the pervasive m2m market opportunities & verticals

Exploring Verticals, Market Sizes and Business Models

Presented by:Victoria Romero-Gomez, Product Marketing Manager

Recursion [email protected]/in/victoriaromerogomez

@vickyrgomez @recursionsw

The Pervasive M2M Market OpportunityThe Pervasive M2M Market Opportunity

© 2010 RECURSION SOFTWARE, INC. 2

Pictorial of the M2M Verticals

Source:


How Carriers Segment M2M

ATMPoint‐of‐sale/ATMFinancial Services

Communicating appliances

InfotainmentVideo game handhelds

Photo frames

Cameras

Connected Consumer ElectronicsConnected TVs

Security

Smart HomeAll Consumer devices (aka Emerging Devices)Home automation

Dynamic Digital SignageTelematics

Emerging OpportunitiesRemote monitoring

Emergency ServicesWireless routingIndustrial

Automation and controlAutomation and control

VendingVending

SecuritySecurity

Public TransportFleet managementTransportation

Utility MeteringSmart grids; Automated meter readingUtilities

TelemedicineHealthcare

Telematics and Fleet ManagementAsset trackingAsset Tracking

SprintAT&TVerizon (joint venture nPhase)

ENTERP

RISE

CONSU

MER

Indicates similar segmentColor code=

Source: Carrier websites


M2M Venue Market Sizes


M2M Market Size by Device Class

M2M device shipments could reach 430 million units by 2013


M2M Challenges & Opportunities/New Revenue

Wireless Data Revenue: Up 22% Y/Y on track so far to meet estimate of $54B 2010. Data usage growth rate (CAGR) of over 25% per year through 2014.

“Connected device” (branded M2M) for AT&T and Verizon outpaced postpaid subs in Q2 2010. Operators are fiercely competing in prepaid, enterprise, connected devices, and M2M segments. Connected devices are now 7% of AT&T’s subscription base.

1H 2010, the average US consumer was consuming ~230 MB/mo up 50% in 6 months, indicative of a pending wireless data tsunami.

Wireless connectivity for M2M devices is the first step. Software and content that “follows me” whatever I go on whatever device, using whatever telco or wifi network available is the next step.

Consumer apps dominate the app stores, while enterprise deployments are not easily tracked or are custom solutions. App store prices falling and/or free apps becoming norm.

Source: Chetan Sharma Consulting


Anywhere content access More app selection Better performance Avoid data-caps

Time for a New Pervasive M2M App Value Chain

Extend app to more devices= differentiation Offer new revenue

opportunities Lower development

cost Reduce exclusivity of apps for differentiation Easier platform

management Supply more, unique

on-deck apps

User/Subscriber

Communications

Reduce traffic across entire network Reduce app exclusivity Substitute data-cap with

new service revenueNetwork

Hardware/ Software OEM

Be like Apple: Profit from every link in the app value chain

Developers/ Enterprise

Potential Revenue

Potential Revenue

Infrastructure/Systems Operator

Potential Revenue


Win Developer Hearts & Minds

Solve problems with current Developer‐OEM app store model: Connectivity and Access: Community and social tools, like instant messaging (IM) and project sharing,

allowing developers to interact, would transform a transactional and static environment into a sticky, dynamic, growing community. The developer‐minded application store must be a hub of collaborative testing and development, rather than a mere distribution channel.

Personalization: Using network enablers (location, presence), customer information (purchase history, usage history, etc.), user identity support, and behavior analytics. This will both driver better targeted content and marketing opportunities for developers (e.g. demographic or behavioral marketing)

Purchase Convenience: Through pre‐existing billing and payment enablement, buyer authentication and payment authorization (namely, access to operator billing systems). The ability to complete a sale with the fewest number of clicks cannot be overstated.

Distribution and Reach: Access to a large mobile customer base across multiple devices. On‐portal storefront placement, catalog control, secure delivery and digital content locker support.

Multi‐platform Support: Remove developers need to make platform decisions by cross‐platform support.

Operational Support: Extending robust operational systems and processes as services to the developer community, e.g., CRM‐as‐a‐service, testing services, etc.

This is truly an evolution from app store to true ecosystem!


Smart‐Client (Pervasive) P2P Edge Platforms (ex. Voyager)

What is the Best App Architecture?

Thin Client‐Server (Centralized) vs. Mobile Web (HTML, JavaScript) Mobile Enterprise solutions (ex. Sybase, WebSphere)

Client enters data, each click sends data to server

Server hosts all services and content, acting as a gateway. It receives requests and data, performs filtering or transactions and sends output back to client(s) if shared

Each client has server intelligence and capabilities.

Client displayed data. Process repeats for each click or transaction.

High bandwidth use

Bidirectional communication

Intelligent client andserver processes autonomously until a request to share is made.

Clients can be faceless, such as sensors, and use any language or OS

Content or messaging is sent P2P/Group (guaranteed messaging)

Description: This model uses mature technologies, such as HTML and JavaScript or an enterprise platform

pull only

Bandwidth Efficiency

Description: This model uses mature technologies in a new way, by creating intelligent clients that act as servers, hosting and sharing data remotely on the device

Every click= dataProcess/host data at edge


The Pervasive Smart‐Client Value Proposition

Improved Infrastructure

Offloads processing to the device, resulting in faster, more efficient networks (30x faster than web services)

Preserves LTE or 4G capacity for M2M explosion and data‐intensive content like video

Offers a horizontal platform and architecture for all M2M initiatives and increases cross‐selling opportunities

Shifts infrastructure cap ex towards new revenue generating services

Embedded/Mobile‐ready

New Business Models

Introduces new business models, lessens price pressure, dependency on data‐caps, and may provide alternative strategy around net‐neutrality

Deliver more targeted advertising by capturing customer behavior end‐to‐end


The Pervasive Smart‐Client Value Proposition

Cost/Revenue

Does not require new hardware or OS, but has negligible changes to the existing mobile app dev process (code to API)

Less competition for developers, better share of developer revenue split

User Experience

Device agnostic: eBooks, TV, PC, embedded, sensors, etc., and “follow‐me”content capability

Returns control from hardware to the service providers, perceived value by subscribers

Adds stickiness to subscriber base through content access on more devices, shifting perceived customer value and revenue away from the app developer.

Conserves bandwidth for better user experience

Avoids dreaded data‐caps opens up new service revenue


Potential New Business Models

Developer‐Centric Sell product to entire developer community

Alternatively, open product and launch own app store based on M2M devices, not platform

Build Enterprise solutions though integration partners

Service/Infrastructure‐Centric (Traditional):

Bundle platform to networks as a package with infrastructure solution

Offers new subscription services (per person, per device), while lessens reliance on data caps

Offer professional services or partner with integrators for enterprise apps

Operator‐Centric:White label Network app stores or subscription to content “locker”

Offer developer revenue split and access to more devices

Create incentives for developers to build data efficient apps (reduces infrastructure cost)

Customer‐Centric Apps shared among peers, viral marketing, crowd‐sourced content

Completely ad‐based platform or Person‐to‐Person virtual currency (influencers)

Get Jar meets Social Network

Multiple revenue streams from multiple sources


Summary

Pervasive platform is a service delivery platform that adds value and collects revenue throughout entire mobile ecosystem

There are sufficient control/standards to establish an any‐device content distribution network

Incentivizes developers to conserve bandwidth Spans consumer market into lucrative enterprise applications and sensor networks

Legacy interop to tie into multiple systems and hardware

the pervasive m2m market opportunities & verticals

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