Feb 11, 2014

Google NEST – a case of déjà vu?

Almost 10 years ago, Amazon formed a team to work on a groundbreaking, highly integrated consumer product. Amazon began with a goal of improving the user experience surrounding physical books. The initiative was led by Gregg Zehr who brought considerable pedigree having previously been the VP of Hardware Engineering at Palm Computing.

The new team was set up outside of Amazon and its strategic objective was complementary to Amazon's mainstream activities. This was the genesis of Amazon’s Lab126, a start-up that focused on product innovation around a new generation of connected devices. Amazon's connected device road map has progressed from the connected eReader to tablets. Most recently, Amazon’s Kindle has been talked about as a point-of-sale device.

If we fast-forward to the present day, it is difficult to escape a sense of déjà vu when looking at Google’s acquisition of NEST. Here we have a separate entity with core competencies in creating highly aesthetic consumer products, led by executives with a strong Apple-design pedigree. And, according to Google’s CEO Larry Page, Google and NEST are “excited to bring great experiences to more homes in more countries”.

However, relative to Amazon's start-up costs ten years ago, it seems that the entry cost for a new category of innovation in the connected devices arena has gone up to the order of a few billions dollars!

So what did Amazon accomplish with Lab126? What might we expect from Google/NEST? And, what does this mean for companies that can’t afford billion dollar initiatives?

Jan 26, 2014

Review of M2M Corporate Events in 2013

2013 as a whole was another year of strong corporate activity in the M2M market. A total of 147 events easily surpassed the 115 events that were recorded in 2012. These events include: announcement of an industry changing technology breakthrough; market entry/expansion initiatives; strategic partnering; investment-related acquisitions or divestitures; distribution agreements along the value chain; product innovation and outsourcing of key service delivery capabilities.

While 2013 saw many more companies taking to the press wires to publicize their sales wins, these are not recorded here as corporate initiatives. If anything, sales wins are the consequence of one or more corporate strategy commitments made in prior years.

An important development that occurred over the course of 2013 was a shift in sentiment to promote IoT in preference to M2M. This began with a raft of announcements at the Consumer Electronics Show (CES) in January 2013. Momentum continued to build around the IoT theme due to significant publicity drives and business commitments by large organizations such as ARM, Bosch, Cisco, GE and Intel.

Jan 11, 2014

Trust in Identity

The 2014 CES show is currently generating a lot of consumer technology related press-headlines as different corporations reveal their stakes in seeking to capitalize from the emerging IoT market. IBM/Technicolor got the ball rolling with their IoT/M2M monitoring offering. They were soon followed by Google and AT&T/Ericsson with their connected car ambitions. Intel and Sony also registered on the IoT radar with their messages about miniaturized and wearable connected device offerings.

These companies and the many others that have latched on to the M2M/IoT phenomenon share a vision of a sharp rise in the total population of connected devices.

As this trend develops, users will become ever more dependent on their connected devices. This will give rise to three interesting industry developments each of which represents a potential commercial opportunity.

Nov 17, 2013

The IoT Gets Real as Corporates Commit

2013 has witnessed a strong growth in the number of corporate initiatives that make explicit reference to the Internet of Things (IoT) in contrast to terms such as M2M and “embedded solutions”. It seems that large companies are committing to a market where much of the recent activity can be attributed to start-ups and academia.

A few weeks ago in early November, Intel demonstrated its commitment to the IoT market by creating a special division called the IoT Solutions Group, combining its Intelligent Systems Group with its Wind River acquisition. This development seems like the product of a progressive evolution in Intel’s strategy for the ‘connected devices’ market dating back to its mid-2009 acquisition of Wind River for almost US$900m.

It will be interesting to see how well Intel’s internal re-organization efforts now proceed as it develops more of an IoT market presence, especially as one of its main rivals in the mobile computing market, ARM, has also been active with its own IoT plans.

Oct 21, 2013

Verticals, Horizontal- and IoT-Platforms

One of the implementation challenges that historically acted to restrain the M2M market is the issue of vertical-specific requirements. Each solution necessitated a new and/or tailored IT development effort; this had an impact on solution development costs and constrained the opportunity to realise meaningful economies of scale.

Over the past few years, the M2M industry has expanded in potential scale and scope. It is now interlinked with high volume, consumer oriented application opportunities and, more recently, with an extremely broad scope of connected devices under the Internet of Things/Internet of Everything/Industrial Internet umbrella. Most recently, this evolution has spawned a number of platform announcements from M2M market research firms and also from businesses, such as Aeris, GE and Wind River, many of which are recasting M2M capabilities in an IoT light. Was any of this predictable?

Sep 25, 2013

Managing M2M inside an MNO

France’s Orange has a long history in the M2M market and was one of the early pioneers in establishing an M2M competence centre, leveraging the deep expertise of its M2M team, notably in the Belgian market. It was therefore interesting to see Orange Business Services’ announcement of a strategic partnership to use Ericsson’s Device Connection Platform (DCP).

Orange has operating companies in several different countries and is also a partner with Deutsche Telekom in the UK’s Everything Everywhere. Orange is separately a partner with Deutsche Telekom, TeliaSonera and Telecom Italia in the Global M2M Association. In light of these different constituents, one interpretation of the Orange/Ericsson partnership is as a neutral platform that many, if not all, of the M2M operating businesses can buy into.

If this is indeed the strategy, it would shift the responsibility for coordinating multiple platforms, capabilities and expertise onto Ericsson. Channel and account management responsibilities would then more naturally fall on to individual operating businesses.

To get a sense of the coordination challenges and operational complexities that arises in enterprise-grade and multi-platform environments, it is instructive to look at another company, Telefónica.

Sep 5, 2013

Smart Home Platform Innovator Strategies

Early in 2012, I completed a study for the GSM Association (GSMA) on the topic of new business models that would be linked to innovative, connected-device applications. This study laid out a sequence of value propositions, as companies seek to move up the value chain. In order to bring these new value propositions to market, new and innovative business models would need to be designed.

In the early days of M2M, the value proposition was all about connectivity. This would make stand-alone devices ‘smart’ and the business challenge was largely about how connectivity could be ‘embedded’ inexpensively. Later on, the market evolved as companies started to care about deployment, reliability and the user-experience issues. This ushered in a new value proposition around managed connectivity and several specialist platform providers have emerged in their own right or as partners to mobile operators.

The final two sources of value that were identified included the delivery of ‘platform innovator’ and ‘stewardship’ services. The connected devices market has been moving in these directions with three companies – Arrayent, Deutsche Telekom’s Qivicon and Zonoff – investing their energies in the platforms arena.