This document discusses machine-to-machine (M2M) communication and the emerging Internet of Things (IoT). It defines key terms like M2M, IoT, and Real World Internet (RWI) and describes how connected devices are extending the internet into the physical world. The document outlines the M2M value chain and provides an example of infrastructure monitoring. It also discusses M2M platforms and the roles of various players. In conclusion, it summarizes trends around dedicated M2M network infrastructure, optimized activation rates for IoT, and the involvement of mobile operators.
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M2M IoT Driving Growth of Connected Machines
1. Machine-2-Machine Internet of Things Real World Internet 2011
2011
Machine-2-Machine
Internet of Things
Real World Internet
M2M - "Machine-to-Machine
IoT – “Internet of Things”
RWI – “Real World Internet”
This document begins by discussing how M2M is causing an entire “Internet of
Things”, or Internet of Intelligent Objects, to emerge. How IoT is extending its
reach to the real world of RWI. It discusses and provides a neutral answer to the
question of “What is M2M”. It defines and discusses M2M Drivers and the M2M
Value Chain. It defines the M2M Communications Network and provides for a real
world M2M Infrastructure HVAC example. It then defines and discusses M2M for
the Enterprise – What Should be Looked for in an M2M Platform, the Multiple
Players and various Connectivity Services that can be offered by the different and
Emerging Partners. The document then starts discussing how LTE is driving growth
in the M2M market and the Network Areas associated with M2M such as
Subscriber Data Management, Multiple Access Domains, Scalability and Flexibility,
Identity Management, Security, Messaging, Policy and Charging Rules. A summary
is then provided in conclusion discussing topics such as: M2M’s Extensive Industry
Value Chain: Trends Associated With M2M Infrastructure Deployment Relative To
MNO’s/MVNO’s/ MMO’s; IPV6 Support For M2M Network Addressing; M2M and
MNO’s; MVNO’s; ASP’s; Activation Rates Optimized for IoT; Network Initiated
Data Session Activation, etc.. A copy of this document can be reviewed on
slideshare
The Number Of Connectable Machines Is Five Times Greater Than The Amount Of
Humans (Source: European Telecommunications Standards Institute [ETSI]),
Although The Number Of Machines Currently Connected Is Extremely Low
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Contents
M2M -- The Abbreviated Form of "Machine-to-Machine" ....................................................................... 5
Internet of Things (IoT) ............................................................................................................................. 5
Real World Internet (RWI) ........................................................................................................................ 7
A Neutral Answer to the Question of M2M .............................................................................................. 9
Applications for Machines, for People or for Both? ............................................................................... 10
Drivers for M2M ...................................................................................................................................... 11
The M2M Value Chain ............................................................................................................................. 12
The M2M Communication Network ....................................................................................................... 13
An Application Example - Infrastructure Monitoring ......................................................................... 13
Actual Dashboard of a Real Time Sensor Monitored HVAC System ................................................... 16
M2M for the Enterprise .......................................................................................................................... 20
A Multiplayer Game ............................................................................................................................ 21
New Roles Emerge – M2M Enablers ................................................................................................... 22
What Should Be Looked For In An M2M Platform? ............................................................................ 23
LTE Is Driving Growth in the M2M Market ............................................................................................. 24
Network Areas Associated With M2M Services ..................................................................................... 24
Subscriber Data Management - SDM.................................................................................................. 24
Multiple Access Domains .................................................................................................................... 25
Scalability and Flexibility ..................................................................................................................... 25
Identity Management ......................................................................................................................... 26
Security ............................................................................................................................................... 26
Support for Business Operations ........................................................................................................ 26
M2M Network Control Center ............................................................................................................ 26
Accommodating SMS .............................................................................................................................. 27
M2M Policy and Charging Rules Function (PCRF) ................................................................................... 27
Differentiate Among Devices .............................................................................................................. 28
Manage Relevant Resources ............................................................................................................... 28
Performance Management and Network Planning ................................................................................ 28
In Summary ............................................................................................................................................. 30
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M2M Has an Extensive Industry Chain ............................................................................................... 30
The Trend is towards Dedicated M2M Network Infrastructure Deployment .................................... 30
Activation Rates Optimized for the “Internet of Things” .................................................................... 31
IPv6 Support for Network Address Availability ................................................................................... 31
Network-Initiated Data Session Activation for Increased Application Robustness ............................ 32
MNOs .................................................................................................................................................. 32
MVNOs ................................................................................................................................................ 33
ASPs ..................................................................................................................................................... 33
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List of Figures
Figure 1 - Internet of Things.......................................................................................................................... 7
Figure 2 - Coupling of RWI with Enterprise Systems..................................................................................... 8
Figure 3 - Cross-layer SOA Based Collaboration in the Real World Internet ................................................ 9
Figure 4 - M2M Use Cases – Verticals – Intelligent Devices – Cloud Services and Applications ................ 11
Figure 5 - Overview of the M2M Industry Value Chain .............................................................................. 12
Figure 6 - Concept for M2M-Based Infrastructure Monitoring .................................................................. 14
Figure 7 - Expanded View of a Sensor Enabled System .............................................................................. 15
Figure 8 - First Floor HVAC Sensor Monitored Room Temperatures .......................................................... 17
Figure 9 - Room 101A Temperature, Humidity, Airflow and Air Quality Levels ......................................... 18
Figure 10- Power Usage by Subsystem – Mechanical, Kitchen Receptacle, Emergency, Photovoltaic,
Lights, Standby Power ................................................................................................................................. 19
Figure 11 - Real Time Electrical Systems KW Power Usage Meters by Area .............................................. 19
Figure 12 - Building Hot Water Heating System – Primary, Secondary, Temperature, Pumps, Compressors
.................................................................................................................................................................... 20
Figure 13 - Cumulative Inbound-Outbound Gigabyte Data Transfer Traffic across 6 of the 14 Blades of
the Core Network Infrastructure ................................................................................................................ 20
Figure 14 - Basic Business Model for M2M – Mobile Operator Provides Connectivity Services to the M2M
Enterprise Partner ....................................................................................................................................... 21
Figure 15 - Extended Business Model for M2M – Additional Revenues from Auxiliary Services ............... 22
Figure 16 - A Single M2M Platform – Multiple M2M Partners with Customized Services ......................... 23
Figure 17 - M2M Subscriber Data Management ........................................................................................ 25
Figure 18 - The Role of Policy in M2M ........................................................................................................ 28
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5. Machine-2-Machine Internet of Things Real World Internet 2011
M2M -- The Abbreviated Form of "Machine-to-Machine"
The term is used to refer to machine-to-machine communication, i.e., automated data exchange
between machines. (“Machine” may also refer to virtual machines such as software applications.)
