M2M Now Magazine April / May 2015 by Prestige Media

e ow Se N yo k 2M o M in T

M2M Now: ISSN 2046-5882

A P R I L / M AY 2 0 1 5

V O L U M E

I S S U E

IoT IN JAPAN Special Japanese language supplement 日本でのIoT 日本語での特別追補版

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TALKING HEADS Stream’s CEO Nigel Chadwick calls for ‘an Uber model for IoT’

SMART CITIES

AUTOMOTIVE M2M

SMART UTILITIES

mHEALTH

THE BLACK BOOK

Building new connected spaces for living. Our Exclusive Analyst’s Report in the June/July issue

Fast forward to connected vehicles See Our Analysts’ Report at: www.m2mnow.biz

Beneﬁts and challenges of making utilities smarter and more dynamic See Our Analysts’ Report at: www.m2mnow.biz

How M2M is improving healthcare efficiency See Our Analysts’ Report at: www.m2mnow.biz

Independent analysis of IoT in 5 Key Industries Read our Analysts’ Report at: www.m2mnow.biz

PLUS: THE CONNECTED CAR, FLEET MANAGEMENT AND TELEMATICS: Analyst Report inside! • SIGFOX wins $115 million ﬁnancing • IBM to invest $3 billion in IoT • Telit on innovation and IoT • Perspectives on Security • The Contract Hot List • Eurotech on the alchemy of IoT • Hitachi Construction on M2M in extreme conditions • www.m2mnow.biz

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CONTENTS

27 13 TALKING HEADS

49 JAPAN SUPPLEMENT

IN THIS ISSUE

EDITOR’S COMMENT Boundaries of all kinds are eroding and a new universe of data’s emerging – so how do we respond?

24 COMPANY PROFILE AT&T’s activities in the transport and telematics markets are reviewed by Rickard Andersson of Berg Insight

MARKET NEWS Strong demand for smart home devices; Barriers to business M2M adoption; Wireless IoT Forum launched

26 INTERVIEW Mike Lang, VP at Numerex, on the company’s focus on transport and telematics

COMPANY NEWS SIGFOX gets $115 million funding; Telensa and Synoptic join forces; Ooredo and Ericsson launch cloud-based M2M in Indonesia

CONTRACT NEWS & HOT LIST The latest deals for Stream, Telit and many more

PEOPLE NEWS New names at Home Grid Forum, Netatmo and OPC Foundation

PRODUCT NEWS TOMTOM launches WEBFLEET Optidrive; PA Group designs new device for Vodafone’s PAKNET; Synapticon announces new e-mobility solution

TALKING HEADS Applying the Uber model to the IoT? Nigel Chadwick, Stream Technologies’ CEO talks to M2M Now

SECURITY How human perceptions of risk can interfere with IoT security strategies

INTERVIEW Gilli Coston, chief strategy officer and EMEA managing director, Wyless, on security as the emerging differentiator

22 EXPERT OPINION Settling consumers’ minds on security; a security check list for M2M device manufacturing

27 M2M NOW ANALYST REPORT – THE CONNECTED CAR, FLEET MANAGEMENT AND TELEMATICS In this edition’s specially commissioned Analyst Report, Jeremy Green, principal analyst at Machina Research, looks at the current state of the market, the main players and the impact of external forces on its future 41

INTERVIEW Jeffrey Smith, chief innovation and technology officer at Numerex, explores the role of new devices, sensors and processes in the asset management and logistics value chain

45 BIZ TALK Alexander Bufalino, Telit’s CMO on how the world of the IoT must be made more inclusive to stimulate growth, innovation and entrepreneurship 49 JAPAN SUPPLEMENT Case studies and articles from Telenor Connexion and IQP, insights into Japan and IoT and doing business there 68 INTERVIEW Roberto Siagri, CEO of Eurotech, on how IoT can bring an almost alchemical transformation to traditional processes, reducing cost of ownership and increasing efficiency 72 CASE STUDY AT&T Cargo Tracking in action, supporting the shipping of fine art and antiques 75 OPINION James Hayward of IDTechEx on how new sensor technologies will take wearables from hype to commercial success

Cover Sponsor: Stream Technologies has been providing M2M services since 2000 as one of the longest established M2M and IoT connectivity companies. Stream delivers end-to-end 2G, 3G, 4G/LTE, LPRN and Satellite services designed for IoT/M2M on a global basis. IoT-X, Stream’s connectivity enablement platform is available for adoption by any wireless carrier or enterprise seeking a cost effective solution for the management of M2M/IoT connections. www.stream-technologies.com

M2M Now - April / May 2015

COMMENT

EDITORIAL ADVISORS

Building an operating system for Planet Earth? As we go to press with the second issue of M2M Now with me in the editor’s chair, I’ve been reflecting on what’s proved to be a fascinating few months in the role. While I’ve found throughout my career that the infinitely open world of networks and telecoms has brought me into contact with so many different industries and sectors, M2M – and especially the IoT – is taking me deeper into what are truly fractal realms of complexity. At times, talking to industry experts, I’ve had the feeling that we’re in the first stages of creating an operating system for the entire planet. Where exactly humans are going to fit into this – especially with wearables creating what I’ve dubbed an ‘Internet of the Senses – is anyone’s guess. Certainly, with the growth of social media and the Alun Lewis, permanently connected Editor, M2M lifestyle, the ex-biologist in me Now Magazine has a sneaking feeling that we might be ending our days as social apes and moving towards becoming some hybrid mammal form of social insect. After all, they also build cities, use language and tools, have social hierarchies and have been as successful as ourselves at colonising the planet…. On a more grounded note, this edition’s M2M Now Analyst Report on the connected car, fleet management and telematics, by Jeremy Green of Machina Research, explores the role that our sector is playing in finding more efficient – and indeed enjoyable and stressfree for drivers – ways for us to move ourselves and our goods around. Jeff Smith

Contributors in this issue of M2M Now We are always proud to bring you the best writers and commentators in M2M and IoT. In this issue they include:

EDITOR Alun Lewis Tel: +44 (0) 1296 660423 alun@m2mnow.biz EDITORIAL DIRECTOR & PUBLISHER Jeremy Cowan Tel: +44 (0) 1420 588638 jc@m2mnow.biz DIGITAL SERVICES DIRECTOR Nathalie Bisnar Tel: +44 (0) 1732 808690 n.bisnar@m2mnow.biz

of Numerex also adds his views on the role that increasingly smart devices can play in protecting movable assets and securing logistics. In our Talking Heads pages, Stream’s Nigel Chadwick calls for our industry to learn lessons in innovation from some internet companies like Uber; a perspective echoed by Telit’s Alexander Bufalino in his BizTalk article. Security – and its intimate partner – risk, are also looked at from a number of directions by Gilli Coston of Wyless and some other contributors. Finally, we’ve taken a bit of a step into the unknown with this issue – at least where language is concerned. The rising importance of Japan, both as originator of new technology as well as potential customer, has led us to produce our first foreign language content. Let us just say, with an engineer’s understatement, that it was a ‘non-trivial problem’ and our designer is now slowly recovering from the experience.

