Navigating M2M

Is M2M Important to the Carrier? A Rant of Sorts�

By James Brehm, CEO and Chief Strategist  |  November 13, 2014

Earlier this week, I was asked by someone if I would comment on “if M2M is important to carriers”. This question comes up more often than I would expect. Oftentimes in meetings with hardware companies, they ask me if carriers are serious about M2M. In discussions with carriers, they themselves talk about the differences in ARPU between smartphone and M2M pricing. Distributors and systems integrators find themselves vexed by the question. And I don’t even want to get into the discussions with software guys…

And this has spawned many a debate. Yes, I know it seems weird that I would find myself in a debate with a customer. All the while I asked myself, “Are you kidding me?”

Not only is M2M important to carriers, it is critical that carriers understand the magnitude of its importance.

Let me start with a brief history lesson. Companies like AT&T, Verizon and Sprint (News - Alert) began their lives as telecommunication service providers. It was a time when voice was king. People wanted to TALK to people, no matter where they were. InterLATA and intraLATA tariffs were common terms. Long-distance companies would send customers checks in the mail just to switch service providers. And people would pay a premium for quality of service.

But there was a massive paradigm shift.

It started with the Internet. People started browsing, then chatting, in user groups, and then through e-mail. About the same time, mobility came into being. People would instant message from a computer, or hold a Skype (News - Alert) call if they could. This would save them money on long distance. Then they began to text from mobile phones. And BlackBerry enabled mobile e-mail. Then we got smartphones, touch screens, speech-to-text, OnStar, Sync, and the list goes on.

All the while, data usage increased and voice usage declined, all to the point of where voice doesn’t matter much anymore. Meanwhile, companies like Apple (News - Alert) and Google went over the top, moving up the food chain to capture high margin services.

Companies like Verizon, Sprint, and T-Mobile (News - Alert) cannot sustain themselves as legacy voice services companies.

Do you hear that? (It’s the sound of a pin dropping.)

Sorry, I had to use an old Sprint line to get your attention, but voice is dead. Internet 1.0 is dying.

People now use the tablet, smartphone, or phablet as a consumption device. And at first there was a one-to-one ratio of devices to people. But as tablets became more affordable, the number gets closer to two to one.

As cars become more connected, the grid becomes smart, and home automation becomes a reality, will the handheld tablet of today remain as relevant? Or will people consume data differently…in connected cars, as digital signage, at a kiosk, etc.?

How will connected devices and sensor information be used?

Right now, you might have a smartphone, a tablet, a connected car, a connected home, a Fitbit, and 20 other connected items. But those devices added together and usage patterns from them become your own unique identity.

When sensors and devices merge with identity and contextuality, relevance becomes a reality.

Telcos now are not the telcos of old; they are now the onramp to the cloud. And we’ve entered an era where every device that can be connected to the Internet and other devices will be connected to the Internet.

We are in transition, from a world where the phone number was a physical location and you dialed a rotary phone literally making sparks (much the same way early cavemen made fire) to complete a call to a hyper-connected world where sensors talk to sensors, machines talk to machines, and more important than voice quality is data – big data – relevant and contextualized data that flows across the network.

The Internet of Things and M2M are for real. Connected devices and connected data are the new kings.

Moore’s Law has met Metcalf’s Law. And they liked it!

Devices are smaller and smarter now than ever before. The ability to gather data from every thing that contains a microprocessor andconnectivity is the Internet of Things, or IoT.

Telcos are not moving fast enough to help their customers realize the opportunity.

The reason you should care Mr. Carrier, is that the only reason customers are deploying devices andsensors is to get to the data.

It isn’t the network.

And for most customers today, this is not easy.

And while it isn’t easy, it is an opportunity for telcos (who have been using big data for years) to transform, to not be seen as dumb pipes, to not be displaced by the Apples and Googles of the world for a position on the value chain.

By anyone’s measure, IoT is a massive opportunity. In fact, it is the biggest opportunity in the history of technology.

James Brehm is founder and chief technology evangelist at James Brehm & Associates.

Edited by Maurice Nagle

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