Some companies share a vision that there will be 50 billion M2M connected devices by 2020. So why hasn’t the technology been growing according to expectations?

For some years now, studies and reports have been heralding M2M (Machine-to-Machine) as the next big thing. It has even been predicted that the technology will be bigger than the internet. So why do we still question investments in the area of M2M when all predictions tell us that it will happen and that it’s just around the corner? The answer is simpler than you think. We have left out the human element.

All about connectivity
From the very beginning, M2M was all about connectivity and how to get products talking to other products online. Fundamentally, it was all about technology and the biggest question was how?

During the last 10 years we have seen a market that has become more mature and (to some extent) more innovative when it comes to using M2M technology as part of enterprise businesses.

We have seen the effects of M2M in industrial applications and how cost efficiency has been improved by utilising M2M technology. We have also seen how domestic alarm systems have improved by using cellular technology for communication. One of the best examples from Maingate’s own customer history is how a company, by using M2M, totally changed their business model and gained remarkable market share due to innovative thinking and a new value proposition based on the information gained from their M2M investments.

“Seeing the evolution and leading the development within M2M has given us a great understanding of where the market is heading. By combining this knowledge with a strong vertical focus, Maingate can guide our customers in the right direction to where M2M becomes a tool to grow their businesses,” says Baard Eilertsen, CEO at Maingate.
 
Clear planning
Many companies are still preoccupied with the question of how? and spend a fortune in exploring how they can get started with M2M services, either themselves or with the help of a service provider. There are hundreds of companies in Europe who at this moment are considering in investing time and money in how to set up an M2M infrastructure.

There’s nothing wrong with that as the infrastructure is needed to be able to develop further, but unless the question why? has been answered, it will be a poor investment in many cases.

“Before we enter into any discussions with a customer, we always ask them why they would like to use M2M technology. Very often companies do not know and they also have difficulties with seeing the value themselves, they just do it because someone else has done it or decided it,” says Patrik Björkman CSO at Maingate.

“When we ask the question why it very often leads to a discussion that takes the customer into a thought process where they are forced to think outside the actual technology, and be more precise with what they expect in terms of functionality and in terms of business process effects. At the end of the discussion or workshop we can easily define the return of investment in M2M,” Björkman continues.
 
Where is the human element in all this?
If you are still old enough to remember how the record player looked in the 1970s, then think about this…

The record player is an obsolete application replaced, firstly by the CD player and then by the MP3 player. But the appeal of MP3 players has diminished in recent years thanks to music being available online, either through streaming medias or online stores, and very often the new smartphone is used to playback music.

In other words, the record player became obsolete and was replaced by services online. The same goes for the telephone, the typewriter and many more applications.

The common denominator is that technology develops extremely fast and the demand for improved services is evident. Album sales are in decline as more people download from the internet where the choice is easier to select their favourite songs without being forced to buy a whole LP. Furthermore, the availability of the online stores are far greater than any conventional store and our buying behaviours have changed a lot since the introduction of online stores.
 
Paradigm shift
It is the same for M2M! Not that we are buying M2M connections in an online store, but it’s all about the paradigm shift where we move away from the actual technology to buying services.

“Our customers are not occupied with the question of total cost of ownership anymore, they are interested in understanding the total cost of function,” says Eilertsen. “This has led us to understand that our services have to be cloud-based and that we, in addition to offering standard M2M solutions, also offer M2M as a service,” he continues.

This is where the human element comes into the equation. When companies understand how their M2M investment plays a vital role in their customer relations and how the information infrastructure, enabled by M2M technology, can be an important part of their future business the first movement of replacing the technology with services becomes evident.

“Within Maingate we say; ‘What you need to know, right now’. And we really mean it, because when we have helped companies with getting the information into the cloud we can let their customers choose what to see and when to see it. Basically we have created the first M2M online media of valuable information where people can access relevant data from anywhere at anytime,” says Björkman.
 
It’s happening
One good example of how this is done is the 100Koll project with E.ON. Maingate. E.ON jointly developed a solution for E.ON’s customers where customers of E.ON can see their energy consumption in real time, either in an in-home display, on the web or from a smartphone application.

The project has been a great success in Sweden where E.ON now have a completely different dialogue with the customer and where consumers take responsibility for their own energy consumption.

“By enabling consumers, in real-time, to act on their consumption we have created an opportunity to move energy consumers to become energy citizens,” says Eilertsen. “An energy citizen will understand how consumption has an effect on the environment and the cost of living, leading to a responsible use of energy and awareness of his or hers own consumption patterns. This awareness is highly important when we know that we cannot continue to consume the amount of energy we are currently doing.”

The combination of a strong M2M service operator and E.ON made this possible. Understanding the industry and its customers in addition to having the world’s first service operator as the enabler, the case was launched during the first quarter of 2011. For the first time we see that we are closing the gap between a utility company and its customers.

This is what Maingate does best; we close the gap between machines and between machines and humans. We no longer talk about machines servicing machines; we talk about machines servicing humans and machines servicing society.

Contact details:
For further information please visit: www.maingate.se