What is M2M?

Why is it important?

What’s the business case

Why is it a well-kept secret?

How does it work?

How to choose a solution provider

A concise, non-technical overview of the “Internet of Things” Written by Bob Emmerson, Freelance Writer & Industry Observer

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Rationale This paper reflects my M2M learning curve. I have a background in wireless communications and enterprise IT, so the technology wasn’t a problem. But I struggled with various aspects of this interesting and innovative industry. Some of the terminology was confusing, e.g. “MVNO” and “Platform” have different meanings in the M2M space to those in telecommunications and IT.

The multi-vendor value chain was clear, even though it is somewhat complex and fragmented, but it was hard to discern which vendor took the leading role, i.e. who was the solution provider? And to be really honest, I couldn’t understand why the network, particularly a so-called next generation network, couldn’t perform the same tasks as a middleware platform. (It’s “so-called” because, by definition, a next-generation anything is always on the horizon.)

Anyway, I found answers to all my questions. The learning curve goes on, but I’ve learnt enough to create what I hope will be an informative short cut to this fascinating topic. It also includes my thoughts on choosing a solution provider.

Bob Emmerson: bob.emmerson@electric-words.org www.electric-words.org

Contents Q1: What is M2M? p.3 Q2: What is important p.3 Q3: What is the business case? p.4 Q4: Why is it a well-kept secret p.4 Q5: How does it work p.5 RFIDs and sensor networks p.6 Typical business cases p.7 It’s becoming a very big business p.8 MNOs and MVNOs p.8 Middleware platforms p.9 Embedded SIMs p.10 Embedded Wireless Modules p.10 Virtual Private Networks p.10 The Business-to-Business sector p.11 The Business-to-Consumer sector p.13 Security: a key issue p.15 Integration with back-office systems p.16 How to choose a solution provider p. 17 Conclusions p.18

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Interesting M2M applications:

A homecare application sends medical data on elderly patients at regular intervals, e.g. every 15 minutes. But if the data exceeds a pre-set limit then local intelligence kicks in and an alarm is sent immediately to the patient’s doctor.

“Energy harvesting” sensors take power from their surroundings, e.g. from linear motion, light, or differences in temperature. The energy obtained is enough to send wireless signals short distance and perform tasks, e.g. turn lights on and off.

Roadside sensors detect stationary vehicles caused by traffic congestion. They send the data to the roadside station, which transmits it to the individual vehicles. Drivers hear an alert, e.g. “Congestion ahead, drive carefully.”

Dial a taxi service and see the location of the nearest vehicle on your smartphone. Track its position in real time.

Q1: What is M2M? The term M2M is somewhat prosaic and at times it’s confusing. It stands for Machine-to-Machine, but the acronym doesn’t do justice to the breadth and depth of the communications concept it represents. Before looking at that concept let’s expand the term.

One definition goes like this: M2M connects people, devices, and systems and turns machine data into actionable information. Leave out “machine” and it works just as well. The reason why machines are there is historic: M2M started out on factory floors.

Here’s another: M2M uses a device (sensor, meter, etc.) to capture an "event" (temperature, inventory level, etc.), which is relayed through an IP network (wireless, wired or hybrid) to an application (software program) that translates the captured event into meaningful information (e.g., items need to be restocked). It’s long, it’s precise, but it’s easier to recall a picture:

Figure 1. The premise is simple. Capture data, transmit the data, and then analyze the data.

OK. We’ve defined that we mean and it’s clear that it’s hard to come up with something more succinct. The closest is probably “The Internet of Things”, but what’s in a name? A rose is a rose is a rose.

Q2: Why is it important? M2M’s importance depends on your perspective. As a consumer it can and will reduce the amount you pay to the utility companies: electricity, gas and water. Bills are reduced by minimizing wastage and by taking advantage of off-peak tariffs.

As the owner of a fleet of vehicles you need to know their location, but also to be able to pinpoint it on a national or international map. That way the nearest vehicle to a pick up point can be dispatched immediately.

As a concerned individual you will want to be assured that an elderly relative is taking their medication every day. Wireless pill dispensers enable this potentially life-saving objective.

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There are no 800-pound gorillas like Cisco and Microsoft in the M2M space: no obvious market leaders.

