With an explosion of mobile devices, the industry is now looking at fresh opportunities that can arise from making these devices communicate. We do a status check to locate India's position in the M2M growth curve. By Heena Jhingan
The day is not far, when the machines will be be intelligent enough raise an alarm and even make panic calls in case the user is in an emergency. This is what the European Commission is trying to achieve through an ambitious plan called ecall that is designed to assist motorists who are involved in accidents. The concept is simpleâ€”a black box is installed in vehicles that will automatically ring up the emergency agencies in the event of a road accident, and send airbag deployment and impact sensor information along with the GPS coordinates to these agencies that can initiate relief work instantly.
This is one basic example of machine to machine applications. Closer home, solutions have been tested to help Indian farmers turn on and off the tube wells in their farms using mobile phones. The ability of any device or machine to communicate via a wireless medium with another has opened up a wide array of possibilities. These includes things like performing diagnostics and repairs remotely, monitoring product (machines) status and usage in real time thereby significantly improving product performance, lowering service costs, reducing downtime and improving customer satisfaction.
In India too, we are seeing an increased interest from the enterprises to at least learn about these solutions, if not invest in them at this stage. The vendors and application developers are making efforts to set the ecosystem right for Machine to Machine (M2M) applications.
A key trigger for the buzz around M2M communications is the fact that, over the last few years, mobility has been one of the biggest game changers, initially with voice and now data-based communication. Vijay Sethi,Vice President - IS and CIO Hero Honda Motors Limited said that today, everyone is â€˜always connectedâ€™ be it on SMS, messenger, e-mail and not just voice. â€œThe target of mobility is today not just human beings but machines as well. As the voice market is getting saturated and ARPUs are declining, companies are also looking for avenues and focusing on data. The M2M space offers a big opportunity as the user organizations and consumers are looking for such applications that will help them improve the productivity of their organizations.â€
The government mandates around automated meter reading, remote healthcare, surveillance are giving these applications a much needed push at this initial stage. The proliferation of devices will rewrite the way that machines communicate. According to Neeraj Arora, Director, Service Provider Vertical, Cisco IBSG, an industry report found that the number of mobile devices was likely to double by 2015 and that the average number of devices owned by each person in India was expected to be three or more. There will be a larger number of machines embedded with M2M modules to facilitate communication between devices.
Basant Jena, Research Analyst, 6wresearch, explained that M2M modules could be categorized into short range, cellular M2M and satellite M2M modules. Short range M2M modules are used where communication is required over a short distance and the mode of communication in that case is mostly radio frequency. Cellular M2M modules enable communication over a long distance over GPRS, CDMA, 3G or 4G networks. Satellite modules are applicable mainly in remote areas where cellular networks are inaccessible.
Unlike European and North American market, the Indian M2M market is still in a nascent stage. Though, primarily contributed by short range M2M modules, the market is now evolving towards cellular M2M and satellite M2M. As per 6Wresearch, the Indian M2M modules market is expected to generate $98.38 million by 2016, with a CAGR of 33.81% from 2011-2016, wherein cellular M2M modules are expected to grow with highest CAGR of 35.32% for the same period and expected to reach $41.54 million by 2016.
Setting the stage
Thejaswi Parmeswaran, Industry Analyst, ICT Practice, Frost & Sullivan, South Asia & Middle East pointed that the ecosystem for the M2M applications market in the country at present is fragmented. M2M equipment vendors, application developers, telecom service providers and system integrators lack cohesion, which is critical for the faster roll out of these applications in the country.
â€œThe sooner these stakeholders come together, the better it will be for the industry. The Internet of things is going to push the uptake of these applications in the Indian market,â€ she said.
Agreeing that the concept of â€œInternet of thingsâ€ was one of the biggest drivers of M2M services, Vijay Anand VR, Global CTO, Machine to Machine Technology, Innovation Evangelist, Logica elaborated that there was a subtle differentiation between the Internet of things and Machine to Machine technology, which is communication between intelligent devices that can be used to get a specific business value.
â€œHere, the technology part is the essentially M2M concept and the value that is derived is Internet of things. Internet of things is a disruptive innovation, a breakaway from traditional business and technology models,â€ he said.
In India, there are basically three broad ways in which the demand for these applications is being served. Anand of Logica explained that there were some off-the-shelf solutions available for players in the finance, automotive and sustainability space
Interestingly, it the consulting model that is coming up in a big way, wherein vendors offer consulting services, depending on specific business challenges of the clients. â€œPlayers like us work in collaboration with clients and other vendors and get into end to end deployments. In this case, the M2M service providers own the end-to-end framework and offer these services on the lines of a SaaS model,â€ he added.
The third kind of a model is where a telco sells the M2M solutions and the vendors engage in building of platforms for M2M enablement for telcos as this a critical layer for them, considering the fact that managing quality of service and billing for M2M is services is quite different from traditional services.
