THEME »» connecting machines »» what operators should do ▶ Why not connect every “thing”? ▶ The wireless M2M industry has been leading the development of the Internet of Things, but it’s not only machines we are talking about. Theoretically every single thing could be connected via a wireless network. According to Wikipedia, every human being is surrounded by 1000 to 5000 things. This means a potential connection of trillions of things. SEVERAL VISIONARY applications have already been introduced on the market: GTX GPS Xplorer Smart Shoes: Worried parents can monitor where their children are. When the GPS signal goes outside the safe area, an SMS notification is sent. One charge is enough for several days wear. (source: gizmono.com) Pix-Star picture frames: Stay connected with friends and family with instant picture sharing. View, receive and share pictures without a PC with a wireless connection via GSM, WiFi and Bluetooth. (source: www.pix-star.com) The MIT Media Lab Musical Jacket: The electronics and computer industries have been working for some time on developing wearable devices. The next phase will be to integrate computers and other devices into our clothing. (source: gizmono.com ) 26 EBR #3 2010 To reduce opex per connection on a required scale requires radical action. All traditional business processes, ways of working and supporting infrastructure must be questioned. Operators entering new verticals may need to go through similar processes, adding and removing flexibility. There are alternative ways to do this: � Improvements in existing infrastructure: Adding new features, products and services to the existing infrastructure enables quick time to market and reduces the investment risk. However, incremental improvements in infrastructure may not lead to the desired result in the long term. There are also organizational challenges in terms of the prioritization of different businesses. Whose requirements should be prioritized for the next release? Usually, big business wins and small business has to wait. The new internet reality may offer solutions to this; “software-as-a- service” has already proven a viable model in putting m2m into operation and maintaining good service. The challenge is to have a software package that includes all the functionality necessary to provide the services that customers ask for. Quality-of-service enforcement, for example, requires traffic functionality. It’s not only a matter of device provisioning. � Redevelopment of the infrastructure: Business processes and underlying infrastructure can be redeveloped to meet cost-efficiency and m2m specific business requirements. However, running such an ambitious development project requires detailed vertical understanding and technical and financial resources, all of which today’s typical m2m organizations (employing 50–60 people) may lack. The investment risks and costs can be reduced by establishing joint-development projects with operators and suppliers from different markets or verticals. � Outsourcing the infrastructure: Operators can benefit from business partnerships with telecom vendors, in which the vendor builds and operates the infrastructure based on the vertical-specific business requirements. Different verticals can be served through different infrastructure. Cost efficiency is achieved through scale, with several operators using similar infrastructure as a service. MAKING IT HAPPEN Meeting vertical-specific requirements and providing customized solutions while still maintaining profitability is a challenge. To reduce opex per connection on a required scale requires radical action. All traditional business processes, ways of working and supporting infrastructure must be questioned. Successful m2m businesses can be built in many ways depending on the operator’s vertical strategy and local market conditions. To make that happen requires new partnerships and different ways of working with suppliers. This includes managing business and technology integration end-toend, and both providing professional services and developing new outsourcing models in which the infrastructure is provided as a service. ● References • Intelligent Transport, ABI Research 2009 • Fleet News, February 2010 • Frost & Sullivan: “Healthcare in Western Europe,” Oct 2009 • Northstream: “How to realize a world with 50 billion connections?” • Harbor Research 2010 AUTHOR ▶ MARIETTE LEHTO is Associate Principal, Strategic Program Practice, at <strong>Ericsson</strong> Consulting. She started her career as an SMS product manager at Sonera Finland, launching the first messaging service in the world in 1994. Before joining <strong>Ericsson</strong>, she worked with 3 Sweden and Edgecom London, helping operators in Europe, the Middle East and the Americas to establish new operations and businesses. (mariette.lehto@ericsson.com)
Love a car that matches my mood. Love making a difference Love turning heads With the Hertz Fun, Green and Prestige Collections, there are now even more reasons to love the road. Start your journey at www.hertz.com Love the Road. EBR #3 2010 27
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