As the marketing director of an insurance company you appreciate the value of in-car sensors that monitor g-forces and indicate contact areas when there’s an accident. It’s used to minimize exaggerated claims, e.g. for whiplash.

As a concerned citizen you will appreciate the way smart meters allow you to monitor minimize the energy you consume. These devices are also being used as entry gateways to tomorrow’s network homes.

You surely get the picture and it’s a very big picture. It’s also a healthy, fast-growing sector that impacts on the personal and business aspects of our lives in myriad ways.

Q3: What’s the business case? The M2M market is both challenging and rewarding. Challenging because of the relative complexity of the value chain, rewarding because the benefits are significant. M2M solutions are deployed in order to reduce costs, save time and improve operational efficiency, a combination that boosts bottom lines.

M2M has the proven ability to deliver these benefits, as evidenced by its robust growth during a time when the economy was weak and investments were on hold. And they are being delivered right across the economy in numerous Business-to-Business (B2B) sectors.

In addition the Business-to- Consumer (B2C) side of the industry has taken off, fueled by the rapid uptake of smart devices like the iconic iPhone. Innovative products are hitting the market and we are also witnessing groundbreaking services like augmented reality navigation and assisted living in the home. More information comes in the “Typical business cases” section.

Q4: Why is it a well-kept secret? The obvious answer is the term; it’s not readily understood, which is why many vendors don’t use it. M2M works within the industry, but it has to be explained to the market.

Another reason is the application diversity. The B2B sectors include: automotive; buildings; smart energy; homes; healthcare; industrial and infrastructure; transportation; retail; networks and security.

This indicates that one cannot talk about the M2M market: it’s virtually impossible to establish an identity that embraces the diverse manifestations. Moreover, it’s hard to keep up with the developments and the deployments, which are proliferating at a fast and furious pace.

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The value chain is complex because different players can take the leading role. A company that is active in a sector such as healthcare might recognize a business opportunity and partner with third parties in order to realize a solution.

Alternatively a major systems integrator may decide to deploy its IT skills. This is what IBM did; in this case the sector was the smart electricity grid.

Application software providers will always play a key role and in some cases they will be the lead player. In others it could be the vendor of a middleware platform or a mobile network operator.

More information on SIMs and VPNs can be found in two later sections.

None of this is rocket science, but a lot of different technology is employed.

Q5: How does it work? There is a clearly defined value chain and a typical solution can involve five or more vendors, so it is somewhat fragmented. However, there is nothing intrinsically complex about the technology.

The chain starts with sensors and ends with applications. Sensors are used to measure parameters (temperature, pressure, pollutants, etc) and monitor movements (e.g. machine parts). Sensors that employ energy-harvesting technology can operate independently, e.g. switch lights on and off and they can communicate directly with other sensors over short distances. However, an embedded module is normally used to transmit the measured data and in a wide-area scenario the communications medium will normally be a cellular network, e.g. 2.5 or 3G.

Application software running on a so-called middleware platform is used to convert raw data into useful information. For example, the application might display the location of vehicles on a map or it could aggregate the input of tens of thousands of smart energy meters and transfer the result to a back office system. Figure 2 shows a generic solution.

Figure 2. Device and machines, e.g. smartphones, vending machines and vehicle telematics solutions send raw data to middleware platforms, which host the application software. Schematic courtesy Telit.

Robust SIM cards are embedded in the wireless modules. They identify devices in the same way that a regular SIM cards identity phones. However, they are data-only, long life cards and they are designed for use in tough environments. GPS chips are also embedded in these modules for location-centric applications, e.g. fleet management.

The devices have static IP addresses, i.e. they do not change. This allows the devices to operate over a virtual private network (VPN). These VPNs employ public networks but the communications links are not shared, which means that access is secure and the communications service can be managed.

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RFID: Radio Frequency Identification

RFID tags can be active, i.e. there’s a battery and it can transmit signals autonomously. Passive RFIDs need an external source to initiate signal transmission.

RFIDs and sensor networks The earlier definition of M2M is valid for the regular value chain and the solutions that are employed in the vertical sectors listed earlier. However, it does not apply to solutions based on RFIDs and sensor networks.

