Automation is bigger than you can imagine

The Machine to machine market is generating a lot of buzz but we have only scratched the surface of the M2M revolution.

There certainly is a lot of interest in the Machine to machine (M2M) market. Telstra has proudly announced it now has more than one million M2M connections, and we hear similar success stories from around the world.

But what we are seeing is only what is happening on the surface. Most of the M2M activities are taking place unnoticed and their numbers are many times greater than those being put forward by researchers and services companies.

The reason for that is that M2M – or automation as it was called then – has been under development for more than two decades. The problem, however, was that the technologies were expensive and connectivity was difficult. Both of these issues have now changed – technology has become dirt cheap and mobile operators have opened up their networks and are offering services based on costs that make M2M deployment far more affordable.

In many situations including an M2M capability in a new product or service adds only one per cent to the cost. Retrofitting, of course, is a rather different matter.

Streamlining automation

So what we now see is that many organisations that have been involved in these automation processes for many years – and who therefore have a very good understanding of what they can do with M2M – are now speeding up their deployments. These include manufacturers, the mining industry, transport organisations, infrastructure organisations and so on.

Furthermore, all new electronic devices are now M2M devices. Tens of millions of smart meters have already been deployed by the electricity industry, with literally hundreds of millions of them in the pipeline. The recent acquisition by Google of NEST, the manufacturer of smart home devices such as thermometers, will see another explosion of M2M devices.

Healthcare is another key industry. All new hospitals now operate large-scale M2M operations, tracking their equipment with real-time information of what is where. Telemedicine is another area, with smart pills providing a far more effective treatment – 21 billion pills are consumed each year in Australia alone.

Most municipalities understand the need for smart cities. With more people moving into cities in which the city centre can’t increase its size the question is how to handle more movements, transactions and activities within a limited space. Over the last 20 years most councils have invested massively in mapping their assets; this is now being followed up by adding connectivity to these assets – whether it is streetlamps, drainage, sewerage or trees, all are in the process of becoming part of a smart city.

Other developments:

  • Before the end of the decade all new cars will be connected devices as well. Google Car and GM Onstar are some of the best-known examples here.
  • Streetlight automation has now spread to the home with several very innovative products on the market, such as the Philips Hue Connected Bulb.
  • Rolls Royce engines are informing their owners about their performance.
  • The traffic lights of Transport for London, which are connected to self-learning algorithms and this way work with each other, saved 15 per cent in traffic delays.
  • The whole mining industry is being transformed by the Internet of Things. Self-driving machines, continuous measurement, remote control of machines. Machines are now built around their sensors. Rio Tinto attributed a $90 million saving to M2M.
  • Robotic warehouses are another development, with Amazon being perhaps the most visible one. The world’s largest robotic warehouse for e-commerce is currently under construction in the Netherlands for mail-order company Wehkamp.

One of the fastest growing M2M markets is that of the smartphones and the tablets. All of these devices are connected and, as we can already see with the many apps that are available, they have an enormous capacity for a wide range of M2M applications.

So, if anything, it is likely that most of the research data you might read in relation to M2M is greatly underestimated. This truly is a revolution.

The challenge now is how to best interconnect these systems. In the past systems were built around certain questions that were asked, and this formed the basis for a system that would provide the answers. This is no longer the case. These systems are now interconnected and clever people are needed to look at all that big data, see what it tells us and take it from there.

Early adopters of such connected systems report daily about ‘wow moments’ – finding out things about their organisations that they did not know, and thus enabling these organisations to be more effective and efficient. Half of the costs of M2M projects is in relation to this system integration process; in contrast 10 per cent are network costs, with applications and management split roughly equally to make up the remaining 40 per cent.

This is an edited version of a post originally published on March 24. Paul Budde is the managing director of BuddeComm, an independent telecommunications research and consultancy company, which includes 45 national and international researchers in 15 countries.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles