In 2014, the Internet of Things caught the public’s imagination and machine-to-machine technology moved into the mainstream. What will happen next? We combine data and experience to reveal all.
For years, machine-to-machine (M2M) technology, which connects machines and devices to the internet, has been quietly improving internal processes and bringing cost savings to operations such as manufacturing, automation and logistics.
Today, the cost of deploying M2M has significantly reduced. Companies from almost every industry sector –including healthcare, automotive and consumer electronics – are improving processes and enhancing customer experiences. And businesses are becoming more focused on providing end-to-end global solutions. As a result case studies of companies experiencing real benefits from M2M are becoming commonplace.
A fifth of businesses globally now have an M2M deployment in place with 98 per cent already seeing return on investment and 75 per cent expecting to expand M2M from internal operations into customer-facing processes within the next three years1.
What can we expect from M2M in 2015? We combine our M2M experience with data gathered during Vodafone’s M2M Adoption Barometer 2014 to hedge some 2015 bets
The year ahead for M2M
Automotive and Manufacturing sectors will accelerate
The consumer electronics sector is already ahead of the M2M curve and while it is likely to continue growing we predict two other sectors will outpace expectations: the automotive and manufacturing sectors.
Expect to see M2M adoption in the automotive market enter the fast lane. As drivers become familiar with M2M services, consumer demand for the convenience and comfort they provide will increase and today's luxury add-ons will become tomorrow's commoditised necessities. Just as air conditioning, which today typically comes as standard, was once a luxury extra restricted to top-spec vehicles so will a variety of M2M-enabled conveniences become the standard of tomorrow.
As understanding of M2M grows, more manufacturers will also recognise the benefits of M2M and adoption figures in manufacturing will surpass today's market expectations.
Current popular applications in the manufacturing sector include monitoring equipment, employees, mobile assets and fleets. Analyst firm, IDC, expects some of the greatest market potential to come from manufacturing in the coming years contributing to revenues in excess of $7 trillion for the Internet of Things and its technology ecosystem by 2017. 2
Businesses will get smart over big data
Today, 75 per cent of M2M adopters say they are using analytics and 88 per cent expect to do so in three years' time1 . This trend reflects a more sophisticated approach to integrating big data and M2M to drive business benefits – an approach that will continue to expand, boosting return on investment as it spreads.
In the past, organisations simply used data about stock levels within their supply chains to manage deliveries better. In the future, businesses will increasingly get smarter and realise the value big data brings to processes across the organisation. Seasonal adaption in supermarkets is a strong example. Imagine the supermarket that pre-empts an un-seasonally warm weekend approaching, increases its stock levels of barbecue meat and salad ingredients, and then deploys its marketing teams to target general and individual in-store promotions that coincide with the good weather – capitalising on seasonal demands to boost revenue.
Faster connectivity will improve ROI
As 4G becomes increasingly prevalent, businesses will have a bigger opportunity to make new kinds of applications practical and cost effective. These could include video-based security, in-vehicle information services, Assisted Living and mHealth solutions. And those are just for starters.
Faster connectivity will also enable businesses to place a greater focus on the big data insights that can be gathered through M2M technology, providing further opportunity to generate revenue while improving customer choice and service.
Governance will rise up the M2M agenda
More than 72 per cent of companies currently see security breaches as a major concern, although only 12 per cent would consider it a main barrier to M2M adoption. Increased data sharing will push the issue of governance up the agenda – the more data you store and make accessible around your organisation, the greater the privacy and security risks you have to plan for.
We do not believe this will hold up M2M adoption in a meaningful way; however, it will accelerate the maturity of integrated M2M security solutions. All new technologies follow a maturation path. In the M2M market, there is already a huge amount of work going on and security will continue to evolve leading to more standardised and productised hosted services. Security will be inbuilt, become stronger, easier to manage and more cost-effective.