As a core component of the Internet of Things (IoT), machine-to-machine (M2M) technology is expected to branch out in a wide range of new markets, growing significantly over the next 10 years, according to a recent report from the research firm Signal and Systems Telecom.
The report, which surveyed almost 250 companies from over 70 countries, predicts that spending on M2M and IoT technologies—and the wireless networks that support them—will grow to nearly $250 billion by the end of 2020. In the next five years, the number of installed M2M devices will rise sharply to 10 billion, the report adds.
The proliferation of M2M devices can largely be attributed to the widespread availability of wireless technology. This has sparked the imagination of companies that are trying to simplify operations by monitoring and managing equipment remotely. Ordinary objects are being reinvented with digital sensing, computing, and communications components to transmit information on their status and the surrounding environment.
According to Hal Varian, chief economist at Google, in an article with Forbes magazine, M2M technology is growing more widespread as components and wireless networks become more sophisticated and less costly. “The price of sensors, processors, and networking has come way down,” he says. “Since Wi-Fi is now widely deployed, it is relatively easy to add new networked devices to the home and office.”
The report notes that, aside from fitness bands and other consumer electronics, this technology is migrating into a wide range of markets. These include connected cars, telematics, building automation, smart homes, digital signage, manufacturing, utilities, and infrastructure. M2M devices are also being used in sensor networks to alert engineers of structural damages in buildings, or to monitor cargo in the shipping industry.
Steve Prentice, vice president of Gartner Inc., a research firm that specializes in information technology, notes that the “number of connected intelligent devices will continue to grow exponentially, giving ‘smart things’ the ability to sense, interpret, communicate and negotiate, and effectively have a digital voice.”
The report also underlines the potential for M2M technologies to transform the ways in which companies carry out industrial and commercial operations. For instance, utilities companies are managing the distribution of electricity with smart meters, and government agencies have begun to lay the groundwork for smarter cities and infrastructure. The cities of San Diego and Jacksonville, for instance, have started testing sensor-enabled street lamps to monitor traffic and get severe weather warnings.
For years, however, M2M technology has suffered from the perception of being fragmented and restricted to proprietary systems, according to Mobeen Khan, assistant vice president of Industrial IoT Solutions at AT&T, in an interview with Tech Radar. "This is because M2M solutions are specific to each industry; therefore it is extremely difficult to develop a uniform solution to fit all the individuals' needs of each vertical industry," he says. Historically, he adds, M2M technologies have been designed for specific industries, keeping entry costs high and discouraging organizations to invest in custom M2M systems.
The report came as many other independent research firms predict that the total number of installed IoT devices will increase sharply over the next few years. Gartner Inc., for instance, published research last year saying that 25 billion connected devices will be installed by 2020. According to ABI Research, sensor nodes and accessories are expected to account for 75% of the growth in the IoT over the next five years.
While technology that combines remote sensing and management will represent a large part of the M2M ecosystem, the Signal and Systems report predicts that multimedia and video applications will account for more than 20% of the revenue generated by M2M and IoT services in 2020. This is because of the widespread incorporation of LTE technology in M2M modules and gateways.
The 3G Partnership Project (3GPP), the standards organization that developed the LTE specification, is in the process of defining a new release for LTE cellular technology that will target IoT deployments, called LTE Cat. M. The standard occupies a class of low-power wide-area networks (LPWANs) and will replace current 2G cellular IoT system designs.
This attempt to redefine the LTE standard for low-power IoT deployments reflects a growing trend among wireless operators to invest in LPWAN technology, according to the Signal and Systems report. As opposed to Wi-Fi, Zigbee, and Bluetooth technology—which are geared more toward consumer electronics—LPWAN systems target extremely low bandwidth applications in the commercial and industrial IoT, such as monitoring utilities and remote asset sensing.