The Internet of Things (IoT) market is immature and it should come as no surprise that the management systems (sometimes called OSS/BSS) associated with IoT have yet to develop fully. It’s almost impossible for one vendor to supply all the systems management requirements in the IoT value chain. Furthermore, the threshold for scalability has not been tested in real-world deployments.
We discussed the differences between IoT and M2M in a prior blog posting. In summary M2M has generally been a customized solution with minimal sophistication at the applications layer. IoT is the evolution of M2M where applications, platforms, data aggregation and analysis drive process improvement and service innovation through connectivity-enhanced solutions. We are in the midst of the transition from an M2M to an IoT world.
M2M management market
Analysys Mason forecasts that the total worldwide M2M management market will grow from USD397 million in 2011 to USD1.1 billion in 2016 at 23% CAGR (compound annual growth rate): See Figure 1. This M2M systems management market will support an M2M market with billions of device connections. See my first blog entitled, “Progression from M2M to Internet of things: an introductory blog”.The M2M management market is large and growing, but today is highly fragmented. So Analysys Mason decided to undertake some research to see what we’d find in this M2M management market. First, let me describe what we did. Then I’ll describe what we found. All this information is based on Analysys Mason’s “M2M management software: supplier and product review”.
The five areas of IoT/M2M systems management: our research process
We defined the five important areas of systems management in this IoT/M2M world. They are:
- Authentication and security – Solutions in this category ensure that data transferred between devices, modules, the underlying connectivity network and applications are verified, authenticated and protected from any number of security threats including viruses and worms.
- Managed connectivity – Solutions in this category ensure that M2M devices can be detected, monitored and managed across various mobile and fixed-line networks and across various network operators (mobile network and fixed-line operators). Solutions in this category also ensure that interconnection and coordination can occur between various operators’ networks.
- Device data aggregation and analysis – Solutions in this category ensure that the myriad information (e.g., temperature, geo-location, barometric pressure, velocity, acceleration, oxygen levels, usage data, etc.) collected from IoT/M2M devices is aggregated and stored. These solutions allow analysis of these data and actions to be taken based on various data criteria.
- Device management – Solutions in this category ensure that M2M devices can be tracked, remotely monitored and updated over-the-air as required. These solutions will provide management and reporting of M2M devices on a given network.
- Rating and pricing – Solutions in this category ensure that overall rating and pricing of M2M usage can be completed to enable the overall customer billing process
Analysys Mason interviewed 19 established independent communications software and niche IoT/M2M suppliers and evaluated their solutions according to the five IoT/M2M systems management categories. We list the vendors in Figure 3.
Our research findings summarized
There is no all-in-one vendor today.
Not surprisingly we concluded that none of the suppliers evaluated can satisfy all five of the management requirements needed to effectively support the IoT/M2M value chain today. Some independent software vendors (ISVs) have broad product portfolios and strong M2M domain knowledge to quickly adapt to evolving business requirements. There are also niche suppliers that will appeal to industry participants that want to target specific sectors such as transportation and security or want to supplement particular pieces of their existing systems management software.
Solution customization needed.
Commercial ‘off-the-shelf’ software to manage the value chain is not as mature as other operational systems that support more traditional fixed or mobile communications services. Therefore, IoT/M2M management products still require some degree of customization and integration with other software components. In the future ISVs must provide scalable, pre-integrated commercial off-the-shelf software to enable industry participants – including communication carriers — to bring IoT/M2M services to market quickly. Highly customised solutions delay deployments and increase integration cost.
Applications layer critically important to deliver IoT value.
With myriad application vendors in the market, it is important to approach data aggregation and analysis with rules-based models. At the end of the day, removing human interactions from key business processes is one of the ways that enterprises recognize overall cost savings from IoT/M2M deployments. Applications and application platforms can provide a graphical user interface to allow data to be filtered, aggregated and matched to certain key businesses processes. This matching of data with a rules-based approach allows enterprises to more fully automate business processes thereby lowering costs.
It’s a nascent industry today.
We do not expect all the big, established communications software suppliers will enter the IoT/M2M market until demand is stronger. Most niche suppliers are generating less than USD15 million in licensed software and product-related integration services for IoT/M2M software management.
Technology and sales channels bring a winning partnership combination.
Systems management vendors must bring technology and sales channel resources to their partnerships. Good technology is necessary, but not sufficient. Industry participants – communication service providers, equipment vendors, system integrator, application vendors and platform vendors — are looking for viable sales and support channels. Most industry participants – especially communication carriers — do not have sufficient sales channel capacity or depth of global resources to offer their complement of services. Systems management vendors that bring sales channel resources are a precious commodity in today’s IoT/M2M world.
Some vendors can sell IoT solutions directly to enterprises.
Systems management vendors should assess their abilities to sell IoT/M2M solutions directly to enterprises. Some IT and communications vendors have relevant IoT contacts in enterprise organisations – both in IT departments and business units. These vendors should consider selling directly to enterprises and taking a leading role in the implementation and integration of IoT solutions, particularly in the utility and energy, healthcare and government sectors.
As the number of M2M device connections increases from 100 million in 2011 to 2.1 billion by 2021, all industry participants have an opportunity to expand their existing offerings and create new ones. We anticipate cloud services, platform-as-a-service and software-as-a-service will facilitate new business models. And data service delivery platforms will enable rapid, end-to-end management in large-scale networks for IoT/M2M devices.
It is clear that service enablement – SIM activation, monitoring, data aggregation, analysis, billing and rating – are systems management challenges requiring the immediate attention of industry participants in both developed and emerging markets. Participants in developed markets have generally solved or begun to solve this challenge by either contracting with a third-party vendor or building solutions in-house. However, participants in emerging markets have only just begun the process of choosing service enablement platforms. The opportunity is tremendous in all markets.
Share your thoughts about IoT/M2M systems management. If you’re an enterprise that has provisioned IoT solutions, which pieces of systems management are most important for you? If you’re a service provider, which pieces of systems management do you have in place and which still are in the works? If you’re a vendor, which pieces of systems management are most critical for your success?
Thanks and stay tuned for next month’s posting of my series here on Bosch´s IoT blog.