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.

For further comments of more information on this press release, please contact:
Matt Hatton
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.