Viewed from the perspective of its functions and potential uses, M2M is causing an entire “Internet of
Things”, or internet of intelligent objects, to emerge.
In our everyday lives we are using more and more automated and intelligent machines. These include
vending machines, new energy meters in homes, monitoring equipment and many more. Such machines
operating remotely can provide important information (e.g. various measures or alarms). They also need
to be managed and monitored. Increasing numbers of machines are able to do this automatically and
without the control of their owners. This sounds dangerous, especially if we imagine a scenario in which
all our household appliances are capable of sending such information to the producer regarding our
lifestyles and behavior. Fortunately the situation hasn’t reached this stage, yet. Machines are designed
to initiate communication in order to provide vital information, save time and money.
What is the main benefit of such automatic communication? The owner of the machines need not visit
them personally to verify their operation or interpret a machines status manually. Such machines can
automatically send the information to the owner or to another machine or software application that
processes the data further. Such Machine-to-Machine (M2M) communication is cheaper, faster and
brings new possibilities.
A common and useful definition of M2M reads - “Machines” using network resources to communicate
with remote application infrastructure for the purposes of monitoring and control, either of the
“machine” itself, or the surrounding environment.
Internet of Things (IoT)
The continuous progress in microelectronics and networking techniques make it now possible to
envision networks formed by the interconnection of smart 'network enabled' objects and the secure and
efficient deployment of services on top of them. This is the vision of the Internet of Things.
We now see the deployment of a new generation of networked objects with communication, sensory
and action capabilities (wireless information transport networks, RFID, WSAN, etc.) for numerous
applications. The interconnection of objects having advanced processing and connection capabilities is
expected to lead to a revolution in terms of service creation and availability and will profoundly change
the way we interact with the environment. In short the physical world will merge with the digital/virtual
world.
This vision "from simple connected objects as sensor networks to more complex and smarter
communicated objects as in the envisioned Internet of Things" however needs to implement a
disciplinary approach for new technologies, concepts and models (IC development, energy
management, communications systems and principles, embedded systems and packaging, data
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acquisition and processing, field experimentation) and supposes to solve a number of scientific,
technical and business challenges.
We are going to see the ubiquity of personalized services, the generalization of location and context
awareness and of services composition, the global mobility of those services across technological,
administrative domain and terminal borders, the extension of the network through advance
networking paradigms like ad-hoc, mesh and vehicular networks, the merge of the real world with the
digital one through technologies like wireless sensor and actuator networks (WSANs), next generation
RFIDs setting the cornerstone for the “Real World Internet”.
This merge relies on technological breakthroughs in areas such as: (Hardware) advanced
microelectronics for smart autonomous communication enabled objects (sensors, actuators, processors,
memories, batteries and energy scavenging, transceivers - RF interfaces, base band circuits, ..),
packaging that are affected by the environment and the operation mode, (Models & Software)
innovative distributed intelligences and human-machine interaction approaches that are constrained by
flexibility (configuration, plug and play, ..), scalability (trillions of objects could be interconnected ),
security/privacy, and business models.
It is expected that these smart objects will significantly go beyond present 'simple' sensors and RFID.
They will be in particular based on cheap and small devices including sensor and actuator capabilities,
advanced signal and information processing, one or several communication interfaces and networking
capabilities, which can be embedded in most types of environments and systems, including existing
communication terminals, vehicles, clothes, medical/body and most consumer electronic appliances.
These systems offer an augmented perception of the reality to a local or distant user or smart entity
which can act accordingly. Thanks to the integration with the Internet, users will be aware of conditions
in distant places and will be able to control a remote single or a group of objects, mechanisms and
environments. This concept of Ambient Intelligence has been rehabilitated and the term NED
(Networked Embedded Devices) has been used to identify this large diversity of devices with computing
and communication capabilities, capable of self-discovery and coordination for the provision of an
integrated experience.
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Figure 1 - Internet of Things
Real World Internet (RWI)
The Internet is extending its reach to the real world through innovations collectively termed the Internet
of Things (IoT). The IoT concept was initially based around enabling technologies such as Radio
Frequency Identification (RFID) or wireless sensor and actuator networks (WSAN), but nowadays spawns
a wide variety of devices with different computing and communication capabilities – generically termed
networked embedded devices (NED). While originating from applications such as supply chain
management and logistics, IoT now targets multiple domains including automation, energy, e-health etc.
More recent ideas have driven the IoT towards an all encompassing vision to integrate the real world
into the Internet – The Real World Internet (RWI). RWI and IoT are expected to collaborate with other
emerging concepts such as the Internet of Services (IoS) and the building block of parallel efforts, such
as the Internet of Energy (IoE) is expected to revolutionize the energy infrastructure by bringing
together IoS and IoT/RWI. It is clear that the RWI, will heavily impact the way we interact both in the
virtual and physical world, overall contributing to the effort of the Future Internet.
The ubiquity of mobile devices and proliferation of wireless networks will allow everyone permanent
access to the Internet at all times and all places. The increased computational power of these devices
has the potential to empower people to generate their own applications for innovative social and
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cognitive activities in any situation and anywhere. This wireless connection is not limited to user devices,
almost any artifact from clothing to buildings can be connected and collaborate as a NED. Furthermore
new sensor technologies and wireless sensor networks provide environmental intelligence and the
capability to sense, reason and actuate. This leads to the exciting vision of the interconnection of
artifacts embedded in our real environment, forming a society of “intelligent things” and “smart
spaces”.
Trillions of heterogeneous NEDs such as sensors and actuators located in open space or attached to
existing objects, RFID enabled items, robots and Programmable Logic Controllers (PLC), generally many
heterogeneous devices with communication and computational capabilities are integrated into the
fabric of the Internet, providing an accurate reflection of the real world, delivering fine-grained
information and enabling almost real time interaction between the virtual world and real world.
