M2M RFP Best Practices

Machina Research

M2M Evolution – Miami, FL – January 2014

Andy Castonguay, Principal Analyst

About Machina Research

• The leading research/consulting firm focusing on the emerging opportunity for new connected devices and applications, i.e. M2M/IoT

• Supporting our clients througho Machina Research Advisory Service – our multi-client annual

subscription service comprising forecasts, reports and access to the analysts (see below)

o Custom Research & Consulting –client-specific research• We have the most focused research on the M2M field of any

analyst firm in the world: we provide the most granular forecasts for the global M2M opportunity, supported by robust analysis of market issues and dynamics

• Other coverage areas include short-range technologies and ‘Big Data’ analytics

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The Machina Research Forecast Database

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• We recognise that M2M is a very diverse market that requires a granular approach

• We have developed detailed M2M forecasts based on our thirteen focus sectors (see left)

• Within each sector there are very different dynamics for each application, so we forecast each of 61 application groups and hundreds of applications separately

Some of our clients

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1) Provide a good description of yourbusiness and requirements• Identify the need that might be met by a

connected solution, but allow for partners to be creative

• It is incumbent on you to clearly identify your fundamental requirements: Do you need a drill? Or do you need a hole in a wall?

• Vendors need clear description of your business to understand framework and context

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2) Provide detail on your envisagedconnectivity solutionHelp vendors to frame their solution by giving them as much relevant technical detail as possible:

• Monthly and annual connection traffic• Identified periodic peaks and troughs• Geographical distribution• Connectivity specification• Data transfer frequencies and requirements• Anticipated life cycles of products

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3) Explore the coverage and technicalcapabilities of the vendor solutionOne key role of the RFP is to determine which vendors meet the necessary technical requirements in three main areas: networks, platforms and devices. With regard to networks, bidders should be asked the following:• Which technologies do bidders use and what are

their specifications?• Which geographies they address and how (e.g.

facilities-based vs roaming)?• What is the profile of coverage, in urban versus rural

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Platform related questionsThe platform component of the technical solution is core, and whether managed in-house or outsourced, a comprehensive understanding of its capabilities is key. The main differences between many M2M vendors emerge in this area.• What network visibility is available? What about out-of-footprint

(for cellular)?• What are the failover capabilities of the solution?• What additional features (such as API capabilities) are there?• What sort of billing solutions could be applied? Wholesale, retail,

custom?• What reporting capabilities could be provided?• What end-to-end SLAs are available, e.g. Five 9s, service

restoration?• Is server infrastructure fully redundant? Outsourced?

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Device related questions

Finally the RFP process should explore what suggestions the vendor would have with regards to the device solution, and how this hardware component is managed, for example:• Is the bidder proposing a module-based solution, or a

SIM-based solution or an integrated device solution?• What is the process for future activations?• How would replacement of modules and SIMs be

managed?• What types of support and maintenance would be

available?

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4) Seek information, and guarantees, about technology roadmaps

• Technology migration result in costly replacements, upgrades, and new product design efforts

• Exploring the future proofing of any connected device is an extremely prudent and cost effective step. You should seek independent verification where there is any doubt.

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LTE migration to challenge partner decisions and product design cycles

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Faster network speeds and cheaper modules will transform potential applications

Country Network Operator

2G Technology

Expected decommissioning or similar major event

USA AT&T GSM YE 2016 for GSM decommissioning

USA Verizon Wireless

CDMA 1xRTT YE 2020 for CDMA sunsetting

USA Sprint CDMA 1xRTT 2021 likely for CDMA sunsetting

USA T-Mobile GSM TBD

5) Request comprehensive commercial models for all feesPush for detail on fees for basic connectivity and additional service features• Which tools are included and optional for

reporting and monitoring?• What testing services are included and optional?• Does the vendor include any consulting services

or are these optional?• What service and support agreements are

included or optional to the agreement?

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6) Make sure the info you receive is easily comparable between vendors• Technical and commercial details should be

easy to compare• To the best of your ability, attempt to get

responses in a similar template to ease comparisons for pricing and technical compliance, capabilities, etc.

• Be prepared to battle through iterations

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7) Be realistic about the timescalesAllow the vendor time to produce a well thought out submission

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Phase DurationRFP preparation 1-2 weeksRFP writing and review and vendor selection

1-2 weeks

Q&A 2 weeks after releaseSubmission deadline for vendors 3-5 weeks after releaseShort listing and presentations 3-4 weeks after submission

deadline (or quicker if there is company urgency)

Decision 1 week after final presentationsFull RFP process Approximately 10 weeks

8) Clearly define your RFP process for Q&A opportunities, presentations and shortlisting• Communication is critical in the RFP process. You

should provide opportunities for vendors to ask questions and gain additional insights as to your requirements.

• Allow vendors the freedom to be inventive• The feedback process is a two-way street• Seek independent third-party advice on vendor

bids in order to correctly frame key questions

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9) Define and prioritize your assessment criteria clearlyApply a weighting to each of the selection criteria• Quality of Service, SLAs of the proposed

technical solution• Pricing• Future-proofing• Vendor background, security hurdlesBe clear about any gating factors up front

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10) Research your potential partners

• National and international geographical coverage• Type of network connections required (from 2G

to 4G, ZigBee, WiFi, shortwave, etc.)• Module and device ruggedness and capabilities• Levels of system integration expertise• Device management platform capabilities• Application development capabilities

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Core elements of the RFP processThe four key elements that you should reflect in an RFP are:

1. A good, initial understanding of the M2M technology market to position the right technical questions2. A good, initial understanding of the main commercial components to explore the most suitable business models for the solution3. A well-planned and structured management process around the RFP to facilitate further decision-making processes and solicit innovative solutions4. A well-qualified selection process of potential vendors

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Thank you!

Contact us

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Andy CastonguayPrincipal AnalystMachina Research

andy.castonguay@machinaresearch.comMobile: +1-619-888-1347www.machinaresearch.com