been particularly strong here. The “Process” category looks at a variety of practices involved in the supply of M2M services including application development, device certification, client support and systems integration. AT&T, Deutsche Telekom, Telenor and Vodafone scored highly here. The final category is “People” which looks at the CSPs’ organisational structure and general fitness for addressing the M2M opportunity, e.g. through the establishment of dedicated M2M business units. Here AT&T is rated as the most sophisticated, although Machina Research will watch with interest how the development of the ambitious newly-established Telefonica Digital unit will progress.

Summarising the findings, Hatton comments: “None of the CSPs has a monopoly on best practice in all of the categories. Each has room for improvement. Each also has particular advantages due to their company structure or approach that can give them a lead or allow them to differentiate. Above all, however, each of them can learn from the others.”

About the report
Machina Research is a UK-based telecoms research and consulting firm focusing principally on the emerging opportunity associated with new forms of connected wireless device, specifically machine-to-machine (M2M) and mobile broadband. The M2M Communications Service Provider Benchmarking Report, 2012 provides an independent analysis of the M2M capabilities of seven key CSPs: AT&T, Deutsche Telekom, Orange, Telefonica, Telenor, Verizon Wireless and Vodafone.

The purpose of this report is to give Machina Research’s view on the likely long-term success of each of these major M2M CSPs. Enterprises looking to implement an M2M solution will be looking for a trusted and competent partner and making a long-term commitment. As a result they require a high degree of certainty that they are making the right choice of CSP.

The seven CSPs have been selected as the tier-1 M2M service providers, courtesy of their existing scale and focus and their international remit.

Machina Research analyses the CSPs on six criteria:




  • Pedigree – The experience that the CSP has in addressing the M2M market. This will often be vertical-specific. While historical success is no guarantee of what will happen in the future it does demonstrate a level of experience in delivering M2M services, which is frequently a very different proposition from traditional voice and data services.


  • Platforms – The software platform(s) that the CSP uses for supporting its M2M connections. Platform choices will often have implications for the efficiency with which a CSP can address the M2M opportunity, in particular in the provisioning and connection management process.


  • Place – Where the CSP is well placed to provide services. This includes analysis of geographical footprint as well as horizontal partnerships with other CSPs in non-footprint markets. In the latter case, particular focus is given to the ability to perform end-to-end troubleshooting. Also included within this analysis is the availability of broadband (3G and 4G) wireless networks. With regard to network technology choice, the availability (or lack of it) of broadband networks will affect the ability of a CSP to address the needs of particular applications as efficiently as a rival may. It should be noted that there is a well-defined evolution path for most CSPs from 2G to 3G and LTE. Differences related to network deployment will only be highlighted where it differs substantially from the industry norm.


  • Partnerships – Partnering is critical for the success of M2M. The focus is on vertical partnering (i.e. tying up with other players in the value chain to provide the best solution for the market). Horizontal partnering (i.e. with other CSPs to provide the broadest footprint possible) is predominantly considered in the “Place” category where it expands geographical coverage.


  • Process – Examining a variety of processes involved in the supply of M2M services including application development, device certification, troubleshooting, SLAs, project management/systems integration, and client support.


  • People – Much of the success in M2M will depend on having the right personnel in the right place. This section examines the number of dedicated M2M professionals, the CSP’s organisation and the fitness for purpose in addressing the M2M opportunity.
The report provides a ranking of each of these CSPs as well as a 3-4 page profile of each CSP, examining their capabilities in each of the six areas.

For a copy of the executive summary, table of contents and a blank sample data sheet, or to order your copy, find out more about the report or discuss annual subscriptions please contact sales@machinaresearch.com.

Contact
For further comments of more information on this press release, please contact:
Matt Hatton
Director
Machina Research

[1] According to earlier research from Machina Research, “M2M Global Forecast and Analysis 2010-20” (October 2011), there will be 12 billion M2M connections on the planet by 2020, generating a revenue of EUR714 billion.
[2] Assuming same geographical footprint as today.

M2M: comparing CSP footprints

As you might have seen, Machina Research is publishing its M2M CSP Benchmarking Report this week. More details on that here.

One of the graphics that I pulled together for that report was of the likely addressable cellular M2M subscriber base for each major CSP in 2020. This is based on data from our Connected Intelligence Forecast Database. How I built it was to look at the current geographical footprint of each of the major global CSPs and compare that with the number of cellular M2M connections that will be contained within that footprint in 2020. I have also included a calculation (the red bar) of the 2020 footprint taking account of the current alliances and partner arrangements, e.g. DT's arrangemenent with Orange or Vodafone's Partner Programme.



DTAG has the biggest footprint with 800 million addressable connections, thanks largely to its retention of T-Mobile USA. Behind DTAG on around 500 million are AT&T, Sprint, Telefonica, Verizon and Vodafone.