Information about location, status and situation of objects and persons, information about the places as
well as influencing and changing the places (through actuation), objects and persons based on the
gathered information and defined rules and policies can now flow e.g. into enterprise systems (Figure 2)
and decisions can be made in real-time.
Figure 2 - Coupling of RWI with Enterprise Systems
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Advances are causing a paradigm shift where devices can offer more advanced access to their
functionality and even host and execute business intelligence, therefore effectively providing the
building blocks of a service-oriented architecture. As such, event based information can be acquired,
processed on-device and in-network. This capability provides new ground for approaches that can be
more dynamic and highly sophisticated, and that can take advantage of the available context. Cross-
layer collaboration is expected to be a key issue in such a highly dynamic and heterogeneous
infrastructure such as the RWI.
Figure 3 - Cross-layer SOA Based Collaboration in the Real World Internet
A Neutral Answer to the Question of M2M
Finding a neutral answer to the question “What is M2M?” that could apply to all manufacturers or
suppliers is, however, not quite so simple. For GSM and CDMA mobile network suppliers – in other
words, traditional mobile phone network providers who put the infrastructure for mobile phone
networks in place – the answer could involve, for example, automated data transmission via
SMS/GPRS/PDSN, or remote maintenance and teleservice applications.
The activities of suppliers of wireless modems (used in many M2M applications for data transmission via
cellular networks) would lead them to interpret M2M in the same way. Meanwhile, manufacturers of
Bluetooth or ZigBee radio chips generally take M2M to mean AMR (Automatic Meter Reading: in other
words, wireless transmission of consumption data) or similar applications. As far as semiconductor
manufacturers are concerned, there is immense market potential for these kinds of applications (hence
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the philosophy, “every radiator needs a radio chip”) - and the list of examples of perspectives on M2M
just goes on.
To date, an M2M growth market has not established itself worldwide. However, there are a number of
highly encouraging sectors within the market – performance data transmission, telematics, monitoring
and RFID, to name but a few. On closer inspection, however, M2M has merely become a new buzzword
for demanding applications involving telemetry (automatic remote transmission of any measured data)
and SCADA (Supervisory, Control and Data Acquisition).
In contrast to telemetry and SCADA based projects, the majority of M2M applications are broadly based
on established standards, particularly where communication protocols and transmission methods
currently in use are concerned. Telemetry applications involve completely proprietary solutions that, in
some cases, have even been developed with a specific customer or application in mind. M2M concepts,
meanwhile, use open protocols such as TCP/IP, which are also found on Internet and local company
networks. The data formats in each case are similar in appearance.
Applications for Machines, for People or for Both?
Although some industry players classify M2M applications according to category or type, it may be more
useful for an operator to look at them from a different perspective: applications that are not at all
related to person-to-person communications, typically involving independent devices such as industrial
meters or vehicle fleet-management devices, versus applications that relate in some manner to mobile
applications used by people. Examples of the latter include:
• Security - vehicle security and anti-theft, as well as vehicle emergency calls
• Transport and logistics - navigation information
• Metering - consumption of electricity, gas and water
• Health - monitoring vital signs and remote medical diagnostics
• Smart living/entertainment - remote controls, synchronization and smart appliances
M2M applications that can be linked inside the network to people’s existing mobile subscriptions offer
operators enormous potential for strategic differentiation in the competitive marketplace. If an operator
can create an ecosystem of devices around an individual subscriber, all connected and interrelated, then
that operator can come up with some very innovative services which can translate into strategic
differentiators in the marketplace.
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Figure 4 - M2M Use Cases – Verticals – Intelligent Devices – Cloud Services and Applications
Drivers for M2M
The initial reasons for pursuing M2M technologies are commonly a combination of both internal and
external drivers.
The most common internal drivers include:
New Market Opportunities (E.G., The Ability To Provide A Product Or Service Unique To The
Marketplace)
Opportunity To Increase Revenue Through Aftermarket Services
Marketplace Differentiation (E.G., Setting The Product Apart From Others In The Same Space)
Ability To Control Warranty Costs For Expensive Equipment Via Equipment Monitoring
Reduced Travel/Labor Costs (E.G., Not Having To Send Rep/Technician On Site To Collect Data)
Constant Need For Increased Efficiencies (E.G., Saving Money By Not Paying For Meter Readers)
Reduced Cost In Not Having To Lay Cable
Reduced Cost Of Hardware And Networking
Additional Features And Functionality Enabled By M2M (Increasing Value Of Product/Service)
Need For Device/Equipment Data (E.G., Use Data Internally For Engineering Development)
Ability To Access Data Real Time
The most common external drivers include:
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New Market Opportunities (E.G., The Ability To Provide A Product Or Service Unique To The
Marketplace)
Customer Demand (E.G., Utility Push For Smart Meters, Remote Asset Management, Etc.)
Allow Customers To Save Money
Ability To Offer A Product Above And Beyond The Competition (E.G., Remote Monitoring)
Ease Of Use By Customers (E.G., Simplifying The Use Of Devices)
Increased Customer Satisfaction
Improved Customer Experience
Increased Competition (E.G., Need To Keep Current Customers Engaged By Matching
Competitive Product Functionality)
The M2M Value Chain
The first issue that the mobile eco-system needs to address is the long and fragmented industry value
chain that characterizes today’s M2M industry. This results in numerous supplier/buyer interfaces, as
illustrated below, adding costs and time to the launch of any new product offering. The fragmented
structure of the supplier market suffers from concentrated pools of knowledge and poor awareness of
end-user demand, service requirement and commercial issues.
Figure 5 - Overview of the M2M Industry Value Chain
The value chain can be separated into two parts the first relating to devices (depicted horizontally) and
the second to application development and service delivery (depicted vertically). The broad intersection
between these two parts, as illustrated by the shaded zone in Figure 5, represents the means by which
devices are procured and integrated into M2M solutions and services.
Considering the vertical portion of the end to end value chain, one route to market for M2M devices can
involve MNOs, with some operators taking a more active role than others. Equally, as shown, devices
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can be procured independently of MNOs by communications and applications providers, subject to
having their devices certified on a host operator’s network.