Erik Brenneis, head of Vodafone M2M

Alexander Bufalino, CMO, Telit

Robin DukeWoolley, CEO, Beecham Research

Baard Eilertsen, president & CEO, Maingate

Andrew Parker, project marketing director, Connected Living, GSMA

Alun Lewis, Editor, M2M Now Magazine

Rickard Andersson: Senior analyst at Berg Insight, Rickard produced our review of AT&T’s activities in the transport market

Jeremy Green: Principal analyst at Machina Research since September 2014, Jeremy researched and wrote our report on transport and telematics

BUSINESS DEVELOPMENT DIRECTOR Cherisse Jameson Tel: +44 (0) 1732 807410 c.jameson@m2mnow.biz

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Gert Pauwels, M2M marketing director, Orange Business

Robert Brunbäck, CMO, Telenor Connexion

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Bill Zujewski, SVP, IoT Marketing & Strategy, PTC

M2M Now - April / May 2015

MARKET NEWS

Bluetooth SIG finds strong demand for smart home devices Bluetooth Special Interest Group research shows that almost half of consumers think smart home devices will become mainstream within five years. A survey of US, UK and German Mark Powell, Bluetooth SIG consumer attitudes on smart homes showed that a need for simplicity was paramount, with 54% wanting devices that are straightforward to use, and 41% believing they should be easy to set up. However, 67% of consumers were concerned that some devices would make them

vulnerable. Devices that consumers found most appealing were solutions that allowed them to control their environment, such as smart heating/thermostats (45%), smart lighting (34%) and smart security/monitoring devices (33%). “This study confirms consumers are looking for smart home products that ‘just work’,” said Mark Powell, executive director of the Bluetooth SIG. “Demand for smart home devices is ramping up and manufacturers need to deliver products that are simple, costeffective and secure for this segment to become mainstream.”

Machine-to-machine technology embraced by 74%, but they admit barriers to adoption Almost three-quarters of businesses wish to embrace machine-tomachine (M2M) technology but admit they face barriers to adoption, says a new survey by field service management software provider, Advanced Greg Ford, Advanced Field Service, carried out among senior UK managers and engineers. Although 74% said they are open to implementing emerging technology, several business challenges are preventing them from doing so. 57% were aware of M2M - while 43%t were confused about what the

technology is and how it works. Other potential barriers were insufficient time and resources (33%), cost restrictions (19%), cultural resistance (17%) and network connectivity fears (12%). Greg Ford, managing director of Advanced Field Service, says, “M2M can use predictive and prescriptive analytics to reduce reactive works and increase planned maintenance and first-time fix, providing a rapid ROI.” Just over half of those surveyed use sensors to track service vehicles whilst around a quarter monitor mobile equipment and mobile handhelds used by field-based workers with 14% using these devices for tracking service parts.

Smart Wireless healthcare and fitness device services to be a $1.8 billion market by 2019 New research from market analysts, Juniper Research has found that annual revenues from connected healthcare and fitness services will approach $2 billion by 2019, nearly six times the $320 million value estimated for this year. The research, ‘Smart Wireless Devices: CE, Enterprise, Fitness, Healthcare, Payments 2015-2019′ argues that connected healthcare

M2M Now - April / May 2015

and data will substantially benefit both stakeholders and consumers, especially in preventative healthcare. However, deployments will initially be constrained by inconsistent regulation and continued privacy concerns. While medical devices have validation standards, fitness devices have no such benchmark. The development of standards would alleviate consumer and medical professionals’ concerns.

NEWS IN BRIEF Wireless IoT Forum launched The Wireless IoT Forum has been launched to encourage the widespread adoption of wireless wide-area networking Will Franks, technologies in both Chairman licensed and unlicensed spectrum. The Forum is set to announce founding members at the M2M World Congress in London on 28 April 2015 and is actively recruiting new members. Will Franks is chairman and William Webb is CEO. Franks was previously CTO and founder of Ubiquisys while Webb is also president of the Institution of Engineering and Technology (IET).

Mobile Augmented Reality games to reach 420m downloads by 2019 Data from Juniper Research has shown that Augmented Reality (AR) apps in the mobile games market will generate 420 million downloads annually by 2019, up from 30 million in 2014. Head Mounted Devices (HMDs) used in the home, such as Microsoft’s Hololens, will bring a surge in interest for AR games, but for the time being most AR downloads will occur via smartphones and tablets. “The app market has stagnated somewhat, with the industry struggling to move beyond AR marketing tools,” says author Steffen Sorrell. “I do see a shift though – Blippar, for example is moving into visual search, which will open things to a far wider audience.” The whitepaper, Augmented Reality ~ A Market, is available to download from the Juniper website.

IHS – smart water grows in North America 600,000 cellular-enabled water meters will be shipped annually in North America by 2020 according to the IHS publication, ‘The Smart Water Meter Intelligence Service’. Michael Markides, director, says, “Water utilities in North America are under pressure to improve operations, increase conservation and enhance customer service; however, in many instances they lack the capital, expertise and business model required to effectively implement new technologies.”

COMPANY NEWS NEWS IN BRIEF Telensa and Senaptic come together Telensa, international smart street lighting specialist and Senaptic, provider of end-to-end solutions for smart cities, Will Gibson, have merged. Operating CEO, Telensa now under the Telensa brand, the company will provide multiple M2M applications including smart lighting and smart parking. Telensa currently has active networks covering major UK cities and entire counties, with over 10% of UK street lights managed by its systems, and will now build on its existing portfolio to pursue opportunities across the world. Will Gibson, Telensa CEO, said: “Our dominance of the UK market for smart street lighting has led to major new global engagements and our customers are inevitably looking to us to extend the range of IoT applications we offer. That is why combining Telensa with Senaptic’s smart city platform is so compelling. Our aim is to create an unassailable lead in the development and deployment of Wireless IoT systems.” Senaptic and Telensa were both formed by respected technology provider Plextek and now count more than 8 million devices active in 30 countries including the US, Russia, Brazil, China and the UK.

Blue Yonder and Capgemini launch new M2M/loT platform to automate business processes Blue Yonder, platform provider of predictive applications, and Capgemini have developed a new Connected Services Platform. Incorporating predictive applications Peter Eck, that run on Blue Yonder’s VP sales, Blue platform with CRM Yonder software, a wide variety of end-devices that require services such as maintenance, customer support, and field services can be intelligently linked. Peter Eck, VP Sales of Blue Yonder explains “Connected services will allow new business models to develop by interconnecting intelligent services and products. In our collaboration with Capgemini, we have an excellent partner by our side to support organisations in mastering this digital change and to effectively show them how the IoT will quickly drive business growth."

