Pragmatic but exciting view of the Smart world

Transcription

everismart
Pragmatic but exciting view
of the Smart world
major players have their say
First report: overview of the current situation and future key points
everismart
2013 everis
This document is the result of processing and synthesis work carried out by everis, based on
the views of 38 prominent Civil Society figures. These people have been grouped into three
complementary groups: enablers of new business models derived from Smart ecosystems (senior executives of telecom, sensor, software and other technological companies); drivers of new
business models (senior executives of leading companies from all industries: industrial, public
sector, banking and insurance, etc.); and gurus and industry experts.
It is worth noting that the synthesis and consolidation of the views of these 38 people includes
opinions that are different and even contrary to those expressed by some specific participants.
To mitigate any possible subjectivity and bias of the feedback received, this “collective intelligence” has been combined with the addition of external information sources.
Reproduction or disclosure of this document in whole or in part, in any form or by any means,
including photocopying, recording, microfilm, magnetic devices and any other electronic or mechanical
reproduction without written authorization from everis is strictly prohibited.
everis has verified all of the data included in this study. However, everis is not responsible for the use of
the information contained herein by the acquirer.
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Contents....................................................................................................................................... 8
The reason for the everismart report............................................................................................ 10
List of Participants.......................................................................................................................... 12
Index
Introduction................................................................................................................................... 16
A. What is everismart?.................................................................................................................... 17
B. Objectives of the report............................................................................................................... 18
C. Report methodology................................................................................................................... 18
D. Report participants..................................................................................................................... 19
1. Brief history.................................................................................................................................. 20
1.1. M2M a not-so-new reality.......................................................................................................... 21
1.2. Market transformation.............................................................................................................. 22
1.3. What does the future hold for the Smart market?....................................................................... 24
2. What’s happening?....................................................................................................................... 26
2.1. Barriers are being overcome........….......................................................................................... 27
2.1.1. Sustainability of business models...................................................................................... 27
2.1.2.Standardization and normalization........................................................................ 28
2.1.3.Technology...................................................................................................................... 28
2.1.4.Regulation..................................................................................................................... 29
2.1.5.Operational efficiency....................................................................................................... 29
2.2. Changes in the value chain: open collaboration......................................................................... 30
2.3. Who are the main players? What are they doing today?........................................................... 33
2.3.1.Telcos............................................................................................................................ 33
2.3.2. Makers of communications modules and devices .............................................................. 35
2.3.3. Software developers ........................................................................................................ 36
2.3.4. Public bodies ................................................................................................................... 36
2.3.5. Private sector ................................................................................................................... 38
2.4. Conclusion: progress is being made pilot-pilot, vertical-vertical......................................... 40
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3. What’s next?................................................................................................................................. 42
3.1. Why is this the right time?...................................................................................................... 43
3.2. What future challenges should be addressed?..................................................................... 44
3.2.1.Strategic.................................................................................................................... 44
3.2.2.Technology................................................................................................................... 47
3.2.3. Operational services......................................................................................................... 49
3.2.4.Relational.................................................................................................................... 51
3.2.5. Regulatory framework..................................................................................................... 52
3.3. What business models will be part of the future connected world?................................... 55
“The past is history, the future a mystery and today is a gift,
that’s why it’s called the PRESENT”
Let’s make the most of it…
3.3.1. Industry solutions............................................................................................................ 55
3.3.2.
Smart Energy.................................................................................................................. 57
3.3.3.
Smart Spaces................................................................................................................ 57
3.3.4.
Smart Health.................................................................................................................. 58
3.3.5.Auto................................................................................................................................ 59
3.3.6.
Smart Home................................................................................................................... 59
3.3.7.
Smart Data..................................................................................................................... 60
3.3.8. Enabling Services............................................................................................................ 61
3.4. What role can the various players on the market assume?................................................. 63
3.4.1. Manufacturers of end user oriented devices.................................................................. 63
3.4.2. Device manufacturers for other stakeholders.......................................................... 64
3.4.3. Integrators and providers of intermediate solutions....................................................... 65
3.4.4. Manufacturers of end customer-oriented solutions...................................................... 66
3.4.5. Telecommunications Operators........................................................................................ 67
3.4.6. Public Administrations..................................................................................................... 69
3.4.7.Automotive................................................................................................................ 70
3.4.8.Utilities............................................................................................................................ 71
3.4.9. Infrastructure and services............................................................................................... 72
3.4.10.Healthcare................................................................................................................... 73
Bibliography and references.......................................................................................................... 74
Annexes.......................................................................................................................................... 76
A. Detail of main equipment suppliers........................................................................................ 77
B. Detail of main platform suppliers.............................................................................................. 78
C. Description of valuation parameters of market players.......................................................... 79
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Like millions of fishermen in India, Baju Rajan´si survival depended on his nets and the possibility of selling his catch at the nearest port to a small group of buyers. Of course, it had to be before the intense
heat that permeates the coast had a chance to ruin his catch.
Everything changed the day our man got a simple mobile telephone. Suddenly, Baju could get the best
offer, in real time, while still at sea and then decide which port to put into, thus maximizing the value of
his catch.
Prologue
As any economist will tell you, the economy and, in short, the creation of value comes down largely to an
information problem. The Smart world which this report discusses opens up new possibilities for acquiring information, interpreting it and incorporating intelligence into that information and, more importantly,
making decisions and responding immediately on the basis of that valuable information.
For years now, there have been movements in many different areas (Smart Cities, Smart Energy, Smart
Automotive, Smart Home,…) that have tried to convert the Smart promise into a reality. However, no
truly significant, much less exponential, advances have been made. Occasionally we find approaches
that are too technology-oriented or that focus exclusively on achieving efficiency, both of which are
perspectives that can cloud the real value of the Smart world: the enhancement of the information and
its inherent reactive capacity as the cornerstone for generating new business.
What is the reason behind this apparent frustration with not achieving the initial expectations? Does the
opportunity really exist to convert all of those capabilities into valuable services? In what areas and for
what purposes? For whom? What are the fundamental drivers and triggers? What is keeping the current
experiences from achieving their maximum potential?
While practically all analysts are predicting strong growth in the near future, in an effort to shed some
light on these questions we were motivated to undertake this complementary exercise in collective
intelligence and to reflect the results in this report. The methodology we used has been tested in other
everis initiatives. For example, Transform Spain in 2010 or more recently, Transform Talent. Based on
individual interviews with relevant personalities from both Europe and Latin America, in this case in the
Smart world, their views, which do not necessarily agree with one another, are incorporated into the
body of the report to definitively enrich the entire exercise.
As the title of the report indicates, the result is a pragmatic view of what has been achieved to date.
As the contents are revealed to the reader he will discover an exciting future, given the Smart world’s
potential as the driver of new services, new businesses, new forms of collaboration between players…
but also a future filled with paradoxes and challenges to be confronted.
The Smart world will elevate the value of information and the ability to act on it to a dimension never
before experienced by humanity. This will be true not only because of the tremendous opportunities
promoted by companies but also because of the applications that will be defined and used by people
like Baju to achieve their aspirations, in short, to convert that promise of value into a reality.
Eduardo Serra – everis Vice President
Excerpted from “Demand. Creating what People love before they know they want it”, Adrian J. Slywotzky with Karl Weber.
i
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The world is transforming towards an environment in which we are all connected through machines,
where people require more and better information and services and companies and public organizations have technologies that allow them to offer innovative, added value, more efficient and sustainable
solutions.
The reason for the everismart report
In a large number of companies, analysts, organizations and personalities from the business world are
creating major movements that enable forecasting significant changes in the way of doing business.
These changes include the way in which private companies, not-for-profit organizations and public
agencies are managed, where models of collaboration will be the key to survive in the coming years.
Given this changing and connected ecosystem, a key factor involves studying these movements in
advance to react, take the right steps, and thus ensure that all organizations and agencies will be in a
position to meet the new challenges that the “connected” world entails. But above all, be able to take
advantage of opportunities that arise. Placing themselves at an advantage, ensuring their competitiveness and ability to differentiate themselves in an increasingly complex environment.
This study not only enables businesses and public entities to understand and manage the key aspects
to be able to compete and manage their business in the future. It also enables them to identify those key
aspects that make it possible for these new businesses to be developed, generating a more appropriate
ecosystem for the growth of all players involved (companies, suppliers, consumers and public agencies).
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Thirty-eight senior executives of leading companies worldwide belonging to different geographies and
industries have contributed to this report.
Industry breakdown of participants
Considering the key industries for the Smart ecosystems, participants from all ecosystems have taken
part, with sufficient representation to ensure a global vision of the market.
List of Participants
3%
11%
17%
17%
6%
3%
6%
20%
17%
Guru
Enabler-Sensors
Enabler-Telecom
Driver-Industry
Driver-Retailer
Driver-Health
Driver-Public Sector
Driver-Insurance
Driver-Utilities
Fig. 1. Profile of participants in the report
Geographical distribution of participants
From a geographical point of view, the study includes geographies that have been selected, among
other reasons, for some of the following criteria:
•high growth levels
•socio-economic engines in their regions
•high penetration of “Smart awareness”
The Netherlands
Belgium
Brasil
Chile
Spain
Brazil
Fig. 2. Geographies of the participants in the report
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List of interviewees in alphabetical order
Aldo Garda
Coordinator of Information Technology and Communications
– Secretary of Public Management of the State of São Paulo
Government
Rafael Zamora
Director of Strategy and Regulation – Movistar
Rafael Ariztia
Director of the Agenda for State Modernization –
– Ministry of the Secretariat General of the Office
Ricardo Alonso
The President Corporate Manager, e-commerce
Rodrigo Campero
Farabella General Manager – Mapfre
Roland Zamora
Director of Planning – Santiago Metro
Rubén Wegman
CEO – Nedap
Vicente Trednick Rogers
Director of Technology and Innovation –
Wilson Ferreira
LAN CEO – CPFL
Xabier Amorós
General Manager – Agbar Chile
Alejandro Arranz
Director General of Innovation and Technology – City of
Madrid
Armando Arias
e-commerce Manager – Walmart
Carlos Morales
Global M2M Managing Director – Telefónica Head of M2M
Cyril Deschanel
Southern Europe - Vodafone
Domenico di Siena
Founder of Urbanohumano
Enrique Calcagni
General Manager – Abertis
Enrique Dans
Professor, IE Business School
Federico Flórez
Director of Information Systems and Innovation – Ferrovial
Group
Francisco Romero
Director – Lógica’eco
Guillermo Ponce
General Manager — VTR
Javier Goikoetxea
Expert in M2M, Telematics & Smart Mobility
Director of Marketing for M2M solutions. Global Telecommunications Carrier
Jose Miguel González Aguilera
Manager of the Autonomous Information Systems Area of the
City of Madrid – City of Madrid
Director of IT Strategy, Architecture and Purchasing of an oil company
Ignacio Gafo
M2M Marketing Manager – Vodafone
Information Officer. Infrastructure and Service company
Luiz Fernando Furlan
Former Minister of Industrial and Commercial Development
and current member of the Board of Directors of Brasil Foods
S.A.
Manuel Fernández
Urban Thinking Strategy
Manuel Miranda e Ignacio
Arespacochaga
FCC
Marc Boher
Chief Commercial Officer – Urbiotica
Marcelo Soria-Rodriguez
Smart Cities Manager – BBVA Labs
Miguel Ángel Sánchez Fornié
Director of Control Systems and Telecommunications Iber- drola
Oliver Flögel
General Secretary – Agenda Digital
Pablo Hernando
Repsol
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Other study participants
Chairman of Brazilian Telecommunications Carrier
Chairman of Chilean Telecommunications Carrier
Director, M2M International Center Global Telecommunications Carrier
Director of Corporate Marketing Chilean Health Insurance Group Chief
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A. What is everismart?
Over recent years we have begun to hear — firstly subtlety, then with increasing strength — about a new
reality, enhanced by the increasing ability of obtaining information “anywhere/anytime” and how to use it
smartly, making it available to certain players, capable of developing new services for society as a whole,
increasingly more capable, more experienced and more demanding in its consumption.
Introduction
This reality has been referred to by many names, that identify it in whole or in part: Smart-X, Internet of
Things, Machine to Machine (M2M), etc.
everis has created everismart, an initiative which encompasses all of the above. It reflects our understanding this reality, which is quite a paradigm shift and leads us to an entirely interconnected ecosystem:
not only devices with connectivity, but also players who have historically worked in a very specific market, will eventually play alongside other players at different levels.
Fig. 3. everismart Vision
everismart a result of the knowledge and skills acquired by everis in each of the industries impacted
by Smart worlds and part of the idea that both the widespread availability of technological means,
and vast communications development, lead to an increasingly interconnected world where M2M, IoT
(Internet of Things) technologies and the like open up great potential for industry solutions.
