The cellular M2M market is chasing scale for both connectivity and applications enablement to get the costs down. By Ian Scales.
According to ABI Research, which has just completed a report on the matter, cell M2M is on a charge. We all know the sort of numbers being quoted - ABI thinks the market will rise from around 110 cumulative connections last year to 453 million cumulative connections by 2017, which is all well and good. But the health of this market won't depend on those raw numbers, but on how elegantly both the connectivity and the M2M applications can be managed. Getting the per connected unit costs down as the numbers and the complexity goes up is what the game is all about.
ABI says that the complexity of cell-based M2M is a real challenge for both the network operators, trying to build a profitable service tailored to the M2M market, and to the application developers and service providers who need to see big progress on all fronts: costs going down along with time to market and the development of robust environments to build services and applications on.
It charts the emergence of what it says are two key M2M software platform markets: connected device platforms (CDPs) and application enablement platforms (AEPs).
CDPs handle the cellular connectivity and management piece while AEPs provide an M2M applications environment and enable remote device management.
In theory there should be a lot of scope for AEPs to really bear down on the crucial cost and time to market metrics by enabling a growing body of 'write it once, re-use it often' code at both the generic and vertical market levels. Not having to reinvent the wheel for each project is perhaps the most important way forward for cell M2M (well, any M2M in fact).
ABI points out that the large MNOs have tended to build their own CDPs, seeing these systems as core differentiators within their OSS/BSS estate. Increasingly, though, the CDP market has become more COTS-like (commercial off-the-shelf) with platforms offered by the likes of Jasper Wireless, Ericsson, NEC and NSN. It says these solutions will be the favoured approach for MNOs now coming to the market.
"Core CDP functionality is going to become an increasingly commoditised aspect of the network, better left to third parties that can amortise development costs across multiple MNO customers," says ABI practice director Sam Lucero.
The small and still-forming AEP market, however, is expected to "grow quickly as application developers seek to offload core functionality, such as data normalization, data modeling, and providing a rules engine, onto third-party platforms, rather than developing the application on a completely customised basis," says Lucero. Again the key is to get costs and time-to-market down.
The leading "pure-play" AEP vendors include Axeda and ILS Technology. These companies are expected to help the AEP market grow from about $168.9 million in 2011 to nearly $1.72 billion in 2017.
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