The M2M sector, if it is a sector, is characterised by vast diversity. The types of devices that benefit from the application of connectivity is almost unlimited, including cars, electricity meters, fridges, industrial containers, heart-rate monitors and refuse bins, to name just six examples. So the starting point of M2M is diversity. However, it is not just the type of end device that is diverse, so too are the different constituent characteristics of the application. Picking any one of dozens of different characteristics of any application you will find that each has different requirements. This is critical to the way that applications are supported.
Consider, for instance, security. Some M2M applications demand substantial levels of security: healthcare information, or any application that involves credit card payments, for instance. For some applications it is almost unthinkable that the device should be insecure. For other M2M applications, the required level of security is very low. For instance, controlling access to bus or train timetable or location information is much less critical if this data is made publicly available as a matter of course. Not only does this disparity have implications for how an application would be provisioned, it also has implications for which technology might be the appropriate one to use and which companies might be able to address it. Furthermore, in the case of security, the very diversity may have implications for how anyone across M2M might think about security. The sensible approach is to focus on end-to-end application security appropriate to the application, rather than securing the different elements in a standard way which might impose either excessive obligations, or a lowest common denominator approach to security.
Turning to another characteristic, location will also substantially influence how an M2M application is provisioned. Those devices that are more widely geographically distributed will tend to favour public networks, and will thus require a service provider of some sort. Those that are less distributed will tend to favour private networks. Movement can also have an impact on the technology choices available. Devices that move will be unlikely to be able to take advantage of fixed connections. Devices that move a lot, such as cars, will necessarily require cellular technologies with the ability to hand over between cells. The choice of technology will naturally have implications for which companies are able to sell the solutions and which players may need to be involved in the value chain.
A third characteristic (of many) is application complexity. Some M2M applications require only the simple gathering of sensor data, as might be the case with a humidity sensor or home weather station. Other applications are more complex and might be tightly integrated with a company’s business processes, for instance cold chain transportation, or with complex interacting elements as with an intelligent transportation system. Again, there is a diversity of complexity. Not all organisations are able to support the development and management of each of these types of applications. For instance a systems integrator might be required for the more complex.
These are just three examples of where different characteristics of applications are very diverse. There are any number of other cases, relating to factors such as access to power, duty cycle, data volume requirements, price sensitivity, billing requirements, device integration, and need for complex analytics. Each of these, and many more, will determine which companies are well placed to support which applications. At the beginning of January Machina Research made its ten predictions for IoT and M2M in 2015. One of these relates to the greater criticality of segmentation. Companies across the value chain will need to get much better at targeting those sectors of the market where they are particularly differentiated. This requires more sophisticated segmentation, which requires a more granular consideration of the different attributes of M2M applications to understand those areas where the organisation has a competitive advantage.
A further implication is that the idea of the ‘niche horizontal’ will start to become a dominant theme. Up until now the M2M market has been dominated by major industry players addressing substantially the entirety of the market. Smaller players entering the market will naturally look for ways to differentiate by developing specific capabilities.
The mass market phase of M2M (and IoT) adoption will be characterised by this more differentiated approach, addressing a few particular types of applications with particular, otherwise underserved, requirements. What is certain is that every player in the M2M value chain will need to give greater consideration to the characteristics of M2M applications, or what we have termed the ‘DNA of M2M’.
It is this issue that led Machina Research to develop its DNA of M2M study, released on 27th January 2015. The study is available via a web interface on our website, along with an explanatory Research Note. Within the study we have assessed each of the 27 identified DNA characteristics for each of the 180 different M2M applications that we forecast, and attributed one of 104 complexity ratings for each of the resulting 4,860 DNA strand/ M2M application pairs. We have termed these underlying characteristics of M2M applications to be the ‘DNA of M2M’ applications, and we have developed this interactive web interface to allow users to view the M2M opportunity from the perspective of their key strengths and capabilities.
