Cloud Boosts Operator M2M Profits Five-Fold

Cloud Boosts Operator M2M Profits Five-Fold

Jasper Wireless and Machina Research have announced the results of a new industry research project summarised in a White Paper, which found mobile network operators (MNOs) that implemented a cloud-based M2M services management platform could potentially see a five-fold profit increase.

M2M is widely recognised as being a significant future growth opportunity for mobile operators faced with otherwise stagnating traditional markets. Machina Research predicts that there will be 2.1 billion cellular M2M connections worldwide by 2020 and expect that the addressable market for mobile operators in M2M will total USD373billion in 2020.

The majority of ‘value’ in the M2M market lies not in undifferentiated connectivity, but in moving up the value-stack to capture a bigger share of the M2M opportunity. Many of the world’s leading mobile operators have made significant investments to that end, including establishing M2M competence centres, platform capabilities and partnering initiatives,” said Jim Morrish, Machina Research.

The first step when adding more value is the provision of a value-added connectivity support capability, allowing MNOs to generate more revenue per connection and to focus on generating application revenue directly from customers.

For this White Paper Machina Research has undertaken a detailed business modeling exercise to quantify the potential benefits of adopting a cloud-based M2M platform solution. We have found that adopting such a platform could have a substantial impact on an MNO’s M2M revenue.
As Jim notes:

“The effect of adopting a cloud-based M2M platform is to increase cumulative profits from M2M between now and 2020 five-fold in comparison with a scenario where the same mobile operator does not adopt any form of platform capability”.

The main sources of benefit that we identified include: additional local client wins, additional regional client wins, ARPU uplift, and cost reduction.

Jasper Wireless has been at the forefront of prescribing a purpose-built and cloud-based platform for profitably delivering M2M services,” states Macario Namie, Vice President of Marketing at Jasper Wireless.
“We are pleased to see that the business modeling exercise validates the benefits that such an offering can provide to our current and future operator partners.”

The White Paper investigates purpose-built M2M platforms and the potential to significantly enhance a mobile operator’s prospects in the M2M space including:

  • Supporting the need of clients, who are looking for partners to integrate into end-to-end business processes, rather than simple providers of connectivity. To this end, clients of cloud-based providers of M2M platform services are also able to benefit from the wider operator and M2M ecosystem across different geographies.
  • Maintaining a leading edge proposition in a rapidly changing, and technically sophisticated, marketplace. A third-party, cloud-based, M2M platform capability can potentially be positioned as a competitive differentiator in this context.
  • Supporting multi-country client solutions. Given the level of systems integration that is required between mobile operators and companies offering (or using) M2M solutions, there is a considerable benefit in using the same platform to support solutions in multiple geographies.
  • Reducing operator costs, in the context of a typically low-ARPU environment. Cloud-based platforms offer operators a low-cost, low-risk entry into providing M2M connectivity and associated services without disrupting or burdening their core lines of business.

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