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