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The Real Skinny on M2M Growth

Posted by Norman Miglietta on 08/29/2012

Strategy Analytics recently published a report on M2M growth, which was summarized here by TMCnet. The “Global M2M Connections Market Forecast & Analysis” report’s central premise was that cellular M2M connections will grow from 277 million in 2012 to 2.5 billion by 2020. According to the analyst firm, this growth will be driven mHealth, the smart grid and telematics applications.

One item that isn’t crystal clear from the Strategy Analytics press release is the definition of a connected device (this is a popular topic of conversation at the KORE water cooler and in the M2M market in general). For instance, if tablets such as iPads are counted, then the 2.5 billion number does not seem that impressive. However, if it’s more “traditional” M2M devices – those which operate without any human contact or intervention – then the 2.5 billion number is realistically attainable, at least according to this author. In any event, it’s much more realistic than the 50 billion connected devices number that has been thrown around for some time.

Regardless of the debate on the actual number of connected devices, there seems to be some consensus on the applications actually driving the market forward.  This blog has made several posts on the mhealth or telehealth market and it is no secret that fleet tracking and AVL have propelled the M2M market forward since its infancy. The one market not discussed in the Strategy Analytics report summary is the evolution of enterprise M2M applications. M2M is beginning to proliferate across large enterprise organizations wishing to more efficiently manage remote assets and deliver value-added customer services. Simply put, M2M has caught the attention of corner office enterprise CIOs who are learning that they can reduce costs, increase visibility and control of prize assets and add new revenue streams by deploying M2M applications.

The Strategy Analytics report also states that the growth in M2M will spur the development of global connectivity platforms, drive new government regulations and result in the standardization of the M2M service layer. While I agree with these developments, KORE is also seeing some additional drivers across our customer base.

For instance, the switch from proprietary radio networks and spectrum to cellular remains a popular trend, as cellular networks become more ubiquitous and cost-effective. In addition, 3G and 4G cellular network performance and coverage has drastically improved. This is no question about  the proliferation of the smart phone because of these advances in network technology, but the M2M market will see new applications emerge now that higher bandwidth connections are available - such as video surveillance, sensor “data dumps” and real-time, on demand notifications in almost every industry. Another driver of M2M growth is the decrease in device hardware costs and the significant decrease in network data fees charged by the carriers themselves. 

All of these trends have created the “perfect storm” in terms of M2M deployment acceleration. With current cost-to-benefit ratios, embedding M2M into just about everything is financially feasible. I expect to see manufacturers including M2M modems and capabilities into a number of “machines.” In some cases, they may not even connect them to the network, but having that capability, should it be needed in the future, is a great benefit. We can call it M2M future-proofing.

Whether you agree with the Strategy Analytics 2.5 billion connected devices by 2020 number or have another number in mind, the consensus is clear – M2M is exploding – and we at KORE are proud to play our part in the M2M eco-system to help accelerate the rate of market growth.

Robert Metzler, EVP Sales and Marketing

With over 20 years experience in leading winning sales teams, Bob joins KORE to drive adoption of KORE in the market by capitalizing on our unique service, management and billing capabilities, coupled with the most comprehensive and skilled network of partners, all dedicated to delivering the most reliable and relevant solutions for our customers, every day.

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