SIGFOX gets $115 million funding SIGFOX has secured $115 million financing from investors in Europe, the U.S. and Asia. Following its deployment in France, Spain, the United Anne Lauvergeon, Kingdom, the chairman, Netherlands and soon SIGFOX the United States, SIGFOX will use this new equity round to accelerate its worldwide network roll-out in Europe, Asia and the Americas with the support of international telecom operators (Telefonica, SK Telecom

and NTT DOCOMO Ventures), a leading financial sponsor (Elliott Management Corporation) and industrial partners (GDF SUEZ, Air Liquide and Eutelsat). “This record $115 million round is a significant step in the development of our network’s coverage all around the world. The trust of our investors and the dynamism of SIGFOX’s team allow us to strengthen our position as the world leader in IoT communications,” said Anne Lauvergeon, SIGFOX’s chairman.

Actility announces partnership with Swisscom for LoRaWan-based IoT services Actility is partnering with Swisscom to develop innovative services for emerging markets such as smart city and smart building services. Actility’s network solution includes ThingPark Wireless base stations, Gerhard Schedler, central network Head of M2M, controllers and Swisscom management platforms for low-power sensor provisioning and network monitoring. “We foresee a significant increase in demand for Low Power Wide Area Network based solutions in the market,” states Gerhard Schedler,

Head of M2M at Swisscom. “We feel that Actility serves as an important ecosystem and technology partner as we explore new opportunities to meet the diverse and emerging needs of our customers.” The ThingPark Wireless solution requires a small low-cost antenna to connect sensors in a 2-5 km radius for dense cities or in a 15 km radius for countryside applications. Actility’s ThingPark solution also includes the ThingPark Cloud infrastructure, a data storage and application development interface, and ThingPark Store, an online marketplace engine dedicated to the IoT sensors, applications and network solutions.

Ooredo and Ericsson launch M2M platform in Indonesia Ooredoo’s Indosat and Ericsson have launched a cloud-based M2M solution in Indonesia using Ericsson’s Device Dr Nasser Connection Platform Marafih, (DCP) to serve Group CEO, developing markets. Ooredoo Indosat is the first member of Ooredoo Group to launch this M2M platform with Qatar, Algeria and Tunisia scheduled to follow this year. Dr Nasser Marafih, Group CEO, Ooredoo said: “Our cloud-based M2M

service delivers a higher, faster level of support and more agile service for business customers. This launch is the first in a series of group-wide innovations that will deliver better results for businesses. Additionally the platform will play a key role in speeding up the implementation of smart city technologies.” Ooredoo is already working with a number of leading organisations to support the development of smart cities, and has signed a strategic alliance with KT Corporation of Korea.

M2M Now - April / May 2015

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CONTRACT NEWS

Telit Wireless bags deal with FastTrack Telit Wireless Solutions has announced that FastTrack, a player in electronic bag tags and track and trace solutions for travellers, has designed its new Eviate eTrack solution using Telit’s HE910-D and SE868 V2 GPS receivers.

Caribbean, Central America and Asia Pacific, to drive its IoT growth strategy, leveraging Stream’s IoT-X™ unified access connectivity environment to manage connected devices over satellite, cellular, Wi-Fi, short-range or LPRN.

Stream Technologies has been selected by Digicel Group, a global communications provider with operations in 33 markets in the

PodsystemM2M, provider of multinetwork data SIMs for the M2M and IoT industries, has announced that its Signal Multi Network SIM cards have

been selected by MyFamily Mobile in the USA for their wearable childrenspecific, voice and data messaging and smart locator anti-kidnap devices. Royal Philips has announced that the City of Los Angeles will use an advanced Philips lighting management system based on mobile and cloudbased technologies to save energy, reduce maintenance and make the streets safer for LA residents.

THE CONTRACT HOT LIST M2M Now April/May 2015 It's free to be included in The Contract Hot List, which shows the companies announcing recent contract wins, acquisitions or deployments. Email your contract details to us now, marked "Hot List" at <news@m2mnow.biz> Vendor/Partners AEC Actility Aidon Ardian AT&T Azuri Badger Meter Blue Yonder Brickhouse Security Cyan Ericsson Eurotech Gemalto GreenPeak Technologies Huawei Indiegogo Inmarsat Jasper Jasper Kamstrup Lantiq Locamation BV PowaTag Masternaut monitorlinq Multi-Tech Systems Inc. Novatel Wireless Powel AS Podsystem M2M Position Logic PTC Quake Global, Inc Qualcomm Life Royal Philips Silver Spring Networks, Inc. Silver Spring Networks, Inc. Singtel Stream Technologies SIGFOX SIGFOX Swisscom Swisscom Swisscom Telekom Austria Telenor Connexion Teclo Networks Telit Telstra ThingWorx ThingWorx Vodafone

Client, Country A2A, Italy Swisscom, Switzerland Hafslund Nett, Norway SERMA, France Airbiquity, USA Lotus Africa, Tanzania City of Santa Fe, USA Capgemini, France Securus, USA XLink Communications, South Africa Oredoo, Indonesia WebRatio, Italy CRTM, Telefonica, Spain ZTE Health, China Giesecke & Devrient, Germany Insulin Angel, UK Parrot, France Icontrol Networks, USA Salesforce, USA DONG Energy, Denmark IOLITE, Germany Liaoning Power Transformation, China L'Oreal USA SRCL, UK Somfy, France Multi-Tech Systems Inc., UK Feeney Wireless KELAG, Austria MyFamily Mobile, USA BIGmate, Australia University of Huddersfield, UK CNH Industrial, Netherlands CHU, France. TBS GB, UK City of Los Angeles, USA Bristol City Council, UK EVESA, France NetComm, USA Digicel Group, Caribbean TALIS, Germany Kaisaras Group, Portugal i-engineers AG, Switzerland Sixt Leasing, Switzerland H-Net, Switzerland Rosenbauer, Austria SRETT, France Stream Technologies, UK FastTrack, Netherlands Doctor Foster, UK Smoove, France SmartPatch, Italy PHT Corporation, USA

Key: AIS = Automatic Identification System EV = Electric Vehicle M2M = Machine-to-Machine

Product / Service (Duration & Value) LED Lighting Partnership for IoT Automatic metering infrastructure Acquisition of 43% stake Cloud services for connected cars Pay as you go solar power Smart water meter solution Joint launch of connected services platform Acquisition Distribution agreement M2M platform launch Application development partnership Pilot Contactless project for Madrid transport system Smart home apps and support for aged Joint alliance for connectivity services Smart medication Drone certification3.2015 Distribution agreement Partnership for IoT deployments Smart metering Partnership for smart home development Substation automation and smart grid Mobile advertising platform Fleet management solution Partnership for home automation solutions EMEA office opened in Heathrow, UK Acquisition of IoT solutions company Smart Energy software Provision of multi-network SIMS Global partnership PTC FlexPLM for teaching use IoT partnership Partnerships for telehealth biometrics Street lighting management system Smart city project Control of street lighting and traffic control systems in Paris Marketing of M2M services in Asia Support of IoT growth strategy Smart city fire hydrant monitoring solution SIGFOX operator in Portugal Electronic patient records Partnership for fleet management - Managed Mobility Acquisition of medical data exchange company Global M2M telematics solutions Telehealth connectivity Data flow optimisation solution Bag tracking Acquisition for smart health IoT platform for global bike-share service IoT platform for structural health monitoring Connectivity for global patient data in pharamceutical trials

