Several weeks ago, I attended the AxedaConnexion 2012 industry conference as a panelist for a discussion that explored next-generation connected products and M2M solutions. Axeda is a Wipro partner and offers a compelling M2M platform. The event was well attended with participants from AT&T, Cisco, SAP, SalesForce and many other influential players in the M2M market.
I am a believer in M2M, but caution that the market will not take a big leap forward until compelling industry specific applications emerge. These types of solutions will require tight integration with business systems.
The growth in connected devices and the potential of this market is undeniable. And with a Telco-Media Industry that is desperate for new sources of revenue, the hype surrounding M2M is understandable. Yet, adoption has been slow. I believe there are four factors that have held back market growth:
- The complex eco-system has scared off potential adopters: The presence of a diverse set of stakeholders – such as network operators, device vendors, software vendors and system integrators – requires a large number of players to come together to develop a single solution. Potential adopters are overwhelmed with this challenge and are unable to take a holistic, solutions development view. Put another way, the landscape is highly fragmented and few leaders stand out from the crowd.
- The absence of enterprise ready applications: Let's face it; enterprises don't buy shrink-wrapped applications. Every enterprise is different and will have its own concerns in embracing M2M. To give an example, how will new M2M systems integrate with enterprise ERP systems, and by extension, the supporting business processes? A data warehouse utility that enables a turnkey approach would address much of this concern, but today, such a utility is still a pipe dream.
- Post-deployment management: Potential adopters must also worry about post-deployment management. This is not for the faint of heart and requires support processes for device operations, business operations and IT/cloud operations.
- Lack of a proven business case: Last but not least, enterprises are still unclear how investments in M2M today will create more revenues and cost savings in the future. A strong and established business case for M2M is still elusive for many. And with the very real CAPEX constraints faced by network operators today, investments will not come until the returns are clear. The business case may be transparent for high value products and services, but is more obscure for a majority of applications.
In summary, I perceive a disconnect between technology and business solutions. Telecom operators will not embrace the existing industry silo-edM2M approach and will need to rollout a managed end-to-end solution that enterprise customers prefer. M2M should not be treated just as a business application but as a platform that can unlock a new source of financial value for operators.