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Rise of the machines

The European market for machine to machine solutions – including hardware, software, and services – is forecast to grow from $4.4bn in 2006 to $19.2bn in 2011, according to research firm IDC.

The rise of the machine to machine (M2M) market could be attributed to the imminent arrival of Hollywood blockbuster “Transformers”, but IDC reckons it’s because penetration in mature markets is at, or is closing in on, 100 per cent – and operators are exploring every possible area of new growth.

Such pockets of growth for M2M solutions include services such as fleet management systems, automatic meter reading, and surveillance solutions.

“So far mobile operators have neglected this market due to a legacy ARPU focus. Logically, a SIM card in a remote module does not generate a lot of revenue if it sends one SMS per day with technical data; but it is the total solutions revenue that needs to be in focus,” said Brian Troelsen, a research manager with IDC’s European Telecoms and Services group.

Hardware manufacturers, software vendors, systems integrators, and telcos are fighting fiercely for market dominance in this field. Where once systems providers had a head start due to strong business process understanding, “Now we see that the largest telcos in Europe are starting to build up the necessary IT and consultancy skills of their own,” said Troelsen.

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