In this context there are multiple multi and inter-industry initiatives aimed at exploiting new opportunities:
known as Smart-X environments, such as Smart Spaces (Smart City, Smart Buildings, Smart Streets,
etc.), Smart Grids, Security, Vehicle Telematics, Industrial Processes, e-Health, etc, focused on a smarter use of all connected elements.
The existing initiatives, from very different objectives and areas, have individual or industry outlook,
usually biased by the drivers of each initiative or the type of information they manage. In many cases,
unidirectional or detached from other projects or areas of Smart connectivity.
While all of these initiatives have come about from separate business purposes and with their own particularities, all have a common denominator: providing Smart connectivity and interaction between
different elements, providing extremely higher added value than currently is the case.
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B. Objectives of the report
The main objective of this report is to gather collective intelligence from all players involved to understand the key factors enabling this paradigm shift to be successfully addressed. Understanding the
impact on all business models which may arise from the territories and in all industries, as well as the
interrelationship between these.
Therefore it has been considered necessary to interview people from influential groups in the Smart
environment to provide an overview of the market to be included in the report.
Some of the questions we will answer are:
everismart
Conversations with more than 38 outstanding
individuals in the everismart environment
Aggregated
analysis of results
Drawing
conclusions
Analysis of external sources Fig. 4. Report methodology
This report was developed between June and December 2012.
•What is the momentum change? What has materialized so far? What will materialize in the future
and when?
•What are the barriers that remain to be overcome?
•What are the drivers driving Smart businesses?
•What challenges do all those involved face? What are the current main risks to be overcome for the
business to reach its full potential?
•What opportunities will generate this paradigm shift?
•Which industries or what kind of companies have a critical role in this paradigm shift? What will
your role be?
•How will this paradigm shift impact the current business models in companies or organizations in
different industries? What business models will emerge earlier and with more impact? What kind of
alliances should be created to respond to the new market?
•What factors should be taken into account by the players to be successful in this environment?
•What should the role of the regulator be?
C. Report methodology
To find collective answers to the above questions, the initiative proposes to reveal, mainly from a business viewpoint, the opinions of a significant number of prominent people from the Smart environment.
In relation to the selected sample, there have been two essential characteristics. Firstly, full transparency in expressing voluntary and unbiased opinions has been key. This has been achieved through
individual, private and anonymous conversations. Secondly, it was important for a range of views to be
represented in the sample, therefore people from different regions, areas of activity, political sensitivities,
generations and genders have been chosen. In the case of experts, the representation is reinforced
by choosing relevant topics related to Smart ecosystems. For business leaders, the representation is
reinforced by mixing business owners with business managers and combining mainly large companies
with medium and small companies
D. Report participants
To ensure that the report contains all points of view, personalities from three large influential groups from
the Smart environment have been interviewed:
1. “Trackers” of new business models, or those organizations that drive change based on “demanding” maturity of new technologies and offering innovative services for these. Examples include
the public sector through regulations or utilities companies which are beginning to provide “Smart
metering” services, as a prior step to “Smart grid”.
2. “Enablers” of new business models, or those organizations that will enable change thanks to their
range of technology products and services, such as device or software manufacturers, or telecommunications companies that make connectivity possible.
3. “Experts” from the Smart environment.
All participants from the different groups of respondents currently hold senior executive positions in
private companies and public agencies, in Spain, Europe and Latin America.
This report is divided into four sections:
Introduction (this section). Establishes general concepts and states the objective of the report and the
methodology followed for its preparation.
1. brief history. Describes the first steps and successes, with particular focus on the drivers that have
generated and driven these as well as the expected growth trends and barriers that have limited this
development.
2. What’s happening? Focusing on the present, the barriers that are being overcome and the main
players developing this market.
3. What’s next? As a summary, answering key questions thanks to the collective intelligence of all
participants.
To mitigate any possible subjectivity and bias of the feedback received the “collective intelligence“ has
been combined with the addition of external data. As a result, the methodology represented in Fig.4 has
been adopted to develop the initiative.
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1.1. M2M a not-so-new reality
Brief history
•The first point of consensus is that, even though Smart initiatives are being receiving a lot of press,
they play a significant role in R&D and innovation plans in all communications and press releases
associated with an innovative approach, not really a fad, but something much more. One of the
concepts associated with Smart is Machine-to-Machine services (M2M - technological base to offer
Smart services). This is not something new, given that it has been being implemented since the late
90’s in various industries.
These solutions are technically viable and report proven operating profit, therefore, we could say that
they have been a reality for years. So why have they not been widely exploited?
In its 1st wave of use, which extends to 2008, a market situation arose, characterized by,
•Very Vertical Solutions. These solve specific problems. Solutions based on closed devices and
protocols. Reuse difficult. Lack of standards.
•High costs for modules, development and maintenance of M2M solutions.
•High connectivity charge (rates from operators, lack of global rates, roaming).
•Portability difficult (fear of being a captive customer).
•Low technical performance of the access devices (batteries, coverage, reliability). High maintenance costs in the field.
At the end of the 1st wave of M2M
applications, there are already
mature markets.
- Security (alarms and telemonitoring)
- Fleet management
- Remote control of critical
infrastructures and industrial processes
1st wave
Vertical
applications
Fig. 5. First M2M wave
It is not that is has not been done so far; in fact significant progress and advances have
been made. Now technological maturity is arriving so we’ll see how it gains momentum
Telecommunications Company
In this pilot and demo stage, the solutions have been developed vertically within each industry as the need arose
Public Administrations
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Some examples of vertical applications created during this period:
•The food giant Nestle was one of the first to adopt the technology, installing sensors in hundreds
of ice-cream vending machines to monitor stock levels1.
•Fleet Management. The company Microlise opened its transport fleet division in 2002, supplying
shipping equipment to provide shipping telematics to truck manufacturers such as MAN and
Scania.
•In 2006, the company LogicaCMG finishes the shipping telematics project to control the temperature in the shafts and transmit information in real time from high-speed trains to the Norwegian
high-speed enterprise Flytoget.
•In 2006, the Company Numerex offers its asset tracking and management system based on
wireless M2M.
In 2004, huge potential for M2M was expected, confirming it could be a market of US$1.8 billion in
2008[1].
•Power (Remote meter reading. ORDER ITC/3860/2007 dated December 28, 2007). A legal requirement to implement Smart electricity meters in every home in Spain before December 31, 2018.
•Elevators in Spain are also included in the regulation, which in this case requires the installation of
a communication line to be used in the event of an emergency.
2. Sustainability. There is a need to optimize consumption and this type of technology will enable us
to use fewer resources, optimizing the use. As an example, in the transport industry, this enables a
great saving of time and fuel, while reducing CO2 emissions to the atmosphere.
3. Digital Culture. The new generations of “digital natives” and the increased use of new technologies at all levels makes these kind of solutions more readily accepted by the general population.
4. Improved connectivity. The extensive development of networks and technologies enable us to be
connected anytime and almost anywhere.
People currently between fifteen and twenty-five years old belong to the “digital natives”
generation. Access to services and information through mobile devices is essential for this
generation
Telecom Industry Company
Other forecasts that year stated the market value in 2010 would be US$2.5 billion[2] and US$7 billion by
extreme optimists[3].
However, progress was not as fast as expected: in 2007 The Economist published a report on the
development of the industry that valued it between US$2.5 billion and US$4.8 billion, depending on
what was included in the total[4].
In 2010 this figure had risen to US$12.1 billion, according to Machina Research. A significant market but
still not fulfilling forecasts made a few years earlier.
Therefore current valuations are well below the most conservative estimates, and significantly
lower than the most optimistic.
•Storage. Enables large volumes of data to be made available and instantly accessible. The functionality and versatility of Cloud storage and processing .
•Infrastructure. Network communication devices.
•Development. Availability of frameworks and middleware which make implementations easier.
Open Source and SaaS, trends that reduce the initial costs of licenses and machines.
•Specific rates for machine communications. The specific rate plans favor the adoption of new
solutions that usually require low traffic volume.
•Maintenance. The new device management platforms make the work of maintaining large volumes of devices easier and cheaper.
1.2. Market transformation
After a period of growth focused on particular uses, a series of changes have begun to take place in the
market resulting in a substantial increase in use.
In recent years many operators have begun promoting M2M communications because they
represent interesting new revenue lines. Ten years ago operators focused on the still buoyant traditional market and promoting M2M was somewhat unappealing
Industrial Industry Company
1. Regulation. Legal requirements. The recent regulation of certain industries favors the promotion of solutions based on M2M communications that promote greater on-line control of consumption, traceability, etc.
•Automotive Industry (European e-Call Standard, European Commission. European Road Safety. Aims to halve the number of victims of traffic accidents in the EU in 2020). Implementation
expected in 2015. This standard requires the installation of a communication device in all newly
manufactured vehicles with the aim of making an emergency call in the event of an accident.
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5. Cost reduction.
6. Connected devices increasingly smaller and more advanced. The miniaturization of devices
(micro and nano) increases the number of cases of commercial use of the solutions, especially important in Smart solutions.
More sophisticated and economical technology, coupled with a regulatory environment that
guarantees its success
Smart Solution Provider
All these aspects result in a second wave, in which we currently find ourselves. The regulation is the
main factor for the emergence of large-scale deployments.
Although the use of these solutions is growing, the big boom predicted has still not materialized, with
frequent pilots and testing taking place on a small-scale.
“Rise of the Machines”, 2012,The Economist.
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The 2nd wave, through
regulation, takes M2M to
large-scale industries.
- Automotive (emergency)
- Utilities (telemetry)
- Elevators (emergency)
1st wave
Vertical
applications
This new reality has no precedent because it is very new, which creates too much uncertainty when making assumptions for a business case
Financial Industry Company
There are still many technological challenges to resolve before the business models have
a solid foundation: harvesting, obsolescence, generic data processing, communication,
etc
2nd wave
"Legal"
Applications
Fig. 6. Second M2M wave
Lack of investment to develop the desirable scenarios, these being clear business cases
that are lost along the way. In some cases the technology is too expensive and in others
there is no business model
Utilities Industry Company
No interrelation between players will be looked for until there is a cultural or business model
change in the companies involved. Collaboration is the opportunity for greater value
Telecom Industry Company
1.3. What does the future hold for the Smart
market?
Although there is talk in the market of the Internet of Things as “the next big thing” and its ability to
manage and take advantage of the data generated, we still have a long way to go, as it is still a widely
open concept. But possibly this will enable the arrival of the third wave of solutions that will give us the
opportunity to contribute to creating the most complex structure ever created, the Internet of Things.
The 3rd wave gives us
the opportunity to
create the most
complex structure ever
created, the Internet
of Things.
1st wave
Vertical
applications
2nd wave
"Legal"
Applications
3rd wave
Internet of
Things
Figura 7. 3ª oleada M2M
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The general opinion of the respondents indicated that although the market has not boomed yet, we
are seeing significant growth (with respect to interest, demand and solutions) and there is no doubt
that this will increase.
The Internet of Things (IoT) may struggle, boom or grow progressively, but what is clear is
that it is here to stay
Smart Solutions Provider
What’s happening?
The data shows that after a slow growth in late 2009, in the following two years, there are increases in
terms of device sales of 48% and 35%, with current figures expected to triple by 2016.
Similarly, regarding connections, after reporting a drop in 2009, in 2010 these increased by 55% and in
2011 there was a growth of 33% compared to the previous year[11].
2.1. Barriers are being overcome …
Although it cannot be said that the barriers hindering growth have disappeared, there have been
advances that have resulted in what previously prevented a customer from deciding to go into an M2M
business now being considered a point of improvement, not a hindrance.
2.1.1. Sustainability of business models
Market developments have resulted in cost sources being substantially reduced, enabling viable business models that until now were not affordable.
•Equipment costs continue to decline to reach sufficiently attractive levels, in some cases of use,
such as in identifying business models for viable deployment.
•Connectivity costs In this respect there are two significant advances. On one hand, technologies
and standards have been developed to minimize the number of connections needed, and on the
other, telecom operators have developed their commercial offering, creating cheaper rates geared
towards these usage models.
This new telecommunications strategy has been achieved after having realized that the low ARPU and
high aggregation of SIM devices can be compensated by high growth in the number of deployments
if the market booms, with reduced maintenance costs and very low Churn levels.
Regarding roaming costs for solutions requiring international coverage, there is currently a debate
among operators: while some do not see that roaming is a particularly serious problem for the
market, other operators believe that is still a hindrance in implementing solutions that transparently
interconnect different networks for the end user.
In roaming you provide the customer with a service, then after you see which network it is and
you rely on the agreements in place. This is not an obstacle for clients
Telecommunications Company 1
Naturally, to make telecommunications work in several countries, all operators are used to
working together and yet the only negative business case is when working with roaming
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•Economies of scale that can be captured, by being able to replicate deployments in different companies with the same solution, evolving the historical situation of ad-hoc implementations for each
client.
•Materialization of cloud computing which enables applications to be to deployed and data to be
stored more efficiently. As well as enabling new information consumption models in multiple devices
to be transparent to the user.
