The network is central to the worldwide proliferation of machine-to-machine applications
15 November 2010 |
The expansion of wireless networks across the world has made it far easier for machine-to-machine (M2M) communication to take place and has lessened the amount of power and time necessary for information to be communicated between machines. The M2M or connected devices business is attracting massive interest as projections suggest as much as 50 billion additional devices could be connected to networks across the world. The good news is, it’s also a massive opportunity for network operators
Networks are the foundation of the M2M business
Modern machine-to-machine communication relies on a system of networks that transmits data to and from appliances such as sensors, metres and other unattended devices. To date, much has been made of the simplicity of M2M service delivery with early examples focussing on low-grade consumer applications with minimal data requirements. The line of thought suggests that the network usage of connected devices will be commoditised from birth and will cause operators to rethink their operations to strip costs out of service provisioning for such high-volume, lowvalue deployments. For simple applications, efficiency is the name of the game but, although such applications are garnering the bulk of current publicity, the real opportunity extends into far more critical and readily monetisable areas.
Connected devices are starting to be deployed in environments that require far more than a simple daily exchange of micro-data over a commoditised, besteffort network. These data collection devices, such as smart metres or diagnostic equipment, automatically trigger machine-to-machine data transfer– both wired and wireless – as participants in an omnipresent computing ecosystem. M2M applications can be mission-critical and failure can have high-risk consequences. For example, sensors on oil rigs and pipelines use networks to continually send status updates and, because such sensors and other endpoints are often sited where there is no human presence, resilience and reliability are key goals. Put simply, reliable networks may be more highly valued in the connected devices business than in the traditional telecommunications sector because, in the absence of humans around-the-clock to raise alarms, businesses increasingly shift the burden from humans to machines, choosing to rely instead on unattended but connected devices to monitor and report on events and information used to mitigate risk.
Those potentially severe examples and the basic example of a static metre pinging information back to headquarters at set intervals are the bookends of M2M implementations. In between are a vast number of applications that have complex operational requirements and generate substantial value for the organisations they serve. Connected devices applications include: seismic data collection; tracking of cargo containers, vehicles, plant equipment and even animals; smart grids that go way beyond simply metering utility bills; and vending machines and other terminals that can communicate stock levels, service requirements and send alarms. These are just a few of the thousands of applications for M2M communications and many of these, by their nature, demonstrate huge value potential to the end user. As a consequence of that, the telecoms industry needs to pro-actively move beyond the characterisation of connected devices as a commoditised subset of the core business of human-to-human communications.
The expansion of networks across the world has made it far easier for M2M communication to take place and has lessened the amount of power and time necessary for information to be communicated between machines. Both wired and wireless networks allow an array of new business opportunities and connections between consumers and producers in terms of the devices, applications and services being sold.
The M2M application space presents a welcome opportunity for operators to expand their offer portfolios by introducing new services with characteristics such as low churn, low cost per gross add and the utilisation of network resources during off-peak periods. For network service providers, the upside potential is vast in terms of predictable and manageable increases in traffic volume and high value cloud-based services.
The network itself is the essential fabric that sustains and acts as the foundation for new ways of creating business value. Facilitiesbased operators can therefore confidently and securely assert that the network has not been reduced to a commodity and it is key to the success of M2M initiatives. That case is supported by the fact that M2M applications, by their definition, run with little or no human supervision. The network is prime because such applications are greatly impacted by sub-par network performance, congestion, transmission delays, security leaks or downtime.
For that reason wholesale providers, rather than being downcast that the machine-to-machine opportunity presents yet another commoditised service provisioning burden, should welcome the increased traffic, customisation and reliance on network excellence that many connected devices opportunities present. Depending on the nature of the devices being connected and the machines that are communicating with each other, there is a substantial revenue generation opportunity and a chance for operators to differentiate on service quality, resilience and the capabilities of their propositions.