The many steps involved in producing devices combined with segment-specific service application needs
limits economies of scale and adds to both costs and time to market. Economies of scale are difficult to
achieve because the target segments for embedded mobile solutions are individually very distinct –
transport differs from healthcare which differs from utilities, for example. Matters are compounded by
the fact that several sub-segments can exist within a single segment.
The M2M Communication Network
The communication network in an M2M application is the central connection component between a
DEP (data end point) and DIP (data integration point). In terms of physical components, this kind of
network can be established using a LAN, Wi-Fi, telephone network/ISDN, GSM, CDMA mobile network,
or similar.
An Application Example - Infrastructure Monitoring
Today, countless applications use complex networks of devices, in which most systems perform their
services 24 hours a day, 7 days a week, without any human monitoring. Should an individual subsystem
fail, the entire application will be damaged, at least in part. However, detecting the precise failure as
promptly as possible is a problem. A typical example in the field of IT is an individual switch within a
large Ethernet LAN. If this switch fails to perform its duty, certain computers within the LAN will no
longer be accessible, or will be unable to communicate via the LAN.
If, with one of these computers, the company’s e-mail server is involved, considerable problems may
arise. Therefore, ideally each switch and the accessibility of the e-mail server (as well as each of the
company’s other servers) should be permanently monitored. Every fault must be immediately reported
to the appropriate administrator, who should generally be able to rectify it within as short a time as
possible, as quick response times are possible within a company’s premises. Presumably, the longest
duration of time that would elapse in such cases would be the time leading up to a user noticing a
malfunction and informing the administrator.
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Figure 6 - Concept for M2M-Based Infrastructure Monitoring
This kind of situation is considerably more difficult where widely distributed applications are concerned.
Let us take the example of the infrastructure for an energy supplier, which consists of a number of
distributed pumping, transformer and substations used to operate the water and electricity supply for a
region unattended.
Whether within a company building or distributed across an entire country, using an M2M based
infrastructure monitoring solution (i.e., "infrastructure monitoring") enables failures in individual
function units to be detected considerably more quickly. As is well known, the quicker a failure and its
cause are detected, the shorter the total downtime. In many cases, fault signals on individual modules
are even able to detect the imminent failure of individual system components (by means of an
appropriate signal lamp, for example). These kinds of visual warning signals do, however, frequently go
unnoticed.
Figure 6 above illustrates the use of an M2M-based solution for infrastructure monitoring. The data end
point (DEP) in each case permanently checks the availability of any given infrastructure component by
means of special monitoring sensors. Any potential failures can then be detected immediately by the
DEP concerned. The individual DEPs are connected to a monitoring software application by means of the
communication network: This application is used on the data integration point (DIP). It receives failure,
error and fault messages from the individual DEPs with respect to the infrastructure to be monitored (X,
Y and Z in the above figure).
In addition to the connection to the DEPs, the DIP’s monitoring software has two other interfaces, for
configuration and notification. Among the facets of the configuration interface is the ability to
determine who is responsible for the system and when. This generally makes it possible to envision a
number of different notification scenarios (table below). This interface also enables the monitoring
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behavior to be defined precisely. The notification interface sends the message in each case (SMS, e-mail,
automatic fax sending, or calling a telephone number and playing an audio file).
Figure 7 below gives a more expanded and detailed view of a sensor enabled system. It is fundamentally
showing that low value information is acquired from various device types, that this information can be
aggregated and transported across standard cellular and various gateway devices, and then transformed
into high value information via a cognitive sensor platform.
Figure 7 - Expanded View of a Sensor Enabled System
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Actual Dashboard of a Real Time Sensor Monitored HVAC System
Figures 8 – 12 are example dashboard views of an actual Universities enterprise, real time, and sensor
monitored HVAC system application. “H-V-A-C” or “H-VAK” stands for Heating, Ventilation, and Air-
Conditioning—three closely related fundamental functions found in homes, offices, and other building
structures. M2M technology has changed the HVAC field as a great deal of development of the HVAC
system lies on ever-changing technology and continuous innovation. Using PLCs (programmable logic
controllers) in HVAC is certainly the trend nowadays.
Companies are adopting wireless technology after they found out that networking HVAC controllers,
which often use sensors, can eventually cut installation and labor costs. A lot of engineers are also
focused on further improving this technology through the use of mesh wireless setup, which will work
for both the wireless sensor and wireless controller networks. This continuous innovation fits directly
into the core model of M2M and the associated and evolving standards that are all driving towards IoT
and RWI.
These types of M2M capabilities allow service technicians, facility managers and business owners to
check the status of any piece of equipment, and much more from virtually anywhere using affordable,
easy-to-install sensors to monitor a variety of HVAC equipment around the clock: rooftop units, boilers,
heat pumps, chillers, air handlers and more. An M2M HVAC control system gives insight into the cost of
operation utilities and helps assess operational efficiency. You can even see historical operational
analysis. Plus, you receive automatic alerts when conditions indicate a problem.
If conditions are right for an equipment failure the M2M enterprise application will alert personnel, and
it can find the nearest service technicians to correct the alarm or issue at hand. Automatically, you get a
just-in-time response that extends the life of expensive mechanical equipment:
Repair small, low-cost failures before they require high-cost replacements
Reduce technician response time and time to repair
Increase life expectancy of high-value assets
Diagnose issues remotely before making service calls
Increase first-call resolution rates
Eliminate business downtime for customers to ensure long-term loyalty
Increase service revenues with performance guarantees and premium service contracts
Proactively manage maintenance for customers
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Figure 8 - First Floor HVAC Sensor Monitored Room Temperatures
Figure 9 below is a drill down of room 101A from figure 8 above showing in real time the actual room
temperature and humidity, the rooms airflow temperature and humidity and the last chart showing the
rooms airflow quality expressed as CO2 levels.
Figure 10 and 11 are showing the buildings real time electrical systems KW power usage by area
subsystem – Mechanical, Kitchen Receptacle, Emergency, Photovoltaic, Lights, and Standby Power.
Figure 12 is showing real time the buildings hot water heating systems primary, secondary supply and
return and feeder building supply temperatures; the amperage being drawn by the multiple feeder
pumps and compressors plus the buildings supply and return differential pressure in psi.