2.1.2. Standardization and normalization
2.1.4. Regulation
We have seen the first attempts of standardization, but there is still a long way to go. In this respect the ETSI (European Telecommunications Standards Institute) has developed “M2M Release 1”
standards, which include high-level requirements, functional architecture and the description of some
interfaces. The ITU (International Telecommunication Union) established the M2M Standardization Task
Force in November 2011. In January 2012 the Global Standards Initiative was established, where national and international standardization organizations will work together all over the world.
Different regulatory requirements have been observed depending on the geographies involved in the
study. While in places such as Chile the level of regulation is low, in Europe and Brazil regulatory actions
have been carried out affecting the energy and automotive industries. This point is highly significant,
since a large number of respondents mentioned the criticality of the actions of public agencies to act
as a driver and not as a barrier.
Different players, especially device manufacturers have begun approaches to reconcile their products.
The various manufacturers are betting on their new product versions as increasingly standardized solutions (Wireless Mbus, open-sea WiFi, among others), enabling end users to be more independent
in developing and managing the solutions, while contemplating possibilities to share infrastructures
for different solutions and suppliers. In a short period of time the number of partnerships between
companies has significantly increased and as a result so has the compatible product offering on the
market, and the trend continues in that direction.
So, the conclusion drawn from this collective intelligence with respect to standardization is that regardless of location or industry, everyone agrees that still much needs to be done (what has been done to
date is far too generic or does not have high-profile impact). In any case this is deepening the natural
evolution because the market has already begun to demand it.
It will be necessary to continue advancing in developing global standards to ensure and
facilitate this communication. Only this way can this concept become mainstream
The regulation is a driver, but it may also be a barrier. It should not be there to control and
fine, but to encourage innovation
2.1.5. Operational efficiency
Finally, in this time of crisis, the need to seek maximum operational efficiency of the various businesses
has helped to overcome the reluctance of many companies to use Smart solutions. This favorable influence, however, may not be enough in itself to justify the necessary investment, so many companies
try to find new revenue sources that complement the benefits gained by increased efficiency.
In this respect there are different opinions on the situation based on the main leading market of the
respondents:
•European respondents, with the exception of the public sector, widely consider that extensive work
has been done in efficiency and although it remains the main growth driver there is definitely a
need to pivot towards new revenue-oriented services.
Market leader
Above all it will need to be efficient, not just a cost saving. The key driver is to be Smart
2.1.3. Technology
Moreover, technology has been developed to the point that the majority opinion, almost unanimous
among respondents is that the current technology available is no longer the main barrier to key
business cases. Among these technological advances the following are highlighted:
•Improved connectivity, with the introduction of high speed networks such as 4G. With respect
to hardware, we are beginning to see alternatives to the lack of network coverage, mainly geared
towards the use of shortwave radio frequencies such as the development of WiMax subnetworks
in areas of low population density, which enable the lack of coverage to be addressed. Of lesser
importance at the moment, but also relevant, are the efforts to take advantage of abandoned TV
frequencies after the switch to digital TV (TV Whitespace).
•There is a clear, albeit slow, breakthrough in battery technology, achieving improvements in the
quality-price ratio. The offer and efficiency of alternatives based on solar panels has increased, for
those projects where it is feasible to use this solution. Both software and hardware devices incorporate features aimed at improving efficiency in managing energy consumption.
•Technological evolution regarding security and information privacy, incorporating new features
and software on M2M devices and systems on private networks. Moreover, design patterns are
emerging that define best practices in this area, considering an end-to-end view of the process (e.g.
“Privacy by Design”).
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M2M Solutions Provider
There are all kinds of ideas, but the boom will be driven by new revenue, not efficiency.
Although efficiency is the first step
Currently the solutions are geared towards efficiency, however new services are being
worked on
Telecommunications Operator
The solutions will aim to obtain more things: new services rather than just efficiency
Market leader
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Looking for both efficiency (80%) and new models (20%)
Industrial Industry
Models geared towards efficiency are already under way. They are already sufficiently optimized and the business case is not so expensive
In this respect, the need for collaboration between different industries is a common factor in the
majority of interviews.
Partnerships should be promoted and not be squashed. There is increasingly more transparency and more sharing, especially in the private sense, in the public sense there are
more problems. Open collaborative models are already under way and will produce
results
Market leader
In times of crisis that’s when you have to obtain income from any source
In particular, as several respondents have indicated, public sector involvement is essential, as the
tracker of public service solutions. The drive towards Smart initiatives from various public agencies is
undeniable, and becomes a determining factor in the future to obtain vertical and independent initiatives
reaching inter-operability with each other.
•Latin American respondents believe that there is still long way to go in finding efficiency in the
operation.
We have to be increasingly more efficient and have common processes, processes that can
be performed giving benefits to the company
It provides us with efficiency. Introduced in processes to minimize losses and streamline
billing
We must change the way we view the collaboration. Even between different public sector
entities and not just public-private partnership. The political and administrative environment
is a barrier, it is unfortunate to see projects come to a halt because different administrative
levels do not work together
Market leader
Given these changes in the value chain, an analysis based on traditional industries would be reductive,
since the Smart initiatives are emerging in “business territories” in which players from different industries collaborate to a greater or lesser extent.
A way to group these territories would be as follows (with examples of initiatives in each case):
We are living in the decade of efficiency
Efficiency above all
Why? The crisis will require more efficiency
Utilities Industry Expert
The benefits would mainly be in efficiency savings
Health Industry Company
Fig. 8. everismart Territories
2.2. Changes in the value chain: open
collaboration
The current situation confirms that we are facing a revolution, a paradigm shift. This is well understood
by seeing the movements of the different players along the value chain: none are resigned to
staying where historically they have conducted their activity and they want to position themselves in a
different way to a greater or lesser extent.
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Smart Spaces
Smart Buildings. (energy consumption, safety, environmental quality)
Smart District. (energy efficiency, lighting, security)
Smart City. Urban waste management
Smart City. Traffic and mobility management
Smart City. Parks and Gardens management
Smart Home
2.3. Who are the main players? What are they
doing today?
There are two main groups of players depending on their role within the value chain, although some of
them can form part of both:
•Enablers: included in this group are telecom operators, manufacturers of communication modules
and devices and software application developers (platform and middleware).
•Trackers: national and regional public agencies, companies in the industries taking part: Infrastructures, logistics, automotive, retail, vending, hospitals, etc.
Home Energy
Security
2.3.1. Telcos
Automotive
There is a unanimous view that when Smart solutions arrived they were not just something operational but they have transforming potential.
Connected vehicles
Fleet management
Insurance Services
In the vast majority of cases, operators are aware that Smart businesses will not have a future if they
only provide connectivity. They are working on positioning themselves along the value chain by partnerships with other players: SIM providers, communication modules, application developers, etc. The
ability to offer end-to-end solutions alone is not feasible.
Smart Energy
Smart metering (electricity, water, gas)
Smart Grid
Operators consider their role is beneficial because big corporations prefer them as service providers for
their reliability and customer service experience.
Smart Health
Telco industry perspective:
Telecare
Retailer: POS (Point of Sale)
Vending Machines
It is clear that we will go from being a company that
cares only about connectivity and start providing services
that add value and generate loyalty from connected
customers
Industrial Efficiency
Manufacturing
Retailer: POS (Point of Sale)
Vending Machines
Not only providing connectivity, but also giving the device, service, after-sales support
The reality is that not all territories are at the same level of maturity and their configuration is not
definite. The boundaries between them are fuzzy, and will be a dynamic configuration as the market
accepts and demands these solutions.
In fact, an important aspect in this regard is that some of the respondents state that more mature territories should enable and fund the necessary infrastructure for other emerging territories.
An initiative needs to be found that has short-term economic return and thus enables the
infrastructure to be built, allowing other long-term models to be created: viable short term
solutions enable us to invest in long-term infrastructure
As telcos, we position ourselves as solution providers
through partners
We do not want to merely provide connectivity and where
we don’t reach or can’t add value, we will rely on various
partners
However, the perception people have of their role from other industries is not so clear, as it is
thought they will not be able to overcome the challenge of providing more than just connectivity.
Perspective from outside the telco industry:
Telcos see themselves becoming dumb pipe. The utility
already knew it, so it may have a more important role, but
it will be more complicated for telcos
Telcos will only be able to move in the value chain and
provide more than connectivity if they can capitalize on
their relationship with the customer
Telcos don’t push it because it’s not their business core
business, and they’ll stay in connectivity, although they
run the risk of commoditizing it and not moving ahead
Operators are still far removed. They continue to think in
terms of minutes, interconnection, roaming, etc. so they
won’t find it easy to play a role in this world
As far as telcos are concerned, it looks like they have in
fact begun offering M2M stuff, but not so strongly as to
understand that there is a business case there. There are
ideas out there, but they have failed to convince
Being so conservative, telcos are likely to remain focused
only on connectivity
Smart Solutions provider
If they only provide connectivity they will be off the market
in five years
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The approach of how to implement Telco services is mostly mixed vertical/horizontal, with priority currently being given to vertical services are these are beginning to return money now. Although the
number of verticals varies between operators, the territories being targeted are those described in the
previous section: automotive, utilities, fleet management, Consumer Electronics, Smart Cities, etc. To
launch these services on the market, operators are also creating partnerships with companies developing niche solutions.
In large operators there is an interest to acquire commercial M2M platforms (Jasper, Axeda, Ericsson,
Amplia, etc.) that can be gradually extended with vertical solution modules to provide complete horizontal solutions.
It is not necessary to do everything in horizontal, but there must be something. The quickest
way to start developing the market is to begin with vertical and then go horizontal. Growth
is of the utmost importance
All operators understand that this is a global market, therefore they are trying to reach all geographic
areas possible. In order to expand their footprint they are working on major alliances within the industry.
A typical case is the Global Mobile Alliance (GMA) formed in 2012 between France Telecom, Deutsche
Telekom and Telia-Sonera. For these global deals a favorable roaming regulation will be essential, since
today there are countries that do not allow services to be provided with cards of a foreign operator in
“permanent roaming”.
They are prioritizing B2B and B2B2C business models, with currently more maturity and revenue for the
former (this model includes, for example, Utilities and fleets). The B2B2C is beginning to be developed
right now (consumer electronics, mainly) and will be based on partnerships.
AT&T
Verizon
Transport and logistics:
Eureka Navigation Solutions,
Device Insight, TIS, Kratzer
and YellowFox
Automotive:
BMW, Continental
Utilities:
IPM System (Intelligent Power
Management), Stadtwerke
Duisburg (Smart metering),
Consumer electronics: QGate
Safety: Securitas and Pyrexx
Industrial automation, monitoring and control: Neuhaus
Healthcare:
Lavandoo[8]
Nissan, Hertz, BMW, Ford,
Con-way Freight, and USA
Technology[9]
Transport and logistics:
International Truck and Engine
Corporation, General Motors,
OnStar and TeleNav
Utilities:
Smart Grid: Genscape and
Consert (pilot)
Smart meters: Duke Energyn
Phase OEM: Siemens Water
and ABB Power
Public Sector:
public safety: Blueforce Development Corporation;
Healthcare:
Phillips Medical, VectraCor y
Manley Solutions[10]
Source: Prepared by the authors.
2.3.2. Manufacturers of communication modules and devices
Although it should be noted that in this area the role of small and medium enterprises is essential
among the wide variety of current module manufacturers, Fig. 9 shows the position of suppliers with the
highest share of the European market at the end of 2011[11].
Orange
Vodafone
OnStar, DPDHL (transport),
Endesa, Iberdrola, Gas Natural
(Utilities), Amazon (Consumer
Electronics)[5]
SITA (baggage screening),
Konica Minolta (printers); ELM
Leblanc (central heating monitoring), Securitas (security),
Union Fenosa, (Smart metering), Transics (fleets)[6]
Cantaloupe/Pepsi (vending
machine monitoring), BMW
(automotive), Boston Scientific
and TRxCARE (healthcare),
Transpoco, Bluetree Systems,
DriveCam Europe and The
New Motion (transport and
logistics)[7]
Low
Telefónica
Ability to Gain Share
High
The following table shows the main clients that are currently working with large telcos.
Deutsche Telekom
Niche
Leadership
Sierra Wireless
SIMCom
Telenor Cinclus
Gemalto
Telit
Cinterion
Motorola
Crisis Potential
Low
Legacy
Opportunity Alignment
High
Fig. 9. IDC Leadership Grid: West European M2M Market
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2.3.3. Software Developers
The last group of players are considered as enabling companies software and M2M platform (middleware) developers.
By June 2012 twenty-three Spanish cities had already joined the network: Santander, Palencia, San
Sebastian, Vitoria, Bilbao, Cáceres, Logroño, Pamplona, Madrid, Valladolid, Barcelona, Seville, Burgos,
La Coruna, Malaga, Castellón, Salamanca, Palma de Mallorca, Valencia, Murcia, Rivas-Vaciamadrid,
Sabadell and Alicante[14] and gradually new initiatives have appeared.
