How to Harness M2M tecHnology to Build sMarter Business Models

Transcription

How to Harness M2M tecHnology to Build sMarter Business Models
How to Harness M2M Technology to
Build Smarter Business Models
By Brian Vezza, Director M2M Solutions, Wind River
INNOVATORS START HERE.
EXECUTIVE SUMMARY
Much has been written about machine-to-machine (M2M) communication from a
technical perspective: enabling technologies, connectivity requirements, compatibility
considerations, security issues, and so on. However, much less has been written about
M2M from a business perspective. That’s partly because M2M is a complex and multidimensional topic—and partly because the role of M2M in the commercial arena is still
emerging. But it’s a situation that is changing quickly as business leaders begin to see
M2M for what it truly is: a unique opportunity for transformation.
The astonishing capabilities created by M2M open the door not only to smarter devices
but also to more efficient business models, new products and services, and new sources
of revenue. This paper provides a brief overview of M2M capabilities and describes the
economic and technical trends that are driving the adoption of M2M technology. The
discussion then focuses on the keys to transforming the “promise” and “potential” of
M2M into real-world business results, with industry-specific examples of the possibilities.
TABLE OF CONTENTS
Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Making Sense of Data to Make Systems Smarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2..
What’s Driving the Adoption of M2M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Getting Started: Challenges and Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Foundational Capabilities: Harnessing the Full Value of M2M. . . . . . . . . . . . . . . . . . . . . . 3
Software Requirements: Top 10 Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
The Next-Generation M2M Approach in Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
M2M Examples: Business Transformation in Select Vertical Markets. . . . . . . . . . . . . . . . . . . 5
Smart Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Industrial. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Medical. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Importance of the M2M Ecosystem. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Learn More. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1 | White Paper
HOW TO HARNESS M2M TECHNOLOGY TO BUILD SMARTER BUSINESS MODELS
Making Sense of Data to Make Systems Smarter
the business potential of M2M technology is its ability to transform
The machines that we depend upon to make our lives easier, more
data into actionable intelligence.
productive, and longer are getting smarter. Recent advances in
Businesses, consumers, and governments can use M2M to make
multi-core processing, mobile and wireless networks, sensor tech-
smarter, faster, and more effective decisions and take appropriate
nologies, and M2M communication are shattering conventional
actions to accomplish business objectives.
notions about what a business can deliver for its customers.
To understand M2M, you first have to grasp a key concept: The
What’s Driving the Adoption of M2M
Internet is no longer a network of computers. It has evolved into
M2M devices will comprise more than 33% of all connected devices
a network of devices of all types and sizes, all connected, all com-
by 2015, according to market intelligence firm IDC. There are
municating and sharing information all the time: cars, refrigera-
already more than a billion M2M devices at work in sensors, smart
tors, smartphones, toys, cameras, medical instruments, industrial
meters, industrial control systems, SCADA devices, video surveil-
systems, even trees embedded with sensors.
lance, point-of-sale (POS) systems, smart buildings, and so on.
In this “Internet of things,” devices, systems, and machines don’t
The rapid adoption of M2M is occurring despite the fact that
only communicate with humans, they also communicate with each
M2M technology is not clearly understood by consumers. Except
other. And they can generate an enormous volume of data about
for those who have used more “human” devices such as a Kindle
all kinds of things: temperature, GPS position, speed, humidity,
reader or an Xbox game system that we can see, touch, and inter-
vibration, altitude, and so on.
act with or those who have worked with telematics, industrial con-
This data can be used in all kinds of smart ways when it is collected, analyzed, and applied to products, systems, and services.
trols, the smart grid, embedded computing, or related areas, most
people have not been exposed to M2M technology.
It can be used to optimize performance, maximize efficiency, and
But ever broader understanding and adoption of M2M is clearly
minimize cost and resource usage. M2M and related smart sys-
underway. Ericsson, Cisco, IBM, McKinsey, and other leading
tems can even use data to infer decisions that need to be made
companies forecast that there will be 20 billion, 50 billion, or even
to meet business goals (e.g., improved service delivery, increased
1 trillion connected devices by 2020. And according to online
responsiveness, lower prices, new or enhanced service offerings,
business journal McKinsey Quarterly (June 2010), “More than two-
etc.)—and they can often do so faster and more efficiently than
thirds of new products feature some form of smart technology.”
people.
