Verizon M2M - revised priorities?

My attention was recently drawn to Verizon’s recruitment activities in the M2M sector. I was intrigued by the profiles and the roughly 130 positions Verizon has been trying to fill notably when these are viewed against the acquisitions it made as part of its M2M strategy. More on this will follow after a recap of Verizon’s initiatives.

M2M service provider metrics

This note is part of my occasional series dealing with business metrics for the M2M sector. On this occasion I examine a few operational benchmarks for an M2M service provider. In this case, I have drawn on data for Numerex in the US which is one of a few publicly quoted entities in the M2M market.

Numerex was established in 1992 and has focused on wireless connectivity since 1999 after divesting its wire line business to BT. The company recently passed the 2m connections milestone during Q1-2013. While this connections base is small in relation to the M2M business units of the large mobile operators (many of which fall in roughly the 5–10m range) it serves as a useful reference point for business planning, performance benchmarking and investor due diligence insights. These are highly topical in the present climate where companies are expanding their M2M operations; this earlier post on building a billion dollar M2M business, for example, has been the most read item on this site in recent months.

Competing for In-Home Services

Late last year, in the course of some project-related research, I took a look at the home security market in the context of 'smart-home' service concepts. Fixed- and mobile-network operators view this as one of several promising market opportunities to offer home automation and home security types of service.

A great deal is made about mobile operators pursuing new opportunities such as these in what are referred to as ‘adjacent markets’. However, it is as well to recognize that incumbent providers from those 'adjacent' markets may also have ambitions of their own in the communications arena.

M2M Corporate Initiatives 2012

Please check the Corporate Initiatives navigation tab for the most recent market developments  
 
2012 proved to be another strong year for the M2M/Connected Devices market with a significant rise in corporate business ventures. The nearly 100% increase in activity during 2012 – a total of 114 corporate events – easily surpasses the rate of market development in 2011 according to our database tracking M2M corporate ventures.

The two strategies showing the greatest amount of activity during 2012 were:

• The creation of commercial partnerships across the M2M value chain to supply integrated M2M offerings to the market

• Market entry and expansion initiatives by companies targeting new and different M2M segments.

Connected-device business models in the US Market

(published in RCR Wireless - 26 Nov 2012)

A previous article in RCR Wireless magazine highlighted the topic of new M2M business models with reference to the size and characteristics of this fast growing market opportunity. It also highlighted the central role that communications service providers (CSPs) occupy in the eco-system. Beyond traditional data plans, however, what are the new business models that will allow the full market potential to be attained?

Vodafone and its M2M strategy

In Vodafone's H2-2012 financial results presentation, its CEO outlined Vodafone's 2015 strategy including a reference to its M2M goals. In particular, Vodafone's M2M business unit will be a part of its Group-wide Enterprise unit. This raises important questions about Vodafone's longer term goals especially in the light of a growing consumer M2M market and the reorganisation plans of several of its competitors.

M2M Corporate Transactions Q3-2012

Please check the "Corporate Initiatives" navigation tab for the most recent market developments.

M2M started to develop as a sizable and strategic market for the mobile industry around 2008. This was the year that consumers and mobile operators began to appreciate the novelty of Amazon's Kindle connected eReader.

The Kindle offered an innovative eBook service enabled initially by Sprint's mobile network and now supported by AT&T in the USA. It employed a smart pricing model that did not force readers into a mobile data contract. It also did not oblige users to think about how much data they were downloading. Amazon's business model was also intriguing in positioning the device as a way to drive revenues in Amazon's core eCommerce business rather than a standalone commercial proposition.

In the market evolution of M2M, 2008 is also important for another reason. This was the year that mobile operators as a group addressed the market potential for connected devices through the GSM Association's Embedded Mobile market development campaign.

Competitive dynamics of international M2M alliances

This note will be updated in light of new alliance announcements. 