For operators there is also good news in that, while demand will be unprecedented, it will also be fairly predictable. Unlike human users, endpoints are often static, eg, a building’s security system, so the operator may know where the demand will be placed on its network and what the nature of that demand will be. That means operators can build their networks in very deliberate and specific ways in the knowledge of the type of traffic that will be communicated in a given geographical area. M2M needs, in terms of connectivity, capacity, speed and reach, can be more simply planned for in advance of deployment because endpoints in a sensor grid, for example, are pre-determined and traffic expectations can likely be pre-calculated in terms of volume, location and time of day. This will help both suppliers and customers minimise demand during expected peak periods and increase the utilisation of otherwise idle network assets.
Operators are well positioned here since there is the potential for their interdisciplinary skills to be required. In the M2M arena, endpoints can be tethered or untethered, reachable via wireless, satellite or wireline communications methods so a provider that can address all these methods and take into account the disparate needs of endpoints and the applications they serve, can demonstrate the value of their networking expertise. Think of an oil pipeline extending from eastern Europe into central Asia, for example. Sensors along its length can monitor throughput and generate alarms in case of an emergency. With thousands of kilometres of distance covered, the communications service provider needs to have international scale to operate in all the countries through which the pipeline passes. In addition, the more developed markets of eastern Europe will be able to support the connectivity requirements of the application using cellular networks or fibre while the service may need to be supported using satellite communications in sparsely populated areas of central Asia. Such an M2M proposition is totally dependent on a network provider that has the scale and scope to serve its needs. Critically, knowledge of individual country markets and the technologies available within them is essential.
For those reasons, in order to support the demands of M2M customer organisations, wholesale operators will play a critical role thanks to their network footprint, their quality and their ability to rapidly make capacity available over large geographic areas. Network operators are central to the M2M supply chain and well-positioned to reap the benefits of widespread M2M application usage. AT&T has been early in identifying the wholesale opportunity presented by M2M communications. Far from seeing it as an unattractive, low-margin, high-volume business, AT&T sees it as a massive opportunity to highlight that the network is the real value-added element of such services. The operator sees the M2M business as exclusively good news for the wholesale market and sees itself as central to the M2M value chain.
AT&T has made substantial investments in its network, service delivery platforms and in building expertise to enable deployment of M2M solutions that fit customers’ needs across a range of industries. In tandem with that vertical expertise, AT&T has developed M2M-oriented operational process applications that are relevant to all vertical sectors. These are backed by the operator’s network strength which encompasses wireless data coverage in more than 190 countries and 3G services in more than 80 countries.
A common misconception, given the current hype surrounding M2M and the ‘Internet of Things’ is that the business is new. The reality is that AT&T has been supporting the M2M industry for more than a decade and already supports millions of M2M endpoints. AT&T has certified more than 900 nonstock devices for use on its network which include in excess of 300 M2M devices. In addition, there are more than 350 AT&T-approved M2M solutions. In the fourth quarter of 2009, AT&T added over one million emerging devices to its network. These include: a factoryinstalled application that provides enhanced safety functionality for owners of a major high-end car maker’s vehicles; an application for a global car rental firm, which addresses location assist, remote unlock, drive time tracking and return information; and a full vending solution with energy monitoring and inventory support for a supplier of wireless, cashless, micro-transactions and networking services for the vending industry. Further to these, AT&T Control Center, powered by Jasper Wireless, delivers service management with real-time access to core network elements that help operators run their connected device business efficiently.
In this phase of M2M deployment, where much of the focus is on retail and consumer applications, the operational efficiency aspect of M2M service provisioning is a critical feature. Highly automated and powerful AT&T service management platforms empower wholesale customers to make efficient real-time changes to their M2M network services. As the business matures and the number of endpoints and applications proliferate, far from being marginalised, the expertise and the fundamental network competencies of wholesale providers will continue to underpin the development of the marketplace.
