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Challenges in M2M

While the M2M market is growing rapidly today, there are quite a few challenges that enterprises and telcos have to overcome while deploying / commercializing M2M solutions and services today.  In this blog, we look at such challenges and possible ways to overcome them:

Technical challenges:

       Scalable M2M infrastructure and network

       Explosion in data volume from a large number of devices affect throughput and storage space on the M2M infrastructure and network.

       Increased network traffic and load on the M2M infrastructure due to large data volumes from devices.

       Standardization, interoperability & governance

       Currently no single global set of standards exist for the IOT and M2M technologies, devices, platforms, and solutions.

       Interoperability issues between devices following different standards pose significant challenges for M2M application developers.  Adoption of Zigbee standards is becoming more prevalent in the industry today, though differences in implementation of Zigbee profiles among vendors still pose a challenge for interoperability.

Making use of gateway devices with 'edge intelligence' can help address the issues of network traffic and data volumes to some extent.  In addition, a flexible and scalable M2M middleware that can be used to integrate a wide variety of devices following diverse protocols & standards will be of tremendous value.

M2M Platforms and Middleware

       High licensing fee and TCO of commercial M2M platforms

       Many commercial M2M platforms in the market today are comprehensive in features and are highly scalable, but come with high licensing fee and high TCO. 

       High upfront investment on an M2M platform, where the market is not mature involves significant risks for enterprises and telcos who wish to invest in M2M.

       Commercial platforms are not suitable for early stage exploration / innovation activities

       Typically, 9 out of 10 M2M ideas never make it to the market.  Therefore, high licensing cost of commercial M2M platforms make it unsuitable for early stage exploratory / innovation activities - where a new M2M idea/application needs to be rapidly prototyped, field tested in the market for technical and business feasibility before being launched commercially.

Light weight and agile M2M platforms with the ability to scale incrementally (as per needs) and having low TCO is much sought after in the market today.

M2M Value Chain

       Complex value chain

       The IOT value chain comprises of multiple players, each specializing in different applications, devices, platforms, middleware, vertical specific applications, etc.

No single player can deliver a complete solution.  As such, forging strategic partnerships with different members of the M2M value chain is important for going to market with M2M applications and solutions.

Industry Adoption and Business Value

       Business process & efficiency

       Enterprises are not always clear on what benefit they can derive from deployment of M2M application & services.

       Addressing the right business problems

       M2M technologies are not always necessary for solving all types of business problems.  The challenge is in identifying the right business problems that can be solved by M2M technologies.

       Privacy & security

       Enterprises have concerns about privacy & security of enterprise data on public cloud.  Many still prefer on-premise deployments though cloud deployment can save them on capex.

Co-creating M2M apps & services with clients/customers, and launching the service on pilot basis to validate viability / market acceptance will go a long way in gaining customer confidence.

Cost & ROI

       High cost of end devices and long payback period for M2M solutions and services pose significant challenges for early adoption by enterprises / customers.

Finding ways and means to reduce the burden of upfront investment for the customer is important.  Leasing, or renting of M2M devices, equipment, etc. can reduce the burden of upfront investment for the customer.  Customers can also take advantage of tax rebates and incentives (especially those that are related to "Green" solutions) offered by various governments when deploying M2M solutions and services.

Monetization - M2M Business Models

       Telcos are not clear about the market potential for several new M2M apps & services, and are still taking baby steps while investing in M2M.

       Monetization is a key challenge in the M2M area.  For some M2M apps & services, it is not clear what is the right business model, who pays for the service, what is the opportunity size, etc.

Identifying the right business model is the key to the success of M2M apps & services.   Telcos today are finding innovative ways to deal with this challenge.  For example, some telcos are building financial transaction right into an M2M application so that they can monetize on the financial transaction made by the end-user, even if they can't charge the enterprise customer for the M2M service itself. 

Licensing, Pay-as-you-go, revenue sharing, subscription model, etc. are some of the models that are prevalent today.

 

 

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