RFIDs are electronic tags that can be deployed in a wide range of applications that do not need wireless modules. In this case the ID of the tag is transmitted over a short distance using radio waves to an RFID reader. Cellular networks can be employed when distances are longer. Sensor networks work in a similar way.

Organizations employ RFIDs to identify and manage their assets. They can be incorporated in mobile phones to enable point-of-sale purchases, i.e. credit card information can be stored and bank accounts directly accessed. They are widely used for electronic toll collection at tollbooths. The tags can be read remotely as vehicles pass through the booth, which helps speed the traffic. Tags are also being used in identification badges. They are more convenient than magnetic stripe cards since they only need to be held near the reader.

Sensor networks can also be used in different ways. For example, as shown in this schematic, when smart utility meters are deployed radio frequency sensors can form a local area network that aggregates information and then passes it on to the cellular network. This approach is cost-effective since it eliminates the need to have M2M SIMs in every meter.

Sensors normally need to be powered and batteries are often employed, but a technology known as energy harvesting takes the necessary power from its surroundings: for example, from linear motion, light, or differences in temperature. The amount of energy obtained in this way is enough to send a wireless signal a short distance (10 to 30 meters inside buildings) and perform a task, e.g. turn a light on or off.

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As people get older everyday tasks get harder and short-term memory problems can become serious. We are talking about mild cognitive impairments that for part of the population evolve into dementia later on. Smart homes that are sensitive to the needs of the occupant are addressing this issue.

Vending machines were an early M2M application. A typical solution will indicate stocking levels, thereby eliminating lost sales and also preventing visits to machines that don’t need replenishing.

US$ 80,000: that’s how much a research pharmacy lost when one of its refrigerators failed over a weekend. The unit contained $ 80,000 worth of research material, which had to be thrown out. A remote monitoring system would have prevented the accident.

In the aviation industry sensor technologies are creating new business models. Manufacturers of jet engines retain ownership of their products while charging airlines for the amount of thrust used.

Efficient energy converters, ultra-low-power electronic circuitry and a reliable wireless protocol characterize the technology, which is used to create smart residential and business environments. Savings of up to 40% in energy and operating costs can be realized.

Typical business cases Because there is any number of radically different solutions for the very different market sectors it is hard to make a generic business case. In some cases the solution generates revenue to governments or local authorities. The German Toll Collect road pricing system is generating billions of Euros every year and the US OnStar system generates over a billion dollars annually.

In other areas the solution might address a social concern and the case would be based on a mix of human values and potential financial and resource savings. One obvious example is assisted living. It is not only very expensive to look after elderly people in a care home, but demand is growing in line with populations that are living longer and this is going to further strain the financial and human resources of the health sector. Therefore a solution that allows elderly people to stay in their own home and take care of themselves is not only good for the individual, it’s also good for the economy.

The need to improve the efficiency of electricity grids hit the media headlines following the announcements made in 2009 by the Obama administration. So-called smart grids will work with smart meters in smart homes being used by smart consumers. An interesting feature is the ability to connect an in-home display. The information provided is designed to improve consumer awareness of what used to be taken for granted: the consumption of electricity and other utilities and the resulting tariffs. This allows consumers to control their energy bill by switching on appliances like dishwashers and washing machines when tariffs are lower.

A text messaging solution has been evaluated by a number of pharmacies in the US for refill reminders. A message would be sent to customers when prescriptions are due to be refilled. Customers then send back trigger messages with refill instructions and the pharmacy sends a final text when the orders are ready for pickup.

A recent survey of corporate adopter readers of M2M Magazine investigated how and why organizations are using M2M, and what their plans are for the future. The research indicated 61% of respondents see reducing costs as an important role. However, respondents also favoured

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12% of new cars will ship with embedded telematics. Investment in the smart grid will total $200 billion worldwide by 2015. In North America more than one million home automation systems will be installed by 2012.

M2M technology is moving into consumer sectors, e.g. smart meters in the home, so the numbers shoot up and there is an emerging business case for MNOs to take a direct role and thereby a more profitable position in the value chain.

the role of service and support. In a harsh economy, providing enhanced service and support may be nearly as important as reducing costs, since improved service can translate into increased business.

The business case that underpins these examples is very different but it’s clearly there.

