The telecommunications industry has come a long way since Lily Tomlin’s iconic skit of telephone operator Ernestine accurately captured the frustrating experience of most customers. Savvy communications service providers (CSPs) have long known they need to move past their core competency (i.e., the network) to embrace business model that will delight customers in the digital age.
‘Over-the-top’ vendors like Google, Amazon, and Apple have been quick to use their digital platforms to create revenue-generating services. But the truth is good old CSPs are sitting on a gold mine of data if they have the means to capture it for their customer’s business value.
We’re talking about the huge opportunity offered by machine-to-machine technology (M2M), aka the internet of things. Cellular M2M connections will grow from 277 million in 2012 to 2.5 billion by 2020. That’s the central premise behind the Global M2M Connections Market Forecast & Analysis report from industry analyst firm, Strategy Analytics. These analysts think mHealth, the smart grid, and telematics applications will lead the charge.
Sensors are ubiquitous and some think they are the next technology frontier. Networked machines able to exchange data and take action without humans can boost productivity and customer satisfaction faster than any outsourced call center. Valuable information can be had from everything from parking meters and vending machines to printers, coffee machines, and security infrastructure. Gartner predicts that by 2020, there will be over 30 billion connected
things, with over 200 billion with intermittent connections.
Already, many drivers can’t live without their GPS navigation, feel safer with automated roadside assistance, and depend on service alerts that prevent unexpected breakdowns. Smart meter readings offer utilities and consumers energy and cost savings. Health care professionals are also exploring ways M2M can help save lives and lower costs. For example, patients can ingest smart pills that record body changes, indicate if a patient has taken
medication, and measure the impact of medications. According to M2M Magazine, Global telehealth revenues will grow 55% in 2013.
Admittedly, M2M is still emerging and raises complex issues about privacy and security. And, the wacky quotient is high in some circles as seen in “7 Craziest Things Connected to the Internet.” But amidst the hype, many companies are quietly laying the groundwork for leadership. CSPs like AT&T, Verizon, and RACO Wireless are releasing M2M offerings they announced at CTIA Wireless 2012. Ericsson and SAP AG just announced at Mobile World Congress an agreement to jointly market and sell cloud-based, M2M solutions and services to companies through operators worldwide. By teaming up, Ericsson and SAP aim to help businesses run better by fixing machines before they fail, servicing remote locations faster, automatically ordering inventory before there’s a shortage, and much more. While CSPs may not be built from the ground up for the digital age, they can partner with software and infrastructure providers to help power the next business revolution with M2M technologies.
This post originally appeared in Forbes SAPVoice.
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