As mentioned above, the main competitors of these companies are the operators themselves, with their
own in-house platforms and some of the hardware manufacturers which have also developed platforms
to manage the devices they make and the data they generate.
The various Smart City initiatives in Spain have been articulated in the early stages around the capacities
that participating companies and agencies bring, with distinguishing nuances existing in the direction
each one brings to this field, the most notable being:
Additionally in the Smart ecosystem there are a wide variety of small niche solutions developers usually
partnering with operators to provide end-to-end horizontal solutions.
•Barcelona, a pioneer in this field, with solutions that meet the needs to reduce carbon emissions
and regulate solar facilities, mobility, and the management of municipal services. In addition an innovation lab has been established exclusively dedicated to Smart Cities.
Gradually large manufacturers are entering this market, where suppliers such as Ericsson are taking a
leading role globally, and new suppliers, as is the case with Oracle, which is in the midst of building its
platform, may play an important role in the coming years.
2.3.4. Public agencies
•Madrid, deploying the Smart Madrid model with a clear focus on efficiency, quality and transparency, aimed at promoting the optimization of services and participation and information in real time.
•Málaga, with a clear focus on Smart energy management with the participation of the energy group
Endesa.
•Santander, which has advanced in researching services and applications aimed for use by the
public, based on a preliminary deployment of devices that provide various functionalities in an integrated platform for public access.
In this area, we have to carry out an analysis by geographical area.
A. Europe
Europe has a “long” tradition of being concerned for the sustainable development of its cities and
applying innovation and technology for this purpose. Special mention should be made to the cities of
Copenhagen, Stockholm and Amsterdam, recently chosen as the three “Smartest Cities” in Europe[12].
As we have already seen, the problems identified by some of the experts consulted, especially in Europe
are there are many pilots in progress that are not aligned with each other and the entrepreneurship
and innovation ecosystem is not sufficiently agile, there is too much bureaucracy and paperwork.
Entrepreneurship is not encouraging and therefore there is not as much innovation as there
could be
It is true that in Europe, R&D is far from the market. It lacks collaboration between companies and universities (M2M Solutions Provider)
M2M Solutions Provider
At an institutional level, the European Union is particularly focused on developing Smart technologies
applicable to cities. Thus, in July 2012, the European Commission announced a partnership scheme
for innovation in which it will invest €365 million a year until 2020, following a PPP (Public Private Partnership) model[13].
•Barakaldo, although a newcomer, is making a strong bid to ensure the interoperability of the different entities involved in the field of reducing the carbon footprint in a Smart district environment.
•A Coruña, is shifting the capabilities of its Smart City towards incorporating an integration platform
for the various services.
C. Latin America
In Latin America the development of Smart Cities has come a little later than in other areas. In November 2012 the “first Smart City of Latin America”, the Smart City Búzios, located in Armacao dos
Buzios, in the state of Rio de Janeiro, was opened. Sponsored by Endesa, based on the experience of
Smart City Malaga, enables the city and its residents to apply different rates according to the time of
consumption, the use of more sustainable public lighting systems and promoting energy efficiency in
public buildings and homes, enabling consumption per device to be controlled in real time[15].
Other recently announced projects in the area, but not yet operational, are the Digital City of Guadalajara (Mexico) and Medellin (Colombia) to deploy Smart systems related to traffic control and sustainable
mobility. As well as, “Smart City Santiago” through Chilectra and Ciudad Empresarial, driving the first
Smart City model in Chile, with the aim of putting Santiago at the forefront of issues such as “home
automation operating departments, photovoltaic generation through solar energy, electrical network
automation, and remote LED lighting”, among others[16].
D. North America
Especially significant is the case in North America in the medium-sized Iowa city, Dubuque, (60,000 habitants) and its Smarter City program, which enables more efficient use of municipal services: water,
electricity and transportation. It has managed to reduce the average household water consumption by
6% and electricity consumption by 11%[18]. The most innovative state is California, with two cases of
particular importance: the Smart Parking Management System in the city of San Francisco and the
Smart Water Metering system throughout the State. Driven by state law which requires a 20% reduction
in consumption by 2020, in 2011 already 50% of water meters were Smart[19].
B. Spain
Specifically, in Spain Smart Cities are a growing reality. Since the first pioneer project in Malaga in
2009, more and more cities have joined different projects.
During 2012 work was carried out on creating a Spanish Smart Cities Network (“RECI”), with the
aim of sharing experiences between cities, fostering synergies and collaborating in creating a regulatory
framework for developing the Smart Cities model.
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E. Rest of the world
In the rest of the world, it should be mentioned the phenomenon of cities that are being built from
scratch with Smart planning, connected by sensors. Examples include Chengdu (China), Masdar
(Abu Dhabi), Dubai Smart City and, above all, Songdo, Korea.
The most similar case in Europe is the IT Valley project which is being built in the north of Portugal which
hopes to accommodate 225,000 people in the year 2015[20].
As can be seen, in projects funded (or co-funded) by public entities, all players in the value chain
take part: operators, sensor manufacturers, application developers, companies from different industries
(health, industrial, construction, utilities, etc). Therefore the work of these entities is critical.
The solutions which will initially be successful are those that resolve the needs of the first
layer of the Maslow pyramid: comfort, safety, economy
Market leader
C. Automotive
With respect to connected vehicles, most major automakers are offering the following services: road
safety and emergencies, theft, navigation support and traffic information, etc. The most common business model is the partnership between car manufacturers and small developers of niche solutions.
2.3.5. Private Sector
These initiatives have been driven by a combination of competitive factors and regulations already mentioned in previous sections. Major European manufacturers such as BMW, Audi and PSA guarantee that
the services already launched are compatible with eCall.
It is worth seeing the major trends in key territories, to see how they are positioning the private sector
companies:
At the end of 2011, the five manufacturers with more customers for these services globally were: GM
Onstar, PSA, BMW, Toyota and Mercedes-Benz[11].
A. Smart Energy
Currently Smart Meters are being deployed worldwide. Respondents belonging to the utilities industry,
mentioned the problem that the business case for Smart Metering is currently not viable, at least
in Spain it is still cheaper to send an operator to read the meters. In addition the fact that the electricity
market is regulated does not help.
With respect to fleet management, the model is slightly different since they are independent solutions
from vehicle manufacturing. Here the developing companies typically offer end-to-end solutions to the
customer independent from car manufacturers. It is an industry with great traction in Latin America
(Mexico, Argentina, Brazil).
The accounts do not currently add up, but in the short and medium term they should
be viable. Provided there is more regulatory progress and more technological
development
Despite this, it is clear that for regulatory reasons at the end of this decade all European Union meters
will be Smart meters. In 2009, Sweden was the first country in which all electricity meters were replaced
with this technology.
In Latin America, respondents perceive Smart connectivity and initiatives as a great advantage from the
present, making costs more efficient and combating fraud, especially in a country and a market as
large as Brazil. In this country the government is currently working on regulating Smart meters.
In North America these systems are in a more advanced stage of development and in fact the penetration of Smart metering is now higher than 50%[11].
B. Smart Home
One of the tranches in which work has been carried out over recent years is in the optimizing electricity consumption in the home (Home Energy). Solutions of this type allow real-time information
about consumption of each household device to be managed remotely and alerts to be configured if
consumption exceeds the preset amount. There are hundreds of applications around the world devoted
to this, the most relevant case in Spain is My Energy, a joint project between Telefónica and Endesa.
With respect to security, security alarms have evolved from a fixed network system connected to a
central alarm system to a system compatible with mobile networks, paving the way to develop new
applications. It is estimated there are about 30 million alarm systems connected in Europe and the U.S.,
with security companies ADT, Secom, Protection One, UTC and Securitas Direct[11] the main providers
of this service.
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We are achieving OPEX savings of 15% thanks to the fleet management solution
At the end of 2011, the five companies providing fleet management solutions with the highest number
of devices installed worldwide were: Trimble, Qualcomm, Digicore, FleetMatics and Masternaut [11].
D. Smart Health
Both operators and experts consulted on health matters agree that the eHealth solutions sector will
have a great future but for now it is not well developed, due to regulatory and economic barriers and
patients not trying new forms of medical treatment.
State-provided services such as health and education, heavily rely on the legislation of each
country and change in these areas will be more gradual
Currently found on the market today are mainly monitoring solutions for patients, either for self-control
(cardiac monitoring, for example) or for patient care in situations of dependency (Alzheimer’s patients).
E. Industrial efficiency
As mentioned earlier in this document, from the mid-90s new Smart initiatives appeared aimed at remote control of critical infrastructures and industrial processes. Since then many worldwide applications
and pilots have been developed: vending machines, elevators, assembly lines, aircraft engines, baggage handling systems at airports, oil exploration, mining, etc.
A success story is that of Deutsche Post, the German postal service. Deutsche Post has assembled a
system with more than 7,000 sensors to automatically process and distribute incoming mail in boxes
until they are full and ready to be distributed.
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Outside these territories, another important player must be considered: Consumer electronics, which
has been boosted by different collaboration models between manufacturers of electronic devices, mobile operators in this segment, currently only providing connectivity, and digital content providers.
The biggest piece of the pie lies in the consumer products market for the home and mobility.
Many things are seen even in kickstarter
These capabilities, which are provided under business models and operational models which add
value within each territory, and through technological components, are the key components to
providing services in each territory. This combination shapes and determines each of the territories.
Global service analysis capacity
(data, events and device status)
Global service management
capacity (data, events and devices)
Improving industrial process
quality and efficiency
Market leader
Functions belonging in the security sphere
One of the most significant cases is the Amazon Kindle, where the connectivity provider is absolutely
transparent to the end user.
Improving the quality of day-to-day
actions and citizens' way of life
Features focused in the field of
logistic pinpointing and tracking
2.4. Conclusion: progress is being made
pilot-pilot, vertical-vertical
As we have seen, currently work is being carried out with a vertically integrated mentality focused on
specific drivers for specific territories, but a more global outlook is still lacking regarding the Smart
environment as a whole. To quote one of the experts consulted “Interoperability is the way to go, but
currently there are many pilots that are not aligned”.
Almost all experts consulted agree with the view of approaching the reality globally, providing specialized solutions to each problem/territory and enhancing collaboration across the ecosystem to maximize
global benefits and obtain the maximum interrelation synergies.
Telemetry: Features that display events and alarms online, generating statistical reports, storing historical
data, etc. based on smart storage and management and tailor-made for sensor data.
Remote: features based on the intelligent use of actuators that can autonomously and easily carry out certain
actions.
Fig.11. Capabilities
Delving deeper into this conceptual model, the logical infrastructure determines aspects such as
streamlining technology, global service management, developing SOFTWARE for these services
and integrating these services into their systems, both for companies using Smart services and for
the players which make these services possible.
Implementation or enabling of the required M2M platform
for the operation of required AllConnected services
In other words, to overcome this phase and reach the mass of such solutions, the tendency is to go
with a model in which the territories are “supported” by common capabilities, that enable interoperability of the various initiatives and make it easier to obtain the maximum benefit from all solutions,
cross-referencing the different information obtained from each.
Implementation
and operation
platform
System
integration
Aplication
development
There are many models on the market, as shown in Fig.10, which aim to define a conceptual framework
and look to reuse and interconnect capabilities that are involved in a Smart ecosystem.
Service for integration of existing
systems and systems required for
operation in the AllConnected world
Development services tailored to all applications required for the desired AllConnected operation
Fig. 12. Logical infrastructure
And finally, the physical infrastructure comprising the different devices, infrastructure and components
that enables data to be collected and managed to later generate information.
Infrastructure and communications cover the transfer of information based on very different technologies with very different types
of deployment:
- Landline and 3G networks, short term, NGN and medium-term 4G
- Bluetooth, NFC Technology, etc.
- HW Infrastructure, traditional or cloud
Infrastructure
and conective
Devices
Data
Allows data exchange and connection between
different active elements in decision making.
Sensors, electronic devices, cell phones, etc.
Getting data from different types of sources (sensors, mobile devices, social networks, open data, corporate
data, etc.) that ensure intelligent decision making, as well as generating new businesses using the information
gathered
Fig.10. everismart leading model
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Fig.13. Physical infrastructure
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3.1. Why is this the right time?
While forecasts predicted a boom in the number of connections, from 2 billion in 2011 to 18 billion[20]
in 2022, this did not happen, which is causing a certain amount of concern and disbelief at this market
potential. There is a set of market evidence which confirms the consolidation and growth of this market
in the coming years
Why is this the right time?
A. Growth in declining markets
Taking the example of the Spanish market, recent data published by the CMT[25] shows that in a crisis
environment where mobile lines are declining, the number of M2M lines are increasing in all operators, which means this new line of business is seen as a potential source of additional revenue for
telecom operators.