In July of 2012, seven mobile operators announced a cooperation agreement featuring a unique SIM. This appears to be a move to address a segment of customers seeking to deploy global connected devices and to compete with Vodafone's global SIM offering. However, there are other competitive dynamics at play and longer term corporate strategy implications for companies that are using partnering approaches as a rapid means of market entry.

Prior Work in the Public Domain

This post will be updated as new materials become available.

The following items refer to reports, White Papers and presentations that I have delivered in the public domain. Items are presented in reverse chronological order for ease of access to the latest knowledge. Contact me at ken@more-with-mobile.com to obtain a copy of specific documents.

2016	IoT Solutions World Congress	Intelligent Transport Systems: Lessons from a Large-scale, public-private sector trial

This presentation outlines the challenges that organizations will face in building and delivering IoT services on a large scale. It draws on early trial experiences involving the InnovateUK-funded oneTRANSPORT trial and the role of standards in the form of oneM2M service enablers - https://www.youtube.com/watch?v=bOHsmq7RCpY/.

2015	IoT Slam '15 Virtual IoT Conference	A Road-map for IoT Strategy & Business Model Innovation

I was invited to take a commercial focus on the IoT market opportunity for this virtual conference (http://iotslam.com/session/a-road-map-for-iot-strategy-and-business-model-innovation/).

My presentation mapped out the IoT landscape with the objective of providing companies, both solution suppliers and buyers of IoT solutions, with a road-map that they can use to develop their IoT business strategies.

The road-map highlights three avenues of growth: support for more connectivity technologies beyond the mobile (cellular) which is the main-stay of M2M; movement up the value-chain into platforms, applications and risk/reward sharing business models; and, support for interoperability in ways that permeate the silo characteristics of present-day applications.

By referencing this road-map and revenue potential from following different paths, companies can work out how to make the transition from the (M2M-silo) value chain and into the partnering ecosystems, platforms and interoperability touch points that characterize the IoT market.

2014	IoT Day 2014 web-conference	Event-closing conversation with Alicia Asin Perez (CEO Libelium)

For this on-line event (http://iotday.org/2014/) to celebrate IoT through events around the world, I interviewed Alicia Asin Perez, one of the co-founders of Libelium which provides an open-source sensor platform for IoT applications.

2013	Telecommunications Industry Association	Future of the Network Documentary: the Internet of Things

This interview for the TIA's Future of the Network documentary series focuses on the IoT market opportunity and its key characteristics - http://www.tianow.org/videos/ken-figueredo/11241. 

2012	Market Review for the GSM Association's mEducation Initiative	mEducation - New Business Models: Innovation in Practice

Digital content allied to mobile delivery are two important ingredients in the emerging market for mEducation services because they allow traditional and modern-day approaches to enable a "blended" educational experience. 

Between July and September 2012, I analyzed the market for mEducation services and innovative business approaches that different organizations are using to enter this market. Education content and service providers, policy makers and mobile operators from around the world contributed their insights and ideas on new sources of value, the role of mobile and emerging business models. 

A summary of this work can be found at the GSM Association's web site. It includes some innovative and early stage approaches from BhartiAirtel (India), SFR (France) and Tata DOCOMO (India). 

I presented highlights of this work at the GSM Association's Connected Living Summit in Gothenburg with several communications service providers and technology vendors in attendance. This turned out to be an interesting discussion and several attendees remarked that the scope and value of mobile in the education sector was more promising than they had originally considered.

2012	Presentation at New Digital Economics Conference	M2M Strategies and Business Models

The advent of new value propositions and business models will have an impact on suppliers to the mobile industry, mobile operators and other businesses that are implementing connectivity strategies.

I discussed the drivers of change and implementation challenges linked to these new business model concepts at the New Digital Economics panel on Digital Things 2.0 (San Francisco, 2012). Some of the key implications for companies in the mobile eco-system are the need to:

• think creatively about new value propositions beyond connectivity
• deploy processes and platforms to manage populations of connected devices
• explore partnering as a business strategy to bridge expertise and cross-industry knowledge gaps
• master new skills to orchestrate multi-party supply chains in order to deliver more innovative connected device services
• develop trusted brands which will be essential in a future of multi-sided business models where a core set of device and sensor information can be simultaneously used in services for for multiple customer groups.