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PaaS = Platform as a Service RFID = Radio Frequency Identification SIM = Subscriber Identity Module TTM = Time-to-Market

M2M Now - April / May 2015

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Smart Data Delivered

PEOPLE NEWS

HomeGrid Forum elects Donna Yasay as its new president Donna Yasay is currently business development director at Marvell Semiconductor, one of HomeGrid’s promoter members. She has some 20 years’ experience in the telecommunications industry, working in engineering, sales and business development roles in both operator and vendor organizations, including AT&T, Asoka, D-Link, Netopia, and Ikanos Communications. Donna Yasey, Home Grid Forum

Donna sees her role as encouraging the efforts of members to make G.hn the ubiquitous in-home networking standard and a strong wireless enabler for all consumers in both carrier and retail. “G.hn is such a powerful and promising technology and I am delighted to be taking on this role at such a key moment,” says Yasay. “In my view G.hn has the potential to become the 4K TV enabler throughout the home and the in-home technology leader for mixed managed services combining voice, video and data with carrier class quality of experience.”

Stream Technologies expands management team with industry veterans Lawrence Latham and Melissa Jenkins have joined Stream Technologies as, respectively, CMO and senior vice president of architecture and innovation, while Martin Wiesner also becomes EMEA Director. Latham joins Stream from James Brehm & Associates as a recognised innovator and thought leader in the IoT marketplace, building on his many years’ experience in the sector, while Jenkins spent six years at Orange developing their machine-to-machine (M2M) practice and since then has consulted to tier 1 carriers throughout Europe. Wiesner has been with Stream since 2013 and, in his new role, he will add responsibility for business development and strategic sales, promoting new business for the entire product offering across EMEA. Stream’s growing management team

Stefan Hoppe named OPC Foundation vice president The OPC Foundation has named Stefan Hoppe, a member of the Foundation’s Board of Directors and president of OPC Europe, as its new vice president. In this new position, Hoppe will take a global leadership role in the effort to position OPC-UA as the worldwide standard for interoperability and IoT (Internet of Things) communication. Stefan Hoppe, OPC

“It’s exciting to be able to work with people and organisations around the world who share my passion for the importance of building an infrastructure to support greater connectivity in manufacturing and automation,” said Hoppe. “Our goal is to have OPC-UA become the accepted standard worldwide for IoT communications within the next 3-5 years.” OPC is the interoperability standard for the secure and reliable exchange of data in the industrial automation space and in other industries and the organisation serves over 440 members worldwide in the industrial automation, IT, IoT, building automation, oil and gas and smart energy sectors.

Dyson’s Broadway appointed chief operating officer for Netatmo

Matt Broadway, Netatmo

In his new role as COO, Matthew Broadway will report to Netatmo CEO and founder, Fred Potter and will oversee the company’s global operations including sales, marketing and support. “After working alongside Sir James Dyson for 10 years, I’ve had the privilege to witness first-hand Matthew’s proven experience in achieving growth in a global organisation. I’m thrilled to recruit him. His leadership and organisational skills and his track record of achievement will help bring Netatmo to the next level. We look forward to him injecting his considerable knowledge and experience into Netatmo and being instrumental in driving the business forward,” said Potter. Matthew has 20 years of experience in the global consumer electronics industry in senior sales, marketing and general management roles with leading technology brands. Matthew is appointed immediately and is located in Paris.

M2M Now - April / May 2015

PRODUCT NEWS Innovative real-time driving advice lets the professional driver anticipate the road ahead TomTom Telematics has launched its next generation of WEBFLEET OptiDrive, incorporating predictive real-time advice to help drivers to drive in a greener, safer style. OptiDrive 360 uses vehicle and map data to advise business drivers when to take their foot off the accelerator or shift gear and what their optimum speed should be. These innovations form part of OptiDrive 360’s complete approach for continuous driving improvement. It provides professional drivers and business management with the information to create a full improvement programme for learning, coaching while driving, posttrip evaluation and in-company comparison.

Pre-trip, OptiDrive 360 provides motorists with best practice advice on how to drive safely and fuel-efficiently. Direct feedback and driving advice is offered during the trip to actively coach the driver. After the trip a snapshot analysis is available to review the trip statistics. All information is displayed via the driver terminal. The OptiDrive 360 scores drivers based on a total of eight performance indicators – speeding, driving events, idling, fuel consumption, green speed, coasting (release gas while in gear), gear shifting and constant speed which can be used as the basis for performance reviews, training and driver benchmarking.

Synapticon launches LEV modular control solution for efficient electric mobility Synapticon, sensor and actuatorfocused embedded systems and cyber-physical systems specialist, has announced a new e-mobility solution, specifically designed for the deployment in LEVs (Light Electric Vehicles). The modular control solution consists of the new built-in Bluetooth 4.0 LE + CAN module for communication, the new CORE module CA 11, and the drive DC 5000 as IFM (Interface Module).

New PA Consulting Group design claims major improvements to Vodafone’s Paknet The PA-designed RadioPad RM25 module for Vodafone Paknet provides users with a range of improvements in both functionality and form over its predecessor. Vodafone’s Paknet has been delivering machine-to-machine communications across the UK for 25 years and is used in a wide range of business critical applications, from credit card authorisation, fire and security alarms, traffic management, to remote monitoring and control systems for utilities. PA’s new module upgrades the performance of the bespoke RF transceiver and provides a completely new high performance processor platform. It integrates these into a compact singleboard module with full type approvals. Full backwards compatibility with existing applications and interfaces is also retained, with the addition of a further carrier board assembly.

"The target group of the now showcased package - consisting of OM, Core and IFM - are manufacturers of electric vehicles and other low-voltage drive systems. For the volume production of LEVs subsequent to a prototype or small batch production based on the standard modules, we also offer modified, individual, costeffective and integrated solutions for series production," explains Nikolai Ensslen, managing director of Synapticon.

OPINION

SPONSORED COLUMN

End of the IoT hype is nigh It seems that much of the nonsensical characterisation of the Internet of Things such as your refrigerator ordering your groceries and having them delivered to your home is finally coming to an end….. Access to data from edge devices outside the campus expands enterprise visibility, showing management more precisely how customers are using products, allowing companies to fine tune offerings in a constant and virtuous cycle of continual improvement.

