The end of M2M and the birth of IoT

Transcription

1 European Summit 2013: Enabling innovation, driving profitability The end of M2M and the birth of IoT 10 October 2013 Steve Hilton and Morgan Mullooly EVENT PARTNER:

2 2 Ecosystem changes the transition from M2M to IoT Why is IoT/M2M happening? Key issues facing operators and vendors

3 M2M becomes IoT: changes in hardware, connectivity and analytics Hardware, connectivity and applications layers of M2M and IoT to support changing strategic aim of solutions 3 Strategic aim M2M world Non-integrated, multi-product focus, cost avoidance IoT world Integrated, solutions sale, cost avoidance and innovation Hardware Custom devices, unintelligent terminals, high costs Intelligent devices, processing power, power management, QoS Connectivity Mobile network, fixed-network, non-differentiated tariffs Hybrid network (FMC), unique tariffing, global roaming, QoS Application Customised, simple track/trace, varied platforms Cloud applications, data aggregation, analytics, common platforms for OSS/BSS, QoS

4 4 Ecosystem changes the transition from M2M to IoT Why is IoT/M2M happening? Key issues facing operators and vendors

5 5 Why is the IoT/M2M revolution happening? The three drivers of the IoT/M2M revolution The global business world is changing The social world is changing The communications world is changing

6 6 The global business world is changing Economic output in emerging markets is 2 3 times that of developed markets: 5 6% growth in output per year revenue growth employee growth profit growth. Growth in developed markets is slow. Enterprises in all industry sectors in developed markets must refocus on both operational excellence and innovation. Growth in world output, developed and emerging economies, [Source: World Economic Outlook Update, IMF, July, 2013] 7% 6% 5% 4% 3% 2% 1% 0% 1% European Union Emerging markets

7 7 The social world is changing Application categories for the typical user Streaming TV guide Remote TV Music Download On-demand Radio Recognition Media Music player Video player Commerce Retail Coupons Comparison Payment Banking Budget Stock tracking Apple Google RIM Nokia Piracy Operator Third-party Portal E-reader E-books News Encyclopedia RSS reader Audio books Newspaper Magazine Publisher Operator Self care TV Security Wi-Fi Portal Music Telephony Sports Maps Messaging Events/promotional Games Social networking

8 Percentage of connections The end of M2M and the birth of IoT 8 The communications world is changing M2M and total traditional device connections, worldwide, % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 7% 9% 12% 17% 23% 27% 93% 91% 88% 83% 77% 73% Traditional (CAGR 0.6%) M2M (CAGR 36.3%)

9 9 Why is the IoT/M2M revolution happening? Four key M2M/IoT issues for carriers and vendors 1 Revenue and profit focus 4 New markets and segments 2 Partnering 3 Customer experience management

10 10 Ecosystem changes the transition from M2M to IoT Why is IoT/M2M happening? Key issues facing operators and vendors

11 11 Key issue 1: revenue and profit focus Profit is becoming increasingly important. Our calculations involve: M2M organisation employees by functional area for small carriers revenue based on our forecast of connections and ARPCs costs based on carrier conversations employees 11% 8% 8% 32% platforms marketing/advertising 11% sales commissions G&A expenses 13% 17% other. We will present our findings soon. Sales OSS/BSS R&D Partnership management Technical support Marketing Product management

12 Key issue 2: a search for recognised partners and channel support Increased focus at the applications, integration and services parts of the value chain. Heightened interest in M2M MVNOs to supply channel capacity for various industry sectors, applications and geographies. We have created an analysis of 13 different types of M2M MVNO, with examples and illustrations of the value they add. Not all M2M MVNOs are created equally and not all are helpful. M2M value chain Application Customer support System integration Managed services M2M platform Connectivity MNO Service provider Enterprise 12 MVNO MVNE

13 Key issue 3: heightened focus on customer experience management Customer experience management is the ability to understand customers needs and to translate this understanding into solutions. Despite a lower risk of churn in M2M compared with other telecoms services, operators are still concerned with customer perceptions. Process and systems must be aligned to improvements in the customer experience. Key aspects of CEM Touchpoint Join On-board CEM processes 13 Product and service availability at the advertised price delivered on time Ordering process Activation process Billing process and training Product failure and/or service disruption Support Product replacement and/or problem resolution

14 Connections (billion) The end of M2M and the birth of IoT Key issue 4: new markets and segments present themselves to carriers and vendors At the end of 2013, there will be 173 million M2M device connections worldwide. This will increase to 2.2 billion by % CAGR over the 10-year period. New application markets: luggage/logistics air cargo insurance telematics personal healthcare/safety. New segments particularly SME/SMBs. M2M device connections by industry segment, worldwide, Retail Industrial Healthcare Automotive and transport Financial services Government Security Utilities 14

15 15 Contact details Steve Hilton Principal Analyst Morgan Mullooly Analyst Boston Tel: Fax: Cambridge Tel: +44 (0) Fax: +44 (0) Dubai Tel: +971 (0) Fax: +971 (0) Dublin Tel: +353 (0) Fax: +353 (0) Edinburgh Tel: +44 (0) Fax: +44 (0) London Tel: +44 (0) Fax: +44 (0) Madrid Tel: Fax: Manchester Tel: +44 (0) Fax: +44 (0) Milan Tel: Fax: New Delhi Tel: Paris Tel: +33 (0) Fax: +33 (0) Johannesburg Tel: Fax: Singapore Tel: Fax: