Machine-to-Machine (M2M) Gateway to a connected world.

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1 Machine-to-Machine (M2M) Gateway to a connected world. 6th May

2 Introduction 1. Visiongain M2M 2011: Opportunities and Challenges with Connected Devices. The world is on the verge of epic change. Conventionally unconnected devices are fast becoming connected as we enter an exciting new era of technological innovation. Today, most people are connected to the Internet via their laptops, smart phones, tablets and gaming devices. Tomorrow, this will extend to the connection of virtually anything from humble household appliances to entire buildings. The unprecedented growth of Machine-to-Machine (M2M) connectivity is driven by a global push for intelligent solutions across a range of industries such as utilities, government, transportation, health care, security and finance. The widespread adoption of ubiquitous wireless networks worldwide has facilitated a system that allows for M2M on a drastically larger scale, enabling M2M communication at greater speeds using less power and resources; thereby opening up a huge arena of potential opportunities spanning diverse industries and applications. 1 M2M connectivity is already transforming our daily lives. M2M opportunities are increasing productivity, decreasing costs, lowering energy consumption and saving lives in countless areas. Patients, such as those suffering from renal failure, are benefiting from the remote monitoring of medical treatment equipment (i.e. portable dialysis machines) designed to alert doctors the moment a problem arises. The lives of people living in low lying coastal areas are now being safeguarded with the use of tsunami warning systems deployed in unmanned, hazardous or remote locations such as offshore stations. Our public transport system is also undergoing a process of change with cash soon to be replaced by an integrated electronic ticketing system designed to operate across public ferries, trains and buses. While the possibilities are almost endless for industries using wireless Internet connectivity to remotely monitor and manage end-to-end processes, reliable M2M communications can only be achieved using gateway technology that supports undisrupted wireless network access from almost any location, even in harsh and demanding environments. The long-term success M2M communications is therefore closely aligned with the timely deployment of rugged industrial wireless broadband gateways customised to meet specific industry requirements. What is M2M? Machine-to-Machine (M2M) technology connects physical infrastructure (such as smart meters, CCTV cameras, vehicles, ATM machines and medical equipment) to communication networks to enable real-time observation and control of remote assets. It facilitates communication between machines and other machines, and between machines and people. 2WHITE PAPER_M2M_1/6/2013_V3 M2M is an umbrella term for the various hardware, software and processes that facilitate the flow of data between wired and wireless devices of similar technological capabilities. M2M communication opens the door to significant new application possibilities which are forecast to grow at an unprecedented pace and scale. It s a shift from knowing what happened to knowing what is happening all the time and then automatically controlling systems with that knowledge. When products become networked, the environ ment shifts to a more aware and responsive support en vironment; helping product manufacturers and their customers optimise processes, save money, and

3 2. Harbor Research, Visiongain M2M 2011: Opportunities and Challenges with Connected Devices. 4. M2M 2011: Opportunities and Challenges with Connected Devices. Visiongain. 5. Frost & Sullivan. Taking M2M to the next level in 2013Visiongain M2M Frost & Sullivan s Top Five Technologies that will Impact Healthcare Delivery in Asia-Pacific in become significantly more efficient. 2 Wireless M2M systems have the network intelligence needed to gather and analyse realtime field data without the need for human intervention, enabling virtually unlimited uses and opportunities. M2M connectivity is achieved through telemetry, a language used by machines when talking with each other. Information is uploaded from a machine over a network before being passed through a gateway to a central system for analysis or review. Traditionally devices would communicate through a central hub that would reroute the information to the required device. Current M2M technology allows devices to connect directly to each other without the need for a central hub or rerouting of information. 3 Updates are automatically sent over wireless networks, enabling the efficient deployment of intelligent products by eliminating costly and time consuming human intervention. Growth Drivers According to Visiongain, several convergent factors are driving M2M adoption rates with success in both the consumer and enterprise space. The fast growing take up of M2M can be attributed to: The global expansion of mobile broadband networks; Increased efficiency with telematics and telemetry; Opportunities from the adoption of IPv6 technology; Improved processes and productivity through direct communication between remote machines and central management systems; and, Increased performance and reduced costs resulting from the use of real-time information and the ability to perform remote diagnostics and repairs while monitoring machine status and usage in real-time. Large-scale Deployment Enterprise customers currently utilising M2M technology have seen dramatic improvements in efficiency, and significant capital and operational expenditure savings, with solutions and services extending to: customer loyalty; improved functionality; connectivity to benefit end users; automated information exchange negating the need for human interaction; product differentiation and new revenue streams. 4 It has been clearly established that smart technology offers immense business advantages to device manufacturers and their partners in the application development and systems support arenas. The deployment of M2M technology was once the exclusive domain of large multinational organisations possessing the capital and resources required to build, operate and maintain their own dedicated networks. Today, the rate at which service providers target the SME market remains an obstacle to M2M market development ; but by deploying open non-proprietary platform M2M devices with embedded Linux OS and SDK functionality, businesses of all sizes can create M2M applications for any function without restriction. 3

