Eric Goodness

A member of the Gartner Blog Network

Eric Goodness
Research VP
10 years at Gartner
21 years IT industry

Eric Goodness is a vice president in Gartner Research, where he is the agenda manager and customer lead for Managed Services in the Communications sector. His research and advisory services focus on customer and vendor outsourcing and IT services… Read Full Bio

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Machine-to-Machine and The Internet of Things in 2012: Big on Hype, Addressable Market Potential and Pain

by Eric Goodness  |  January 11, 2012  |  4 Comments

There is no doubt that the machine-to-machine market, as a component of The Internet of Things, holds a lot of promise for many OEMs, ISVs and ICT service providers.  I’m currently writing Gartner’s first ever user survey related to M2M solutions.  The survey engaged over 600 user companies across the US, UK, France and Germany.  Our survey avoided specific vertical market solutions in favor of more horizontally focused point solutions:

  • Asset tracking and location
  • Asset monitoring and control
  • Logistics control and optimization
  • Asset serviceability
  • Security monitoring
  • Energy demand response
  • Environmental monitoring
  • Payment processing
  • Messaging, notification & advertising
  • Regulatory compliance monitoring

One thing is clear in the results: the next 24 months will be challenging to convince companies to integrate new M2M solutions if there isn’t significant promise of cost reduction related to the companies own operations or how efficiently they provide service to their own enterprise customer base.  This perspective has been validated in my inquiry calls with Gartner clients – user and providers.

In terms of  market objections, we found among the 377 respondents with no plans to deploy M2M solutions that the biggest objection to M2M investment, across all geographies, is a lingering doubt that connecting OT and IT, or simply applying M2M connectivity to IT, will provide measurable business value.  This feedback is likely based on a lack of knowledge and ineffective solution positioning by providers.  In my inquiries I  hear user’s frustration with how their provider’s enable inflated expectations in the pre-sales phase only to back off claims  when confronted with the user’s real world requirement to establish an ROI expectation in a contract.  The gap is sometimes massive…and off-putting.

While the success of M2M adoption is certain, the timeline of success is less so.  In 2012, we will hear more success stories yet I believe that the growth rates will under-perform many of the standing forecasts in the market today.  I expect the survey analysis document to be published in early February 2012.  I will follow the survey analysis will a market forecast later in the year.

In the interim, I look forward to speaking to you about IT services an outsourcing opportunities related to M2M solutions.

4 Comments »

Category: Cloud Convergence of IT-OT Infrastructure IT Governance IT Services M2M Machine-to-Machine outsourcing Strategic Planning Uncategorized     Tags:

4 responses so far ↓

  • 1 Jim McDonnell   January 11, 2012 at 6:28 pm

    Totally agree that there is massive potential and that it will take some time for it to be realized. Having led Cisco’s move into the space for its own products, I can certainly attest to the investment that is needed to deliver solutions successfully – for most companies it is a prohibitive cost, and most of the investment goes into basics like connecting devices securely. Many of the technology enables in this space are focused on that challenge. One new entrant who I believe will be very interesting is FloType. They are focused not just on the mechanics (which I believe they execute on elegantly), but on how to quickly add value – a developer ecosystem. To me, this has been one of the key missing ingrediants that has stalled the market.

  • 2 Jan Behrmann   January 12, 2012 at 9:28 am

    “I hear user’s frustration with how their provider’s enable inflated expectations in the pre-sales phase only to back off claims when confronted with the user’s real world requirement to establish an ROI expectation in a contract. ”
    –> Fully agree!

    The reason for that is, that the providers moslty do telecommunication – without deep understanding of the business of their customers.

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