52.566.515
51.279.279
50.959.868
51.552.023
49.627.560
48.403.211
2.708.714
2.484.520
2.129.275
1.847.561
1.470.234
M2M Lines
Mobile phones
1.111.136
2007
2008
2009
2010
2011
2012
Fuente: CMT. IIIT 2012
Fig. 14. Evolution of the number lines. M2M vs. mobile voice lines and datacards
B. Movements in the Smart business ecosystem
Viewing the historical evolution in which the Smart market was generally being developed by small/
medium niche companies, a change in direction can be seen. On one side there are an increasing
number of companies interested in becoming part of the Smart market and, on the other hand, large
firms are appearing (large integrators, telecom operators, network equipment manufacturers, among
others), which in the light of market forecasts, are trying to find their niche.
On the other hand, the market need for global suppliers to make the complex ecosystem transparent, is
creating great movement among different players, looking to have more capabilities either by acquiring other companies as an accessory or by enhancing stable partnership models.
C. Need to optimize scarce resources
The capabilities offered by these new models for operational optimization or the use of resources, is
encouraging the market’s interest in driving solutions that help public and private organizations in reducing costs.
On the agenda of many public agencies, solutions are being contemplated in this regard: public electricity management that enables power consumption to be significantly reduced, car parks management that avoids search time and fuel consumption, controlling full waste containers saving costs
on personnel, time and fuel, among others.
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D. The involvement of public agencies
Aware of the Smart market complexity and high coordination needs, public agencies in their role to
harmonize and standardize are beginning to take an active lead in this respect and various national
and international organizations are beginning to generate public/private committees, incorporating
the different players in the industry to drive this.
E. Collaboration between private entities
The economic crisis; limited resources in the market; and the high fragmentation of players in the value
chain, has put a greater need for coordination and sharing of experiences on the table, with the aim of
stimulating a market that otherwise may be difficult to articulate.
In recent months the number of organizations, working groups and forums is increasing (City Protocol, oneM2M, ETSI TC M2M, among others), searching, coordinating, standardizing and structuring a
currently unstructured market, as a need for global solutions.
Therefore, although we are beginning from a situation of tight market developments and individual solutions, it can be concluded after the different aspects analyzed, that a solid foundation has begun to be
built for generalization and that the overall market context leads us to say that now is the time when
the Smart ecosystem will begin to prevail as part of business needs.
3.2. What future challenges should be
addressed?
The future evolution of Smart ecosystems faces a number of challenges in different areas that range
from the technological characteristics of the solutions to the relations between the different players that
make up the ecosystem.
The way in which participants face these different challenges will determine the degree of success to
achieve this new ecosystem.
everismart
B2B accounts for 35% of the market and is growing at a rate of 60%, but B2C
has not yet arrived
Regarding the small business segment, for which Smart solutions may be an element to significantly
increase competitiveness in a complex market, more bundled models are required than those currently
existing to date, involving ad-hoc projects, and even the possibility of self-implementing equipment and
applications.
The gap is in SMEs. The state should encourage access to these technologies
In this respect initiatives are emerging, such as the marketplace of Deutsche Telekom[21] as well as
Smart City cab solutions from addfleet[22], which aim to facilitate commercializing and implementing the
services, but there is still a long way to go.
B. Creating market demand
As has happened with other innovations, some of the Smart solutions come at a time when there is
greater choice between different providers than market demand. This, in many cases, needs to be created, mainly because of the existing lack of awareness about them and certain doubts about the benefits
they can bring to the business.
With Smart the tables are turned and the offer needs to be directed, it has to be created
LThe technology is almost ready, but the market is not yet fully prepared
Industrial sector company
3.2.1. Strategic
A. Access to new market segments
Until now the main business opportunities have come from the B2B market with very verticalized solutions for large corporations. However, the real boom will actually come from incorporating larger segments and a need for a large number of connected elements. It is therefore essential to overcome
the barrier of big businesses and access the residential market, on one hand, and on the other, the small
and medium enterprises segment.
In the case of the residential segment, this will need to be developed from the point of view of infrastructure, as has happened to date, and develop an outlook for services where the former do not
cease to be a means to achieve the latter. This requires all technology behind this type of solution being
transparent to the end user, both from a physical point of view and in terms of the associated costs.
Some cases which have set out on this path are solutions such as LugLoc or Trakdot, that for a fixed
subscription offer a service to find and recover lost luggage.
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There is no society demand; the market has to be generated
Some of the key factors in this respect, are:
•Provide solutions with maximum market orientation, avoiding purely technological based solutions
without a model of clear marketing and profitability.
•Analyze from the outset the usability of the solutions, finding solutions that are user-friendly and
improve the user experience in the processes in which they are involved.
•Appropriate focus on communication and dissemination, so that the market is aware of its existence and perceives its value. In this regard recent Smart initiatives led by public organizations under
the umbrella of Smart Cities, are having limited impact and use, due to a certain level of ignorance
of their value by the public.
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It is essential that the services provided are concerned about the customer experience and
make life better for
We have to stop talking about sensors, the challenge is to find services that solve
problems
Market leader
C. Scarce financing and limited purchasing capability
•Financing deployments to capture operational benefits, to make the economic model of the service offered viable. In this respect, the infrastructure and utilities companies will be the major players,
taking on the role of public agencies in paying for infrastructure, to be used in the services they
provide.
3.2.2. Technology
From a technological point of view, a large part of those interviewed indicate that this will not be one
of the main problems that hinders growth, and it is believed that there is enough technology to market
different types of solutions.
A. Energy consumption of the solutions
The current economic environment of clear instability can affect the dynamics of generating ideas and
developing solutions, as well as the ability to undertake investments by end customers.
In the market many ideas begin to emerge, although the difficulty of separating the wheat
from the straw and limited access to financing makes it difficult to make them a reality
One of the aspects that needs to be worked on in the coming years, especially for high-mobility solutions and with no electrical connection points, is the optimization of energy. It is expected that, in the
coming years, solutions that promote the self-supply of equipment through various mechanisms will
be on the rise. Some of these are still in full experimentation, such as piezoelectric materials that can
convert mechanical energy into electricity, solar panels integrated into housing or improvements to Lithium-Polymer (Li-Po) batteries with greater load bearing capacity. Until this issue is resolved, the main
lines of work will be aimed at minimizing consumption via software, such as for example by improving
the hibernation function of equipment.
B. Solution interoperability
In our current state of affairs, there is too much aversion to risk and financing is given to
safer investments
In general, respondents in Europe believe that public agencies cannot, and should not, intervene in the
financing of such projects, focusing on their role as market facilitators. Whereas Latin America is more
in favor of public financing.
Institutional support is needed, although subsidies are never good
Faced with the current situation, where there is a high level of isolation of solutions and where interoperability is lacking, progress would mean that these solutions acquire the ability to interconnect with
one another, thus being able to exchange information so as to enable better decision-making based
on more information about the larger context.
The various stakeholders are fighting their own battles. If they do not come to a common
agreement and there is no interconnectivity between their services, this could affect the
market
Empresa de Telecomunicaciones
The government should provide an environment and climate which helps to create an environment of innovation and development. Not in terms of investments, but rather encouraging development
Solutions have been getting increasingly specialized depending on the industry, and services are not integrated in a way that would allow them to
Each city has its own platform; there needs to be a minimum of standardization
The catalyst for this change should be the public agencies, for their ability to create critical
mass with their own needs
Financial Sector Company
In this regard, it will be essential for private companies to take on the challenge, for which new financing
models and payment for services may arise, changing traditional economic flows.
•Financing for leveraging the marketing of the services themselves. A case that heads in this
direction is the initiative of Telekom Austria, Unlock M2M[23], where the operator seeks to fund ideas
of partners by providing end-to-end solutions to customers.
Aside from the physical layer, there is also a logical layer because interoperability is currently
not guaranteed in any way
Interoperability and the sharing of information between the various services should clearly
be a feature of Smart Cities
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In this regard, different paths may be taken – depending on the time to market – for integrating an
ecosystem of solutions, with some possibilities being:
•Suite of solutions, different vertical services provided by the same supplier, who offers integration
between the different elements. This can be an early stage of development or one that covers some
of the vertical services of the ecosystem. It substantially reduces deployment deadlines, but it is a
model that makes it generally difficult to incorporate third-party and legacy services.
•Platforms Enabling Smart Solutions, allows the construction of ecosystems containing solutions
from different suppliers, through a common enabling platform that facilitates the creation of new
services and the exchange of data between them. This option increases flexibility and allows for the
incorporation of different players within the same ecosystem, with some attempt at development
and integration. However, in this case, interoperability with solutions that are outside the enabling
platform may be more difficult.
•Middleware, link layer between the different elements of the ecosystem, which enables the sharing
of information between them. It is the most flexible and open of the three options, but requires more
effort to set up the platform and to incorporate each new solution into the ecosystem.
It should also be noted that these developments should take into account the compatibility with
existing systems. This is a key factor for the Smart market to take off as customers, regardless of the
market size, should not see the incorporation of new solutions as a threat to the current IT systems
structure they are using.
There should be a layer that normalizes all information. Moreover, the platforms have to be
interoperable whether we like it or not, as there are many systems today that will remain
unchanged and that need to remain operable
While there are still no reliable technologies that can solve this problem, finding a solution to this issue is
only a matter of time. However, the real challenge for the implementation of this type of model is securing
the involvement of the different industry stakeholders concerned (mainly operators, SIM manufacturers, device manufacturers) as well as ensuring the adequacy of the existing operational models.
D. Minimizing infrastructure and deployment costs
While suppliers have made continued progress in this area, there are some difficulties that must be
overcome in the coming years:
•Equipment manufacturing, the appearance of a set of services (remote measurement of light/
water/gas, Smart lighting, consumer electronics...), with increasing market demand, will lead to an
increase in production volume, reducing unit costs and, moreover, encouraging large manufacturers to engage in the mass production of hardware. This will further reduce the production costs of
computes; in this respect, Asian manufacturers such as Huawei, ZTE, and others will be key players.
•Platforms, the number of market platforms that seek to facilitate the development and marketing
of Smart solutions will continue to grow. These will be put at the service of other developers and will
have a direct effect on the cost of the service. Furthermore, the use of cloud solutions will be key
to offering competitive solutions to the Mid-Market segment. These will and should be considered
by large companies as a model for optimizing costs and saving time compared to self-developed
solutions.
There is a general lack of capital, which means it is essential to look for low-cost developments that provide maximum benefits
C. Number portability and work on the SIM
The growth of embedded SIMs will be essential, as will be the development of intervention models for
making changes, which will allow companies to act OTA (Over The Air), thereby enabling:
•The removal of barriers to entry to those customers who fear being tied to an operator in the long
term without the possibility of change.
•The optimization of production costs, by including the card from the production line of the device
in which it is to be embedded.
•Business flexibility, enabling the telecommunications provider to offer private deals based on the
profile of the client and of the acquired service.
•Reduced operation costs, deriving from the absence of SIM cards, since it will no longer be required to store and manage SIM card logistics.
•Possibility of optimizing the management of provisioning and centralizing processes, with further
opportunities for those who enable the aggregation of demand and provide services to telecom
operators or for companies marketing the device where the SIM is embedded.
A key point to keep in mind is the globalization of business models, because economies of
scale are the goal
•Infrastructure sharing, it should be noted that a way to share the infrastructure to be deployed
needs to be created, from custom-made elements to M2M networks. Considering a future in which
there may be countless Smart services and each of these might be provided by a different supplier,
it is not recommendable that each develops its own infrastructure, rather than one shared among all.
•Planning and optimization of equipment deployment, evolving in this area in a way that minimizes costs and avoids installing more equipment than is strictly necessary, is key to ensuring a
satisfactory quality of service that is tailored to the physical conditions of the deployment area, which
– depending on the terrain – can manifest problems with regard to coverage, radio signal transmission, frequency, or signal interference.
3.2.3. Operational services
A. Ownership and information security
White SIM is supported, but this is technically not fully mature yet (with regard to encryption and security standards, for example) and operators have not come to an agreement
regarding this
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Some of the business models that may arise are based on separating the data capture and transport
capabilities, and improving them in order to build valuable services. One of the main issues arising with
these models is the lack of clarity with regard to the ownership of the data, which results in customer
fear, as clients may feel that there is a privacy risk and that their data may not be securely handled.
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It is necessary to continue improving management and marketing models that allows data reutilization,
benefiting both the owner of the devices as well as potential agents who may be able to reuse it.
These developments, along with the market diversification that each company must strive
for, require the staff of the company at all levels to engage in a constant learning and adaptation process, to varying degrees according to their responsibilities
It is important to have a clear data management policy, as these data can be an interesting
source to generate economic profit
Safety is key and lawmakers must make decisions, but it will still take years and meanwhile
there will be “failures”
On the other hand, with the help of many Smart solutions, users can have detailed information about
their energy consumption, control their alarm systems, etc. They can acquire information about their
consumption habits, the time they spend at home, etc. This can be a positive first step towards a
substantial improvement in the quality of life of citizens, but it can also prove to be a barrier.