Figure 13 is showing the cumulative inbound and outbound gigabyte data transfer traffic in real time of
6 of the 16 bladed core network infrastructure server(s) that host the HVAC M2M and other Universities
applications.
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Figure 9 - Room 101A Temperature, Humidity, Airflow and Air Quality Levels
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Figure 10- Power Usage by Subsystem – Mechanical, Kitchen Receptacle, Emergency, Photovoltaic,
Lights, Standby Power
Figure 11 - Real Time Electrical Systems KW Power Usage Meters by Area
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Figure 12 - Building Hot Water Heating System – Primary, Secondary, Temperature, Pumps,
Compressors
Figure 13 - Cumulative Inbound-Outbound Gigabyte Data Transfer Traffic across 6 of the 14 Blades of the Core Network
Infrastructure
M2M for the Enterprise
Figure 14 below presents a very basic M2M communication business case from a mobile operator’s
perspective, where connectivity is provided to an M2M IT enterprise partner.
As the level of M2M traffic increases and devices become more common, the price of individual
hardware components falls, boosting M2M popularity even further. According to Gartner, the average
price of an M2M module (one that is attached to a connectable machine and contains the necessary
communication capabilities such as SMS/GPRS) will amount to approximately $ 28.67 by this year -
2011. Compare this to the average price of a similar module in 2007 – which was almost $ 57.34 and we
can see that the hardware cost has almost halved.
In addition to the reduced hardware costs, the declining price of data services renders more M2M
business scenarios viable. Scenarios that a couple of years ago were deemed useless due to high costs,
are now an attractive business opportunity. Instead of taking the market share away from mobile
operators, the companies that use M2M services introduce new business opportunities for them.
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Other aspects important for operators should also be considered. The churn rate for M2M subscriptions
is extremely low, the machines can be controlled in groups, and the data from machines does not
usually overwhelm the network. Additionally, most of the M2M subscriptions do not require complex
customer service. Of course, the ARPU of an individual M2M subscription is lower than that of one
person, but the amount of connectable machines is higher.
M2M is certainly a promising area which is continuing to develop, with machines becoming an
increasingly important customer segment for mobile operators.
Figure 14 - Basic Business Model for M2M – Mobile Operator Provides Connectivity Services to the
M2M Enterprise Partner
A Multiplayer Game
Telecom operators are not the only players in the Machine-to-Machine world. At this moment in time
they offer connectivity services to M2M partners who own or operate these machines. The second
group, M2M partners, represent various business sectors – for example, vending machine operators,
electricity suppliers, monitoring companies and many more.
If the operator is only offering M2M connectivity services, the revenue stream in most cases originates
solely from monthly fees for M2M subscriptions. However, there are numerous other possibilities and
services which can be offered to M2M partners helping operators to maximize this revenue.
Figure 15 presents a scenario whereby a mobile operator gains additional revenues from the services it
offers to the M2M partner. Compare this to Figure 14, in which the mobile operator only provides
connectivity services – the difference between the levels of revenue can be quite significant.
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The most substantial difference is in offering services like provisioning, self service portals, B2B
gateways, rating, charging services and resource management. This decreases the complexity of the IT
systems required by M2M partners, enables faster and easier startup of M2M businesses and simplifies
the management of M2M subscriptions. Such services can be delivered by the mobile operator through
the platform, which operates like a gateway (or service enabler) placed between existing mobile
operator systems and various M2M partners. Delivering such services to M2M partners facilitates
mobile operators with increasing revenue.
Figure 15 - Extended Business Model for M2M – Additional Revenues from Auxiliary Services
New Roles Emerge – M2M Enablers
In addition to the operators that are expanding into M2M, new types of players have arisen as a result
of M2M business growth – M2M enablers offering services to M2M partners.
A typical M2M enabler can be described as the owner of the M2M platform (depicted in Figure 14)
delivering services to various partners and in most cases with a connection to more than one mobile
operator or ISP.
An M2M enabler’s business model bears many similarities to the business model of a Mobile Virtual
Network Enabler (MVNE), already known in the telecommunications world. Both types of business offer
the necessary network connectivity (that can be obtained from the MNOs), back-office operations and IT
platforms allowing end operators to concentrate on their core businesses.
The enabler’s role in the M2M business is very important, especially when considering how many of the
new M2M partners and enterprises on the market derived from industries other than
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telecommunications (e.g. utilities, security and automotive markets) and that lack the sufficient
expertise to cooperate closely with mobile operators.
What Should Be Looked For In An M2M Platform?
What features are essential for an M2M platform used by a mobile operator or an M2M enabler
providing services for M2M partners? Figure 16 presents an example of a business case, in which an
M2M platform is integrated with the existing systems of a mobile operator and which exposes services
to M2M partners.
Figure 16 - A Single M2M Platform – Multiple M2M Partners with Customized Services
Let’s take a look at the typical features of an M2M platform and how they support the business of a
mobile operator or an M2M enabler. With these features, they can both attain additional revenue by
offering advanced services to their M2M partners. These features include:
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Provisioning of services such as activation and deactivation of SIM cards; the M2M partner does
not need to perform complex integrations with mobile operator systems, yet the mobile
operator can provide easy-to-use interfaces allowing the partner to perform mass provisioning
operations on M2M SIM cards on an ad hoc basis.
Data mediation for the M2M partner to collect, unify and correlate data from the machines (e.g.
meter readings) and then send it for further processing
Rating of events allowing the mobile operator to charge the M2M partner for the service usage,
as well as provide charging services for end users of the M2M partner as a value-added service;
in this case the M2M partner does not need to have their own billing system
Integration with inventory as a repository of M2M SIM cards and M2M equipment with
customized structure, lifecycle management and logistics
A self-service portal for M2M partners and end-customers enables the operator to lower costs
by shifting the focus of customer service to the web
Mass SIM card management enables M2M partners to control the SIM cards (such as mass
activation or deactivation in a specific building or area) on their own, without involving the
mobile operator
B2B gateway making it possible to safely expose all features of the platform to multiple partners
with easy-to-use interfaces (e.g. Web Services) and integration of the M2M partner systems
It is important that operators can add the M2M platform to their existing systems similarly to the way in
which the MVNE platform can be added to the MVNOs infrastructure. With the M2M platform, mobile
operators can enter the M2M market without performing complex changes to their existing systems,
limiting the risk and increasing potential profitability.