McKinsey estimates that at least $3 trillion in current spending
In the medical arena, for example, M2M devices can now provide
could be impacted by M2M.
heartbeat-to-heartbeat monitoring and give doctors the data
The momentum behind M2M devices is being driven by mac-
they need to diagnose and treat people with chronic heart condi-
roeconomic trends and trends that impact specific industries or
tions. On the highways, M2M systems can provide dynamic traffic
groups of adopters. The following are among the most impactful:
control to help prevent accidents and optimize traffic flow so that
• There is a permanent need to increase productivity year
more people can reach their destinations sooner. On the factory
after year: For the past 200 years, per-capita GDP growth
floor, automation systems can use M2M data to more quickly and
has averaged 2% per year; however, it is slowing due to aging
flexibly respond to changing tastes and preferences of consumers.
demographics and fewer workers. A handful of top-tier break-
The essence of M2M is situational awareness. M2M devices can
throughs have accounted for much of the growth in previous
sense, monitor, and control their environments, resources, and
years, including the microprocessor, PC, Internet, and wireless
other objects—and respond intelligently to fast-changing condi-
connectivity. M2M combines each of these and has the poten-
tions. The lifeblood of situational awareness is data, and the key to
tial to increase productivity for the next decade or more.
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HOW TO HARNESS M2M TECHNOLOGY TO BUILD SMARTER BUSINESS MODELS
• High labor costs are creating demand for solutions that
costs, but will it be around for the life of your device or service?
reduce OPEX: It typically costs at least three times as much for
With 4G you have much higher bandwidth, but it costs more.
a human to perform a task as a machine. M2M devices can now
Where will you source the needed components? How much
perform many tasks that require intelligence and situational
memory, which processor, and which operating system are best
awareness, such as utility meter reading, smart building moni-
suited to your project? What coverage and technologies are sup-
toring, power management, and so on.
ported by wireless service providers in your area? At scale, any
• Eco considerations are driving the need for smarter use of
resources/energy: Machines can perform power management
tasks with finer precision and faster response times than manual,
human-dependent systems—saving energy, prioritizing usage,
setting policies for response to outages, and so on.
• The move to outsourced managed services promotes M2M
devices: Businesses want to focus on their core competencies,
not routine, labor-intensive tasks that add little value to their
operations. M2M devices help support the move to outsourced
services that save money and improve efficiency.
poor choices you make now can cause huge issues operationally
and financially.
Outsourcing is another alternative and has the advantage of allowing you to focus on your core competencies while M2M specialists
implement and deploy your solution. This approach, however, can
leave you dependent on a third party, which sometimes can lead
to a sacrifice of control over solution elements and delivery time
frames; and cost can become an issue both for the initial deployment and for ongoing operations over time.
• There is a pressing need to meet customer expectations
A better option for many companies is a mixture of the in-house
immediately: The demand for instant gratification shows no
and outsourcing models. This hybrid approach enables you
signs of abating. Whether it’s just-in-time servicing, real-time
to choose among the products of a key vendor and its partner
order fulfillment, or immediate answers to complex questions,
ecosystem and implement solution components your way, with
businesses and consumers want it now. M2M systems can accel-
your staff—without losing focus on your own value-add and dif-
erate many services—and in the process accelerate revenue
ferentiating functionality. There are two basic steps involved in
generation and ROI.
implementing this model: first, understanding the “foundational”
requirements of M2M technologies and how each prospective
Getting Started: Challenges and Requirements
vendor delivers them; and second, mapping the software require-
Many business leaders have recognized the potential of M2M tech-
ments of your solution to the prospective vendor’s offerings.
nology and decided to undertake an initial M2M project. Usually
Foundational Capabilities: Harnessing the Full Value of M2M
the plan is to improve a specific area of the business (increasing
service value or reducing expenses) via a pilot program, then
expand the pilot to full-site or multisite deployment, and then
repeat the success within another area of the business. Typically,
companies want to do as much of the M2M project themselves
Often people take only a passing glance at the M2M software
“foundation”—the protocols, the security mechanisms, the management aspects—and skip ahead to making sense of the data.
This can set up companies for issues down the road.
as possible to save time and maintain control. And all too often,
Many devices that were not connected in the past are quite con-
they learn the hard way that there are many hidden pitfalls in the
nected today. For instance, there used to just be a utility meter,
do-it-yourself approach.
now there is a smart meter. There used to just be a personal health
Take something as seemingly straightforward as how to connect
M2M devices to the network. Should you use cellular, 802.11,
802.15.4, WiMAX, or satellite? If cellular, should you use 2G, 3G,
or 4G? With 2G, you may have wider coverage globally and lower
3 | White Paper
monitoring device, now there is a connected personal health
monitoring device. This increasing connectivity triggers a number
of follow-on changes that are often poorly understood when starting an M2M project and can turn into any number of pitfalls if the
M2M software “foundation” is not in place and solid.
