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2011: The Year of M2M and a New Outsourcing Frontier

by Eric Goodness  |  June 9, 2011  |  1 Comment

Yesterday I attended and presented at the Axeda Connexion 2011 conference in Boston (Twitter #Connexion11).  The conference brings together business and technology leaders together to discuss, and learn, about M2M and how connecting assets and devices create real business value.  While pretty gung ho about this market before attending, the conversations I had with practitioners and enablers have me even more excited the potential of connected solutions in the market.

Founder Dale Calder, an indefatigable champion of the M2M market, led off the conference positioning how The Network Effect applies to M2M connectivity in terms of creating value.  I might quibble with Dale’s projections for the number of connections realized over the next 10 years but he was dead-on about the total economic impact of M2M connectivity.   The dollars realized from cost reduction efficiencies AND the creation of business growth platforms is enormous (I hope to provide finer points on the economic impact in the coming months).

In my presentation I provided a few overarching trends that I see driving the M2M adoption rates:

  • The Cloud:  The cloud removes CAPEX and OPEX burdens from user and vendor organizations looking to roll-out M2M solutions.  Coupled with lower prices and subsidies on modules,  flexible ‘right-sized’ network service models and the emergence of a community of value-added external services providers promise to drastically reduce the TCO of M2M solutions.  I believe that the cost per connection will reduce by 50 percent over the next 5 years.
  • The Convergence of IT and OT:  As characteristics of OT converge with IT there will be architectural and organizational impacts in how companies connect, gather data and manage Enterprise process assets.
  • The Market’s Acceptance of ‘Smart Services’:  M2M is the enabling platform to improve how IT, OT and business processes are monitored and managed.  Because of the scope and scale of connected assets, I believe M2M connectivity is going to create significant pressure in the market to innovate in service automation to move service automation from reactive to proactive to predictive and preventative.  M2M can learn from a number of market adjacencies that are Communications specific such as Remote IT Management, Mobile Device Management and Telecom Expense Management.

The primary reason I see 2011 as The Year of M2M is because of a strong, emerging community of  resources in the market to add value to the M2M supply chain.   That is, there are a significant number of consultancies and integrators and outsourcers that can help users roll-out M2M solutions faster with reduced TCO.  Companies such as Walsh Vision, MahindraSatyam,  Integron, Symphony Services, AT&T, M2MV, Orange Business Services and others have proven that they can be valuable partners.  My current research shows that users that have engaged 3rd party expertise to roll-out M2M solutions are able to realize the benefits of M2M 30 to 50 percent faster than their peers with self-designed and provisioned M2M solutions.  Those companies using external expertise are ultimately more satisfied.

Moving forward, my immediate  focus will be on helping Gartner clients, both users and vendors, to create more effective business plans to rationalize M2M solutions.

Happy 2011.

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Category: cloud  convergence-of-it-ot  it-governance  m2m  machine-to-machine  strategic-planning  it-services  

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

Thoughts on 2011: The Year of M2M and a New Outsourcing Frontier

  1. Erin Smith says:

    Your presentation is getting very high marks from Axeda Connexion attendees. Customers working on M2M deployments found it extremely valuable!

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