LTE Is Driving Growth in the M2M Market
LTE technology certainly is one factor driving the growth of the M2M market, specifically for high-
bandwidth applications such as connected vehicles and video sharing. Yet LTE-based service will exist for
some time in coverage islands that are located in a larger 2G/3G environment. From a subscriber data
management (SDM) perspective, operators obviously cannot separate 2G, 3G and LTE devices into
discrete silos, so they will need solutions that ensure seamless management of shared subscriber and
device context and data between and among the different networks. By delivering a consolidated view
of the subscriber and device across all three domains, such solutions ensure system performance and
database integrity.
Network Areas Associated With M2M Services
M2M will have an impact on several areas of a Service Providers network: SDM; messaging services; the
policy and charging rules function (PCRF); and performance management. The following is a look at each
of these areas and how operators can optimize them for M2M services.
Subscriber Data Management - SDM
SDM is usually the first network area to be affected by M2M services, primarily because of the scale of
devices and the need to incorporate related information within associated databases, including the
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Home Location Register (HLR). There are several opportunities to optimize and improve legacy HLR
platforms, which are designed for voice-centric human-to-human communications, so they can
accommodate M2M services (see Figure 17).
Figure 17 - M2M Subscriber Data Management
Multiple Access Domains
Operators need next-generation SDM platforms that are more than just next-generation HLRs. These
M2M-optimized platforms must be able to track and manage devices across multiple access domains,
from 2G and 3G to LTE, Wi-Fi and WiMax, each of which uses its own authentication and authorization
functions.
Further, such platforms not only have to maintain all those domains but also need to be able to select
among them to ensure they can terminate the message to the appropriate domain. They also must
tackle all the IP-domain functions, such as dynamic/static allocation of IP addresses; SIP-registration
tracking; and network-initiated packet data protocol (PDP) context set-up.
If these functions co-exist in the same database and data server, within the same run time and
application framework, operators can build and maintain smarter network capabilities, such as
terminating SMS messages to the IP domain when the device is in, for example, the home Wi-Fi
environment, or establishing network-initiated connections. The ability to create such scenarios
translates into the ability to conserve important network resources.
Scalability and Flexibility
Another critical set of capabilities for M2M-optimized SDMs includes scalability and flexibility. The
required scalability comes from appropriate resource management which allows for the independent
scaling of databases and applications. In addition, dynamic, i.e., intelligent, management of the memory
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for both active and dormant devices enables the system to scale to millions of devices in the most
resource-efficient way possible.
The flexibility of the database and data model is extremely important for keeping critical information,
such as device serial numbers and firmware information, close to information about the device’s
location and network state. The proximity of these information sets enables operators to create custom
fields about specific devices and via such fields for all devices, obtain an instantaneous view of what is
happening in the network right now.
Identity Management
Management of identities in M2M services is another requirement for next-generation SDMs, and it is a
particularly important one because of the predicted deployment of billions of devices in conjunction
with the coming shortage of expensive identifier resources such as phone numbers and mobile station
international subscriber directory numbers (MSISDNs). One way in which an SDM solution could tackle
this challenge is to pool these identifier resources and dynamically assign them on an as-needed basis.
Another approach is for the SDM solution to make other, more plentiful types of identifiers equivalent
to phone numbers. For example, a device could use a SIP uniform resource identifier (URI), which would
allow the termination of SMS and other types of sessions.
Security
Securing M2M services is an essential aspect of next-generation SDM platforms. Device authentication
must include multiple simultaneous algorithms and a single sign-on function which can follow the device
across any type of network. In addition, an EIR is essential, so the operator can identify and block stolen
devices immediately.
Support for Business Operations
A strategic differentiator in M2M services is the ability to tailor operations to individual customer needs-
in other words, to provide:
• An application programming interface (API) that is oriented to Web services;
• A framework for extensible markup language (XML) event-based notifications; and
• Provisioning capabilities based on automated templates
For example, an electricity company or a vehicle fleet-management company wants to find a given
device and check its health. This type of M2M service requires a rich business API which, in turn,
requires a flexible framework to support these simple object- access-protocol (SOAP) operations.
Finally, a next-generation SDM should incorporate a frontend query server which features a high-
performance, open, lightweight directory access protocol (LDAP) API; offline access; and
reporting/integration with back office operations. Such a solution is essential to support database
queries, analyses and reports.
M2M Network Control Center
Any successful M2M solution must work across network domains and protocols, i.e., the SS7 domain
which manages the 2G and 3G worlds and the Diameter/SIP router for the LTE and IMS infrastructure.
To control these M2M devices and address the scalability and security issues, operators can dynamically
build a subscriber-aware point in between the two. This M2M Network Control Center (NCC) can receive
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copies of very specific information from the network and store these data alongside other important
M2M information.
As the NCC grows, the operator can use it for multiple purposes, among them:
• Push information to the policy server to enrich the policy rules;
• Analyze and monitor the network and, using that base of information, make the appropriate routing
decisions; and
• Use that same information to block access to the network for devices with specific firmware-in other
words, control the floodgates when a security issue arises or an overload is imminent.
Accommodating SMS
The second network area on which M2M communications has a significant impact is messaging, first
because of the sheer volume of messages that M2M services must handle. Secondly, many M2M devices
still leverage SMS, which has a global reach. Next, although SMS remains perfectly suitable for
monitoring and controlling small-message traffic, its use of the traditional store-and-forward approach
makes delivery times uncertain.
Operators can resolve this issue by using SMS routers and first delivery attempt (FDA) technology to
forward the message instantaneously. By handling SMS traffic cost-effectively, SMS routers enable
operators to lower the cost per SMS message. Basically, SMS routers free up legacy SMSC capacity by
using FDA for mobile-originated MO)/application-originated (AO) messages. That means SMSCs have to
handle only about 15 percent of the message traffic that truly needs to be stored until delivery can be
completed. This approach extends the life of capacity-stretched SMSCs.
M2M Policy and Charging Rules Function (PCRF)
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Figure 18 - The Role of Policy in M2M
Differentiate Among Devices
As policy control becomes more tightly integrated with the SDM infrastructure, the emergence of M2M
services creates critical requirements for the third network area on which M2M services will have a
direct impact-the PCRF. These requirements include the ability to distinguish these M2M devices from
devices used by subscribers and, using M2M profile, application, location, network condition and time of
day, to differentiate among various device classes. Depending on the type of device in question and its
network status, the policy server also must be able to offload traffic to different networks (see Figure
18).
