Tags Posts tagged with "M2M"

M2M

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Sitting listening to one of the speakers whilst attending the ‘M2M: Beyond Connectivity’ seminar hosted by European Communications this week, for a moment I was reminded of the classic football chant – “Who ate all the pies?”  The general consensus is that the chant was originated by Sheffield United supporters at the end of the 19th century and aimed at their 140kg goalkeeper.  Not sure he would be playing in the top flight nowadays!!

So what was it that led me to draw a parallel between an overweight football player and M2M?  In the presentation by Ansgar Schlautmann from Arthur D. Little, an interesting and revealing view of the holistic value chain for smart solutions was given.

The individual players in the spread of total revenues need not however be concerned by the splits shown; even in fact for the CSPs who see their connectivity portion with a distribution of somewhere between 15-20%.  With the anticipated value of the M2M market projected to reach approximately $86 billion[i] by 2017, even this slice of the pie should be enough to get their teeth into.

The analogies associated with balanced nutrition and how the industry will ensure that each participant will get its own healthy share can be drawn in a number of ways, so let’s consider them.

Use by

If we have to be honest, it’s a good thing that the M2M industry has come to us with a long shelf life.  It’s been a number of years to even get us to this point where we see on the horizon a potential explosion of new product/service offerings being crafted for the market.

There will always be those people who want to be early adopters and will derive the niche, well crafted packaged service for their market, but surely one of the keys here is to just start thinking M2M in all areas of our lives, we need to start using it, to start realising the potential it can bring to daily routine where in a sense – decisions are made for us.  This isn’t to a Skynet level, albeit the goal there was for speed and efficiency and to reduce human error – even though M2M can bring us that.  To reap the benefits of M2M, we need to build it, we need to use it, when by?  The sooner the better.

Best before

Even though we can get excited by cars that will arrange their own services; highway maintenance being done based upon vehicular data relating to potholes; smart cities that will see routine maintenance programmes scrapped for self servicing provisioning and so on – the reality is we are a little way from reaching this best before point.  Now I say best before not in the context of a product/service will expire in it’s usefulness at some point in the future.  I mean with regards to when we will see offerings come to us as consumers that will encapsulate all of the richness that M2M could potentially bring to us.  It is getting closer, advancements are being made in all sectors of the industry, but to reach a best before point – I don’t see that happening until we see wholehearted adoption within the verticals themselves.

Ingredients

Having the right ingredients, i.e. providing energy, protein, carbohydrates etc. in the right quantity, quality and packaging in many cases are a key factor when we hit the supermarket or the online grocery sites.  As consumers in this M2M arena, will we be so different?  We want well packaged, well balanced, quality products and services.  As participants in this M2M value chain, the balance will come from the blend of services that can be offered; the partnerships that are built; being able to craft simple, yet wholesome solutions to the consumer flavour of the day.

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The revenue

The statistics are astounding. The predictions for future adoption and revenues from machine to machine (M2M) technology nearly boggle the mind. Devices in the billions, revenues in the hundreds of billions. No matter how you define M2M, the uptake and revenues look very promising.

The risks

Any service that expands quickly will have growing pains and certain functions will need to play catch up. Small issues that while manageable on a small scale tend to break down when the scale is increased. M2M and fraudsters are most likely in this category. Devices that are physically removed from constant human presence and are in unsecured locations provide fraudsters with an opportunity for acquisition. In addition, these devices being part of a network provide additional opportunities for fraudsters. Many of the fraud cases to date have been with the stealing of Subscriber Identity Module (SIM) cards from unattended devices, plugging them into devices that allow the fraudster to make calls. Cases, such as fleet monitoring devices, traffic lights, vending machines and others have fallen prey to this. The only key is that fraudsters figure out where they are and have the tools required to gain access to the SIMs. Although network providers often have the ability to limit SIMs to only make calls, and not send text messages or use data access, they are often not able to prevent calls from happening when plugged into a device. This provides fraudsters a way to make calls by simply using a screwdriver at the correct target.

Other types of fraud are likely to become more relevant. Downloading malware onto a device either via direct physical connection or through the network that an M2M device is connected to will enable the fraudster to take over the device. This could enable the fraudster to change the behavior of the device. Imagine a security system that suppresses notification of intrusion or a traffic light that changes based on the desire of the fraudster, which could either create traffic jams or a dangerous free for all. An M2M device could also be used for its Internet connectivity to launch Denial of Service (DoS) attacks and try to hack into Internet sites with no tie back to the actual fraudsters.

Internal fraud is also a large worry about M2M services and devices. Employees have access to generate orders and employees and in some cases third parties have access to the devices and SIMs cards and may steal or route them to fraudsters. Once SIM cards have been acquired, then they can be used for similar purposes as described above.

The response

A comprehensive strategy to prevent fraud in M2M services has three main facets. The first facet in limiting fraud is to put the appropriate internal controls around ordering, fulfillment and distribution of devices, including channels. These controls need to limit or eliminate the possibility that fraudsters will gain access to devices without them being deployed for their specific purpose. The second facet is to restrict as much as possible the activities that a device is able to perform. Some networks do not allow for voice calls to be prevented, but certainly international calls can be disabled. Also, data access is a required service for M2M, but restricting data to certain bandwidths or URLs can be effective at preventing fraud. The final facet is setting up a monitoring system to look for activity beyond the norm for a device, variation from historical patterns or activity that is similar to prior frauds that have been detected.

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I’m sitting in the Spring sunshine (it’s the UK so it’s cold) preparing my talk for the GSC conference in Windsor which starts tomorrow. This is a great venue as it gets representation from major carriers globally mostly concerned  with Trading international traffic and the subsequent business processes that support that seemingly simple activity. Few thoughts are paramount, one of them is that I’m presenting on Thursday so there will be a lot of information sharing by then so I hope I would manage to glue the audience to their seats.

The theme of my presentation is Evolution of Partner Settlement.   I think that the apparatus, systems, structures and know how which allows carriers to trade voice minutes will soon be in demand to negotiate, set prices and monitor a whole range of services and not just voice.

One particular area I’m interested in is content settlement. How does the carrier (or a cable company) set a fair price with a content creator?  How does the content owner verify the final payment?   If it’s all about supply and demand, how do providers gauge demand and look at product performance? Who could have predicted that a Danish sub-titled crime thriller, The Killer series, would take the world by storm? ( I guess the writer!)

What strikes me is that what Telcos sell changes, but not how successful business runs.  I once worked in a toy shop in a particularly posh part of London. Our buyer made the company a fortune from buying Japanese pencils ( a bit like Hello Kitty) – everyone thought she was nuts. She also ceremoniously dumped the then unfashionable Kermit the frog.  This released floor space, which she crammed with pencils  and she watched point of sales like a hawk. Nowadays we have sophisticated systems such as  ours to do this. But the core things that buyer spoke about, attractive stock, great presentation, customer experience are all key elements of product management and content distribution.  Managing the content catalogue and getting value for the content creative and the CSP are critical.

So I’m hoping to have a great discussion about Partner Settlement with people this week about all the hot topics  IPX, Content, M2M, Mobile Money – don’t ever let anyone tell you billing is boring.

Blog more later. Have a good week.

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