The Internet of Everything Chronicle #3
M2M or Internet of Things is neither an industry nor a solution. One could possibly claim it's a market but I claim it's more of a trend. By collecting information about things, gather it centrally, turn it into useful information and distribute it to EPR systems, decision making systems and apps we can improve business processes and decision making. That is relevant in most if not all industries and the value created is normally a combination of efficiency, security and sustainability. No wonder it is going to be big!
2013 has been the year when M2M became a teenager and many organizations went form powerpoint and plans to pilots and projects. Up until now the smart meter market and vehicles have been the two largest segments of M2M when it comes to numbers. But it is important to remember that this has been pushed by politicians rather than driven by the market. A lot of meters for electricity and gas are connected already and next comes big roll-outs in UK, France, Spain and Japan for example. Telefonica and Arqiva were chosen to deploy 53 million meters for electricity and gas using wireless technologies in UK in something called the biggest M2M deal ever. PLC is chosen for over 35 million smart meters in France and a massive upgrade is taking place in Spain. Also Tepco in Japan is working on a 27 million smart meter project. The pace of roll-out is impressive and over 51,4 million smart meters where shipped world-wide first half 2013 (Navigant Research).
The market for connected vehicles includes different things including embedded connectivity in cars, a variety of fleet management solutions for trucks, systems for blue light vehicles and solutions where smart phones and pads are used. The total number of new cars with embedded telematics (like BMW ConnectedDrive and GM Onstar) shipped globally 2012 was 5.4 million with another 4.5 million shipped with in-car systems using smartphones for connectivity (like Ford Applink, Toyota Entune or Mercedes Command) according to SBD/GSMA. The number of new connected cars shipped 2018 is estimated to be 6-8 times bigger. When it comes to fleet management systems by year end 2012 Berg Insight estimate 3.05 million in EU (23+2), 2.2 million in Russia/CIS and Eastern Europe, 3.3 million in North America and 1.6 million in LAT. The fleet management market is growing with 15-20% and it is driven by business needs rather than politicians.
Connected vehicles and smart meters will remain large growth markets but Internet of Everything is much more pervasive than that. When we connected people and organizations to the Internet everything changed. We gained efficiency like never before and new innovative products, services, business models and ways of doing things came to market. This is about to happen again, now when it is affordable and realistic to connect things. GE released its Industrial Internet Vision about a year ago: "Industrial Internet: Pushing the Boundaries of Minds and Machines". They claimed Industrial Internet could add a sizable $10-15 trillion to global GDP over the next twenty years – the size of today’s U.S. economy. And during 2013 they really executed on their vision! After two years in business they will make more then $290 million in revenues 2013 from products built using the industrial internet philosophy. GE is investing $2-3 billion over 2-3 years behind their Industrial Internet Predix platform and are partnering with companies like Pivotal, AT&T, Cisco and Intel (Gigaom). GE already utilize their Industrial Internet capabilities across industries like rail, energy, healthcare and aviation.
Things are being connected and organization after organization, industry after industry, will face dramatic change. Data collected, managed and distributed cleverly enables faster processes and innovative products, services and business models. That is where the value of M2M aka Internet of Things is and it can often be translated into efficiency, security, sustainability and convenience. The focus has shifted from connectivity to data which turned our baby to a teenager. And over the year major ICT companies like Oracle, Cisco, SAP and IBM have jumped on the train. I started the Swedish M2M Service Enabler alliance in March 2012 to educate the market, position Sweden as a good place to look for M2M solutions and to promote the members. It has grown to 19 members and five sponsors during 2013 which is yet another indication of what is going on - decision makers are looking for companies who can help them connect their heating systems, pumps, boats, diesel tanks, etc.
I believe this will continue and accelerate in 2014: more companies start trials and more products are being connected. And this will accelerate the beginning of a trend we saw in 2013 - acquisitions of specialized M2M Service Enablers. But it will take 2-3 years until M2M will be grown-up and mainstream. By then we will have complementary wireless networks in place enabling millions of smaller and cheaper things to be connected like smoke detectors, pets, bicycles, forrest fire sensors, animal traps, water leak sensors, billboards, etc. The key reason why we need that complimentary network is autonomy - the ability to make a small battery in a WAN connected device last for 5 years. That will rock the boat!
I wish you all an exciting and successful 2014!