2012
07.11

Carriers are recognizing that success in M2M requires new and different commercial approaches. Some changes will be perhaps different than anything they have tried before.

As we learned in part one, carriers are not the center of gravity of the M2M markets. As such, they are not primarily responsible for good, bad, or ugly market development of value creation. But they could be.

We would not have believed it had we not experienced it with our own eyes and ears:  Connected World’s Peggy Smedley chaired a panel of executives from top wireless providers at the Connected World Conference on June 12. For the carriers, it was a forum, in their own words, to describe their new and emerging market positions based on what can only be called a more enlightened view of the opportunities to connect and manage unattended devices through cellular networks.

That new position? A balanced one: Enabling others and leading where expected. Enabling others to create new solutions, make new markets, and create new value.  Leading these markets to a new understanding of how M2M markets need to be developed, including in many ways, different from how the cellphone markets developed. And in this case, that might mean with carriers still playing a critical, if somewhat less dominant role.

Therefore, new approaches were needed – for carriers, too.

Attended Versus Unattended Device Markets
This may be over simplistic, but, we think it is as good a place to start as any. Attended device markets—phones—are for more homogenous than most if not all of the unattended device markets –M2M. As such, the hardware and software platforms, service plans, and significant components of the infrastructure are, relatively speaking, simpler.

We are not suggesting that they are easier, or less sophisticated or less competitive. Not at all. We are instead simply suggesting that people are largely people. People want to talk, they want to SMS, they want their search, social media, rich media, games, and business apps. And they want them whenever they damn please … from everywhere. And while we can segment people by hundreds or thousands of personas, at the end of the day, the basics of our use case scenarios are very similar.

That similarity is evident in the fact that so few smartphone devices capture so much of the share in global markets for attended devices. This is evident in the concentration of channels to acquire attended devices, and services. This is also evident in the concentration of user time on relatively small collections of tasks, sites, applications.

In other words, the parados are concentrated.
But the unattended device markets ARE the Cambrian explosion in wireless network connections. The differences among and between the vast majority of unattended devices that are being connected to one or another network far outweigh the similarities.  To be clear and simple, consider just these five of what could be 50 major differences:
1.Power: All cellphones run on rechargeable batteries. Unattended, can be either, or.  Many are run off a DC power platform.  Power requirements for cellphones are fairly homogenous, unattended are all over the place.

2.Connection: Cellphones are expected to be connected to their networks persistently for realtime, any time communications. Unattended devices are all over the place; some burp, ping, alert, or alarm.

3.Physical form factor: While human hands come in many shapes and sizes, they can be measured within a fairly narrow range of three dimensions. With a single device, one could capture 10% of the planet or more. Unattended … could not be more different – even within the same application segment.
The unattended connected device markets are fragmented, inefficient, multifaceted, and in some cases stubborn as hell; stubborn about legacy technology support, customization, capital cost, M&O costs, and more. What they are not, is very much like the attended device markets in a number of critical ways.

How Different?
Our work has led us to believe that the enterprise markets for unattended connected device solutions are looking further and wider for support specifying, qualifying, sourcing, purchasing, and operating their unattended connected device solutions.

Data collected recently from the Connected World enterprise user community, along with INEX teams’ experience in a number of related mission critical technology markets, arrived us at the conclusion that perhaps one of the market development challenges for the unattended connected device markets – M2M– was a hyper-concentration of effort, energy, and expectation that carriers would drive the market.

What we saw was a collection of market opportunities whose fragmentation – as described in summary above – was revealing itself in ways that had serious implications for market and channel development requirements.

In other words, the fragmentation of the unattended connected device markets would arrive prospects at the point of decision through myriad channels—NOT hyper-concentrated as they are in the attended device/ cellphone markets.

High-Level Takeaway:  Given the fact that so much demand for unattended connected device solutions is rooted in gaining secure, realtime access to relevant EXISTING data, we expect that a number ‘IT’ channels—branded vendors, their ISI (independent systems integration), and ISV (independent software vendor) partners will play more important roles in the M2M market. And to listen to members on Smedley’s panel–leaders from Verizon, Sprint, T-Mobile, AT&T, and Rogers—we get the impression that they see this too.

Our Advice: Recognize the differences between concentrated (perhaps hyper-concentrated) cellphone markets and the highly fragmented and emergent M2M markets. Pay heed to the conservative voice of the customer that serves as the logic filter for markets’ grand visions—these are smaller project markets as much or more than they are broad rollout markets. Accept the basic facts that these new unattended device connections are valued for their ability to access existing data from existing sources and integrate them efficiently and securely into existing decision support tools.

There is much that is new, but it will only be deployed if it can leverage some existing … technologies and relationships.

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