Ashish Gulati, Country Manager, Telit Wireless Solutions pointed out that, in most cases, the M2M module suppliers found it difficult to reach out to enterprises directly. To bridge this gap there is a layer of system integrators.
| || How Service Providers can succeed with M2M applications |
- The service provider will need to make its network into an M2M optimized infrastructure
- Service providers need to have dedicated teams to handle M2M clients like Orange (They offer complete end-to-end bundling right from pre-sales consultancy, geo-localization and pricing)
- From the organization point of view, the operators will need to identify and focus on nice applications
- Integration with the enterprise systems and applications will be required
- Footprint and performance of a service provider will depend in the footprint and quality of services.
Building new business cases
M2M communication systems have been deployed in verticals such as automotive, transport, logistics, security, utilities and banking and finance in India. Although the automotive, transport and logistics verticals occupy a major share of the market, those such as security and utilities are expected to spur growth in the market.
Manufacturing is one of the fastest adopters of technology in these times. Rajesh Uppal, CIO, Maruti Suzuki India Limited, said that M2M applications formed the backbone of production units like theirs. These form the critical interface for the production floor. Telematics technology has existed in different forms such as in-vehicle systems, wireless data delivery, and public safety answering point systems. However, the lack of standardization of communication protocols and diversity of human language are some obstacles that the industry is yet to overcome. Prototypes have been successfully tested with GPRS and in-band signaling over cellular networks. Quite similar to eCall, there are some other solutions that rely on SMS that already exist today from the big car manufacturers such as BMW, PSA and Volvo. Notably, the reach of this class of vehicles is niche. The true potential of these solutions can only be realized with mass deployment. Once this happens, other telematic services such as route advisories and traffic information will change the driving experience
Jena elaborated that the need for implementing smart grids to avoid power loss and theft has enabled the deployment of M2M modules in the utilities vertical. The Rajasthan government has started deploying M2M modules in this vertical so as to capture the data from smart meters. In the automotive vertical, M2M modules are now getting deployed in vehicles so as to provide track and trace facility. Cab operators are now extensively using these modules in their vehicles.
Ciscoâ€™s Arora said that devices were getting smarter rather than just bearing tracking capabilities. The Governments of Madhya Pradesh and Karnataka were already doing pilot projects around remote surveillance and remote healthcare.
â€œAn interesting development is that we are working with large real estate players to make smart buildings using building automation applications. The real challenge lies in developing solutions for small grocers and micro-finance companies where the impact can be huge,â€ he said.
Make way for the telcos
Cellular M2M is expected to gain a significance presence in the Indian market for the simple reason that service providers have stabilized their 2G/ 2.5G networks and are now implementing 3G networks across the country. The larger mobile operators such as Vodafone, Airtel and Reliance have already started working on this aspect. While Vodafone has been selling M2M solutions as telemetry (vehicle and employee tracking), location tracker and security solutions, Reliance is focusing on high impact M2M applications for the rural market. These are mobile applications that aid automation, surveillance, remote monitoring and data gathering.
Indian operators are focusing on the rural market and on developing applications that enable the automation of agricultural and irrigation services, water level monitoring and data gathering for milk and agricultural cooperatives, fisheries, poultry and soil analysis. However, for the urban market, the opportunity lies in mobile ticketing, purchasing in kiosks, vending machines and the remote monitoring of office automation products. Both Reliance and Airtel have been competing to get their share in this space through metering applications.
In the present scenario, cellular M2M looks to be the most promising option thatâ€™s available in the country, given the mobile penetration. In the recent past, we have seen revenues from voice shrink and since service providers cannot keep selling SIMs to humans, they have to look beyond them. Machines are the obvious alternative.
Parmeswaran of Frost and Sullivan said, â€œThe service providers will need to strategize. They will have to come up with a comprehensive portfolio of services, enter into partnerships to build internal capabilities in terms of strengthening their networks and building their billing platforms. Service providers lack the knowledge of selling these solutions. As competition increases, service providers will need to transform themselves to be able to deal with a managed mobility application environment,â€ he said.
As of now, enterprises have been unable to attach an immediate value to investing in M2M services. Moreover, there are no established use cases.
The pull back
Industry observers said that telematics had existed for over 25 years in the form of satellite communications. However, the kind of communication between machines that the industry was now talking about had more to do with real time information exchange and the solutions that were applicable to day-to-day processes of businesses and individuals.
Anand reasoned that M2M applications were not domain-specific. â€œSo we cannot have a specific application across. It is an immature market. The concern is that what is the business benefit that can be earned by making an investment in these solutions. One has to rationalize the investment on an expensive solution. These days were are seeing deployment of these solutions for tracking high worth articles in jewelry or big machinery lease businesses.â€
He said that the industry was looking beyond tracking. â€œWe have already conducted a successful pilot run with an insurance company on a pay-as-you-drive solution.â€
Ciscoâ€™s Arora said that the lack of synergy between various stakeholders had lead to most of the deployments ending up as being complex, standalone and expensive.
Most importantly, a good policy framework is required to make these efforts successful. As already seen in the case of AMR, it has mostly been driven by the APDRP mandate to curb power loss and theft. The government will need to come up with stringent enforcement measures. The government of China has laid down its own strategy for the Internet of Things. Some industry experts felt that India too needed to frame a similar national strategy to leverage the technology and, with state-run initiatives, we might hear the machine babble getting louder.