Welcome to the machine

Monday night I went along to see Ericsson at their ‘mingle’. You couldn’t fault their mingling skills; everyone from Hans Vestberg on down was there to grip and grin, and they made sure to spend a good bit of time with each of their guests. “This industry used to be run from Stockholm and Helsinki,” said CTO Hakan Ericsson, with a smile. “Not any more.” He’s based in Silicon Valley now, which says a lot.

Vestberg was in a jocular mood, his enthusiasm for Ericsson’s 50 billion devices spiel undimmed by repetition. It’s one of those soundbites that suits headline writers, but the reality is that bringing about a world of connected devices is a phenomenally complicated exercise. Earlier in the day I’d sat down with Macario Namie, senior director of marketing for Jasper Wireless, a company at the forefront of this sector.

Connecting people and connecting vast numbers of devices are radically different exercises, Namie said, with provisioning, service support, billing and business models all requiring complete rethinks. It’s not unthinkable that every M2M customer would have an entirely bespoke tariff, for example. Connected devices might generate ARPU of around $3, he said, compared to $50 for a customer, and herein lies a problem for operators. “You can’t take the ame business processes and operational systems that you built for a $50 ARPU business and apply them to a $3 ARPU business. it just doesn’t make any financial sense,” he said.

Vodafone is one operator that thinks it’s got the answers, if a new collaboration announced Tuesday with Intel is anything to go by. Combining Intel’s processor products with Vodafone’s network should make it easier for enterprises to develop M2M services, Vodafone said.

“The M2M market has the potential to boost customer service and profit margins, but take up has been partly held back by the complexity of installing and managing the technology,” said Erik Brenneis, head of M2M at Vodafone. “This new collaboration will create a simple way for businesses to firstly connect devices to the Internet then manage the wireless connectivity of these devices across the world.”

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