Although there are currently at least 16 acronyms for M2M for the networking ecosystem, the only one that counts is Machine-to-Machine and it continues to draw increasing interest. In fact, the latest reports show that this interest is accelerating, and while the most recent numbers indicate why, those numbers probably significantly understate just how big this market is going to become.
Last year the networking industry was talking about 20 billion devices by 2020, but towards year-end that number was bumped up 50%. By January, the prediction had exploded to 50 billion devices by 2020, and with 7 years still to go, we will probably continue to see bigger and bigger forecasts (i.e. IDC stated in October it expects an IoT (Internet of Things) installed base in excess of 210 billion things by 2020, including 30.1 billion connected [autonomous] things).
According to the latest data, the M2M market is heating up, affecting everything from wireless networks to satellites and everything in between. Research and Markets has reported that terrestrial network currently covers only 10% of the world, and has created a need to switch toward satellite networks which would help to cover the remaining 90% of the world, making it the most attractive aspect of satellite M2M connectivity.
This represents an interesting and potentially huge revenue stream for the satellite industry, covering verticals such as automobile and telecommunication, transportation and logistics, oil and gas, energy and utility, mining, maritime, agriculture, healthcare, and public affairs. In 2014, the automobile and telecommunication vertical has the highest market share, but by 2019, the revenue from transportation and logistics is expected to exceed that of automobile and telecommunication.
By 2020 the wireless M2M market is expected to reach $200 billion. According to Market Research Reports, this growth is being driven, in part, by government and regulatory initiatives such as the EU initiatives to have a smart meter penetration level of 80% by 2020 and the mandatory inclusion of automotive safety systems such as eCall in all new car models.
A new report from Infonetics Research states that the M2M module market is expected to nearly double to $2.9 billion by 2018. “The services built upon mobile machine-to-machine (M2M) modules, such as fleet management and connected car, are already a sizable business and are growing much faster than traditional business lines,” noted Godfrey Chua, directing analyst for M2M and The Internet of Things at Infonetics.
For 2013, the global mobile M2M module market totaled $1.4 billion, up 6% from the previous year. North America and Europe are the key centers of mobile M2M module growth, but buoyed by significant investments in China, Japan, South Korea, and Singapore, Asia Pacific is catching up and is expected to account for a third of total revenue by 2018. As businesses turn to the IoT for growth, M2M WAN connections are set to triple by 2018.
Infonetics has also just reported that service providers are focusing more attention on M2M/IoT. “Service provider focus and prioritization of the M2M segment has been a relatively recent phenomenon, but as our latest M2M service provider survey shows, M2M is now scaling to be a significant business for a good number of providers around the world,” said Chua.
“The leading tier of M2M players have committed meaningful resources to developing their M2M businesses and now have significant scale to show for it — between 2 million to just under 10 million M2M connections. They have strategies in place and have created standalone M2M business units comprised of overlay go-to-market and technical organizations. M2M is no longer just an extension of the enterprise business unit for these service providers.”
You can add retail to the list of verticals being impacted by M2M, according to a new report from Gigaom Research (and underwritten by NTT). The operational efficiencies that can be achieved when systems and devices are connected in real time such as better inventory management, remote IT support, automatic data entry, and improved interdepartmental communication are just too great to overlook, said Gigaom’s Craig Foster.
However, as M2M devices and data increase, so too will the probability of hackers targeting these systems to exploit networks, steal data, hijack systems, and compromise workflows, he said. End-to-end security therefore needs to be implemented to fully protect enterprise networks.
The bottom line is that the rise of the machines is in full bloom, and if we don’t have to worry about Skynet, the sheer volume of devices, data and threats will provide enough of a sugar rush to keep Networknators busy for years to come.