Manage Relevant Resources
In addition, the PCRF must be able to manage and, in some cases, to guarantee bandwidth. Some M2M
applications, for example, electricity metering, consume very little bandwidth, while others, such as
surveillance cameras, need a great deal of guaranteed bandwidth to function properly. Clearly, an
operator does not want to provide the same levels of quality of service (QoS), uplink and downlink
bandwidth, latency, jitter, etc. to the two device types.
Further, those required levels likely will vary even for one device, say, a wirelessly connected security
system in the home. The system’s periodic stay-alive and health checks will require a certain priority
level but not necessarily significant bandwidth. However, if the alarm system detects movement and
triggers the camera to function and send a recording feed to a central server, a different QoS level
becomes necessary. In other words, based on an ongoing M2M communications session, the ability to
change policy rules, even for one device, is essential-not for the lifetime of the device but only
when circumstances dictate.
It is the job of the PCRF to handle all these requirements. Located at the center of the policy
architecture, the PCRF basically links the applications on top, the devices on one side and the subscriber
and device data-residing in the subscription profile repository/ home subscriber server (SPR/HSS)-on the
other side. Although it is the same policy architecture in current 3G and LTE networks, it must have
some M2M service-specific rules to be an efficient, effective solution.
Performance Management and Network Planning
Finally, operators competing in the M2M marketplace need solutions that enable them to manage the
network’s performance, so they can comply with service level agreements (SLAs); detect and
troubleshoot problems; and plan/optimize the network. For operators, the M2M customer is not each
individual device but an enterprise such as a utility or a fleet-management company. Such customers
require different, more stringent SLAs specifying the level of network support and service the operator is
to deliver-than operators provide to consumers. In the case of a utility, for example, an SLA might
specify that a penalty will apply if for whatever reason an electricity meter is not able to submit its
reading at the end of the month.
Or, a customer may request an SLA that guarantees the ability to refresh the firmware of that
customer’s devices a set number of times per hour, using over-the-air provisioning. Because such a
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capability will be critical for such M2M customers, operators must be able to track the relevant
information to comply with these SLAs.
Because ARPU in M2M services likely will be much lower than for consumer services, the PCRF is
essential for network planning and optimization as well. For example an operator can obtain statistics
on PDP context activations within a certain period of time for an M2M service, compare those with the
number of PDP context activations in that same time period for a consumer service and then optimize
M2M-related network resources accordingly.
Since many M2M services are new, it can be difficult for operators to determine the cost and expected
revenues, for example, of adding 20 million meters and to determine the impact on the network of
adding those meters. The answer to both questions will vary from operator to operator. Consequently,
the ability to obtain accurate statistics related to M2M services is an operator’s first step in determining
whether it makes sense to sign that 20-million-device contract, and how much it is going to cost in new
radio bandwidth and other network resources.
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In Summary
M2M Has an Extensive Industry Chain
This chain requires the participation of various enterprises (see Fig. 5). Horizontally, M2M equipment
vendors provide sensor network and terminal modules. Telecom operators provide transmission
network and M2M middleware. Application developers provide industrial application servers. Vertically,
telecom operators provide service operation, promotion, management, and maintenance, while M2M
integrators engage in service integration.
M2M integrators assist the industry users in small-scale applications by providing them with solutions.
While for large-scale applications, M2M integrators are limited by their capital and influence in the
industry chain. In this context, telecom operators can give full play to their advantages in capital,
creditability, and channels, acting in the dominant role of the industry chain. Operators can engage in
service operation, promotion, management, and maintenance, integrating the industry chain.
M2M has distinct features and its applications are closely related to specific industries. The industry
needs unified standards, open architecture and standardized terminal and interfaces.
With the introduction of a M2M services platform, various application servers can be connected to the
communications network through standard interfaces. The M2M service platform helps to realize
network connection and data management, giving operators a control point for the entire M2M value
chain. Separately developed M2M terminals can hardly generate an economy of any scale. M2M
terminal standardization has become a key concern. The introduction of an M2M gateway would help to
provide a unified interface for different terminals, while bridging the sensor and communications
networks. The M2M gateway can also provide functions like data transmission, terminal management
and terminal access control.
For operators, a profitable M2M service is the key. Less investment is required if M2M service is based
on existing networks, but operators need to analyze the impact of M2M service. Large investment is
required if a new network is built for the M2M service. In this case, operators should consider how
long it takes to be profitable.
The Trend is towards Dedicated M2M Network Infrastructure Deployment
MNOs and MVNOs/MMOs are increasingly deploying network elements such as GGSNs, PDSN’s and
HLRs specifically for the provisioning of M2M services. In the case of MNOs, separate network elements
provide several benefits:
Simplification of Internal Business Operations - An M2M business unit within the MNO can run
all M2M data traffic over the dedicated M2M network elements, without having to negotiate
with other business units for access to the core data network. This is important because
negotiation with other business units can lead to lags in service provisioning.
Optimization Of Network Utilization - The separate sets of network elements, for traditional
data services and for M2M, can be optimized for their respective needs and use cases. For
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example, processor cards on the M2M mobile packet gateways can be architected for larger
numbers of connections but lower throughput per connection.
For MVNOs deploying their own mobile packet gateways and HLRs (and thereby become MMOs), the
key benefits are the ability to:
Enable Quicker Provisioning and Diagnostic Capabilities to Their ASP Customers: MVNOs
working as re-sellers of airtime essentially have to work through their MNO partners to create
service tickets on behalf of their ASP customers. While extremely large MVNOs can negotiate
excellent deals with the MNOs for rapid MNO response, in general the use by the MMO of its
own network elements offers the ability to directly control and thereby speed up these
important M2M business functions for their customers.