2012	Strategy Paper for the GSM Association	Connected Life - The Need for New Business Models

The new application opportunities that connected devices and sensors make possible occur at the intersection of mobile and non-mobile industries. For these ideas to become a commercial reality there needs to be a corresponding level of innovation in business models.

Early in 2012, I prepared a paper on new business models as part of the GSMA's Connected Life campaign. The paper made the point that mobile operators are in a central role to accelerate the connected devices market beyond basic connectivity into areas that: 

•  add a layer of quality to connectivity services via a managed connectivity business model

• expand the portfolio of goods and services offered through a retail entity that functions in the role of a customer stewardship-service model

• facilitate services innovation by encouraging new, data-intensive applications across business silos through a platform innovator business model.  

This work featured at a panel session for Mobile World Congress (Barcelona, 2012) and also at Mobile Asia Congress (Shanghai, 2012).

2011	Strategy Study in collaboration with Beecham Research	M2M - Service Enablement Services (SES)

In order to elaborate on the business opportunities beyond basic connectivity, I co-authored a study in 2011 with Beecham Research on the market for service enablement services. These services allow businesses to launch and manage connected devices through the use of over 110 SES elements which are defined in the study.

The research for this study was based on discussions with SES platform providers and over 200 companies from 7 industry verticals that were in the process of designing connectivity into their products and services. As such, it was the first ever demand-side analysis of this market.

A forecast of the future market opportunity for connectivity subscriptions and service enablement services projected a higher growth rate for SES. This  was due to the fact that companies adopting connectivity were much more aware of the capabilities required to support devices in the field. In addition to valuing these services they also expressed an interest in outsourcing these services.

2010	Report & Conference Presentation for the Telco2.0 Initiative	M2M - Beyond Connectivity

By 2010, the idea of extending wireless connectivity in different types of device was taking hold in the market. Mobile operators were using a variety of approaches to expand their presence in the M2M market including the launch of dedicated business units, changes in their distribution channel strategies, vertical integration initiatives and mobile to non-mobile partnering. At the same time, analysts were forecasting declines in the average monthly revenue per connected device, raising doubts about the commercial appeal of M2M offerings.

I was invited to speak at the Telco2.0 Executive Brainstorm in London about the business opportunities of M2M, beyond connectivity. My presentation outlined the different operational and scale challenges of M2M compared to the handset business model. It also highlighted the importance of processes and platform tools to manage large populations of connected devices and closed by outlining incremental revenue opportunities by extending into new markets beyond basic M2M connectivity.

2009	Report & Conference Presentation for the Telco2.0 Initiative	M2M - mobile panacea for the health sector?

In 2009, the Telco2.0 initiative prioritized developments in the M2M market. In particular, the broadening scope of M2M offered the potential for M2M to enable new business opportunities at the intersection of the health care and mobile industries.

My presentation described $1.2trillion in wasted expenditure that could be targeted through three types of mHealth solutions:

• encouraging changes in patient behavior
• information and operational-efficiency services in clinical environments
• and, operational savings from the improved use of IT.

A video of this presentation is available for viewing here on Telecom TV.

2008	Market Strategy Study for the GSM Association	Embedded Mobile: M2M Solutions and Beyond

The earliest work on new opportunities for connected devices was a 2008 strategy study I carried out for the GSM Association. 

The key conclusion of this study was that the mobile industry needed to move beyond traditional M2M market opportunities and into adjacent industry segments. In particular, connected consumer electronics, health care and smart meters were three key categories that could drive device volumes to levels that would rival the mobile handset business. 

This would focus greater industry attention on innovative service opportunities while the economies of scale from high-volume designs would improve device and service affordability.