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Market Opportunity for M2M Involves More than Just Connectivity
Service providers have a big opportunity with machine-to-machine (M2M), if they focus on the right things, according to a new report from market research firm Ovum. Carriers may miss out on the biggest opportunities if they concentrate solely on managed connectivity for enterprise businesses and organizations, says Ovum. They would do well to highlight “their ability to transport, collect and aggregate large amounts of information to grasp a bigger share” of the M2M market.
Ovum forecasts cellular M2M connections will grow 162 percent over the next five years to reach 530 million, while revenues over the period will total $252 billion. Total cellular M2M revenue for 2019 alone will rise to $66 billion, Ovum forecasts. That, the market research provider points out, offers “an attractive revenue opportunity for operators that choose to invest in their existing capabilities.”
As a share of M2M's growing pie, network operator revenue will rise to $25 billion by 2019, Ovum forecasts. As of 2013, operators' M2M revenues were driven largely by managed connectivity (43 percent) and network-level data transport (36 percent).
However, the largest revenue opportunity in the M2M market space lies in other network layers, with integration expected to account for nearly 50 percent of overall market revenue in 2019. Hence, Ovum advises, “[O]perators need to look beyond connectivity to reap the bigger rewards.”
“Over the past few years, as the hype around Internet of Things has taken off – driven by some wildly exaggerated forecasts – we’ve seen operators take a gentle approach to M2M. Staying within their main expertise, most have taken on management of the connectivity layer, yet as conventional wisdom tells us, only minor returns will be made here,” Ovum senior analyst Jamie Moss was quoted in a news release.
“Instead, operators need to leverage their other capabilities, namely their ability to aggregate large amounts of data around their customers. We’re seeing device and application management become the new focus in M2M, and the ability to collect vast amounts of data will be of considerable value. Data itself has intrinsic worth, but it is the business decisions made based on the aggregation and analysis of that data that are the greatest source of value for enterprises and their connected service provider partners.”
NetAmerica Alliance recognizes the growing opportunity that M2M presents for our Members. We are taking steps to ensure our capabilities and our partners are aligned with maximizing these growing opportunities.