When we take account of partnerships and alliances the picture changes somewhat. Vodafone/Verizon are streets ahead with 1.8 addressable connections, courtesy largely of access to each others markets. Behind them are DTAG, Everything Everywhere, Orange and TeliaSonera, which are benefiting from a cross-partnerships. Telefonica and China Unicom, which recently inked a deal for strategic co-operation, are the only other CSPs with a footprint of more than 600 million when partnerships/alliances are taken into consideration.

Of course there are a few caveats to attach to this analysis. It pre-supposes that each company will maintain the same footprint and won't be involved in any M&A for the next 9 years which is, let's face it, pretty unlikely. It would also be wrong to assume that CSPs can only address M2M opportunities within their footprint. Of course that's not the case, although they will probably have an advantage in terms of network transparency and roaming rates. Finally, it should not be assumed that M2M is all about footprint. It's not. It would be possible for a company with a huge footprint to make a complete pig's ear of M2M if it gets its partnership, platform or process decisions wrong. Which is why in the report M2M Communication Service Provider Benchmarking Report, 2012 we look at all of those elements, and more. I'll be blogging on the results of the report, but thought you'd all be interested in seeing the table.

Drop me a line if you'd like more details about the report and how to get access.

Monday, 9 January 2012

Vodafone/Verizon merger "would make sense". What?

So I pulled up Fierce Wireless this morning and was confronted by this monstrosity: "Analysts: Vodafone/Verizon merger would make sense". Apparently Goldman Sachs (remember them?) reckon it would make sense for Verizon to merge with Vodafone. Because, you see, Verizon could demerge its fixed assets and merge its mobile assets with Vodafone. And that would all be brilliant.

I agree. It would make sense for Vodafone. They'd love to get full control (including branding) on Verizon Wireless. And that's why they've been trying off-and-on to do it for the last 5 years. What's stopping them? Verizon. They want to maintain a fixed and mobile presence. And what's changed? Nothing.

The article is right that they've been co-operating on a lot of things recently, not least M2M. After all Verizon Wireless is a 45% subsidiary of Vodafone. The ARE the Vodafone Group's presence in the US. Of course they co-operate!

OK, sorry, rant over.

Friday, 6 January 2012

Verizon Wireless's buy out of Qualcomm's stake in nPhase was necessary

In the UK we have a saying: "like painting the Forth Bridge". Other countries may have similar sayings. It means to be engaged in a piece of unending work. Once you think you're done you have to start again at the other end. I'm currently engaged in such a piece of work, our M2M CSP Benchmarking Report. It'll be out in the next week or so, presenting our views on who's best placed to take advantage of the opportunities presented by M2M. Click here for more details on the report. The problem is that stuff keeps changing, and thus changing our view on the market. The latest development was Verizon Wireless (one of the CSPs profiled) buying out Qualcomm's share of their 50/50 joint venture nPhase.

The nPhase platform, in all its incarnations, has been in existence for 10 years, supporting industrial applications from the likes of ABB and Siemens. In 2006 it was acquired by Qualcomm. In July 2009 Qualcomm and Verizon Wireless formed a joint venture and named it nPhase. In their own words this reboot "was created to leverage Qualcomm’s advanced connectivity technologies and Verizon Wireless’ expertise and simplified device certification process. The joint venture will deliver seamless, fully integrated M2M communication with global connectivity. Key new capabilities will include cloud computing solutions to automate device provisioning, and to track, monitor and manage assets. Custom white label applications for OEM customers, productized applications for end-use markets, new diagnostic tools for monitoring network health and device performance, data aggregation services, back office integrations and other professional services required to deliver whole solutions also will be provided”.

The nPhase connectivity platform is active in three areas: wireless network services (i.e. the usual activities of an M2M platform such as provisioning and management); application services (providing open APIs for 15-20 standard M2M device actions, e.g. wake-up, timings, thresholds, delivery etc which are abstracted out and provided to the customer to make application development very simple); and device performance services (taking advantage of Qualcomm’s device management expertise to optimize remote diagnostics).

So why has Verizon bought nPhase and what are the implications for the wider industry? At least partly, I suspect, because the two partners had slightly different visions for what nPhase could/should be. Qualcomm's focus is clearly global and multi-carrier. As a result they'd want other carriers to be adopting the nPhase platform. In contrast VZW would want to focus nPhase on being the most effective M2M management platform for their operations in the US. They'd want full control over the development roadmap for the platform given what a differentiator it could be. This is also just another manifestation of the vertical integration we're seeing in the industry (e.g. Gemalto acquiring SensorLogic). If, as a CSP, you have scale (as the likes of Verizon, AT&T and Vodafone do) then it's more important to have development control over your platform than it is to try to take advantage of economies of scale from using a multi-carrier platform. With this in mind it'll be interesting to watch how the AT&T/Jasper relationship plays out. It's working well so far, particularly as it's allowing AT&T to export applications to a big footprint of territories.

These are just my first thoughts and we'll be chatting with Steve Pazol and various others over the next few days and getting some insight.