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The rise of the machines

The rise of the machines
November 10, 2011in Business2011-11-102013-03-18businessen
The race for competitive advantage: tapping into new revenue streams with M2M. M2M is changing. While it has already had a significant impact on fleet management and logistics, now the potential is being realized in a whole range of applications including automotive, utilities, construction,...
the rise of the machines
the race for competitive advantage: tapping into new revenue streams with M2M
M2M is changing. While it has already had a significant impact on fleet management and logistics, now the potential is being realized in a whole range of applications including automotive, utilities, construction, agriculture, office equipment, engineering and manufacturing.
Businesses faced with the twin challenges of globalization and economic downturn are presented with competition and opportunities in new markets. M2M opens the doors to a new world of pre-emptive maintenance, real-time insight into how products are used in the field and potential subscription revenues from delivering tiered levels of service.
Analyst Berg Insight estimates that the number of machines using mobile M2M communications increased by 48% in 2010 to 81 million, including 37 million net additions during that year alone, a sign that the technology is at the beginning of the acceptance curve.
Other analysts have just as impressive forecasts. The Yankee Group believes the number of M2M-enabled devices will march on to 200 million connections by 2015, and Analysys Mason pegs the 2020 market as comprising 2 billion connections, with over half in the utilities sector, driven by regulatory requirements for smart grids in Europe.
Many sectors are alert to the potential for machine intelligence. Among the more hyped are fleet management (for tracking goods and vehicles), consumer electronics (including e-readers, car navigation systems) and retail, where EPCglobal (an RFID standard) is an increasingly common approach to stock control.
And if you dig a little deeper, you find M2M being used in manufacturing, oil and gas, automotive, security, transport and even environmental management. The potential for making machines "smart" is almost limitless.
competition driving adoption
"Look at the manufacturing business today," says Frederic Jammes, Director of M2M at IT&Labs, the systems integration arm of Orange Business Services. "It's incredibly competitive. A lot of western manufacturers are faced with high-quality and low-cost competitors emerging from developing markets. They know they need an edge, and they see remote monitoring and maintenance as a lever to do this. If you can control the device or equipment remotely, or fix things before they break, you can charge customers in a new way."
Examples include a leading industrial machine manufacturer that wanted to monitor the power output of its machines. It was a small step to remotely raise the machine's power limiters and charge customers for power on demand.
And Manitowoc, a leading crane and lifting manufacturer, uses M2M to remotely collect information about how its cranes are being used. The data is used to optimize maintenance and safety, and it can use this channel to provide subscription-based services to customers.
Analyst Kathryn Weldon at Current Analyst notes that creating a new revenue stream is not typically the primary reason for deploying M2M, but it can soon become the most important.
 "There is a company manufacturing fire detection and prevention systems," she explains. "They were experiencing a huge number of service calls saying 'this doesn't work.' They implemented M2M so they could do remote software updates and so reduce the cost of servicing customers. Then they realized they could offer a subscription-based service. What started as problem solving had become an opportunity." 
what do you want to do today?
Kamel Ouali, a Senior M2M Consultant for Orange Business Services in Switzerland, sees a second wave of M2M that is inspired more by the business case than by technological capability: "Many heavy industry manufacturers have been using remote monitoring for 10 years or more. Now they are looking at the business opportunity and wondering if they could move into subscription services. Obviously it's difficult to charge for something they were previously offering for free, so they need a different approach." 
Once a new business proposition has been thought through, such as pre-emptive maintenance, automatic stock ordering or power on demand (all qualities that may be worth paying extra for), then you can build a system for capturing the data, understanding it and acting upon it. 
Technology choice will also affect system deployment. "It is important to design a technology strategy that matches your needs. You may find that wireless mesh networks or satellite or fixed-line communications have the right coverage, speed or cost profiles for your specific application," explains Leonard Carey, Head of M2M for IT & Services Solutions, Orange Business Services. "And your sensors do not speak the language of your back-office systems, so you need middleware to bring the data in and make sense of it." 
Through its consulting, integration and software development teams, Orange Business Services has been piecing together the different technologies that create an intelligent ecosystem for a range of different companies. For a concrete delivery company, Orange built a solution combining M2M cellular communications, geofencing and servos. The mixing process on the concrete mixing truck begins closer to the destination because fresh concrete is less likely to be rejected by a customer.  
And for a paper manufacturer in the Middle East, which has to know the environmental conditions of the paper in its warehouse, Orange created an M2M solution which allows it to remotely monitor temperature, humidity and light levels to ensure huge rolls are not spoiled.
Another challenging environment is underground: Orange is designing a solution for mining customers that will see underground sensor networks deployed to monitor water levels, temperature, humidity, air quality, seismic activity and so on. The mesh network that aggregates this sensor data and relays it to the surface can also be used to track miners and vehicles, proving that safety and business process improvement can go hand in hand. Not only that, the head offices in major capitals can see, in real time, what is happening in their mines in the most remote of locations. 


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