4 M2M Applications 7. Maximizing Mobile Operator Opportunities in M2M. ABI Research, Q1, IMF Research, Although many consumers have never heard of M2M, there are countless day-to-day applications that are based on wireless M2M communication; and growth in this area has only just begun. Objects such as household appliances, sensors, vehicles, vending machines, manufacturing equipment, meter readers, ATMs/Point of Sale terminals, home health care devices, and lifts will come equipped with the intelligence and systems awareness required to remotely communicate with, and control, other objects from any location, at any time, without human intervention. The connected object will benefit from improved customer and product management through: automated software updates; automated after-sales service and remote service and management. Industrial Equipment monitoring, fleet management and supply chain optimisation. In transport and logistics there are many new services enabled by device connectivity that improves efficiency. It is critical that the industrial sector has the ability to remotely monitor, control and manage plant and field equipment and processes to ensure optimum productivity within safety limits. Connected consumer devices Netbooks, tablets and ebook readers. The launch of ebook readers has been a remarkable success with steady growth expected until Devices such as the Kindle have stimulated M2M technology though opportunities in terms of scale. With consumer electronics companies expecting a constant connection for their products, the interest in M2M is rising on a global scale. 4WHITE PAPER_M2M_1/6/2013_V3

5 9. GSMA: The Rise of Connected Devices Will Drive Mobile Operator Data Revenues Past Voice Revenues Globally by Visiongain. M2M: Opportunities and Challenges with Connected Devices Berg Insight. Report: Security Applications and Wireless M2M. 12. Harbor Research, M2M White Paper: The Growth of Device Connectivity. The FocalPoint Group, M2M 2011: Opportunities and Challenges with Connected Devices. Visiongain. Large utilities Implementing smart grid/metering programs to comply with government legislation or green initiatives. Metering gives the utilities industry the ability to monitor equipment and reduce the costs associated with providing energy and water to customers. Smart meters are replacing traditional utility meters to improve efficiency and reliability in energy distribution and the allocation of resources while giving customers better insight into their energy use and spending. Business to consumer Home health care, automotive telematics and home energy / security applications. The healthcare industry in Asia-Pacific is undergoing a transformation under the influence of an evolving consumer profile, dynamic disease patterns and increasing healthcare costs. Natasha Gulati, Connected Health Industry Analyst, Frost & Sullivan Asia Pacific, said Efficient, affordable and timely delivery of quality healthcare services is a priority for governments across the region. M2M communication is now being explored in healthcare by medical device manufacturers and mobility solutions providers who are investing in integrating advanced communication technologies, such as motion sensing and wireless, into patient monitoring devices. The vision is to encapsulate the healthcare consumer in a web of devices that constantly monitor physiological parameters, evaluate the information and communicate it to the right people and devices in real-time. Several large telecommunication companies, including Telstra and Vodafone, are providing products and services in this space for the Australian market. 7 5

6 M2M Growth by Sector 15. Advisory Report. Best Practices in M2M: The Operator Perspective, July 2010, Current Analysis. 16. The Growth of Device Connectivity White Paper, The FocalPoint Group, LLC. Cellular M2M connections forecast (World ) WHITE PAPER_M2M_1/6/2013_V3 Millions Health: Global telehealth revenues are forecast to grow 55 per cent in 2013 (IMF Research). Of particular concern to governments worldwide is the rise of chronic conditions in a rapidly aging population. Telehealth is projected to be increasingly incorporated into post-acute care strategies from 2013 to help reduce readmissions. Visiongain expects revenue for the wireless health market in the US alone to top $14 billion in 2016; and according to GSMA, Health could save $400 billion in healthcare costs in OECD countries. 8 Retail: Wireless M2M connectivity enables ATMs, PoS terminals, vending machines, kiosks, parking meters and fare collection devices to be deployed in areas where fixed line connectivity is unavailable or impractical. With a potential retail market size of 80 million devices worldwide, Berg Insight forecasts that the number of wireless M2M connections in the retail industry will grow at a compound annual growth rate (CAGR) of 21.6 per cent to reach 33.2 million connections in 2017.