AT&T is working to advance the adoption and acceptance of M2M applications by applying the power of the network to more people and places and rethinking what’s possible across a broad range of devices. To help bolster machine-to-machine communications, AT&T is helping guide manufacturers of wirelessly connected products to market with the following initiatives designed to help customers shorten learning curves and reduce the capital expenditures required to develop new technologies:
> Dedicated Emerging Device Certification Lab that tests and certifies consumer electronics and M2M devices for the AT&T network;
> Emerging Devices Website, a resource for those who have an idea for a wirelessly connected product and need a trusted hand to help guide it to market; and
> Advanced Enterprise Mobility Solutions for Business team that works with businesses to mobilise their applications, transform their business processes and capture the potential opportunities that M2M technology offers.
AT&T data service delivery platforms enable rapid, well-managed, large-scale wireless deployments for specialised M2M devices. This helps lower time and cost barriers, simplify the deployment lifecycle and enable efficient operational management. By making its network and management expertise available to customers, AT&T is maximising access to AT&T innovations. As you can see, AT&T is committed to the machine-to-machine business and sees exciting potential in the coming years. As M2M deployments increase, the tremendous network demand will increasingly require wholesale services. This is a great opportunity, not just for application providers, but for network service providers worldwide.?
M2M opportunities are proliferating
M2M opportunities are often identified as ‘Smart Grid Applications’ and under the futuristic heading, the ‘Internet of Things.’ Global providers with expansive and secure networks, geographically dispersed data centres and mobile applications services that incorporate global positioning system (GPS) capabilities and telemetry will find a ready audience among carriers seeking ‘smart grid’ capabilities to support their own operations. Carriers that position their infrastructure assets as smart-grid enablers will find many opportunities to support both the internal operations and service platforms of customers.
Controlling household technology remotely is an intriguing concept. Smart grid applications have the potential to manage nearly every type of household or office electronics device including indoor and outdoor lighting, kitchen appliances, environmental control systems, robotic vacuum cleaners, smoke or carbon monoxide detectors, water sprinklers, home theaters and surveillance systems.
Beyond the remote control of familiar consumer appliances, the ‘Internet of Things’ depicts a world where identifying information is encoded on radio tags added to goods, such as textbooks, shoes, car parts and containers, during the manufacturing process. If all objects of everyday life are so equipped, they could be pin-pointed, recognised and managed remotely as the embedded devices would be pre-programmed to contact a self-configuring wireless network. Network-based applications would be able to detect if volume is running low, a part is defective or an item is misplaced. In turn, a buyer would receive an alert to re-order the item, an end user would be advised to take her television to a service centre and a relieved parent would learn the location of a missing backpack.
The potential is compelling, but the ‘Internet of Things’ is dependent on IPv6 supplanting IPv4 as the primary internet protocol used worldwide. The primary reason is that IPv4 is nearing address exhaustion. IPv6 has a vastly larger address space – due to the use of a 128-bit address versus only 32 bits – and will be able to identify more objects.
According to the Wikipedia® website1, every human being is surrounded by 1,000 to 5,000 objects. To accommodate all of these items, it will be necessary to encode 50 to 100 trillion things and follow the movement of each. This volume is beyond the capabilities of IPv4 but not IPv6. The new protocol will be able to manage the load easily. Although IPv6 lags IPv4 in terms of general worldwide deployment, the protocol has been implemented on all major operating systems in use in commercial, business, and home consumer environments and is expected to gain ground steadily over IPv4 installations.
In addition, for the ‘Internet of Things’ to become pervasive, entire supply chains will need to cooperate and share common goals. This includes RFID tag manufacturers, manufacturers of consumer goods, software developers, network providers, data storage businesses, etc. The timing of this ecosystem development will be driven by potential economic returns. These will be predicated by marketplace demand, technical realities and opportunities for mutual value creation. It will happen, but the question is when?
For more information, please contact:
Vice President, Wholesale & GEM Solutions Marketing
11h | Natalie Bannerman
11h | Alan Burkitt-Gray
11h | Jason McGee-Abe
11h | Jason McGee-Abe