Alexander Bufalino, CMO, Telit

It exposes ways companies can optimise operations with suppliers and other partners. It also delivers real-time information from new sources which

M2M Now - April / May 2015

companies can cost-effectively integrate into their strategy development process, allowing them to get new products and services launched faster and targeted more precisely into the market. It is these and many other examples like them that deliver the real value and the wealth creation power of the IoT. The economic power of this wealth is what will transform the business landscape. Not - sadly – the talking fridge.

locate, communicate, accelerate

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TALKING HEADS

Nigel Chadwick, co-founder and CEO, Stream Technologies

Creating an Uber model for IoT – Stream shares the vision That almost all new technologies eventually come to subvert the established order is clearly evident for anyone looking at the last few decades of history. Soon most humans on the planet will own the equivalent of a 1980s supercomputer – a smartphone - and businesses will increasingly benefit from advanced applications and services through cloud-based pay-as-you-go models. Moore’s Law inevitably means disruption – at least for a few years yet!

M2M Now’s Alun Lewis caught up with Stream Technologies founder and CEO, Nigel Chadwick, to explore how his company has responded to this tightly intertwined mix of technology and

M2M Now - April / May 2015

commercial change, creating in the process – and in his words – “the Uber model for IoT”. M2M Now: Nigel – you co-founded Stream around fifteen years ago. What are the most significant changes between then and now in both technologies and market needs - and how has the company differentiated itself in response to them?

If the forecasted billions of connected devices are to become a reality, then TCO must be radically reduced

NC: Market needs and technologies have both shifted dramatically over the past 15 years. What was early stage M2M, based largely around small data via text messaging, has evolved to include GPRS, 3G, 4G, satellite and, increasingly, Low Power Radio Networks (LPRN). We have also witnessed a surge in platform technologies, although only a relatively small number of players have developed platforms that manage the connectivity layer. ▼

Voice and data communications, once the preserve of highly regulated and state-owned monopolies, has become a free for all. We expect to be able to connect anywhere and at any time and a host of new wireless technologies have emerged linking the last few miles and even the last few metres. Large chunks of the radio spectrum are also being repurposed and resold. But what does all this mean for the M2M/IoT sector? Some players will try a business as usual approach, but corporate inertia and legacy business and technology models will stifle muchneeded innovation. However, others will quickly see and exploit the immense opportunities emerging from these disruptive forces.

TALKING HEADS

Simplifying IoT connectivity management layers within the IoT stack – the key to enabling billions of connections

Stream has focused its R&D on the TCO challenge for over a decade, giving us a uniquely different technology. Our IoT-X™ platform enables Mobile Network Operators (MNOs) across the world to deliver high quality and simple to manage connections across all M2M verticals – from high data capacity requirements such as those relating to digital media/CCTV, through to small data such as sensors and smart meters. Operating as a highly specialist MVNO for nearly 15 years means we are now strongly positioned as an MNO ‘enabler’ through our IoT-X platform which MNOs can adopt to manage their M2M connections. IoT-X is agnostic to wireless layers, so supports the management and billing of satellite, LPRN and WiFi as well as cellular. Our evolved backhaul infrastructure design, monitoring/analytics tools and highly experienced technical and operations teams, have created something special. In particular, MNOs and others looking to deploy and manage LPRN gain an ‘out of the box’ management platform at minimal cost. M2M Now: In much of your company material you stress the need to support a full portfolio of connectivity options, in particular emerging LPRN and WiFi. What’s your thinking on this and the implications for Stream’s IoT-X platform strategy? NC: History is littered with new technology winners and losers. Both markets and legacy ways of doing things get disrupted, with new technologies and business models evolving that result in a major acceleration in adoption, as redundant technologies and commercial models are replaced. I believe Stream’s IoT-X is poised to become a disruptive

technology in IoT: it’s next generation technology and so radically different from anything else out there. Stream for the past decade has been focused on simplifying IoT connectivity management layers within the IoT stack – the key to enabling billions of connections. With IoT-X, we’re not talking about a platform designed to manage connectivity for hundreds of millions of endpoints and devices, but one ready for billions using all types of wireless and non-wireless connectivity. This agnosticism has enabled true scaling. Stream’s early roots were in cellular connectivity but, compared with LPRN, the TCO of cellular connectivity per end point is still high. LPRN is coming over the horizon fast, bringing lowered costs and exponentially accelerating deployments. LPRN also introduces new challenges to connectivity management not only in respect of LPRN itself, but also the backhauling element – whereby multiple hops might also include satellite, cellular or WiFi. Stream’s technology drives down TCO and our expertise and technology are ready to be applied to all layers. IoT-X also has an integral powerful billing engine, with algorithms capable of processing many variations in billing structures, enabling the innovative monetisation of end point deployments that transit data over LPRN, Wi-Fi, satellite and traditional cellular solutions. The prospect of monetising down to a micro-payment levels - across vast numbers of devices and billions of chargeable events is a truly exciting opportunity. This will be incredibly disruptive and is the key to exponential growth. M2M Now: Scalability at both ends of the M2M/IoT market is an important challenge, especially if we’re to drive true mass market adoption and enable small, new and innovative players to disrupt their own particular sectors. How have you adapted the Stream solution to suit such a diverse and often demanding customer base? NC: Few tend to talk about scalability in the context of servicing a myriad of smaller deployments. There will always be SMEs with a limited deployment of IoT, as well as companies requiring data transfer services for R&D or beta stage commercialisations. The consumer sector has yet to really adopt IoT, but when this happens we will face completely different challenges. Just as large scale deployments require resilient and easy to manage connectivity, these micro-scale deployments will also require

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Market needs will be extremely diverse across the global pool of 50 billion devices by 2020 predicted by Cisco. As end points grow and friction is removed from connectivity processes, the range and scale of organisations deploying IoT over multiple network types, across and within multiple national boundaries, will increase. For the past decade, we believe that Total Cost of Ownership (TCO) has been a major barrier to high velocity scaling. If the forecasted billions of connected devices are to become a reality then TCO must be radically reduced. Connectivity infrastructures are currently fragmented – if these billions of connections are to be enabled, managed and billed, they must be radically simplified and much more efficient.

IN ASSOCIATION WITH STREAM 14

M2M Now - April / May 2015

this same service level. More so in fact, as their technical resources will be limited, though they can benefit from Stream’s technical expertise and agnostic systems that have evolved to overcome the many challenges presented by multiple connectivity protocols. We’re seeing substantial interest in IoT-X from companies worldwide who seek a management and billing platform that can integrate with LPRN based deployments. This typically includes sensorbased technologies as well as more traditional M2M solutions including smart meters. While the expertise within both our team and our software covers cellular, satellite and LPRN, we’re also focused on ensuring resilient and reliable data transit, including its streamlined and efficient management and monetisation. Our systems have evolved to meet scaling requirements in both directions – massive and micro. M2M Now: Ensuring a high quality customer experience – wherever they sit on increasingly complex and multidimensional value and service chains – is a critically important aspect of M2M/IoT success. What’s your strategy – especially towards small new entrants needing support? NC: Customer experience is uppermost within Stream’s delivery programme. Operating as a data transit specialist means connectivity must be resilient and reliable, with uncompromised data getting from A to B when it is scheduled to do so. Enterprise clients seek the very best technical and operational support and our team’s incredible depth of understanding across all aspects and types of IoT connectivity provides this. Expert advice is provided ahead of solution deployment, assuring success in scaling. Crucially, Stream Technologies is also supporting deployment by MNOs and emerging LPRNs of new networks globally via IoT-X. This is a unique situation and technology play, vesting our know-how and technologies with MNOs, enabling them to replicate the same level of customer experience that Stream’s renowned for. Cellular MNOs and other operators can gain an immediate competitive advantage in their local IoT sector through this. IoT-X as an out-of-the-box solution is invaluable to adopters as they gain immediate access to the partnership eco-system within IoT-X, choosing from a range of integrated value-add partner applications and solution options. By ‘small entrants’, you probably mean SME clients. We however see this also as applying to MNOs who have limited