7 17. Visiongain. M2M: Opportunities and Challenges with Connected Devices Harbor Research, Current Analysis Report, Smart meters and grids: Governments and utility companies worldwide are implementing smart energy management solutions to: better manage demand, reduce carbon emissions and provide customers with information designed to help reduce waste and save money. Already comprising almost a quarter of the global M2M market, analysts project that M2M connections in the utilities sector will continue to increase. Berg Insight projects that the worldwide installed base of smart electricity meters will reach million units in 2016 (up from 76 million in 2009, ABI Research). Asia-Pacific has the largest and fastest-growing smart meter population. Berg Insights also reports that State Grid Corporation of China (SGCC), the power utility covering 80 percent of the population, will invest $200 billion annually in Smart Grid infrastructure through to In Europe, at least 80% of consumers will be equipped with intelligent metering systems by 2020, with 100% reached by (Pike Research) The United Kingdom will see a mandated deployment of 48 million electricity and gas smart meters to 27 million homes. Smart meter penetration will reach 50% in North America by 2016 (Berg Insight). Automotive: The European Commission promoting an Europe-wide ecall initiative that aims to ensure that all vehicles sold in Europe by 2013 will use a combination of M2M based services to automatically notify the relevant authorities of the vehicle s location and incident details in case of emergency. 9 Security: Shipments of wireless M2M modules for security applications are forecast to grow from 2.3 million in 2009 to nearly 22 million in 2014 in Europe alone. At the same time, the number of alarm systems and tracking devices monitored from an alarm receiving centre and similar will grow from around 10 million in 2009 to 34 million by the end of The manufacturing, construction, finance, logistics and transport industries are also expected to continue to deploy wireless M2M communications solutions to increase productivity, enhance efficiency, decrease costs. Real-time connectivity, embedded software, advanced analytics and cloud services will enable substantial improvements in equipment uptime, support resource scheduling and deployment and supply chain efficiencies. The potential impacts on businesses as well the economy overall are significant. 11 Companies service customers more efficiently and appropriately by anticipating and responding to problems before they even arise in many cases. Businesses will increasingly benefit from reduced costs associated with automating the supply chain through the remote upgrading of device features and software. M2M has the potential to unleash significant productivity gains and economic growth unlike any previous technology wave. 12 The future of M2M lies in cloud platforms, intelligent devices and systems that seamlessly integrate with each other thereby unlocking the full potential of smart, connected devices and smart systems. The complexities of disparate networks, devices and hardware will be removed, thereby reducing time to market and overall costs and risks for custom application development. 13 7

8 20. Advisory Report. Best Practices in M2M: The Operator Perspective, July 2010, Current Analysis. M2M and LTE While most operators are currently targeting vertical industries such as: fleet management, automotive; telematics; remote equipment / asset monitoring, home health monitoring, consumer electronics and smart energy / meter reading the opportunities for future M2M applications are considerably more extensive. The development of 4G / LTE networks will provide new opportunities for applications such as high-definition telemedicine applications that require high quality images for X-rays, cat scans and MRIs for remote diagnosis. 14 M2M and Cloud computing Cloud computing will enable exciting new growth opportunities for M2M. Visiongain believes that the most pressing barrier to successful M2M and cloud computing partnerships is a lack of adequate standards, although an increasing number of standard bodies are becoming active in this area and real progress is being made. The emergence of the adequate standards will allow for a wealth of innovative M2M applications and services. Differentiating M2M Prior to M2M, technology primarily supported interactions between people with the emphasis being on powerful high-bandwidth communications. M2M communications differ in that devices interact with both people and other devices using technology solutions that require device specific applications with less bandwidth requirements than what PC users demand. 15 M2M connectivity centres on services and applications such as remote access, ongoing monitoring and maintenance, than on features and functions such as speed, memory and processors. Technology and computing knowledge is not expected to be as relevant for consumers wanting to interact with the device; while cultivating an environment where content and services are delivered without the need for human intervention. 8WHITE PAPER_M2M_1/6/2013_V3