In this regard, work needs to be done in the field of privacy and data management, with processing techniques that allow clients to add and remove data, so that the data is able to be profitably used while
avoiding a perceived lack of intimacy by the end users.
The challenge of alleviating security concerns has already been taken on by the M2M industry in general, and there have been significant advances in the development of hardware, firmware and software
that have been able to provide solutions based on the “Privacy by design” philosophy, which aims to
ensure end-to-end data protection in a way that is transparent to the end user. Some key players in the
industry have teamed up to create new companies specializing in this field (e.g. Gemalto, Giescke &
Devrient and others recently created Trustonic).
Sometimes in the digital world we complicate simple things that in the real world have little
security (e.g. signatures)
In many companies, it may be necessary to regenerate executive layers in order to achieve
the necessary cultural change and eliminate any reluctance that may remain about digital
or technological change
Industrial Sector Company
3.2.4. Relational
A. Evolution of partnership models
If the various players seek to expand their position in the value chain to position themselves as a sole
supplier to the market, there are many important barriers that prevent them from achieving this goal
by themselves, such as: the difficulty in matching the available knowledge in the company, the lack of
trade capacity and vertical views of the business, among others.
It is essential to work with open, collaborative models. In general this is quite difficult, but in
Spain especially so, due to the general aversion to partnerships
Given this difficulty, the development of stable partnership models will be key. The following will be
critical for this development:
•The existence of complementarily of capabilities, avoiding overlaps or competition situations that
draw the focus on the relationship between the partners rather than the goal.
•Sharing market strategies and ensuring the alignment targets of the companies involved.
•Having real win-win models aligned with the value contributed to the relationship.
B. Operation impact
While the need for operational efficiency and substantial improvements in the value offering seems
unquestionable, the reality is that, in some cases, high-impact structural changes (organizational, operational) will be needed in order to achieve this, and organizations will have to take on the risks of implementing these changes while faced with the uncertainty of profits.
•With the passage of time the number of large-scale implementation should continue to grow, with
the market becoming more aware of the benefits involved, which could reduce entry barriers.
•Organizations should consider developing transition models that allow for a gradual transition to
the new operating model and that do not initially intrude on the traditional operation model.
The problem is that companies do not want to share their product, infrastructure or solution
so as not to lose their competitive advantage
The challenge of cooperation can be solved by starting with very practical questions and
by each of the partners contributing their own specialization and skills. It is important to be
humble and not always try to be the prime contractor
•The implementation of such models in some organizations, due to the large scale, requires a period
of assimilation and acceptance by the organization.
The transition must be progressive and integrated in order to evolve without losing
profitability
Insurance Industry Company
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The relevant stakeholders must have a common vision, a common understanding
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In this regard, there have been some indications of the market moving in this direction, as is the case
with m2ocity[24],a joint venture between France Telecom and Veolia to supply remote water measurement services.
In the case of public bodies, the resource constrains when it comes to offering new services to the
public will require new models of relationship with suppliers.
These must enable the development of truly effective PPPs (Public–Private Partnerships), for which
companies must make their relationship models more flexible in the face of traditional public tenders.
The idea should not transcend the limits of the technology. Service companies in PPP with
the body public should be the drivers of development
Contractual frameworks in public administration, such as PPPs, are insufficiently developed. New models of public–private partnerships must be enabled
It is not feasible for this rapid development to be subsidized by the government. It has to
come from the private sector
Enhancing collaboration based on SLAs (Service-Level Agreements), which determine an important
part of the amount received through the contract, depending on the quality of service provided. For these aspects, both in order to optimize the operation, as well as to self-manage the service, management
and efficiency improvement solutions, including Smart services, can be a helpful support lever in this
regard.
In terms of telecom operators, the possibility that these might enter into agreements, both on a national and international scale and at various levels, may provide a leverage effect for the development of
the ecosystem. These agreements could range from sharing infrastructure, to ensuring uniform quality
standards regardless of where their customers are based. One of the first initiatives in this regard is GMA
(Global M2M Alliance), signed by France Telecom, Deutsche Telekom and TeliaSonera.
3.2.5. Regulatory framework
A. Standardization
One of the main barriers that may hinder the widespread adoption of Smart Solutions is the issue of
standardization of technology, protocols, etc.
Unlike with other market experiences, where standardization was achieved from the private sphere by
the companies involved, who simply placed a product on the market and ensured its widespread adoption, the high market complexity of the Smart market and the multitude of possible use cases suggests
it can be difficult for this model of adoption of standards to be implemented in the medium term.
The high number of businesses and stakeholders involved on a global level, who often seek to defend
their own private interests over global interests, can make it difficult to reach consensus in a short period
of time.
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Fig. 15. European Telecommunication Standards Institute
The lack of standards in sensor technologies is a fear for public authorities. There are technological challenges to overcome, but those who are prepared to take on these challenges
are doing so without any standards in place
According to experts from various standardization organizations, the physical and logical layer providing
specific connectivity and transaction services, as well as connectivity and quality of service protocols,
will be the one to be implemented first, since it covers a range of horizontal services that can be incorporated to any vertical sector or service where M2M technology acts as an enabler.
The development of global standards that ensure and facilitate communication will greatly
expedite the adoption of this concept. Thus arose the Internet
Today, what is sought in addition to connectivity is compatibility
The great difficulty of reaching a global consensus on the market suggests that in the coming years
there will not be one single standard. The catalysts of the first standards may be large corporations
that, while pursuing their own private goals, seek to integrate a large amount of suppliers looking for a
common goal (e.g. vehicle manufacturers).
A great, overarching standard would be helpful but is not viable; there needs to be a minimum for creating a market. The next market will be the one to decide on the standard
B. Regulation
A large part of the interviewees emphasize the importance of regulators as market drivers.
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Regulators are reactive and conservative; they only act when there is a problem
3.3. What business models will be part of the
future connected world?
Opportunities that open up in different
sectors for the fact of having
connected elements
The regulator should be the one to put forward certain initiatives in instances where M2M
can be promoted
Industry
Solutions
However, there is some concern in the market as this perceives that the limitations imposed by regulators will not improve in the coming years, which can constrain the development of this market. The
limitations are:
•Delay in the definition and implementation of regulations, with organizations being always well behind the market, which may generate a certain slowdown of the market or may require an advance
that has been made to be undone, depending on the final regulation.
•High market control, especially in strategic sectors such as utilities, with very rigid pricing models,
which limits the ability of new forms of income generation; this has a direct impact on investment
capabilities.
Data
Intelligence
Enabling
Services and new business models that will emerge as a result of combining data from different
sources of information and adding intelligence to
the same
Set of services that can arise within the value
chain that facilitate and expedite the operation
and serve as a means to reduce launching and
operating costs
Fig. 16. Potential lines of business
The regulation should avoid penalizing innovative companies, which might cause them to
withdraw from their activities for fear of the consequences of unsatisfactory results in the
short term and due to seeing themselves punished for taking risks
There are initiatives but this is a highly regulated industry, and therefore the changes are
slow
Health Sector Company
3.3.1. Industry solutions
The machine-to-machine communications market is undergoing a transformation process. During the
next five years, we will witness a true explosion of new Smart solutions, since the overall market is perceiving the great potential of this technology to reduce operating expenses, as well as to aid the development of new services that increase revenues.
According to estimates, the majority of the number of connected devices in 2022 will be those related to
intelligent buildings and consumer electronics, which will account for nearly 70% of the total.
In some places companies must simply ‘make do with what there is’ while in others there is
greater freedom to invest and expand one’s business
Intelligent Building
4%
Consumer Electronics
5%
Utilities Industry
Utilities
Automotive
8%
In Spain there is a regulated tariff regime, which means there is no competition and
therefore no investments
37%
Healthcare
Smarcities & Public transport
10%
Manufacturing & Supply Chain
Retail and Leisure
Smart Enterprise Management
State-provided services such as health and education, heavily rely on the legislation of each
country and change in these areas will be more gradual
32%
Agriculture and Environment
Emergency Services & National Security
Construction
Source: Machina Research 2012, prepared by the authors
Fig. 17. Distribution of connected devices by type of use (2022)
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It is estimated that Smart services have a high global economic impact, both in terms of increased
revenues as well as in terms of reducing costs. Overall, it is estimated that ten applications concentrate
more than 60% of the total economic impact, while it is those related to the connected vehicle that will
have a greater impact.
Although efficiency is the first step, the explosion will be generated by new revenues, not
efficiency
3.3.2. Smart Energy
According to recent data provided by Machina Research, the number of Smart meters that will have
been implemented in 2020 will be about 1,500 million[20], mainly due to the need to meet European regulatory standards in the electricity sector.
A nivel global, las 5 mayores empresas eléctricas[20] por número de contadores, que se encuentran en
700
600
500
400
Utility
Markets
Vodafone
Meter
ERDF
France
34M
2017
Enel
Italy
31M
2006
Iberdrola
Spain, UK, USA
14M
2018
Endesa
Spain
11,2M
2018
British Gas
UK
6,5M
2018
300
200
Building Automation
Electric Vehicle Charging
Traffic Management
Smart Meters
New Business Models for Car Usage
PAYD Car Insurance
Home and Building Security
Assisted Living
Clinical Remote Monitoring
0
Connected Car
100
Source: Machina Research 2012, prepared by the authors
Tabla 2. Empresas eléctricas por número de contadores.
The main visible uses of remote measurement solutions will be: offering customers the possibility of
having private readings accurately reflect consumption – as compared to the consumption estimation
models used in many countries – while for energy companies two major benefits will be the reduction in
instances of fraud and theft.
The availability of remote measurement solutions will allow energy companies to take advantage of these solutions by improving their ability to determine the demand at a given time, which enables a better
match between energy generation and consumption needs.
Fig. 18. Value provided by having a connected environment (Billion USD)
It is difficult to determine, in such a dynamic and changing environment, which will be the leading services on the market in the coming years. But it is important to begin by creating open environments that
encourage innovation and collaboration, in order to facilitate the development of such services.
In any case, below is a brief overview of the different sectors and use cases emerging that show the
greatest potential for the immediate future.
From the point of view of the consumer, it is estimated that consumers will make more rational use of
resources, something that is being demanded as a target for 2020 by various international institutions.
According to some pilot experiments, households with remote measurement solutions reduce their
consumption between 3 and 13%, mainly due to a more conservative consumer model, as consumers
have a greater awareness of the energy consumed.
Finally, the availability of remote measurement services in households opens up the possibility of creating
new services and business opportunities, arising from having a higher quality and quantity of consumer
information – from early detection of leakages or of energy supply theft, to greater commercial flexibility
due to being able improve the commercial supply of energy companies based on customer needs; the
latter is not possible in all cases due to regulatory and tariff restrictions in this sector in many countries.
3.3.3. Smart Spaces
One of the areas where the greatest number of solutions could be introduced is in ecosystems/spaces
that require a great diversity of services and that, in the coming years, will need to manage these more
efficiently (e.g. cities, airports, ports, etc.).
One of the most pressing problems remains the ability of cities to support the expected growth in the
numbers of vehicles in the coming years, which is why governments will be focusing on finding solutions to traffic optimization, developing traffic jam identification models and routing models for intelligent
transportation systems, as well as managing and signaling parking areas, among others.
Fig. 19. everismart Territories
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The key to the success of services does not only lie in the available technology. We should
not be talking about sensors but about services that solve problems
Market leader
It will be these new services that will drive change, improve management and
QoS, etc.
Another important aspect to be addressed in the coming years is the need for improvements in the
sorting of waste and for increasing the operational efficiency of its collection and subsequent treatment.
This way, cities will increasingly seek to incorporate fill level detection systems, which can provide the
public with additional information that can aid efficient collection and serve as a first step towards defining optimal solutions.
The existence of video infrastructure in major cities worldwide, for traffic management or safety reasons,
indicates that administrative bodies will be particularly interested in solutions that are able to analyze this
footage and make decisions in real time, making it possible to reduce operational costs and anticipate
risk situations.
The gradual replacement of traditional lighting by intelligent lighting will be a reality in the next few years,
since the latter generate significant cost savings in maintenance and energy consumption. Additionally,
due to the budgetary constraints of governments, the providers of these services seek co-funding models or seek to cede their operation for a period of time in exchange for a renovation plan of the lighting
model.
In the area of building automation, there are enormous potential savings in both the commercial and residential building market. It is expected that this will be the market with the largest number of connected
elements. Gradually, we will witness the development of solutions that make appropriate use of existing
equipment, identifying the right time to use it, thus avoiding unnecessary expenses (e.g. switching on
heating when the user is near his home, rather than schedule it always for the same time).
3.3.4. Smart Health
Considering the high health expenditures by both governments and private institutions, along with an
aging global population that will raise their cost even more in the coming years, it seems clear that reducing health care costs will be a priority in the next decade. Some uses such as the monitoring
of chronic patients (e.g. suffering from coronary heart disease) will enhance patients’ quality of life,
improve the quality of their treatment and reduce costs.
