What is the business value of M2M technology?

30.10.2018
6 min.

We live in a world where there are more IoT devices than people. These devices are interconnected through wired and wireless systems, which allows them to exchange information with no or minimal human assistance. This is called machine-to-machine communication, or M2M.

M2M facts and figures

The concept of M2M appeared in 1968 when Theodore Paraskevakos created a system that communicated telephone numbers to machines, the basis for a modern caller ID system. Since then, M2M technology has evolved rapidly to become one of the major forces driving the internet-of-things development and the most dynamically growing connected technology in the market.

M2M is currently used to improve productivity and efficiency in various verticals, including transportation, logistics, manufacturing, energy, robotics, and healthcare. The global survey M2M: Hype or Transformative Tech found that energy, IT, and transportation are the top three industries using M2M technology or planning to do so in the coming year.

So what do companies want to get from their M2M investments? The same survey reveals that key drivers for M2M implementation are developing new business opportunities, increasing response times, and enhancing existing products or services.

This article will go through some of the above-mentioned benefits that organizations in various sectors may get by adopting M2M in their operations.

New business opportunities

M2M technology creates enormous new opportunities for companies in a number of verticals.

Take the example of the transportation and logistics industry. The ability of connected trucks to communicate with each other using embedded sensors, RFID, and a wireless network enables smart fleet and asset tracking. It allows companies to view details about the location of any asset that their business owns, manufactures, or manages.

M2M provides new opportunities for the utilities sector as well, mainly through smart metering solutions. A smart meter measures how much energy, water, or gas is consumed and communicates that data to a smart grid, thereby contributing to resource consumption control and optimization.

Further, businesses receive access to the data that lets them improve operations and drive customer engagement. Through enabling new cars with M2M sensors, for example, automotive manufacturers and dealers may tell their customers when engines or other components need replacement, thus taking them to a whole new level of customer service.

Faster response times

In M2M communications, sensors embedded in a machine gather real‑time information and send it to a central point over the internet. The instant transmission of information enables faster response times and quicker business decisions. This can be particularly useful in emergencies.

In healthcare, patient monitoring systems can raise the alarm at the nurses’ station if a patient shows early signs of a cardiac arrest. Thus, doctors and nurses will be able to react very swiftly to the patient’s critical health conditions and provide timely medical assistance to save lives. M2M makes it possible to achieve even faster emergency response time when it’s integrated throughout the hospital by unlocking interior doors that would normally require a key card automatically.

Yet another example of how M2M technology contributes to faster response times is in the utilities industry, particularly in water leak detection and repair. In-pipe sensors monitor water flows and help detect a leak. If a leak arises, they don’t only send an alert to service personnel but also communicate this information to the electrical system that automatically turns off the power to prevent electrocution.

Existing products/services enhancement

As it’s seen in the diagram above, 69% of organizations say enhancing their existing products or services is a major or top expectation from M2M adoption. Gaining greater insight into their business operations will help organizations identify possible areas for improvement.

One of the biggest opportunities for M2M technology to enhance services is in healthcare, for instance, better medication dispensing. A smart pill dispenser releases the required prescription automatically at the right time. This way, older people who need to take various meds every day will be able to get their prescription without visiting the doctor.

In industrial environments, the machines’ ability to interact with each other may result in better interoperability. Based on the information collected from other devices in the factory and specific patterns programmed into the operating system by engineers, machines decide on their own what is the best action to take, such as to pause upon the completion of a production task.

In the retail industry, M2M provides better POS data, as well as better shopping experiences through personalized digital signage. Digital signage, which is updated in real time thanks to M2M technology, can be used in shopping malls as a display to help users find their path on a map or to promote products in an interactive way.

Cost savings

Cost savings and rising incomes are other important factors for M2M adoption. Major organizations around the globe have already experienced considerable financial gains. For example, Intel generated $9 million in cost savings when it integrated IoT and M2M technology at its plant in Malaysia.

The use of M2M technology helps businesses automate much of their processes, thus improving effectiveness at a lower cost. For example, organizations can monitor their assets remotely, thus saving a lot of time and effort.

Smart factories may use M2M for predictive maintenance: sensors on their equipment would send an alert at the very first sign of a problem and schedule a repair before it breaks. This way, they help reduce costs by minimizing equipment maintenance and downtime.

Moreover, M2M may help factories cut energy use and associated costs by connecting all machines. If one machine fails, the other machines can immediately pause the production to reduce energy consumption.

M2M solutions can now be found in the agriculture industry as well, reducing the human effort in areas such as cultivation of fields and animal monitoring. One interesting example is a cow monitoring solution, which measures the cattle’s vital data and notifies the farmer instantly when calving begins or when a cow is on heat so that to promptly call the veterinarian. The result is a higher reproduction rate for the herd and more profit for farmers.

M2M opportunity matrix

As you can see, M2M opportunities are boundless: from cost savings and process optimization to new product development. For organizations to get the greatest value, it’s important to understand how exactly your business may convert M2M data into meaningful insight to improve business performance. To help you with this, let’s look at the M2M opportunity matrix.

The bottom of the matrix shows some of the most common business objectives: reducing costs, increasing revenue, and adding value. However, the list of objectives may be extended with additional business goals that your organization pursues.

The left part of the matrix shows data resources available to your organization. “Data in-hand” means that you’ve got a database with a wealth of information gathered from an asset monitoring system, smart metering, or any other source. “New data from existing sources” means that you have additional data from previously integrated sensors but haven’t used this information yet. “New data from new sources” stands for all data that you’ll gather after installing new sensors.

An M2M opportunity emerges at the intersection of a data resource and a business objective. The M2M opportunity matrix is to demonstrate that opportunities in the M2M space are enormous for almost every business, whether it has an implemented solution or just plans to acquire one. Nevertheless, the more data resources you have, the more opportunities arise.

Welcome to the future of M2M

M2M technology is to reach 200 billion U.S. dollars in revenue by 2020 and seems to have a bright future. The two key trends that are driving the widespread adoption of M2M are falling costs of sensors and the ubiquity of low-cost wireless networks, which makes communication between things available to everyone.

The business demand for deeper connectivity and M2M communication grows in the struggle to meet the needs and challenges of tomorrow, where machines will take decisions for people. This will result in tremendous benefits for many companies across industries and vertical markets that make use of M2M.