9 Overcoming M2M Challenges Networks must be able to manage multiple connection paths for the successful large scale deployment of M2M applications. M2M deployment issues can be solved with the following basic requirements: Secure Data. Application level encryption is the safest way to secure data. Two-way connectivity. Secure two-way communications between device level or server level machines can be achieved by connecting applications directly to wireless infrastructure. Support for more than one type of communication (i.e. Ethernet). Flexibility concerns must be overcome. Availability. Data should be managed by advanced Network Operation Centres (NOCs) to provide minimum downtime or lost data. Costs. The most effective cost solutions come from pay by the byte costs. Technical problems can be avoided if engineers are provided with the right tools from the outset. 16 Selecting an appropriate wireless M2M device will help to overcome challenges associated with managing remote assets. With a diverse range of applications and sectors to which M2M communications can be applied, it is essential that commercial grade 3G (HSDPA/ HSUPA) wireless broadband products and services can be uniquely customised to complement a wide range of remote M2M communication and business continuity (disaster recovery) applications. To successfully overcome the challenges of remote network access, gateways should include dual system management capabilities, allowing customers to upgrade the router s firmware over the air to maximize reliability and reduce lifetime cost. Remotely managed industrial grade 3G gateways must be designed for easy installation and integration into existing enclosures. NetComm Wireless M2M technologies offer advanced integrated software customisation capabilities (SDK); browser based device management; multiple routing protocols and the development of hardware, custom firmware and project management solutions to meet specific requirements. 9

10 Opportunities for Device Manufacturers This category will be the major driver of new service opportunities for connected products in the future. According to Visiongain, the after-market category is a relatively mature market, device manufacturers are considerably younger. The OEM (Original Equipment Manufacturer) category in particular is still at an early stage with extraordinary prospects for growth over the next five years. Device and network intelligence that drives real-time awareness underpins wireless M2M. Companies are increasingly learning that more automation is needed to better manage systems performance. Device automation will create significant value along the equipment support chain allowing customers and their equipment vendors to develop true value in a network environment where information becomes currency that can be shared and utilised collaboratively. 17 Gateway developers will benefit from the need for whole new product lines that rely on realtime two-way connectivity; and from tremendous new cross industry opportunities based on an industry transformation that promises increased efficiency, cost reduction, revenue generation and improved customer satisfaction. Alliance Partnerships End-to-end solutions have proven impractical for the M2M ecosystem where players have evolved into specialist categories. While operators differ in their strategies, large operators are offering beyond data value-added services and support to enterprises seeking to deploy M2M applications. Many have formed dedicated M2M organisations segmented by industry verticals, separating their business and consumer divisions for better targeted distribution, support, revenue realisation and reporting requirements. 18 There is a need to find commonalities between different ecosystem domains to enable reuse of common elements. Horizontal solutions that bridge the gap between applications and connectivity, and ecosystem stakeholders - developers, service providers and consumers - will simplify and speed up the development of applications as well as open up new revenue streams. 19 Network operators are partnering with leading hardware manufacturers such as NetComm Wireless in areas such as smart metering. WHITE PAPER_M2M_1/6/2013_V3 10 For example: Smart metering has had a definitive impact on metering vendors and has shaken a relatively static industry, creating a wave of new partnerships as in the case of the Victorian Government s state-wide rollout of smart meters which involves a collaboration between: Utility companies (SP Ausnet) Carriers (Telstra and smart metering company, Landis and Gyre) Network providers (Ericsson) Software / management systems company (Grid Net) The communications card provider (NetComm Wireless Wireless).