M2M Now - April / May 2015

budgets and IoT expertise, but who want to compete in their local M2M markets. They need to ensure effective connectivity management via an enablement platform. Our solution provides this, but also goes one stage further. When another network operator adopts IoT-X, so too does Stream’s footprint expand into that geography – meaning local network services become available for all enterprise customers of Stream and all other incumbent IoT-X adopters. This is a uniquely valuable global proposition as IoT deployments accelerate. M2M Now: Pricing and billing are key issues. What strategies and technologies is Stream adopting – or have you any insights into particular price points or contract types that will prove especially attractive to this cohort? NC: Let’s take technology first. If IoT network operators and adopters can’t bill for IoT enabled products and services, they can’t properly monetise them and get full ROI. Stream’s billing and rating capabilities allow consolidation regardless of network technology via product bundles, hardware as a service, and so on. Hundreds of our customers enjoy exactly this type of billing capability. On the topic of pricing, this is critical for widespread IoT adoption. Technology hasn’t been the growth curve inhibitor for the past few years – it’s been cost. Although costs for devices and data plans have come down, many still charge what the market will bear, stifling growth and keeping deployments in the low millions. We’ve also been hearing about Software Defined Networking (SDN) - but where are the cost savings? We haven’t seen it and future adopters of IoT solutions haven’t either. Contrast this with the impact Amazon Web Services has had on the data centre market or Uber is having in transport. At Stream we built our financial models around the IoT scale pricing concept. We do cellular connectivity better and cellular will be one of the key connectivity methods - but we’ve also expanded our best of breed capability out to other network technologies and we did it with billions in mind using ‘utility computing scale’ which implies scalable software business models. This is ultimately about utility computing connecting billions. Call us idealists, but we clearly see which models have worked and which haven’t. Our goal is to help forward-thinking network operators and their customers realise the fullest benefits of IoT and a big part of that is reducing cost barriers, regardless of the underlying network technologies.

SECURITY

Risky business ? Who’s to know….? Security’s an increasingly sensitive topic in our community. While it’s always been important, it’s only recently that we’ve been waking up to the size of the responsibility that’s being placed on our collective heads, writes M2M Now’s Alun Lewis.

While this scaling up obviously presents huge technical challenges, it also creates major problems when it comes to one of the most difficult aspects of security – evaluating risks and then responding appropriately. Despite what we may believe and hope, we’re a deeply irrational species – and even more so when large numbers of us interact together. As far as perceptions of risk are concerned, a wealth of evidence – both historical and experimental – shows that we’re also deeply flawed when it comes to accurately evaluating our exposure to threats. While author and polymath, Nicholas Taleb elegantly addressed many of these issues in his seminal 2007 bestseller ‘The Black Swan’, they’re also neatly summed up by ex-US Defence Secretary, Donald Rumsfeld’s 2002 comments on the WMD threat: “There are known knowns; there are known unknowns; but there are also

unknown unknowns – the ones where we don't know that we don't know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.” Although expressed with typical political understatement, that does tend to sum up the current situation facing our sector – and it’s the ‘unknown unknowns’ that are going to present the most serious challenges. Peter Warren of MWR Infosecurity comments on this: “Educate your stakeholders and yourselves. The concept of risk is widely used, but the behavioural and statistical science involved is not generally well-understood. Risk behaviour and estimation bias are common problems and have been extensively researched by psychologists. That said, research has shown that these errors can be reduced through training and good statistical methods.” That problem of getting a clear perception of risk in an implicitly uncertain world is often accentuated by the different drivers and cycles that are found in human organisations. Daniel Shepherd, director of International Strategy at security company S21sec, observes, “Look at any business survey these days and you’ll see security

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Hackers in the past have tended to attack consumers or the financial systems of corporations. Not manufacturing lines - or the essential infrastructure that keeps our societies ticking over in reasonably efficient ways - and which could be called our ‘civilisation-critical’ systems.

M2M Now - April / May 2015

usually comes high up the corporate agenda – but after growth and profit. With business innovation cycles getting tighter and tighter, how do IT security staff explain to their board that while a new ERP system might take a few months to install, securing it properly might take much, much longer. There’s also the issue that much security in the past has involved adding ‘boxes’, but when it comes to the much more diffuse and amorphous world of the cloud and Big Data, the challenges are very different.” Jason Hart, who began his working life as an ethical ‘White Hat’ hacker and is now vice president, cloud solutions for identity and data protection at Gemalto, echoes this thinking: “IoT is going to be the next ‘Black Swan’ environment. Around about ten years ago, the industry was kind of getting there in terms of understanding the risks it faced and developing appropriate solutions. The environment that we’re in now with the cloud is effectively turning the planet into one giant PC motherboard and that requires new thinking.” He continues, “Ask any C-level exec what they want to protect and the answer will be ‘My business’. The problem is that ‘their business’ isn’t so much physical infrastructure or even IT systems anymore - it’s actually the data that their business runs on and some of that might be outside their direct control. Consider a remake of the film ‘Trading Places, where the plot revolved around speculators getting advanced access to production forecasts for Florida orange juice. Imagine what could happen now when masses of agricultural data is being gathered from multiple sources and from sensors in the ground and farm machinery - and it was that which was being hacked into and changed?” Indeed, it’s the role – and vulnerability – of the ‘things’ themselves that is also causing significant concern, with some suppliers pushing the fact that their devices don’t have IP addresses. Richard Foggie from the UK’s Knowledge Transfer Network observes: “Multiple additional points of vulnerability increase the chances for security breaches exponentially. The UK’s smart meter roll-out, for example, will introduce up to 26 million potential nodes to attack a critical national infrastructure.” Getting people who are used to dealing with physical assets in the real world to think differently is an uphill struggle. On the topic of risk itself, Tim McGarr, manager at the British Standards Institute’s (BSI) Governance and Resilience department, an organisation doing a lot to establish best practice in the Smart City area, comments, “Processes for managing risk have been defined for a long time. Different labels are used but broadly speaking they follow the same process as is used in International Standards whereby the context is established, and then risks are identified, analysed, evaluated and finally treated as necessary. However, the emerging IoT problems don’t come from issues with the process, they arise from people not assessing risk properly or

M2M Now - April / May 2015

not even doing any risk management. He adds, “The massive projections for the IoT market and the rapidly decreasing cost of connectivity and sensors mean that developing ‘IoT enabled’ products is seen as a ‘no brainer’ with virtually no additional cost and large projected returns. As such, private and public bodies are rushing head-long into the ‘IoT market’ while putting little or no thought into the consequences of this. Subsequently, there is a steady stream of news about the result of this failure including insecure fridges, baby monitors, CCTV cameras, TVs etc, affecting organisations of all sizes and sectors including start-ups and the largest global organisations with long established governance frameworks.”

