Despite being around for a decade, machine-to-machine communications, or M2M, remains a scrappy start-up kind of a business. But changes can be made that streamline design and deployment for enterprises, taking it mainstream. Guess which value chain partner has the chance to be at the center of that realignment? Give yourself a gold star if you said “carriers.” But you also get a gold star if you said “channel partners.”
M2M is a data-only segment that incorporates devices large and small, which communicate in a person-less fashion with each other and with centralized servers over mobile connections. Think security, fleet management, GPS tracking, inventory management and the like. The productivity and cost-efficiency benefits for end users are obvious and translatable especially in a down economy, but the market has stubbornly refused to go mainstream. A big reason for that is the sheer number of moving parts that go into crafting a solution.
“Technology solution sales need to be painless for enterprise buyers, but M2M isn’t there yet,” said Steve Hilton, enterprise research vice president at the Yankee Group. According to recent Yankee Group M2M survey, “it takes four to six vendors and partners to effectuate one M2M enterprise solution. This creates cost and schedule over-runs, and plenty of finger-pointing when things go wrong.”
And for many enterprises, even determining whom to point the finger at in the first place is a problem. Who, for instance, is the market leader? “If you asked 20 people, you’d get at least 20 different answers,” explained Hilton. “With the current M2M supply chain, we hear plenty of enterprise dissatisfaction around the complexity of project implementation and the inability to articulate a straightforward ROI story,” Hilton said. “Now it is time to make some changes – changes which will drive M2M to market share consolidation, increased awareness, deep channels and simplicity of delivery.”
And those changes are underway as larger players capable of delivering integrated solutions are stepping into the breach. “We are witnessing a shift whereby the silos of hardware, software, communications and services divided between hardware vendors, independent software vendors, application service providers, systems integrators and mobile operators are being replaced,” said Andrew Brown, director of wireless enterprise strategies at Strategy Analytics. And because of this, the total M2M market will be worth almost $40 billion dollars in 2011, the firm said.