It’s becoming a very big business M2M is a relatively small sector of a gigantic global telecoms marketplace, but it is healthy, despite the economic climate. Revenue stats can never be precise, but in 1998 the market was worth around $50 billion and it is set to rise to more than $ 250 billion by the end of 2012. One research outfit estimates that there are 13 billion machines or devices in Europe that are potentially capable of communicating.

MNOs and MVNOs M2M data can be communicated over any IP medium. Ethernet, for example, is employed on factory floors as well as Wi-Fi, but for wide area deployments cellular is the obvious preference, particularly for applications that need a longer transmission range, international coverage, or where the assets are mobile.

Until recently most Mobile Network Operators (MNOs) have taken an indirect, albeit pivotal role in the value chain. Their networks transport the data traffic from the embedded modules to back-office systems, i.e. they carry the bits. The role is indirect because so-called MVNOs (V = Virtual) tended to be the leading the communications players in the value chain.

In this context the term MVNO is somewhat confusing. Regular MVNOs compete with the MNO from whom they purchase airtime, i.e. they offer an alternative service. M2M MVNOs don’t compete; there is no alternative voice/SMS service; the airtime they purchase produces additional revenue for the MNOs.

Companies that provide M2M MVNO service use alternative terms. Wyless is one such company; they operate in over 120 countries and therefore they refer to themselves as a “global network enabler”. Wireless Logic is another; they talk about “SIM aggregation”. In both cases they partner with Tier 1 MNOs in order to offer robust, secure access wherever and whenever it’s needed.

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OSS (Operation Support System). BSS (Business Support System).

MNOs such as Orange, Telefonica and Telenor have added the requisite functionality to their networks in order to facilitate the development of M2M services. In this way they move up the value chain.

API: Application Program Interface.

Figure 3. The “Porthos” Open Management Platform of Wyless generated the information in this dashboard Web display. It includes data usage over time as well as tabular data on incidents and invoices.

MNOs that have played an active role for some time include Orange, Telefonica and Telenor. Other Tier 1 operators are getting into the act via partnership agreements, e.g. AT&T and Jasper Wireless, T-Mobile and Sierra Wireless.

Middleware Platforms Cellular networks were designed for circuit-switched voice and while they do a perfectly adequate job for regular, packet-switched data such as email and Web browsing, they don’t have the requisite functionality for M2M applications. For example, the normal OSS and BSS are not designed for low-cost, mass handling of huge amounts of similar subscriptions.

In order to use cellular networks for robust M2M connectivity, and also be able to integrate data with back-office systems, middleware platforms are needed and service providers, i.e. the M2M MVNOs, have created them. The application software runs on these platforms. Middleware is software that allows the applications and the embedded modules to communicate with each other over the network. The primary function is that of service enablement.

In addition, middleware platforms establish a link between the network and a company’s business processes, thereby providing real time visibility and control to the customer. They give software developers an application view of the end-to-end data, i.e. the platform’s APIs remove the need to understand what is going on at the bits and bytes level.

Functionality will typically include provisioning the devices, activating and deactivating SIMs remotely as well as routing, buffering, formatting and managing the data flow.

The platform may also have a graphical user interface, see figure 3, that allows customers to see how their devices are performing and when relevant, it provides detailed analysis of network behavior and makes sense of the data that has been aggregated.

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SIM vendors as well as MNOs are working with ETSI and 3GPP on finalizing the specifications for a new form factor.

Wireless Logic provides a similar facility via a Web portal known as SIMPRO that works alongside the company’s four main VPNs (Virtual Private Networks), which run over the networks of O2, Orange, T-Mobile and Vodafone. Functionality includes the ability to monitor, activate, and produce real-time data reports for all installed SIMs.

Embedded SIMs M2M SIMs have a smaller chip than those used for regular mobile communications. They are embedded in the device or the wireless module and they provide the identity of those networked devices (aka assets). They can be connected via a socket or be soldered to the printed circuit board. In many cases the environment for these SIMs will be harsh, e.g. wide temperature and humidity range, shock, vibration, and air pollution.

In the future we are likely to have a product range that divides into three sectors: (1) consumer grade SIMs for regular applications; (2) reinforced SIMs for use in harder environments where removability, device compatibility and time to market are the decision drivers; and (3) industrial grade devices for use in extreme/harsh environments.

