Machine to machine (M2M) communication – whereby sensors and networks allow all the parts of a physical system to communicate directly with each other – will radically change the way we work, live and travel.
M2M will allow us to do more with less, but only if the industry can overcome current market barriers, according to an AT&T-sponsored report published by Carbon War Room.
The potential for M2M technologies to drastically change the way we do business, streamline operations and curb our environmental impacts is evident, but there are significant market barriers that must be addressed to realize the full scalability of these technologies.
“We’ve seen the great potential in this technology and made aggressive investments to capitalize on that potential,” said John Schulz, Director of Sustainability at AT&T.
“We pursued this work with Carbon War Room to tap into their expertise to understand the relationship between this revenue opportunity and potential environmental benefits. This study looks into ways that we can scale that expected huge adoption curve to achieve the benefits faster.”
In the report Carbon War Room proposes strategies for M2M technologies industry to transform key sectors and reduce greenhouse gas emissions by 9 billion tons. It also identifies the challenges that threaten the industry from reaching its full potential, and offers solutions for overcoming them.
Hilary McMahon, Director of Research, Carbon War Room, said:
“We aim to identify how major telecommunications companies and others within the ‘M2M Value Chain’ can work both independently and collaboratively to accelerate the deployment of M2M technologies. Our conclusion is that the industry itself can create the necessary conditions for realizing the great potential for growth and reductions in GHG emissions projected by industry analysts.”
Value Chain Integration and Unified M2M Partnerships:
Barrier: Fragmented Value Chain – Mobile Network Operators (MNOs) often rely on various other players to bring a complete solution to market. This prevents clients from buying a finished, turn-key product system and makes it difficult for end-retailers to offer one.
Solution: Creative partnerships are required if the market is to be able to offer M2M solutions unilaterally. In the meantime, alternative business models and new marketing strategies can be used to accelerate growth and improve profit margins.
Industry Cohesion on Standards:
Barrier: Lack of Universal Standards – Although organizations are working on the creation of standards for M2M applications and hardware, the lack of standard parameters across or within industries makes it difficult to create a comprehensive offering.
Solution: Standardization efforts need both leadership and consolidation.
Measuring Data and Leveraging Its Value:
Barrier: Lack of Performance Data – Potential clients need to understand M2M technologies’ value proposition as these technologies often require significant upfront investment. Although M2M successes are numerous, actual data and analytics for making projections and monitoring results have not been fully integrated into products or sales.
Solutions: Companies must work to build data collection and analytics into their offerings. By creating and updating tools to provide robust metrics, companies can help make their value proposition more apparent to potential clients.
Familiar Strategies for New Products:
Barrier: Communication and Marketing Challenges – Companies offering M2M solutions need to be able to communicate the benefits of implementing an M2M system to multiple layers of a client company.
Solution: Companies should make M2M an aspect of their core business, and integrate M2M business lines with existing marketing approaches.
Innovative New Business Models and Sales Strategies:
Barrier: Incompatible Sales Models and Long Sales Cycle – Clients report that M2M pricing is still too high and companies offering M2M services do not view M2M as a core service offering. As a result, not enough effort has been made to adapt internal sales and marketing models to M2M.
Solution: Companies could incentivize sales by adjusting compensation models and developing inter-corporate campaigns crafted around major events. Also, creating industry cohesion on communication is critical. Telecom companies can lead in coordinating industry efforts to increase deployment of M2M technologies, improve the value proposition of M2M, and develop a common language to promote M2M benefits to customers.
The Carbon War Room is a global entrepreneurial initiative set up by Sir Richard Branson that accelerates entrepreneurial solutions to deploy profitable, scalable clean technologies across industry sectors; and is a registered US non-profit.