11 Revenue Generation Although the revenue generated from M2M connections generate as little as $3-4 per line per month as compared to an average of $50 for a consumer connection, many operators are becoming more aggressive in the M2M market due to the potential of volumes large enough to offset the low connection rate. Data plans associated with M2M will be adapted to fit specific applications, generating revenue from providing systems integration for key applications such as smart grid deployment and fleet management. From the pure connectivity perspective, connection costs may vary considerably depending on the application. Non high-speed connection requirements such as polling a meter multiple times a day to upload a small amount of data on energy usage to a remote server may only offer the operator a small dollar per month yield as compared to high-performance applications such as wireless digital signage used in electronic billboards, the real-time monitoring of medical devices or video surveillance which would provide a significantly higher monthly yield. 20 Customised M2M applications NetComm Wireless Software Development Kit (SDK) provides the freedom and flexibility to develop custom M2M applications (Apps) for virtually any business need across any industry without restriction. M2M devices with SDK allow businesses to develop M2M Apps for functions such as: remote temperature monitoring, observing water levels, transferring video feed, managing energy or controlling medical equipment. M2M Apps enhance the basic capabilities of M2M devices, giving businesses the ability to manage remote assets in areas as diverse as energy management, security, retail, banking, transportation and healthcare. For example: A temperature sensor App monitors room temperature in real time and works with the air conditioning control App to turn on the air conditioning when the room reaches a predetermined temperature. The FTP App uploads log data, downloads updates and configuration changes; and the alerts App notifies a technician of a fault. NetComm Wireless 3G (HSPA+) M2M WiFi Router (NTC-40WV) and NTC-6000 Series devices support custom M2M App development by allowing users to install custom firmware to the on-board flash memory via the programming interface. NetComm Wireless M2M devices have been customised for: A large water and waste utility that required a 3G solution to monitor and remotely control sewerage pumps installed underground A state government public transport electronic ticketing project An environmental monitoring application that measures changes in sea level for early tsunami detection Direct live video feed from television cameras to the news centre 11

12 The SDK enables custom M2M App development with the use of a common, or open, non-proprietary platform. It enables shared access to a number of available development languages (such as ANSI C/C++, Shell Script, LUA Scripting Language), and allowing new languages to be downloaded and installed to the NetComm Wireless M2M device so developers can create M2M Apps for specific requirements. A wide range of existing software can already run on NetComm Wireless M2M devices; and further development is as simple as writing software for any computer running Linux. Benefits An open non-proprietary platform for the freedom to develop tailored Apps No ongoing costs No hardware lock-in Can be applied to virtually any application in any industry Existing technical staff should already be familiar with the platform and software Wide use of Linux means developers are easy to recruit Benefits for carriers Provides vendor flexibility Facilitates a broader range of applications for a wide range of industries Attracts and retains M2M customers Provides a stronger M2M value proposition Provides a total end-to-end M2M solution Customisation flexibility will result in customer satisfaction Provides a basis of an ongoing relationship WHITE PAPER_M2M_1/6/2013_V3 12

13 Conclusion Fast emerging is a highly connected world where anything that benefits from being connected will be. Any type of remote machine, device or object can be linked to vital information systems to collect real-time information to reduce costs, improve efficiency and, ultimately, offer a competitive advantage. Companies of all sizes are positioning themselves for mass-scale adoption, opening the door to huge opportunities for wireless broadband gateway manufacturers with the technology required to keep potentially billions of devices continuously connected from any location in all circumstances. Wireless network advances have facilitated an increased dependence on mobile systems across consumer, business and industrial segments; amplifying the demand for constant connectivity, reliability, coverage, performance and bandwidth. With M2M connectivity available to applications across a highly diverse range of vertical industries, a one size fits all approach will not suffice. NetComm Wireless range of industrial wireless M2M access gateways can be customised to meet specific objectives and remotely managed and easily transported to virtually any location without fixed line requirements. M2M products must meet the latest requirements of modern telemetry, M2M communication, WAN and legacy serial applications to effectively address the need for reliable and cost-effective communications for a range SCADA solutions such as smart metering. Gateway customisation and innovation enable a wide range of remote M2M and business continuity applications in areas such as: transport, security, surveillance, banking, health, transport, mining and development. About NetComm Wireless Limited NetComm Wireless Limited (ASX: NTC) is a leading developer of innovative broadband products sold globally to major telecommunications carriers, core network providers and system integrators. For over 30 years NetComm has developed a portfolio of world first data communication products, and is a respected global provider of 3G and 4G wireless devices servicing the major telecommunications carrier, Machine-to-Machine (M2M) and Rural Broadband markets. NetComm s products are designed to meet the growing needs of today s data-intensive home, business and industrial broadband applications and customized to optimize performance in line with global network advancements. Headquartered in Sydney, Australia, NetComm has offices in New Zealand, North America and the Middle East. For more information about NetComm Wireless visit: 13