Embedded Wireless Modules Embedded modules, both wireline and wireless, are normally embedded inside equipment and the environment in which they function must match that of the SIMs.

The primary task of an embedded module is to convert analog sensor data into IP packets for transmission over a communications medium, e.g. GPRS (2.5G) or 3G. In addition there are intelligent wireless modules that allow part of the application to run directly on the embedded baseband processor. For example, the application may send healthcare data at regular intervals, e.g. every 15 minutes, but if the measured parameter exceeds a pre-set limit then local intelligence will kick in and an alarm will be sent immediately.

Virtual Private Networks Virtual Private Networks (VPNs) employs technology that allows a public communications network to perform in the same way as a private network, i.e. the communications paths are not shared. The great majority of M2M data is transferred over a VPN.

VPNs are an established service. They are used by enterprises in order to provide secure access to their organization's network. A VPN can be contrasted with an expensive system of owned or leased lines that can only be

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PCs normally employ Dynamic IP Addresses that are assigned by the Internet Service Provider (ISP) when the PC goes on line.

The in-car communication technology 'eCall' could save an estimated 2,500 lives a year. The system employs a hardware black box installed in vehicles that will wirelessly send airbag deployment and impact sensor information, as well as GPS coordinates to local emergency agencies.

Over 100 companies around the world have come together to form the EnOcean Alliance in order to develop automation solutions for sustainable building projects that are more energy-efficient.

used by one organization. The goal of a VPN is to provide the organization with the same capabilities, but at a much lower cost.

For M2M applications the key feature of a VPN is security. There are a number of secure VPN protocols, e.g. IPsec (Internet Protocol Security). Another feature of VPNs is the use of Fixed IP Addresses.

Fixed addresses are employed since they facilitate remote access, i.e. each time an M2M device goes on line the network already knows its location and identity since these and other parameters are fixed. With dynamic addressing they have to be established and the exchange of signaling messages consumes both battery and network resources. This is an important issue since a typical device might go on and offline every 15 minutes.

The business-to-business sector As indicated earlier, the B2B sector broadly divides into: automotive; buildings; smart energy; home and consumer; healthcare; industrial; transportation; retail; networks and security. In this section we’ll consider each one in turn, albeit briefly.

Automotive: Telematics, infotainment and location-aware applications are features that becoming standard in new cars. One interesting application is a pay-as-you-drive solution that is being used by several big European firms in the insurance sector. There are three main mobility services: road user charging, environmental impact estimation, and FCD (floating car data) traffic monitoring. The services provided to insurance companies include: vehicle usage profile, crash detection and assistance, recording and reconstruction of crash events, and stolen vehicle recovery.

Buildings: “Energy Harvesting” is a technology that harvests the necessary power from its surroundings: for example, from linear motion, light, or differences in temperature. The amount of energy obtained in this way is enough to send a wireless signal a short distance and perform a task, e.g. turn on a light. When combined with wireless switches and wireless sensors this solution simplifies the cabling of a building. In addition, no new cabling is needed if future alterations are required.

Smart Energy: This is set to become a huge sector, one that is estimated to reach $200 billion worldwide by 2015. Multi-utility smart meters in the home can monitor usage of electricity, gas and water and an interesting feature is the

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Today's utilities are incorporating more intelligence across delivery systems for mission critical communications. The end goal is reduced consumption, improved efficiencies, better diagnostics, controls and forecasting.

Benefits of a dedicated smart home solution include: a real-time alert system (SMS, MMS, email, voice call or fax); the ability to control the system from any mobile phone, PC or Mac; and visualization of the home via an integrated camera or additional cameras.

Monitoring air pollution levels is an interesting and important application that doesn’t fall into one of these categories.

Smartphones carried by cycle couriers help monitor air pollution in the UK. The couriers have air-pollution sensors that connect to these devices via Bluetooth. Custom software transports data on air quality and location to back office servers.

Fleet management solutions can also enable fuel management, driver risk management, driver duty logs, navigation and route planning, and dispatch optimization.

ability to connect an in-home display. The information provided is designed to improve consumer awareness of what used to be taken for granted: the consumption of electricity and other utilities and the tariffs. This allows consumers to control their energy bill by switching on appliances like dishwashers and washing machines when tariffs are lower.