Telefónica and Parc Salut Mar
Recently, the results of a clinical trial carried out during the last two years, during which chronic patients
were monitored, showed both savings and improvements in the quality of life of patients (-34% mortality
rate, -63% hospitalizations, - 41% readmissions and -68% cost per patient).
These data show us the way towards a change in healthcare models that will enable the future sustainability of health models.
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On the other hand, the effect of population aging will lead to the emergence of solutions that will allow
the elderly to maintain their independence – from medicine dispensers and tracking devices for the elderly, to more sophisticated solutions that offer global coverage of patients’ needs.
3.3.5. Auto Industry
In the coming years it will be common for vehicles to gradually start incorporating devices that keep
them connected to the outside world. This will gradually progress from a situation where the devices will
be built outside of the production lines for the existing vehicle fleet, to their factory integration.
It is very likely that, five years from now, there will be no vehicles that do not have this connectivity, e.g. through GPS
The emergence of the electric car, which will have certain connectivity requirements, coupled with a
growing need for companies in the sector to differentiate themselves from their competition, will be
two of the main factors that will drive developments in this sector. It is estimated that, by 2020, 90%[20]
of all vehicles will have connectivity to other platforms, in one way or another.
Vehicles will become the new device for content consumption and solutions, from driver support
(navigation support, accident warnings, hands-free calling, diagnostics and reporting of malfunctions,
etc.) to entertainment. OnStar, developed by General Motors, or UVO eServices offered by KIA, are two
examples of automotive manufacturers leading the path to the future.
To enable content consumption, car manufacturers will seek to create their own ecosystems for
developing and marketing solutions developed by others. They will also enter into agreements with
content providers (e.g. KIA has signed an agreement with Google to incorporate Google Maps into its
vehicles; this means it can also use the company’s capabilities to create new applications).
Finally, the ability to use the information generated by connected vehicles, along with other contextual
information, may create new opportunities for developing new business models. The first experiences
of these models have only started emerging, such as the payment of services based on driving habits,
for example in the case of insurance and rental car companies.
3.3.6. Smart Home
The growing interest in optimizing household resources, and the emergence of certain companies providing equipment designed to facilitate connectivity and control household appliances, indicates that
there will be some growth in this area and a continuous evolution in this sector of the market.
Since Smart Home solutions cover services relating to entertainment content (Smart TV), home automation, security and metering, there is ample room for growth in the supply of services in the future, and
this is expected to increase even more. However, the development of this sector will depend largely on
how a number of challenges are resolved; challenges that affect connected devices (or devices likely
to be connected in the future), the standardization of communication protocols, and the availability of
concentrators in every home.
As for devices connected to a Smart Home, their acquisition cost and rapid obsolescence suggests
that the adoption of this type of services will be gradual, with the construction sector acting as a possible facilitator by ensuring that new homes incorporate connected devices and systems.
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Wholesale Trade
Utilities
Transportation
Retail
Manufacturing and
Natural Resources
Banking and
Securities
In an environment in which business models are still unclear, where there may be large imbalances in the
sharing of the profits generated, and where each stakeholder aims to define his own story and be an important part of the chain, information can act as a great driving force and catalyst for the Smart promise.
Insurance
If we had to define the main point of agreement between all Smart sectors, certainly the information
generated is the key point.
Healthcare providers
New questions and creativity. The value of the data will not necessarily be determined by its origin
or by the initial reason for which this information was generated. The great leap would be to join
predictable analytical models with the ability for creativity and discovery, thus leading to Smart environments generating a value that had not originally been foreseen.
Goverment
From data delivery to intelligent information
Education
information: data streams (live data) and data logs (information that can be treated later); both can
be cross-referenced with other business information to increase their value.
Communications,
Media and Services
3.3.7. Smart Data
Volume of Data
It is essential to increase the value of data being generated, for which we must collect
and correlate various measures to cross-reference and draw conclusions
Velocity of Data
Variety of Data
Underutilized Dark Data
Hardware
Software
Services
The data generated are not just one more piece in the Smart Environments larger picture.
They are one of the cornerstones that may help define future business models
Very hot (compared with other industries)
Hot
Moderate
Low
Very low (compared with other industries)
The wealth of information generated from all kinds of different contexts, market needs and business
solutions can and must have a market value that all stakeholders involved directly or indirectly can use
to their advantage.
The key is to get to know citizens better to provide what they want and encourage
consumption. Within an ethical limit
It is absolutely necessary to have access to all possible information. Otherwise we will
not be efficient and at this time we cannot allow it
Source: Gartner
Fig. 20. Heat map: Big Data by sector
Big Data has become a reality in almost all sectors and almost all criteria are of high importance, which
means big data is becoming more and more relevant.
Smart Data is the practical combination of the Big Data philosophy with Smart environments, turning
Smart Data into one of the cornerstones of potential future business models. These models will have
to make Smart environments sustainable for the actors involved.
In short, Smart Data is a business opportunity and the lynchpin of Smart environments.
It seems that having a lot of information is paramount, but there is no clarity about
what will be done with it
Why can data generated in Smart environments increase its value under “Big Data” criteria?
•Volume. The required scale in Smart environments is very high, given the nature and potential wealth of the acquired information.
•Speed/real time. A high change rate, the continuous evolution of the data generated and opportunities for flexible – and in many cases tailored – decisions, are inherent characteristics of the Smart
environment.
•Predictive analysis will become particularly important in Smart environments where there is a
need to anticipate behaviors and forecast trends in the events managed (i.e. where the focus is on
optimization).
3.3.8. Enabling Services
The value chain of the Smart ecosystem has not yet been built and this opens new opportunities in different ways. The most immediate – and this has already been discussed in the previous section – being
vertical solutions that cover the needs of the various sectors. However, it is also true that other business
models are starting to emerge, based on outsourcing services to third parties; these models should be
developed in the coming years, and utilized as mechanisms for knowledge reuse and for reducing the
time and costs of placing a solution on the market.
•Variety. Disparate sources and data that is not necessarily structured.
• Variability. Great breadth of interpretations and very different levels of the depth of analysis of the
information.
•Context. Different meaning and value of the information based on context (place and time).
For the sustainability of many of the business models that arise, resource sharing is key (e.g.
IT enabled services)
•Live information and past information. Smart environments generate two types of basic
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There can be a great number of opportunities within the scope of enabled services; some alternatives
that may appear in the next few years could be:
Connectivity Enabler – these could be connectivity facilitators that allow interaction with different devices. This raises the possibility of at least two models for enabling connectivity:
•Connectivity Enabler Light: provides access only to one network level, either the M2M network or
the access/transport network of the operator.
•Connectivity Enabler Full: will provide end-to-end managed connectivity services.
This creates opportunities for those players who, for regulatory reasons, must deploy infrastructure to
provide their services (e.g. utilities), which gives them a competitive advantage to provide services to
third parties. Business models that can optimize this initial investment may also may be of interest, as
may be sharing networks with other service providers, and transfer the use of the network to third parties (e.g. Telecommunications operators, manufacturers of network devices, etc.).
3.4. What role can the various players on the
market assume?
In a market yet to be defined, it is difficult to consider a priori which stakeholders will play an important
role in the Smart panorama in the medium term, both because the market is just emerging market and
opportunities are uncertain, and due to the difficulty of companies to reinvent themselves in sectors that
are not their natural habitat.
In this context, we conducted a stakeholder analysis, for which the information obtained from the interviews was considered the input source. We identified a set of factors that we consider key to becoming
a major player in this market (earning capacity, influence on the value chain, access to large volume of
customers, financing capacity, etc.). We used these factors to qualitatively evaluate the potential of
each of the stakeholders, without taking into account issues such as mergers, acquisitions, etc. The
analysis yielded the following conclusions:
3.4.1. Manufacturers of end user oriented devices
Since the regulations won’t go away, they must be converted into opportunities, such
as using distribution networks to deploy communications
Generating
new
revenue
IT Backoffice Enabler – this will enable the end client or intermediary to manage connections in an easy
manner, offering provisioning, billing and reporting services, etc.
While in this respect the opportunity may be filled by the enablers that emerged at the start of MVNOs,
operators will be better positioned in this regard, both due to their detailed knowledge of the business
processes, but also because they would be able to reuse part of the infrastructure they already have.
Influence
the value
chain
Financial
capacity
Application Platform Enabler – this will allow developers to isolate each of the existing technical complications in the management of connectivity and devices, facilitating the development of solutions and
focusing on the business needs..
In this area, while multiple niche players can emerge, offering specialized capabilities for this market,
suppliers will also be well positioned to fill in those niches, as they already have available application platforms for other devices (mobile, PC ...). This may be the case of, for example, Google and Apple, since
having an entire ecosystem of developers and users locked into the ecosystem may be an important
lever for success.
Access to
high-volume
customers
Create
balanced
relations
End-user oriented device
suppliers
Figure 21a: End user oriented devices vs. ideal user oriented devices
These manufacturers may be one of the stakeholders with the greatest potential, among other things
because of their access to a large customer base, their demonstrated ability to create collaborative
ecosystems and their ability to generate new market demands, which results in new revenues.
One aspect they should focus is the establishment of balanced relations with other players in their
environment, since the dominant position they often have on the market imposes models of revenue
sharing that are characterized by inequality.
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3.4.2. Device manufacturers for other stakeholders
3.4.3. Integrators and providers of intermediate solutions
Generating
new
revenue
Generating
new
revenue
Influence
the value
chain
Financial
capacity
Access to
high-volume
customers
Create
balanced
relations
Influence
the value
chain
Financial
capacity
Device suppliers to rest of
players
Access to
high-volume
customers
Create
balanced
relations
Integrators and suppliers of
intermediate solutions
Figure 21b: Device manufacturers for other stakeholders vs. ideal ones
Figure 21c: Integrators and providers of intermediate solutions
While this can be one of the groups that would most benefit from an explosion of Smart ecosystems,
due to the need for more devices and infrastructure to support it, the reality is that their position in the
value chain makes is difficult to conclude they these manufacturers are relevant players in driving these initiatives. Among other things, some of the issues to mention are their limited influence over other
stakeholders in the value chain, their unsuitable placement for generating new revenues and business
models, as well as their difficulty to reach a mass market.
Their intermediate position within the value chain without access to a large volume of customers and
their limited ability to influence the various actors in advance, makes them one of the elements with
greatest dependence on the rest of the ecosystem for their existence. That said, those who gain an
adequate footing in the market may become key players.
To address these limitations, a first line of action could be to leverage the financial ability, mainly that of
large suppliers, for the deployment, financing and operation of the new communication infrastructures,
as is happening in traditional networks. On the other hand, in order to achieve greater customer proximity, they could try to climb from the world of infrastructure to the world of applications, where they
could come to have a role of some significance in the intermediate layers, facilitating access to their own
devices or to devices produced by other manufacturers. On rare occasions, they could even provide
solutions that come very close to the end user, due to their high vertical knowledge of the companies.
In order to reach a point where they can develop these solutions. it is essential that they have stable
partners and make acquisitions that complement their capabilities.
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To cover their position they will have to work on creating ecosystems with partners, devices, applications, etc. which would allow them to gain certain leverage within the Smart market. The capacity of
suppliers who can position themselves within the value chain as enablers will be relevant, to facilitate
the integration of the various links in the value chain, mainly devices, applications and data. Another key
consideration axis which these suppliers should keep in mind is their leverage potential in these platforms and their capacity to manage the information generated by the devices and applications, to climb
the value chain and create new business models with data managed.
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3.4.4. Manufacturers of end customer-oriented solutions
3.4.5. Telecommunications Operators
Generating
new
revenue
Generating
new
revenue
Influence
the value
chain
Financial
capacity
Access to
high-volume
customers
Create
balanced
relations
Influence
the value
chain
Financial
capacity
End-user oriented solution
providers
Access to
high-volume
customers
Create
balanced
relations
Figure 21d: Providers of solutions for end users vs. ideal
Figure 21e Telco vs. Ideal
Some of the most important aspects to this player is its ability to influence the end user to generate new
revenue and the potential of target customers which it has access to, as they have greater knowledge
of the needs they have in contrast to other elements in the Smart ecosystem. This market is highly
fragmented due to required specialization and the need for innovation in solutions offered. These often
come from small start-ups, and results in their limited influence in the value chain and financial constraints which hamper their significant weight from the outset.
They will continue striving to be another relevant actor in Smart ecosystems for two basic reasons. On
the one hand they have a high-profile portfolio of active clients and direct access to a mass market —
although they still face the challenge of being able to capitalize on these relationships and monetize
them. And on the other, their position in the market as a transversal element within the value chain and
their potential involvement in the different domains that are emerging.
To cover all these limitations it is key for it to develop around ecosystems generated by other players and
using0 platforms to facilitate their positioning in the market.
