Vendor, support channels not ready for $408M M2M demand

The appetite for machine-to-machine (M2M) wireless solutions is growing among Canadian SMBs, but existing vendor and support channels have not matured enough to meet current M2M demands, an IDC Canada study has found.

M2M allows data to be collected by one device using sensors or meters, relayed to another device over wireless or wireline Internet networks, and analyzed using specialized software. M2M applications allow each machine or device to be controlled and monitored remotely. M2M ranges from simple text messaging to so-called smart homes that let owners remotely monitor and adjust room temperature, or utility meters that automatically report usage back to power companies.

By automating certain systems and controlling them remotely, M2M saves companies money by cutting down on the need for staff to manually monitor and control those systems on site.

Canada’s overall potential M2M market is forecast to grow to $408 million in 2015, a compound annual growth rate of 30 per cent from $143 million this year, according to a study released at the recent Rogers Technology Showcase in Toronto.

“However, although M2M use cases have started to mature, the vendor and support landscape has not scaled on a similar trajectory,” the study warns.“Indeed, the existing M2M vendor community is highly fragmented and primarily focused on niches particular to their specialized capabilities and strengths.”

“You don’t have to be in enterprise. You can be an SMB employing M2M solutions,” said Mansell Nelson, vice-president of M2M at Rogers Communications Inc. in his keynote speech at the event, designed to showcase the company’s M2M strategy and some of its M2M solution partners.

“The future is really about how do you take all this (M2M data) and use it to grow your business,” Nelson said.

SMBs seem more eager to jump into the M2M waters than their larger counterparts. Twelve per cent of Canadian SMBs surveyed plan on deploying M2M solutions within the next year – double the interest level seen among medium and large sized businesses, IDC reported.

Based on the IDC study, however, those SMBs seeking M2M solutions will have to deal with a very splintered channel network. The fragmented, specialized nature of that vendor landscape was evident on the event’s trade show floor. It featured various M2M vendors whose solutions are sold by Rogers to its wireless enterprise customers through co-sell or re-sell partnerships.

Some of those Rogers partners, like Apple, HP and Research in Motion, are huge. But others serve very narrow slices of the M2M market, like PositiveID Corp., which offers remote glucose monitoring for diabetics and their healthcare providers, or Mentor Engineering Inc., whose tracking apps monitor the movements of drivers in commercial fleets.

One Rogers partner on the show floor, Triella Networks Inc., provides an M2M solution that increasingly appeals to businesses of any size and industry: cloud-based mobile device management. Though the Montreal company has been around since 2003 when it started out providing mobility management solutions for laptops, its business has exploded with the growth of the bring your own device (BYOD) trend as more workers use their personal wireless devices on the job.

Although Triella (an SMB itself with just 35 employees) has customers of all sizes, about 60 per cent of its clients are SMBs, says Rami Karam, Triella’s vice-president of marketing. SMBs are actually flocking to remote BYOD management faster than larger business, he says.

“Where it makes sense for SMBs is that it saves on buying the hardware because (the employee) has already bought the device,” says Karam.

As a huge national wireless carrier, Rogers is dealing with the fragmented niches in the M2M vendor market by partnering with specialized companies like PositiveID and Triella.When a Rogers wireless business client asks Rogers how it can manage its BYOD situation, for example, Rogers has a co-sell deal to refer them to Triella and promotes Triella’s marketing handouts in its Rogers locations. In some instances, Rogers will even simplify things for the customer by putting the costs of its wireless services and its M2M partner’s services on one monthly bill.

“We’re really trying to make it easier for those smaller customers to not have to deal with a bunch of parties to bring this together. We found in our research and discussions with them that they don’t want to have to do that,” Nelson says.

It’s a channel model that works for now, but signs of consolidation are coming, Nelson says.

“I think what you’re seeing is the (M2M) industry is starting to accelerate. There’s a lot of mergers so consolidation is starting to happen…So you’re starting to see that each one of those industries is changing at the pace that the (M2M) technology is being accepted. I think it’s a natural evolution of technology.”

According to the IDC study Canadian industries most likely to adopt M2M solutions in their businesses within the coming year are:

  • Utilities (22 per cent)
  • Construction (18 per cent)
  • Education (17 perc ent)
  • Federal government (17 per cent)
  • Healthcare (17 per cent)
  • Banking (14 per cent)
  • Transport (11 per cent)

Trends contributing to the Canadian growth of M2M include:

  • The green IT movement (to reduce power consumption)
  • An aging population (need for remote medical monitoring and care management)
  • A remote workforce or people working from home
  • Urbanization (more people living in cities pushes up demand for remote alarm and video surveillance systems)

Christine WongChristine Wong is a Staff Writer at Follow her on Twitter, and join in the conversation on the IT Business Facebook Page.

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