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The Machine to Machine Perfect Storm

Posted on: June 5, 2015

May of 2015 marked the month that the Machine to Machine communications entered a phase of exponential growth. Is your enterprise prepared for more devices, more connections, and a plethora of business transformation opportunities related to the Internet of Things?

We witness major changes in the Information and Communications Technology (ICT) supply chain landscape in May this year, and more changes are anticipated. IoT talk is becoming IoT action:

  • May 31, 2015 – Intel to Acquire Altera Corporation for $16.7B
  • May 30, 2015 – Google unveils Brillo OS, a lightweight Android variant for IoT
  • May 28, 2015 – Avago Technologies to Acquire Broadcom for $37B

And prior to these block-busters, M&A related to the Internet of Things (IoT) was already shattering records. As of mid-May, 2015, according to 451 Research, buyers had spent $14.8B to purchase 39 IoT-related companies, surpassing the $14.3bn spent for 62 such companies in all of 2014, which itself was a record-breaking year. Semiconductor-related acquisitions had driven the bulk of IoT M&A with ARM, Intel, and NXP each announcing two or more deals largely driven by IoT-related positioning.
IoT definitions vary, but broadly speaking, we describe it as “ubiquitous connectivity, information, and control accessibility—between people (primarily with mobile devices), machines (M2M) or objects (via RFID) by the Internet and Cloud.” Machine connectivity is not new (Tangoe has been managing corporate M2M connections for years), but M2M has now begun a rapid growth trajectory and will transform how companies run their businesses.

Based on legacy systems and technologies, current M2M applications include ATMs for banking, ticketing kiosks for airlines and entertainment, and remote sensors for transportation, energy production, and manufacturing. But now, thanks to more agile and lower cost cloud options, Internet, mobile and open systems, there are numerous new M2M use cases that innovative businesses and governments can envision and implement. Commercial deliveries with flying drones, first proposed by Amazon, have technophiles drooling. Perhaps cloud-controlled ‘driverless’ trucking might not be far behind? Add-up the traffic, fuel, supply chain, and infrastructure savings that a cloud-enabled trucking logistics company could provide and we can’t help seeing large VC dollar signs everywhere!

Prior to “IoT – May”, industry analyst firm Gartner, predicted there will be 4.9 billion connected “things” in 2015, up 30% from 2014; growing to 25 billion connected things in 2020. From an industry perspective, manufacturing, utilities, and transportation will be the top three verticals using IoT in 2015. Combined, they will have 736 million connected things in use. Gartner also estimated that IoT will support total services spending of $69.5 billion in 2015 and $263 billion by 2020, a CAGR of 30.5%. That is quite a bit of services spending to manage.

A key M2M challenge to more widespread adoption has been vertical-oriented, closed vendor proprietary systems. For example, if an M2M approach must address the consumer market ‘smart home’ devices and platforms’ lack of interoperability to achieve a critical mass of users and sustainable IoT M2M growth. The marriage of Internet, mobile, and cloud can produce interesting new offspring, and semiconductor, operating system and systems integrators now recognize the IoT M2M growth opportunity. Want to get some IoT M2M inspiration? Check out http://www.libelium.com/top_50_iot_sensor_applications_ranking/

And be alert for “business digitization” requests from your organization’s boardroom (you know the non-tech savvy folks who have secretaries handle their email), what they really want to know is how IoT and M2M can supercharge corporate profits to keep stocks soaring, but they don’t speak our tech lingo!

Tangoe Matrix Machine will continue to support your organization’s M2M devices and connections, and Tangoe Strategic Consulting can support your organizations IoT business efforts – so one less thing for you to fret over!

$35+
Billion

of spend under
management

10+
Million

devices managed
globally

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