ICT is the sector it will push the most Its traditional services are flattening and it will want to
play on new ground
The fact that emerging technologies can take over their role as communications provider jeopardizes
their influence within the value chain, unless they are able to reposition with elements featuring greater
differentiating value and closer to end customers. In this case having to serve as a lever in the sale of
their own communication services can become a liability in some cases.
Operators are still far removed. They continue to think in terms minutes, interconnection,
roaming, etc. so they won’t find it easy to play a role in this world
Market leader
The problem for operators is that they are only seen as connectivity providers
It is clear that we will go from being a company that cares only about connectivity towards
providing services that add value and generate loyalty from connected customers
Telcos may be able to do the same if they can capitalize on their relationship with
customers
Market leader
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Large companies will not buy a single provider who is the operator for a core process, but
they will do so for other non-core processes. This applies also to SMEs
3.4.6. Public Administrations
Generating
new
revenue
As far as telcos are concerned, it looks like they have in fact begun offering M2M stuff, but
not so strongly as to understand that there is a business case there. There are ideas out
there that have failed to convince
Influence
the value
chain
Financial
capacity
To overcome these shortcomings, operators must open their platforms and encourage the creation of
solution developer ecosystems that enhance the company, creating vertical solutions adapted to specific needs of multiple clients. Another possibility is to leverage their natural deployment and infrastructure
management capabilities to extend their network services closer to data capture devices, offering them
to all customers or developers seeking to integrate new services.
In Smart ecosystems, telecom operators will remain being major players and may become the providers of services to certain sectors and certain size of customers. But this will not be so in all cases,
as there may be reluctance to incorporate it in a key part of their processes.
Access to
high-volume
customers
Create
balanced
relations
Government
Figure 21f. Government agencies vs. Ideal
Within the different sectors it will be key mainly because of its ability to influence all sectors of economic
activity and its ability to establish legislation and regulations that stimulate the market. They also have
direct access to citizens to promote and establish measures to encourage the use of this new type of
Smart solutions. However, the overall economic situation which most governments are going through
— marked with tight spending — suggests that they won’t be able to independently promote the implementation of projects.
To cover the financial limitations and facilitate the entry of new players to help optimize resources and
identify new revenue models, it is critical for consortiums and public-private partnerships to boost the
initiatives. To this end, the market demands more agility and improved mechanisms to link these types
of relationships.
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3.4.8. Utilities
3.4.7. Automotive
Generating
new
revenue
Generating
new
revenue
Access to
high-volume
customers
Create
balanced
relations
Influence
the value
chain
Financial
capacity
Influence
the value
chain
Financial
capacity
Automotive
Access to
high-volume
customers
Create
balanced
relations
Figure 21g. Automotive vs. Ideal
Figure 21h. Utilities vs. Ideal
This industry is an exceptional case within the Smart world. It stands out for its ability to monitor ecosystems and promote solutions autonomously without the need to establish third-party partnerships, and
its continuing search for new revenue models for traditional business make it a player with great potential for Smart market development. It is true, however, that the high capacity for influence can generate
imbalances in relationships which don’t foster collaboration among players.
The great difficulty of creating new revenue models, often due to regulatory constraints, force utilities to
be reactive in a dynamic market, although recent obligations force them in the opposite direction in the
case of electricity.
One of the key aspects to keep in mind in this sector is to provide it with greater opening of its model of
collaboration with third parties, allowing it to get the best of each of the players in the market, limiting the
use of proprietary platforms. One of the most important lines of work that can be developed is opening
connected vehicle platforms so that small businesses can innovate developing higher value solutions.
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The elevated capillarity of this sector — which stands out for its access to huge customer databases —
and its struggle to create new revenue streams beyond the traditional streams, can open possibilities
to find new types of relationships with third parties to share their data collection network resources and
transport networks.
This will maximize its use for other aims beyond strictly utility activities, which would result in an increase in
the ability to influence within the value chain.
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3.4.9. Infrastructure and services
3.4.10. Healthcare
Generating
new
revenue
Generating
new
revenue
Influence
the value
chain
Financial
capacity
Access to
high-volume
customers
Create
balanced
relations
Influence
the value
chain
Financial
capacity
Infrastructure and
services
Access to
high-volume
customers
Create
balanced
relations
Healthcare
Figure 21i. Infrastructure and services vs. Ideal
Figure 21j. Health vs. Ideal
One of the highlights of these players is their high ability to build relationships, which is common in large
service contracts involving multiple suppliers. This relationship aspect is key to Smart environments
and could make it a player with great ability to stimulate the market, mainly in the SmartSpace domain.
The high demands of information security, standardization of protocols and devices, complex and
fragmented health systems, suggest that the proactivity of this sector to boost SmartHealth solutions
is initially low and its adoption is progressive.
In any case, although the infrastructure and service companies can concentrate financial capacity and
knowledge of business processes, in their collaboration with other players it is key that they provide
technological and infrastructure capabilities to be used, and the potential opening up of the same, generating ecosystems to encourage third parties to enhance new monetization models.
However, the great advantages in care cost reduction, improved patient quality of life and emergence of new services for insurers, coupled with an underlying high market potential, will encourage
various players, especially in the private sector at first, to progressively incorporate this type of solutions
into their patient management model.
Telcos may not perhaps be major players, but contractors can be. There is a lack of financial
capacities which infrastructure and services companies are addressing well
Particularly remarkable is the possibility for patients in remote locations to access medicine. These
people could not receive care by other means. In these cases, government organizations will act as
“funders” and drivers.
The services market is commoditizing and Smart solutions can be a key
differentiation element
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“A machine-to-machine ‘Internet of things’”, BusinessWeek, April 26th 2004
[1]
Research and Markets: the M2M Adoption Forecast: Adoption Patterns and Market Projections, Sep
09 2004
[2]
M2M: The Wireless Revolution, a technology forecast. IC2 Institute. Universidad de Texas, Enero
2005
[3]
“When everything connects: The coming wireless revolution”, Abril 2007, The Economist.
[4]
Bibliography and References
Operator Strategies in M2M_Telefonica, 20-04-12, Ovum
[5]
Operator Strategies in M2M_Orange, 05-03-12, Ovum
[6]
Operator Strategies in M2M_Vodafone, 15-06-12, Ovum
[7]
Operator Strategies in M2M_Deutsche Telekom, 11-05-12, Ovum
[8]
Operator Strategies in M2M_AT&T, 29-03-12, Ovum
[9]
Operator Strategies in M2M_Verizon, 20-04-12, Ovum
[10]
The Global Wireless M2M Market, M2M Research Series 2012, Berg Insight
[11]
http://www.fastcoexist.com/mba/1680856/the-top-10-Smartest-european-cities#1
[12]
http://europa.eu/rapid/press-release_IP-12-760_en.htm?locale=en
[13]
http://www.abc.es/20120927/tecnologia/abci-Smart-cities-espana-201209271108.html
[14]
http://www.energetica21.com/noticia/se-inaugura-en-brasil-la-primera-Smart-city-de-amrica-latina
[15]
http://Smart-cities.euroresidentes.com/2012/08/el-boom-de-las-Smart-cities-en.html
[16]
http://www.ibm.com/Smarterplanet/us/en/leadership/dubuque/assets/pdf/Dubuque.pdf
[17]
California Energy Commission, 2011
[18]
http://living-planit.com/planit_valley.htm
[19]
Global assessment of the M2M market opportunity 2012-2022, Machina Research 2012
[20]
http://marketplace.m2m.telekom.com
[21]
www.Smartcitycabs.com
[22]
http://m2m.telekomaustria.com/unlock-m2m
[23]
www.m2ocity.com
[24]
Informe trimestral comunicaciones móviles. CMT – 2T 2012
[25]
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A. Detail of main equipment suppliers
Sierra Wireless
Manufactures both hardware and a set of
software tools for module integration.
Anexos
4 product families, 3 of them for M2M
Has worked as a supplier of broadband
devices for AT&T, Rogers, Telstra and Sprint.
It has a partnership with Verizon to integrate
its solution with the operator’s network M2M
platform.
Its main vertical market is the automotive
industry and it is involved in projects launched
by European manufacturers as they gear up
to the eCall directive which comes into force
in 2015[11].
Telit
Supplier of Italian-origin M2M communication
modules present in five continents.
It offers flexible and tailor-made solutions,
supports all mobile network technologies and
also short-range RF technologies such as
Zigbee or Bluetooth.
It enjoys a significant market share in Europe,
Asia and the Americas, with about 5,000 customers in automotive, fleet, metering, security,
payment means, etc.
In February 2012 it announced a joint venture
with Telefónica to jointly offer HARDWARE,
SOFTWARE, services, global connectivity and
SME customer support[11].
Cinterion
M2M module supplier, born as a division of
the Siemens group, located in Germany, and
then bought by Gemalto in 2010.
Pioneer in GSM, GPRS and EDGE modules
4 families of products, with ad-hoc designed
SIMs by Gemalto and easy integration with
Condor GPS modules.
It focuses on traditional M2M segments: automotive, metering, security, industrial monitoring, etc. and has clients of all sizes.
Its main market is Europe, but it has developed dual-mode devices with GPRS/HSPA
and CDMA/EVDO to access to the American
market[11].
SIMCom
SIMCom is a division of SIM Technology
Group, a developer of mobile and wireless
communication modules based in China.
Modules for all mobile standards including
TD-SCDMA, offering customization for specific clients and services.
As far as M2M, it focuses on GSM/GPRS
modules and leaves aside modules based
on the 3G Chinese standard
Its main market is in China, where it has traditionally had and continues to enjoy significant
market share. It accesses the rest of the world
market through agreements with
distributors[11].
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Huawei
This telecommunications company based in
China offers a wide variety of wireless modules, network equipment as well as mobile and
fixed devices.
Today it is the world leader in broadband
devices.
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Urbiotica
Urbiotica is positioned as a provider of innovative technology solutions within the emerging
field of Smart Cities and Smart Spaces.
It offers a technology ecosystem to capture
real-time information using sensors which are
managed through its platform.
Its main market is China and the rest of Asia,
where it cooperates with the leading mobile
operators and all types of actors in the value
chain. In the U.S., its M2M modules are certified by AT&T and Verizon[11].
Provides mobile operators worldwide with a
SaaS management solution for M2M connectivity in GSM/HSPA networks.
The platform offers operators an alternative
to developing their own connectivity management solution and offers operator customers
the chance to manage their lines and devices
efficiently.
Since it signed an agreement with AT&T in
2009 to offer a platform to all the operator’s
clients in the U.S. operation, Jasper has continued to grow to 75 operators in 5 continents
(i.e., Telefónica in Europe, América Móvil in
Latin America, Etisalat in the Middle East and
Telstra in Australia, among others) and more
than 500 customers in all segments.
78
This cloud platform provider offers support for
connected devices and M2M applications.
It features a generic platform, the AXEDA
Platform, which enables clients to use it as
a base for building and launching their M2M
applications.
It has established partnerships with multiple
players in the M2M market. It has made joint
proposals for concrete solutions with Vodafone, Telenor, AT&T and Verizon. With AT&T
it also has a multi-year agreement to enable
customers to access the development and
launch M2M applications[11].
B. Detail of main platform suppliers
Jasper Wireless
Axeda
Ericsson
In 2011 it launched its Device Connection
Platform (DCP) for mobile operators.
That same year it acquired Telenor’s M2M
technology platform — Telenor Connection —
which became part of its DCP core. Telenor
also became the first customer of the platform.
It has also developed an in-house solution for
Telefónica, its Smart M2M Solution, launched
commercially in Spain and Latin America in
2012.
It has created e2e solutions for specific vertical markets, especially metering solutions.
Ericsson was selected by Hydro-Québec for
the deployment of up to four million electric
meters by 2017.
Amdocs
It is a supplier specializing in software solutions with a market mainly in North America,
with large clients such as AT&T, Bell and
Sprint Nextel.
Closely related to M2M Amdocs, in 2012 it
has developed and launched two different
products:
Amdocs M2M, a connectivity tool managed in real time capable of supporting
multiple business models and managing a
huge amount of devices.
Amdocs Connected Home, which allows
operators to quickly launch bundled services for the home: security, energy, multimedia, etc.[11]
C. Description of valuation parameters of market players
•Generating New Revenue, being equipped with the technological capabilities, new business models, etc., or being able to create environments that facilitate the generation of value-added services
that result in the creation of new revenue.
•Exerting influence in the value chain, showing ability to influence other elements of the ecosystem
so as to facilitate the alignment of the overall strategic objectives.
•Creating balanced relationships, demonstrating ability to relationship models seeking long-term
sustainability, even arriving at the point of being able to sacrifice some own income if the whole is
benefited
•Accessing high-volume customers, being able to go to market with a large volume of potential
customers interested in their services. Ability to control or influence the going to market step to reach
mass markets.
•Financial capacity, having access to financial resources to articulate far-reaching investment actions autonomously or with significant player weight.
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Argentina
Bélgica
Brasil
Chile
Colombia
España
EE.UU.
Italia
México
Perú
Portugal
Reino Unido
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