M2m Whitepaper

Teleconference
The Emerging M2M Market

Opportunities
Michele Pelino
Principal Analyst
Forrester Research
March 4, 2010. Call in at 10:55 a.m. Eastern time

Agenda
• Machine-to-machine (M2M) technology supports
smart solution deployment.
• Growing corporate interest in M2M solutions
• Fragmented M2M vendor ecosystem
• Requirements for M2M to take the next leap
2
Entire contents © 2010 Forrester Research, Inc. All rights reserved.
Agenda
3
2009 was a tough year, but global IT
purchases are expected to recover in 2010
Source: January 11, 2010, “US And Global IT Market Outlook: Q4 2009” Forrester report
4
Economic recovery will launch the next
IT investment period in Smart Computing
6% Innovation Refinement Innovation Refinement Innovation Refinement Innovation
and and and and and and and
US IT investment-to-GDP
growth digestion growth digestion growth digestion growth

5%
4%
ratio
3% Smart
Computing –
Networked awareness
2% computing — and
enterprise analytics
applications in
1% Personal and the technology
Mainframe computing Internet
computing
0
1959-1970 1970-1976 1976-1985 1985-1992 1992-2000 2000-2009 2010-2016
Source: US Department of Commerce

5
This tech spending boom will have three
important dynamics • Globalization
•LOB influence
•Tech Populism
• Influence sources
Smart
• Cloud
•Virtualization
• Pay as you go
•Mobile input/output
• Pay as you grow
•Hyper collaboration
• Shared risk
•Video
• Outsourcing
•Cheaper storage
•Web 2.0
• Business intelligence
•M2M
6
Forrester’s definition of M2M technologies
M2M technologies collect and transfer information on

the condition of physical assets or people
Source: Forthcoming, “The M2M Market Is A Blossoming Opportunity” Forrester report

7
M2M technologies are core components
of smart solutions

8
Agenda
9
M2M vendor announcements are plentiful,
although few case examples exist
• More than 100 press announcements in the past six months
focused on “M2M” or “machine to machine.”
– 30% announced M2M products
– 25% described partnerships and alliances
– 20% identified strategic activities
• Half of the M2M press releases focused on a specific vertical

industry.
– 33% in the energy/utilities industry
– 12% focus on the manufacturing industry
– 8% address healthcare initiatives
• However, only 10% of these announcements highlighted M2M pilot or
implementation activities.
10
Market forces are driving enterprise
interest in M2M solutions
• Declining device and communication service costs
– Reduced cellular costs
– Expanded customer reach
• Regulatory and economic stimulus requirements
– Green IT initiatives
– Carbon emission reductions
• Broad deployment of wireline and wireless IP networks
– National and international IP network deployment
– 3G network availability in mature markets
11
M2M technology solutions are often
purpose built for specific industries
• Utilities/energy • Public safety
– Smart grid solutions – Security monitoring and food
supply tracking
• Transportation/logistics
– Fleet management and
• Retail
monitoring – Inventory control and asset
tracking
• Industrial solutions
– Supply chain automation and
• Oil/gas
asset monitoring – Monitor flow, pressure, and
temperature
• Healthcare
– Asset monitoring and remote
• Building monitoring
diagnostics – Heating, air, and lighting and
security
12
Agenda
13
Four categories of vendors enable M2M
solution implementation

14
M2M vendors are making strategic
changes to address market opportunities
• Mobile operators aggressively pursue M2M solutions.
– Establish dedicated M2M business units.
– Address billing and customer service requirements.
• Many small vendors provide solution components.
– It’s a complex vendor ecosystem.
– There are a lot of point solutions from individual vendors.
• M2M application vendors go vertical.
– Purpose-built solutions for specific industries
– Vertical knowledge requirements
• System integrators stake a claim in the M2M arena.
– Leverage ability to successfully integrate complex solutions.
15
Partnerships and acquisitions are
prevalent among M2M vendors
• Partnerships are the dominant approach.
– Leverage individual competencies.
– Address the buyer’s preference for a one-stop shop.
• Acquisitions are used by some vendors.
– Expand M2M capabilities under one corporate umbrella.
– This approach requires an resource and integration investment.
• There are very few joint venture M2M relationships.
– nPhase was established through a Verizon Wireless and
Qualcomm joint venture.
– Recent addition of Vodafone alliance broadens international
reach
16
Agenda
17
Supply and demand issues must be
addressed to expand M2M solution adoption
• Fragmented vendor ecosystem confuses decision-makers
• Multiple coalitions and standards bodies for M2M
solutions
• Lack of network and solution ubiquity
• Stakeholder concern over M2M solution complexity and
customization requirements
• Few business cases to support solution deployment
18
Vertical focus and simplification will
facilitate M2M vendor success
• The key to M2M market success:
– Go vertical.
– Consider new ways of thinking and working.
– Create a “one-stop solution” for the purchaser.
– Clearly define the ROI of M2M solution investments.
– Establish application developer communities.
– Address customer service and support concerns.
• There are no clear winners and losers among M2M
vendors — yet.
19
Related Forrester research
• Forthcoming, “The M2M Market Is A Blossoming
Opportunity”
• January 10, 2010, “US And Global IT Market Outlook
Q4 2009”
• December 4, 2009, “Smart Computing Drives The
New Era Of IT Growth”
• October 19, 2009, “Smart Grid Technologies:
Coming To A Utility Near You”
20
Questions?
21
Thank you
Michele Pelino
+1 617.613.6228
mpelino@forrester.com
www.forrester.com
22

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Teleconference

The Emerging M2M Market

March 4, 2010. Call in at 10:55 a.m. Eastern time

growth digestion growth digestion growth digestion growth

Source: US Department of Commerce

M2M technologies collect and transfer information on

Source: Forthcoming, “The M2M Market Is A Blossoming Opportunity” Forrester report

Source: Forthcoming, “The M2M Market Is A Blossoming Opportunity” Forrester report

• Half of the M2M press releases focused on a specific vertical

Source: Forthcoming, “The M2M Market Is A Blossoming Opportunity” Forrester report

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