Scott Swartz, CEO and founder of MetraTech, argues that developing a M2M service platform is paramount. "CSPs have long been aware that connectivity is a commodity. To differentiate they must have a M2M service platform that provides a rich set of APIs, an ecosystem and an in-house cloud that enables customers to build applications. That platform can easily leverage their existing strengths: high reliability, SMS, location-based services, presence capabilities, application-specific quality of service (QoS) and seamless device management."
While transport revenues will certainly increase, the greatest opportunities will be in M2M platforms and suites, as you can see in Figure 4.
Partnerships, as they have in other areas, will also prove key to maximizing M2M opportunities. In a recent Alcatel-Lucent article, authors Rob Parkes and Marc Weinstein spoke of the importance of the partner ecosystem. "One of the big challenges will be to build a vibrant partner ecosystem capable of developing and delivering service concepts that work across industries, markets and borders. The M2M industry is evolving rapidly, and its many players are still working out how to contribute and split effort and revenue. Service providers' ability to build and manage partnerships will help drive their success."
In terms of promising verticals in the near-term, Bruce Thompson at AT&T sees mHealth as a top contender. "Hospitals, doctors and insurance providers are beginning to turn to M2M solutions for remote patient monitoring, yet many still remain in the early stages of adoption." Verizon has also been spending heavily on mHealth initiatives.
Long-term, the opportunities become more interesting. "M2M turns objects into services and changes how things can be sold," says Scott Swartz. "CSPs should focus on verticals which require these value-added services because they are very sticky and provide a way to build value and differentiation. These M2M partners and customers will be enterprises and will require a monetization approach in which complex, multiparty, B2B contracts can be fluidly negotiated."