HOW TO HARNESS M2M TECHNOLOGY TO BUILD SMARTER BUSINESS MODELS
The M2M software foundation has two primary functions:
• The ability to connect and manage M2M devices securely while
ensuring that they perform at expected levels. These capabilities need to be built into the devices from day one.
• The ability to minimize operational expenses and headaches.
This can be a real challenge because many businesses start
small, with a limited number of M2M devices and types in a
pilot. Once this is proven out, it is often expanded to other sites
and other M2M devices. This is where it can get extremely tricky
because each system can have vastly different capabilities and
9. The smarter the device, data, and application, the more valuable the solution.
10.Industry standards must be identified and supported.
The Next-Generation M2M Approach in Action
A growing number of partners, including Kontron, Intel, Wind
River, Eurotech, and ILS Technologies (among others) have built
a next-generation M2M development kit targeted at M2M gateways and higher-performance M2M devices. The following are the
primary components:
not work well with others unless it has a solid M2M software
• Manufacturing and overall physical design: Kontron
“foundation.” By making smart choices now, future problems
• Common, simplified M2M hardware based on off-the-shelf
can be greatly reduced.
Software Requirements: Top 10 Considerations
It may seem at first glance that specifying M2M software requirements is almost impossible, given the multitudes of hardware
options, features, and deployment scenarios that must be considered. However, our experience at Wind River shows that while
there is a broad range of M2M devices, there is a relatively small
set of common software requirements. In fact, the requirements
typically boil down to the following 10 key considerations (and
your vendor selection process should account for each prospective vendor’s ability to deliver on these core tenets):
1. Devices must be secure, reliable, and have acceptable
performance.
2. Connectivity options should include wired and wireless, WAN,
LAN, and PAN, and into the cloud.
3. Devices must be manageable beyond just seeing if the device
is working.
4. Deployments must scale to large numbers unattended.
5. M2M experience must be simplified: easy to understand, order,
buy, install, build, use, operate, manage, fix, and so forth.
6. Solutions must be flexible. A wide range of customer needs,
components, and global requirements exist.
7. Many devices will be mobile and may transition from one
domain to another.
8. Location determination will be important for many devices and
applications.
industry standard boards: Intel and Kontron
• Integrated communications platform for wireless and wired
connectivity: Intel
• Embedded operating system and tools: Wind River
• M2M software including cloud: Eurotech’s ESF platform and ILS
Technologies
This M2M development kit has transformational potential for the
M2M market. Today, most M2M devices are designed and built
using a wide range of approaches, and every day, companies
repeat the same steps of hardware, computing, connectivity, OS,
and M2M software development in a thousand different ways. By
creating a standardized approach where a large number of the
“do-it-yourself” M2M pitfalls are eliminated, companies can focus
on their specific differentiators while speeding time-to-market.
Over time, this approach will expand and provide a platform for
accelerating M2M adoption.
Through the next-generation M2M development approach—
where companies make use of standard-based M2M platforms for
computing, connectivity, and software while focusing on their core
differentiators—large business benefits can be achieved. Simply
put, why recreate the wheel for these capabilities on every M2M
project when the platform can be reused?
The benefits fit into two main categories: initial device development, and operations. Overall, multiple man-years and hundreds
of thousands of dollars can be saved—even for a relatively simple
product. Of course, this depends on the specifics, complexity,
knowledge, implementation, and so on.
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HOW TO HARNESS M2M TECHNOLOGY TO BUILD SMARTER BUSINESS MODELS
M2M Benefits
M2M Examples: Business Transformation in Select Vertical Markets
Initial Device Development
M2M devices, applications, and services are a part of almost every vertical market. The following
Speed time-to-market while
reducing risk and more effectively
leveraging development resources
and dollars by making use of the
following:
are a few examples of how M2M can be a catalyst for business transformation.
• Common hardware platforms
• Connectivity packages using
a wide range of common
interfaces
• Wireless certification to fit into
cellular wireless networks
• Board support packages
(BSPs)
• Operating system and tools
including updates, support,
and roadmaps
• Independent software vendor
(ISV) partners, integration, and
testing
charging; and home and building energy management systems.