Homes: This is also set to become a huge sector. Smart energy meters can also be employed as a gateway for tomorrow’s network homes. There are other contenders for this pivotal position, e.g. set-top boxes, but in order to deliver the full potential a dedicated gateway that interconnects a wide range of consumer devices is required. For example, security camera, door/window opening sensor, motion sensor, remote control, smoke detector, power plug relay, window shutter control and heating control.

Health Care: Medical equipment manufacturers who want to increase market share are wirelessly enabling remote, mobile and patient-premise solutions that provide more efficient and cost-effective healthcare delivery. Instead of visiting doctors periodically and for short time periods, mobile health solutions enable observations of daily living to be recorded and transmitted from home or on mobile devices, which in turn allows doctors and clinicians to respond quickly and efficiently.

Industrial and Infrastructure: M2M started out on the factory floor and it involved data being sent from machines to computer systems over Ethernet LANs. Wireless connectivity was deployed at a later date. Since then a whole plethora of solutions have been developed and marketed. They include: intelligent traffic systems: variable message signs; traffic radar; congestion detection sensors; priority control systems; real-time traffic monitoring; remote video monitoring; weather and seismic sensor measurement.

Transportation: Fleet management was another early M2M sector. The baseline functionality is very simple: actually, that is the case in most M2M applications, even though the results can be very innovative. GPS terminals that are embedded in the vehicles determine the location and this information is communicated over a cellular network to a central facility where it is displayed on a map.

However, today’s customers demand a broader set of services and features for fleet management applications, such as vehicle diagnostics and broadband access.

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The reasons for these changes are new legislation demands for the retailers when handling credit card payments, but also the simplicity of using wireless connected devices.

Security is another area that relies on high-speed, secure communications.

Retail: The ability to be able to manage mobile card payment transactions in a fast and secure way is becoming vital for many players in the retail sector. Wireless card payment transactions have been available to taxi, ferry and ice cream van operators for many years in Scandinavia. Today the technology also encompasses parking meters, restaurants, shops, ticket purchases and vending machines that are online via M2M. Two years ago the Scandinavian market share of mobile card payment terminals was approximately 5%. Leading vendors in this sector foresee a growth of around 50% within the next three years.

Networks: High-speed cellular networks have become the obvious alternative to wireline for enterprises that need rapid, flexible deployment of resources to temporary offices or remote locations. For M2M applications intelligent gateways and routers have been developed that simplify complex routing and networking solutions. In addition, intelligence and robust remote management tools enable rapid deployment of primary or back-up solutions.

Security: wireless security solutions can monitor, control, manage and report on devices in remote locations. For example: CCTV remote monitoring of critical infrastructure; pipelines, substations, dams, etc. Border or points of entry security at airports and ports. Building security/ access control; commercial, residential, government, construction sites. Plus home automation, alarms, and personal security.

The business-to-consumer sector The M2M B2C sector is set to explode, fuelled by the update of smartphones. We can expect to see innovation across the board, making it virtually impossible to categorize this development. Moreover, there will be overlap with B2B. For example, a diabetic patient that employs a mobile health care application is a consumer, but right now this application would be classified as B2B.

However, the smartphone introduces a significant new B2C factor into the M2M equation. In a regular solution embedding a wireless modem in a device enables connectivity and in some cases a Java application, really an applet, can be included. This enables decisions to be taken at the device level, but the functionality is limited by the power of the embedded processor. The primary purpose of a regular solution is to communicate data, which is turned into information by a central server.

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We navigate to a destination in two ways. If we know the way we simply walk or drive and we look ahead; that’s reality. If we don’t, we look at a map or use navigation systems. Regular navigation applications can display the map on a smartphone and give you visual and/or verbal instructions, but that’s only an abstraction of reality, albeit a useful one.

This shot shows how a smartphone, in this case the iPhone, could be used to display route and related information to the driver. The yellow line in this display is telling the driver that a right turn is coming up.