Jason Hart, Gemalto

Again on the issue of human perceptions of risk, there’s also the all-important factor of where the actual buck – in more ways than one - might stop. As far as the pockets, reputations and even personal freedom of the executives involved in an M2M/IoT security failure are concerned, we have the role of the legal system to also consider. Justin Tivey, legal director at international law firm Bond Dickinson LLP, comments, “In the UK and on a Europe-wide basis legislation in this area is relatively old - the UK's Data Protection statute dates from 1998 and was itself an implementation of an EU Directive of 1995. Who is still using a computer that dates from then?” Tivey continues: “Joking aside, this legislation still broadly works and the last two years have seen claims against businesses arising out of data loss, data errors, internet marketing and the right to be forgotten. However the complexities of the IoT, big data and M2M technology do mean that situations will arise which the Courts might find that current legislation struggles to cover. Legislation will be updated at some point, whether via the impending new EU Data Protection regime or even legislation originating in the UK if the next Government perceives that there’s need for the UK to be competitive in these technologies. Class action type law suits are possible even now in the UK. Claims across jurisdictions, even within the EU, are not feasible yet. We live in a connected world – but not that connected - legally at least.” Jon Howes at Beecham Research concludes, “It’s a key prediction of many industry analysts that there will be massive class-action lawsuits against IoT organisations that do not protect their users against loss of data or malicious attacks against integrated systems. Whether it is a connected thermostat that locks out a heating system, or remotely accessed door locks that can be forced open, the reality is there are probably exploits in the field already.”

Justin Tivey, Bond Dickinson LLP

Tim McGarr, BSI

Jon Howes, Beecham Research

With the recent fine in the US of AT&T by the FCC of $25 million for numerous data breaches, both inside and outside the USA, those threats and their financial implications are getting closer every day.

INTERVIEW

Security is emerging as a key differentiator â&#x20AC;&#x201C; both for ourselves and our customers One of the prices of success of almost any kind is an increased exposure to risk â&#x20AC;&#x201C; and the M2M/IoT sector is no different. But where do these emerging vulnerabilities lie and what can we, our customers, and the wider business community do to mitigate and control those risks, now and into the future? Robin Duke-Woolley, CEO of specialist M2M/IoT market analysis and consultancy company Beecham Research, recently discussed these issues with Gilli Coston, chief strategy officer and EMEA managing director for Wyless.

GC: Security is a moving target and an area where we all need to be vigilant for our customers. At one time, M2M solutions were thought to be secure enough because connected objects were little known and not a specific target for hackers. M2M has raised its profile and the IoT is making security centre stage in many implementations. As soon as a solution becomes mission critical for an enterprise, the risks of security breaches increase enormously. In addition, things we have taken for granted turn out to have vulnerabilities. The Heartbleed security vulnerability issue, for example, allows any sensitive data that would normally be protected by SSL/TLS encryption, even private keys, to be stolen. Heartbleed did not impact on Wyless technical resources but it

did indicate that any device, host, or resource could, eventually, be exposed to an immediate vulnerability. Security cannot be taken for granted and this is an area Wyless is continually monitoring and adapting to. RD-W: There is a tendency for people to view the need for security rather negatively as just a cost that has to be borne. Is it right to treat it like that? GC: It is true that security can be seen as a cost and therefore may be resented or perceived as a grudge purchase. As M2M and IoT become more embedded in our ways of life, security has never been so important for our industry. In addition, it is the overall connected environment that has changed and grown in importance and, with it, the potential vulnerabilities and risks. This translates into a rich hunting ground for hackers and a shared

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RD-W: Security has gained strongly in importance for M2M and IoT solutions over the last couple of years in particular. Why do you think that is?

M2M Now - April / May 2015

“Security is a moving target and an area where we all need to be vigilant, for our customers.”

set of risks that can impact everyone. So we should view the need for security as an essential part of the project specification and one that has to work just like any other part of the overall solution. When seen from this angle, what could be seen as a ‘resented cost’ suddenly has the potential to become more of an opportunity for competitive differentiation. It is an area that Wyless has worked on to build particular capabilities that our customers see as of real value within our solutions. RD-W: So, what’s the overall approach that Wyless is taking with security? GC: We offer end-to-end security for M2M and IoT solutions, and we look at this from both a horizontal and a vertical perspective. To enable the horizontal perspective, we take security seriously at every level, from the most fundamental physical security of our data centres to the highest-level aspects of our network, software and service layers. One example of this involves building a secure wall around a business environment, but enabling remote access by authorised users and devices. To implement this we use two data communications technologies – PPTP (Point-to-Point Tunnelling Protocol) client-server and IPSec site-to-site VPNs (Virtual Private Networks). With PPTP, individual users can initiate a VPN and establish traffic to devices on the fly. With IPSec, one or more sites can be linked to the devices over a private, permanent connection. That means it isn’t necessary to have public IP addresses, which in our view should be avoided wherever possible.

Gilli Coston, chief strategy officer and EMEA managing director, Wyless

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In addition, we implement the most stringent security policies that we can, along with robust encryption. Wyless has a particular capability in this area through our acquisition last year of ASPIDER M2M who are based in the Netherlands. We developed an end-to-end security solution specifically for M2M communications that employs state-of-the-art cryptographic technologies. The current version supports symmetric-key cryptography, with public-key asymmetric cryptography coming to cover other needs. As far as we know, Wyless is one of the very few companies to employ

M2M Now - April / May 2015

INTERVIEW

Wyless offers end-to-end security for M2M and IoT solutions, looking at this from both a horizontal and a vertical perspective

RD-W: That covers the horizontal perspective, which is essentially common across all solutions. What about the vertical perspective? GC: Apart from the SIM-based cryptography which is pretty unique to Wyless, the horizontal perspective essentially runs along traditional lines. What is different with these is that they are available directly from us. When you look at different verticals such as utilities, automotive, city infrastructures and so on, there’s an increasing need to cater for the unique requirements that are specific to that sector. This focuses thinking on what is really appropriate for each application. Security needs for different applications may not be the same. By tailoring security to individual sectors and applications, we can provide exactly the right levels and layers of security meaning that the costs involved are applied precisely according to need.

Security is a moving target and an area where we all need to be vigilant for our customers

Implementing pragmatic and grounded approaches that work in the real world is our goal. You need to get away from theory and put it into practice. This means that there’s a need to get right down to the detail involved in each vertical and demonstrate how it really works and benefits the users. RD-W: Can you have too much security for an application? Is there a risk of losing the cost-effective perspective?