• Security
Operations
Limit operational headaches and
expenditures year after year as
your implementations grow and
increase in complexity:
•
•
•
•
•
•
•
•
Deployment
Management
Security of data and devices
Operating system and ISV
updates
Integration and testing
Wireless service provider integration and management
Bug fixes
Support
Smart Energy
M2M is an enabler for smart energy in several areas: exploration and production; power generation including renewable energy; smart distribution networks; smart meters; electric vehicle
As distributed energy sources such as solar and wind power approach 10% of total generated
power, maintaining quality power becomes incredibly difficult without a smarter distribution
network. Increasing distribution effectiveness, improving power quality and reliability, and
enabling a wide range of end user applications are key drivers and can each be addressed by
M2M technology. M2M monitoring and control enables the smart grid to adjust to changing
conditions with higher reliability, security, and performance than ever before.
Industrial
Industrial markets have used machines, robots, and other forms of M2M control devices and systems for many years, but new advancements are creating new opportunities. For example, M2M
technology can be used for predictive maintenance. Predictive maintenance uses one or more
criteria from monitoring data and runs it through analytics and historical patterns to determine
when a component may be nearing failure.
By acting on this knowledge, downtime can be minimized. In a specific example, Intel fabs use
vibration data collected by M2M devices and sent wirelessly to a vibration analysis subsystem.
Since there are thousands of points to measure, it is impractical and ineffective to monitor these
points using a person. By acting before a problem occurs, major issues potentially costing millions of dollars can be reduced. Predictive maintenance is just one example based on M2M
data. Location-based services is another that can be used for many different verticals.
Medical
Approximately 75% to 80% of all U.S. health care spending is related to one or more chronic
conditions (e.g., heart, kidney, lung, other serious illnesses or disabilities). Smart M2M devices,
services, and applications enable people and health-care professionals to understand their conditions and make accurate, timely, and realistic recommendations. In some cases, actions can
be taken (e.g., insulin for diabetes) or a caregiver can be alerted who can assist a loved one who
needs help. There are hundreds of M2M-based health-care services, from the hospital, to doctors’ offices, to the home, and mobile applications as well.
5 | White Paper
HOW TO HARNESS M2M TECHNOLOGY TO BUILD SMARTER BUSINESS MODELS
Why Wind River for M2M?
• More than 30 years enabling
embedded devices
• No. 1 embedded real-time
operating system (RTOS) and
Linux distribution
• Faster time-to-market and
revenue
• Reduction in capital expenditures and operating expenses
through M2M software
“foundation”
• Less man-years of development time and expense
• Substantially reduced risk
(“do-it-yourself” M2M isn’t
easy)
• Ability to focus on differentiating capabilities, not underlying
operating system and platform
basics
• Ability to connect devices to
the cloud/IT systems in minutes (with trusted ISV partners)
• Deep relationships with
top software and hardware
partners
• Superior tools, roadmaps, and
support
Importance of the M2M Ecosystem
Building device-centric M2M solutions combines silicon, hardware, middleware, and tools and
application design, testing, and release. No single vendor has core competency and expertise
in all of these areas; no single vendor can deliver a compelling enabling solution working in
isolation. Therefore, Wind River, Intel, Kontron, and Eurotech have concluded that a strategic
collaboration—focused on removing the complexity between the hardware and the software,
in the form of a verified and validated platform solution—would best address the challenges of
M2M device development.
Our collaboration, and our approach of welcoming added value and innovation from multiple
sources, has enabled us to further reduce time-to-market and expand our service offerings by
providing a richer out-of-the-box experience with a comprehensive set of industry-leading tools
and operating system options. This ecosystem-based approach allows our joint customers to
focus their efforts and investments around key market/business initiatives.
Conclusion
Wind River has significant experience with a partnership-oriented model and is uniquely capable of applying it to the M2M world to benefit customers. Back in 2009, we envisioned a thriving,
rapidly expanding M2M marketplace and began collaborating with key partners as a strategic
investment for all parties and our customers. That investment is already paying off as we build
the core foundation, allowing us to deliver comprehensive solutions such as the M2M development kit. The benefit is a much faster time-to-market, which results in better return on investment and faster monetization.
Learn More
For additional information about Wind River and partner products, services, and solutions for
M2M, visit the following websites:
www.windriver.com
www.intel.com
www.kontron.com
www.eurotech.com
Wind River is a world leader in embedded and mobile software. We enable companies to develop, run, and manage device software faster, better, at lower cost, and more reliably. www.windriver.com
©2012 Wind River Systems, Inc. The Wind River logo is a trademark of Wind River Systems,Inc., and Wind River and VxWorks are registered trademarks of Wind River Systems, Inc. Rev 01/2012