Activation Rates Optimized for the “Internet of Things”
Mobile data applications based on smartphones and PC modem devices primarily need high throughput
at the mobile packet gateway for a successful user experience. In contrast, most M2M applications
typically have low throughput requirements as they are only sending small amounts of data, often
intermittently or even on an exception-only basis. M2M applications do benefit from the ability of the
mobile packet gateways to rapidly scale up to a large number (e.g., hundreds of thousands or millions)
of “PDP context” activations; that is, the activation of an open packet data session between the remote
device in the field and the mobile network infrastructure and, by extension, the application back-end
infrastructure.
If very large numbers of remote M2M devices were to attempt to initiate an active context/session after
recovery of the local mobile network infrastructure from a catastrophic outage, for example, it would be
critical for the mobile packet gateways to have the ability to adequately scale up to initiate the contexts
and properly connect them to the appropriate back-end networks.
IPv6 Support for Network Address Availability
On January 19th, 2010, the Numbers Resource Organization, the entity tasked with protecting the un-
allocated pool of remaining IPv4 Internet addresses, issued a statement indicating that less than 10% of
IPv4 addresses remain un-allocated. Clearly, if millions to hundreds of millions of new devices are going
to be networked in an “Internet of Things” in the coming years, this shortage of IPv4 addresses poses a
challenge, particularly for countries outside of North America that were allocated comparatively fewer
IPv4 addresses to start.
While there are technical short-term fixes to this dilemma, including dynamic IP addressing, the optimal
long-term solution is a shift to IPv6, which enables orders of magnitude larger numbers of available IP
addresses. Most MNOs are in the planning stages for this transition to IPv6, or have already made the
transition. M2M-optimized mobile infrastructure can help with the transition by future-proofing
applications through the use of techniques such as IPv6 tunneling over IPv4. Essentially, this capability
would enable remote M2M devices to use native IPv6 addresses that are translated to IPv4 for transport
across intermediate networks to the ASPs private data network.
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Network-Initiated Data Session Activation for Increased Application Robustness
Very large numbers of data-capable devices are coming onto mobile networks, both for M2M as well as
traditional smartphone and PC connectivity. While M2M-optimized network elements can aid in
managing extremely large numbers of PDP context activations, MNOs are still becoming more
concerned about reducing idle time to make their networks more efficient. It is becoming increasingly
common for MNOs to require idle devices (that is, remote devices that have an active packet data
networking session in place – PDP context – but are not actually transmitting data) to drop their session
after one to four hours of inactivity. This frees up network resources for other remote devices to
activate PDP contexts.
It is not too significant a burden for traditional smartphone and PC modem data users to have a context
dropped if idle; if the session is idle they are simply not using the service and can renew the PDP context
as soon as they need to be reconnected.
For M2M applications, decreasing idle time can be a significant burden, as it is often the server-based
application software that needs to communicate with the remote device. Take, for instance, a new
emergency firmware upgrade that needs to be immediately delivered to a set of remote devices. Given
that with traditional mobile network functionality PDP contexts cannot be initiated from the network
side, that is, by the server-based application software, ASPs have needed to rely on either rules-based
embedded software on the remote device telling it to initiate a PDP context at certain intervals or at
certain specified events, or have had to rely on SMS “shoulder-taps” to cause the remote device to
initiate a PDP context.
MNOs
MNOs already operate the entire network infrastructure needed to offer mobile data service and
deploying specific network elements is not an absolute requirement for them to be active in the M2M
market. Nevertheless, many MNOs do find that separate, M2M-specific network elements do offer a
number of benefits. As the number of M2M devices increases in the field, it is believed many MNOs will
find they pass a threshold at which it simply makes more financial and operational sense to split M2M
devices onto separate network elements than to continue to run all traffic over the same network.
Further, is believed that as increasing numbers of MNOs deploy M2M-specific network elements, they
will also seek to use the opportunity of the M2M-specific use case to optimize the infrastructure for the
specific needs of M2M applications. The technical benefits of M2M-optimized network elements,
specifically around the mobile packet gateway are available today in equipment from networking and
telecom equipment providers. Fundamentally, deploying M2M-optimized network infrastructure will
enable MNOs to provide a more robust and functional connectivity service to their ASP customers. This
serves to differentiate the MNO in the M2M marketplace, compete more successfully, and ultimately
increase their revenue opportunity.
It is important to note that other elements and capabilities, specifically billing systems and management
portals (also known as connected device platforms) are also important in an M2M-optimized network
infrastructure. More flexible billing systems allow the MNO to respond in a more innovative fashion to
the needs of M2M ASPs; for example, bundling in airtime with the purchase of an eReader, to obviate
the need for the eReader buyer to commit to yet another subscription.
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MVNOs
MVNOs have built successful businesses re-selling MNO airtime to ASPs in a way that meets the specific
and unique needs of the M2M market. Some of the very largest of the MVNOs have been able to
develop very close relationships with their MNO partners such that they have the ability of offer services
that appear little different from what could be offered if they indeed had their own HLRs and mobile
packet gateways.
Nevertheless there are real, material advantages for MVNOs to deploy their own network elements,
including mobile packet gateways, to intersect with their MNO partners’ radio network infrastructure.
As with MNOs deploying M2M-specific network elements, MVNOs increasingly will choose equipment
that is technically-optimized to serve M2M applications, rather than deploying generic data
infrastructure. No less than for the MNOs, M2M-optimized equipment enables MVNOs to differentiate
the connectivity service offering to their end-customers and thereby increase their revenue opportunity.
ASPs
Likewise, for the ASP, M2M-optimized network infrastructure provides the benefit of being better able
to serve their end customers with new features and functionality, as well as more efficient, robust, and
responsive services, and thereby differentiate their own offerings in the market and deepen their own
customer relationships. This ultimately results in more revenue for the ASP, as well.
Technical details of the underlying mobile network infrastructure supporting their businesses are
opaque to many ASPs. However, ASPs have a vested interest in the capabilities of their connectivity
partners. The network infrastructure deployed by MNOs and MVNOs directly impacts the capabilities of
an ASP in such areas as rapid service creation, ensuring a high level of QoS, and enabling granular
management and diagnostic tools. In short, the underlying MNO/MVNO network infrastructure impacts
on the ability of ASPs to enhance their own service offerings to their end customers and thereby
increase revenue.
Mobile network elements will be increasingly optimized for the specific needs of M2M applications, and
that there will be a corresponding increase in the differentiation among connectivity service providers in
the capabilities they can offer to their ASP customers.
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