2013 was been a good year M2M communications. According to Machina Research, there were 3.2 billion global M2M connections. More importantly, forecasts show that the momentum in this segment of the mobile industry will continue to gain steam and likely hit 18.5 billion connections by 2022.
As we start 2014, the adoption of M2M will continue to be motivated in large part by enterprises understanding of the potential of M2M to reduce costs and improve efficiencies, as ROI has been well-documented across a broad range of practical, real-world applications.
What will change in 2014 is that more enterprises wanting to boost their bottom line will begin to evaluate M2M for its potential to produce direct revenue for an organization. This capability as a revenue stream most likely will be realized in one of following three ways:
1. Selling Connected Devices
As consumers become more comfortable with M2M communications and, as the ability of manufacturers to embed wireless connectivity into a broad range of products becomes easier and cheaper than ever before, more enterprises will tap into the revenue that comes from selling connected devices.
The opportunity to add connectivity to consumer products now reaches far beyond traditional tablets and ereaders. Think of the growing enthusiasm for wearable technology, such as smart watches, smart glasses and activity and fitness trackers. Other popular connected device wish list items include cameras that offer instant social media sharing and automatic uploading to cloud storage services, personal navigation devices, and gadgets designed to provide speed camera warnings.
One market vertical especially suited for the sale and distribution of M2M consumer devices is health and safety. For example, as more patients, medical practitioners and insurance companies take advantage of M2M’s ability to remotely track and assess common health markers such as blood pressure and glucose levels, the demand for in-home devices capable of automatically sending information will grow. The same goes for monitoring and tracking modules embedded into items such as necklaces and wristbands. As our population ages, these wireless connectivity tools will not only allow the elderly to quickly get help in emergencies but also extend their independent living status.
2. Offering Premium Services and Applications
In 2014, as M2M platforms become more robust, enterprises will find that offering value-added services and applications to their end users will be easier than ever.
Take the connected home, for example. Homeowners often test the technology of wireless remote home monitoring by contracting for a basic service that gives them the ability to set door and window alarm alerts and receive notices of use via their wireless devices. With a well-developed M2M platform that has the capacity to allow the instant activation of dozens of additional features, a home security company will be able to offer a broad array of specialized individual services and packages for which homeowners will pay an extra recurring monthly fee (e.g., carbon monoxide, flood and/or mold monitoring; remote control of security cameras).
This premium paid service concept may be applied to almost any M2M vertical. Owners of connected vehicles will happily contract for advanced features such as in-car entertainment and automatic accident alerting. Businesses taking advantage of security applications at remote, unmanned sites will understand the value of additional investments in energy usage M2M applications. Adult children of senior citizens who already pay for emergency response alert devices will appreciate the ability to add extra services, such as medication reminders, if a parent’s memory begins to deteriorate.
3. Marketing Business Intelligence
A third way enterprises can add to their bottom line involves the packaging and selling of business intelligence. As M2M devices gain the ability to process more data at faster speeds, enterprises will be positioned to take advantage of the massive amounts of valuable information that they are able to collect and analyze.
Auto insurance companies are already clamoring for information controlled by connected car dealers. Medical researchers will want to mine data collected by home health monitoring companies. Businesses will happily purchase information that allows them to improve processes, design new products and services, and much more.
Equally important is that M2M data often is accessible in real time. This level of currency in business intelligence will provide a significant competitive advantage for buyers that are able to leverage the information and make immediate business decisions.
With 2014 poised to be a banner year for M2M connections, now is the time for enterprises of all sizes and in all verticals to take advantage of the direct revenue potential that can be had from either the sale of connected devices, the sale of premium services or the sale of business intelligence. Delays in implementation will only lead to delays in bottom-line rewards.