M2M EXPERIENCE

The M2M abbreviation, that stands for Machine To Machine, encompasses all equipment (hardware), software, and processes that enable machine management related communication between different machines and between machines and people.

The promise of M2M concerns potentially all industries, yet requires know-how in several IT domains. These new M2M projects will lead to the launch of new innovative services and products but will also bring significant changes in current work organization, service delivery, and stock management.

Derived from Sekurus International L.L.C® (www.sekurusintl.com) experience in M2M projects internationally, this document details several technical and financial issues that require consideration when managing M2M projects.

BUSINESS MODEL

In most cases, a key aim of the project is to create new revenue sources linked to the enhancement of existing processes and/or the creation of additional services. In most projects, M2M connectivity will create productivity benefits in both existing and new services.

These new revenue sources that validate the financial viability of an M2M project may come in a multitude of forms and are very much dependent on a company’s area of activity: Remote Maintenance/Monitoring (Industry, eHealth), Remote Alarming (Security, eHealth), Automatic Data Reading (Telemetry, AMR).

However, in some markets, stock management may become more visible and may subsequently create hurdles for adoption by the end-user worried about taxes or regulation concerns. Privacy protection and staff reduction may also be a barrier to acceptance.

On the other hand, M2M services often have a positive “green” side effect, since reducing the number of field visits contributes directly to a reduction in pollution.

NETWORK CHOICE

On the network side, the telecommunication operators’ coverage areas must encompass the locations targeted by the project. For international coverage, VNO (Virtual Network Operator) services ease the search for reliable and affordable network access.

The expansion of traditional cellular communication networks like GSM and CDMA and their evolution to faster and more robust data transfer solutions (GPRS, EDGE, UMTS, HSDPA) make these networks attractive for M2M projects. The specific nature of M2M data traffic may allow a company to obtain reduced rates (night and off-peak traffic, lower quality of service guarantee). However using PSTN/POTS and LAN M2M modules usually lowers communication costs compared to GPRS modules; however the use of such wired networks may cause difficulty in terms of physical access, billing, and security.

The volume of data exchanged and thus billed depends on the size of the fleet of M2M equipment, on the amount of data generated per device and on the protocol used that can be transactional (client/server mode) or of a file transfer nature. Requirements for high network performance such as a permanent link, a minimum throughput with a low response time, redundancy, and high availability drive the choice of network. The possibility to wake-up or to call the devices also impacts this selection and may lead to subscription to optional network services (fixed or public IP addresses) or to the use of an intermediary component hosted on the Internet called “Middleware”.

When financial or personal data is being transferred, security is guaranteed through encryption at the application layer and/or by using secure standard Internet protocols (SSL, IPSec). A private communication network set-up by the carrier also provides good level of security whilst offloading the encryption burden from the M2M modules.

Piracy and hacking in M2M solutions is not usually a big concern since M2M modules are distinctly less permissive than PC operating systems, which are designed to support a large number of applications.

COMPONENTS SELECTION

An analysis of technical requirements and technical competence will govern the choice of components of an M2M connectivity solution from the modules to be installed in the equipment to M2M services allowing their management and the processing of the data transferred.

For legacy equipment, mechanical dimensions and power source constraints deeply impact the choice of M2M modules. The use of GPRS or WiFi requires a power source comparatively higher than for PSTN/POTS or LAN.

The size of the M2M project impacts the hardware format used, with the aim of obtaining the lowest overall cost. For a relatively low number of units or in retrofit scenarios the use of standard products that avoid non-recurring engineering expenses is the most economical solution. For intermediate volumes of more than a thousand units, a module type solution is usually better than an external packaged box. For high volumes of several dozens of thousands of units and more, the use of standard modules remains economically competitive but should be compared to the creation of a new hardware design.

The M2M middle-ware, in charge of managing connections between M2M modules and a back-office server, must include advanced services for easy troubleshooting of the remote devices (remote control, failure detection) and for extending the lifetime of the whole M2M fleet (remote configuration, firmware updates).

The storage capacity of the Back-Office server, in charge of pushing the M2M data into the corporate information system, must be volume-adaptable and must provide safeguards and backup solutions. With hardware investment, ramping-up evolution should be anticipated to ensure quality of service without a substantial increase in related costs.

BUDGET FORECAST

Finally, the cost budget will be based on hardware investment (M2M modules, Middleware, Back-office), non-recurring expenses (software and hardware development, components integration, testing), recurring cost (network access, network traffic, middleware service, support, maintenance) and installation costs.