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Mobile & Wireless
M2M reality check
Mission-critical B2B applications bring unique requirements and challenges
by Alex Brisbourne, President and C.O.O., KORE Telematics
With large wireless carriers now jumping onto the M2M bandwagon, it’s tempting to brand the market as rapidly maturing. Indeed, carriers leveraging their networks to serve consumer devices like the Amazon Kindle or Barnes & Noble’s The Nook have clearly warmed to the fact that these apps can yield high visibility and even revenues with relatively little effort. While the carriers’ entry into the M2M market should be applauded -- their success will benefit all industry participants -- overzealous carriers and industry pundits may benefit in the long run by taking a momentary step back for a reality check.
Wireless providers may see M2M as an easy way to add millions of new network connections, but there’s a lot more to the average application than simply plugging in a SIM card and signing a wireless data plan. Mission-critical business to business applications, which represent a substantial and growing portion of the M2M marketplace, bring unique requirements and challenges that go well beyond the basic connectivity of a Kindle.
Suffice to say, with M2M, the devil is definitely in the details. The way wireless data delivery is sold and billed often does not fit directly into the M2M model. For example, applications that remotely monitor pacemakers or sleep apnea patients may appear attractive because each cumulatively represents thousands or even tens of thousands of potential end point users. But such applications consume a very small amount of capacity. In fact, many of the devices use only ½ megabyte of data in a month, or 10 to 15 kilobytes a day.
Further, many M2M devices do not have a 12 month duty cycle. A sheriff’s department with a shelf full of offender tracking bracelets may only need them to be active on-demand. The owner of a trucking fleet may rotate vehicles in and out of service, with each vehicle averaging only 40 weeks of active duty.
End-users of this ilk are bound to ask, “Why should I pay a flat fee for an entire year of usage?” They want, in fact they demand, the flexibility to pay only for only the network time they consume.
A carrier can certainly revise its billing system to accommodate M2M, but at what cost? How much can they be expected to invest in order to support an application that generates $3/month, or less, in revenue with a relatively slow ramp time, vs. sticking with devices like the Android phone that generates upwards of $60/month?
Application providers also require experienced M2M support specialists who can get them up and running quickly. Making sure an application works end-to-end takes people with the skills to 1) ensure the devices are part of an effective design, 2) develop and oversee customized pre-launch application testing, and 3) perform remote diagnostics and troubleshooting after the application goes live.
Customized, self-service business management tools and services are also critical ingredients. A small vehicle tracking start-up with two or three customers may at first use an Excel spreadsheet to organize its billings. However, as it grows, the company will need to track and bill its network use by industry segment, customer and even service level. It will need tools to ensure proper maintenance of rate-of-usage and to check for faulty devices and/or fraudulent use; if a device malfunctions or consumes more network time than is expected, customers will expect an automatic alert. The provider might even choose to process its monthly use data with a SaaS-based, third-party billing platform.
All of these activities call for a “smart” management platform, whereby application providers and end-users have Web-based controls to check the status of a device and determine its location at any time, whether it is active in the network and the last time it established an IP session. Such a portal also allows the provider to deactivate faulty devices, or provision new ones at will. A sheriff’s office, for example, may also want to upgrade to a newly developed ankle bracelet that facilitates voice communication with the offender.
Last, but certainly not least, mission-critical M2M applications require absolute 24/7 reliability, especially in the law enforcement, security and healthcare fields. Notwithstanding carrier claims, no single set of network resources can consistently establish and maintain this required level of connectivity. M2M users increasingly demand a total package with seamless CDMA and GSM technologies on a single platform, and the network must serve a global customer-base with specialized, cross-border arrangements.
At the end of the day it is difficult to be an extremely competent generalist. Specialized skills and relationships, which are difficult and costly to replicate, will always be required to serve the M2M market effectively. Not every carrier will be able to meet the end-to-end needs of every application, nor should they want to. Instead, M2M is uniquely positioned to benefit from specialized network operators. Not only do carriers more directly get what they want – profitable airtime service revenue without incurring the cost of support and acquisition – but enterprises and ASPs get the level of reliability, service integrity and skills necessary to ensure the health of the application throughout its lifecycle.
Alex Brisbourne is president and C.O.O. of KORE Telematics. He has more than 20 years of experience in the networking and telecommunications industry, in Europe, North America and Asia. He has lead numerous wireless, enterprise and fixed line service companies and currently sits on the Advisory Board of several technology companies in the USA and Canada.
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