Smartphones are a very different type of

device: a rather obvious statement. In this case wireless connectivity is an intrinsic function and a very powerful processor allows sophisticated applications to be run locally. This means that the M2M paradigm is reversed: now a central server sends data that the device turns into information. For example:

You dial a taxi service and state your requirement; the server will know your location as well as the position of the nearest taxi; it sends that information to the customer together with the estimated delay; now see the position of the taxi, it’s displayed on a map; you can also see the position change in real time. Thus, the server is pushing M2M data to the device and the smartphone is converting it into meaningful information.

This reversal of the device/server role is very significant since it is enabling a veritable plethora of next-generation applications. For example, at the last count there were over 1.600 professional medical applications for the iPhone, i.e. apps designed for doctors and clinicians.

Augmented reality navigation is another example of a next-gen B2C application. The camera of a smartphone can display reality images in real time; they’re similar to those of the driver and when you overlay the result with information that matches the driver’s view you’ve got an augmented reality navigation system.

It’s early days for multi-functional augmented apps that could direct you to the nearest Metro station or a relevant bus stop and then go on to tell you if you need to change to a second bus, ping you when you need to get off, and then direct you to the second stop. And if you’re driving, the navigation system could direct you to a parking garage near your destination. The requisite technology is there as well as baseline services such as Google Maps and free location information.

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The new iPhone 3GS was hacked in two minutes, which is alarming when one considers that they are being used by all kinds of professionals, e.g. doctors and clinicians in hospitals.

ISO (International Organization for Standardization) 27001 is the “umbrella” standard that sets the ICT security bar. It entails compliance within many business aspects such as equipment, software and overall processes.

There is a clear and compelling need for end-to-end security, but it must be robust: really robust. It’s a binary issue: either data is corrupted/stolen or not. Moreover, half-baked solutions are potentially dangerous since they induce a feeling of security when the reverse is true.

Security: a key issue Sales of smart phones have bucked the economy and smart utility meters are entering millions of homes, so valid security concerns are emerging. Smart phones, for example, have open operating systems, which means that they are vulnerable to viruses and other malware. However, this is only relevant for B2C applications.

Security isn’t a big issue right now for B2B. It’s enabled by a combination of VPNs, fixed IP addresses and devices that perform relatively simple tasks on proprietary platforms. Fixed addresses stop devices being "open" to receive data, therefore viruses can’t infect them.

Simple tasks equate to minimal code, which means that the hacker doesn’t have much to work on. There are no functions that enable malicious code to be downloaded, nor is there sufficient memory. Creating malware that attacks these first-generation devices isn’t impossible, but it would take a long time and serious damage could not be inflicted. If device integrity were compromised, then the only problem would be that the device would crash and stop functioning.

Another security issue is the Web-interface on the back office/server side of the system. It’s used by solution providers and in some cases by the customer, for example, to self-provision new devices. Hackers love the Web and unless the server is well protected the interface becomes an open door.

However, robust M2M security can only be realized when the communications link is encrypted, i.e. when there are security mechanisms on both the device and the server. Therefore vendors need to generate more awareness in order to generate demand in the market and to raise the bar by shipping secure products.

One leading vendor of wireless modules has added encryption to its embedded software stack. One example is a solution that stops a car being used if the insurance policy has not been paid. In this case the security mechanism prevents the signal being jammed, which would allow usage while not being insured. This is a relatively simple, albeit important application.

Security has not been a major issue for the industry so far. The leading vendors have implemented solutions, but security is a moving target, as we have seen with PCs and servers. Moreover, when M2M data becomes part of an enterprise’s management information system, solution providers will need to demonstrate their total commitment to hardened security.

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Reminder: the value chain comprises module suppliers, device manufacturers, platform software providers, system integrators and network operators.

Setting the global GSM standard was a very long process – about a decade – but consider the result.

ETSI: European Telecommunications Standards Institute.

The ultimate objective is to enable communications between devices and applications to be as simple and ubiquitous, as it is today for anybody who uses a cellular phone.

Integration with back-office systems The uptake of M2M applications is accelerating and in many cases the benefits can be extended and the return on investment shorted by transferring the information to a back office system. And in some cases integration is an integral part of the solution. For example, cashless vending machines need to send payment data to banks and credit card companies in order to validate the transaction and then transfer the payment to the owner of the machine.

The key integration issue comes from the fact that solutions are proprietary. Apart from the wireline and wireless interfaces there are very few standards, which means that integration has to be customized, which takes time and money. Nevertheless fully integrated solutions are coming to the market, for example, some insurance companies are installing black boxes in customers’ cars in order to offer policies based on individual usage instead of proxy assumptions like age and gender.

Without standards M2M will never realize its full potential, but this will take time because the value chain is fragmented and a typical solution will involve four or five vendors and every link in the chain has an agenda. In addition, M2M represents an industry that is broad and deep, which makes it virtually impossible to determine which standards are applicable without any delimitation.

That said, various standardization organizations such as ETSI are working on this issue and given the enormous potential of an expanded M2M space in both the B2B and B2C sectors one can assume that progress will be made, albeit slowly. For example, there is a pre-study for European level M2M standardization effort that was initiated to alleviate the lack of standards.

Another interesting standards development comes from a Scandinavian operator. This company is predicting a shift from proprietary, closed solutions to a layered, open architecture. The basic idea is to enable communications —between devices, systems and software applications — through a new, layered infrastructure.

This infrastructure will provide services and features common to many applications, thereby eliminating the need to keep on reinventing the wheel. However, the really big innovation potential would come from the ability to allow sensor information to be shared in a secure manner across any application and to allow any device to connect to any application.

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Quotes from an industry insider: MNOs have expressed a “sudden and profound” interest in this market and “carriers are only starting to learn what a real industrial strength M2M service has to look like.”

How to choose a solution provider Choosing a solution provider is a contentious subject and this is an objective booklet, so don’t expect any hard and fast recommendations. Instead, this section will highlight the main considerations and propose a pragmatic way that may seem to be obvious.

When I started my M2M learning curve and got round to writing about the subject there seemed to be two main contenders and that is still the case. In the blue corner you have MVNOs and in the red corner there are MNOs. There are several hundred MNOs but not that many have been instigators of M2M solutions.

The success of the industry in a tough economic climate and the recent expansion of the B2C sector, which is where the big numbers are found, have fuelled the interest of the Tier 1 MNOs and they are currently marketing their credentials to the hilt. In theory they are ideally placed: the network is a critical component and one can presume that they will be around for the foreseeable future. However, unless they have formed a separate, focused operation you run this risk of being lost in the bureaucracy of a big organization.

The middleware platform is a critically important credential and they are not created overnight, which is why many operators have either partnered with the MVNOs that developed them or have made an acquisition. The leading MVNOs have been active for several years and have not only developed the requisite middleware functionality, but have also gained considerable experience along the way and have created a comprehensive ecosystem.

Another plus point for MVNOs is the fact that they work with many different MNOs; in some cases they may have a few hundred roaming partners. Therefore they are well placed to negotiate competitive tariffs and the monthly data bill is the biggest operating expense!

So much for the main considerations: what is the pragmatic way? It’s very simple: start looking in the right place. Your solution will target a well-defined sector; let’s say it’s fleet management. You’ll presumably know what is currently out their in the market and some basic research will lead you to the relevant solution providers. Thus, they will be the companies with the relevant expertise and experience. And if your M2M solution needs to be integrated with you back-office applications then systems integration should be a core competence of your supplier.

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Conclusions I started this paper by saying that it would reflect my M2M learning curve and in that way I hoped to create a clear, concise, informative short cut to this fascinating topic.

M2M is not intrinsically difficult, the technology is clear, it’s data communications, but the subject is confusing. The term doesn’t make much sense; there is a long value chain involving several players; and let’s be honest, the industry at large hasn’t done a great job on the marketing front.

If you’ve made it through to this concluding section then the picture should be clear, or at least clearer, but more important is the fact that you will certainly have grasped the enormous potential of the M2M concept. At the end of the day it’s all about applications and they abound.

There are established apps like fleet management that deliver solid, tangible benefits. Groundbreaking apps like pay-as-you-drive that reward careful drivers. Green apps like smart meters that are good for the planet and the bank account. And assisted living apps that address ethical health issues and that are good for society.

Whether they are recognized as being M2M apps isn’t important. It’s the difference they make to the business and consumer sides of our life that counts and that the latter is set to explode because of the power and potential of smartphones. As indicated earlier, these devices reverse the established communications paradigm. Now data flows from the center —now you get the information at your fingertips — literally.