GC: Security for each solution needs to be “right-sized” so that costs are appropriate for that particular solution. In practice, this means applying different levels of security for different reasons, with some being more costly than others because of the potential damage that could be caused by a breach. An easy example of this is a mission critical application, such as controlling a smart grid. Compare this with a much simpler application, such as monitoring humidity levels in a field, for example. The two are clearly not equivalent in terms of the potential damage caused by a breach. It is more justifiable to have a higher level of security for the smart grid application, rather than trying to provide the same high level of security for both. To do so would probably make the field monitoring application financially non-viable. For each application, the cost of the security being provided needs to be weighed against the potential damage of a breach. RD-W: Taking this point a bit further, do you see different security challenges facing IoT solutions compared against traditional M2M solutions? GC: M2M is generally embedded in enterprise processes. The applications typically have clear specifications and architectural requirements and the end-to-end security requirements are clearly defined. The economics are bounded and it is usually pretty clear whether an application needs - or can sustain - a high level of security and the associated costs. Secure communication is a fundamental requirement and solutions are most often created in-house or by a number of trusted partners working together. ▼

this sort of robust technology for M2M security. The security keys for this are stored on the SIM card, so the M2M modem retrieves keys from the SIM, sends encrypted data to the server, which then decrypts the data using the same key. The same process also works the other way, sending data to the modem.

M2M Now - April / May 2015

With the Internet of Things, there are many developers and devices involved who are usually working independently. Security can often be an afterthought, rather than specifically defined in advance and communication often involves unsecured cloud environments. Looking at security from this perspective, new services and applications are continually being created that often draw on sources of information that were originally designed for another purpose. This is a completely different and much more dynamic security challenge than we have seen in the M2M world to date. Consider the hacking opportunities that come with millions of connected remote devices that have a long life span of ten years or more. During that time security vulnerabilities may increase and those devices become hackable. What happens next? Their current security arrangements may need to be updated and remotely managed with new security updates being provided. To achieve this with millions – or even billions – of devices, standards are an essential ingredient. The fact that there are currently limited security standards for M2M applications has not slowed market growth down. It is predictable that in IoT there may not be sufficient means of interoperating securely in large numbers and we therefore must consider what impact this may have on future IoT growth. It could be profound. RD-W: What are the issues that need to be addressed to move forward with all this? GC: These are issues for the industry to resolve together as a community. For example, how do we work together to provide consistent security solutions, from end to end? How do we do that so it doesn’t just add extra layers of cost and duplication? If it is too costly, users then have to start making decisions about what elements to leave out to bring budgets back in line, or choose to reduce the overall functionalities to achieve those savings. These are not really decisions that we should be asking executives to make. When faced with these sorts of questions,

M2M Now - April / May 2015

discussions inevitably revolve around the need to create new standards. There is no doubt that standards are required in order to fully develop what will increasingly become a large scale, consumer-oriented market. Standards typically take a long time to come about and the market is not going to just wait for that to happen. So, there’s an increasing need for market players to work together more informally in the meantime.

We must keep what is inherently a very complex area as simple and as cost effective as possible

We need to take account of the many issues that come from new technologies being introduced all the time, which in turn create new ways of doing things, which then themselves create new security and privacy issues. How can overall security be maintained while these changes are being introduced? In other words, how do you ensure you have security in your end-toend solution in a world that’s constantly changing? It requires a constant assessment of the security implications of changes as they are made, but not in a way that slows down or hinders the introduction of new ideas and new methods. This is a challenge that the whole industry has to resolve. RD-W: So, what’s the key message from all of this? GC: Make security cost effective enough to enable the mass adoption of IoT and M2M solutions and ensure it’s achievable through good practical and directly relevant standards that benefit all our customers. We must keep what is inherently a very complex area as simple and as cost effective as possible. We must focus on and understand the actual needs of businesses and consumers in all their rich variety and help them to achieve those ends by applying new and innovative technologies – but in implicitly secure ways. Gilli Coston is chief strategy officer and EMEA managing director for Wyless. Gilli spent over twenty years at O2 and Telefonica, with her final position being as General Manager of M2M for Telefonica O2 UK. After that, she joined consulting firm CGI. Gilli is the Wyless Board member for the International M2M Council (IMC).

OPINION

Sean Lorenz, LogMein

We must settle consumer fears about the Security of Things The Internet of Things (IoT) is already revolutionising consumers’ lives. Smart meters and thermostats are reducing energy bills while wearable technologies are helping to make us healthier. But, for IoT to truly take off, Sean Lorenz at LogMeIn believes the industry needs to allay consumer fears about security.

A recent study by KPMG found that 62% of consumers in the UK believe that businesses were not showing enough concern for privacy and security, while 70%t believed that it’s too easy for things to go wrong in our hyper-connected world. No doubt these fears are being fuelled by high profile stories of connected devices being hacked or not configured properly, resulting in data being compromised. Organisations looking to manufacture connected products need to make security their number one priority, ensuring that what they’re putting on the market is resilient and robustly protects its owners. This was a point made by the head of the US’s Federal Trade Commission, Edith Ramirez, at this year’s CES event in Las Vegas. Ramirez told delegates that IoT products should not damage the well-being of consumers and that connected products should have robust security built in. Unfortunately, many traditional manufacturing companies are not geared up to do this. They might be great at designing and making their products, but they simply don’t have the expertise to ensure the security of those devices once they’re connected to the web.

Data is the biggest challenge With IoT, the amount of information captured about our lives is unprecedented. Businesses looking to retrieve and store data from connected devices need to ensure that it’s kept safe, otherwise they will come across as the perpetrator, rather than another victim, in the event of data theft. Our data not only needs protecting, but companies also need to be transparent about how they’re using it. For example, what many people don’t realise is that most ‘free’ apps aren’t free at all; it’s just that the provider is capturing and using our data as payment. This needs to change and companies need to let consumers know what they’re doing with their information.

Identity and access Closely connected to the idea of data use are identity and access, which are at the heart of privacy and security. It’s no longer just you that interacts with a device but any number of people including installers, vendors, or building managers. Consumers will want assurances that their devices and associated networks have authentication protocols in place to guarantee that only those with permission can access them. While you can have central defence boxes in and out of the network, like those offered by BitDefender, manufacturers still need to ensure the integrity of their products. As such, make sure you have two levels of interception. By all means have a defence box, but the device needs its own security as the user is not always going to connect the device through their home router.

Security tests When looking to create a connected product, manufacturers need to think about best practice security tests for ‘the board’, on ‘the wire’ and in ‘the cloud’. If you can secure things in these three key target areas, you are closing those security loopholes. • The board – consider the security of the physical device, for example, can anyone tamper with it? • The wire – how are messages securely encrypted while in transit over-the-wire? • The cloud – what authentication and identification procedures are in place and who has access? Sean Lorenz is technical product manager for Xively at LogMeIn. He helps drive the Xively Internet of Thingsplatform roadmap and works closely with customers to understand how connected products and operations can help transform their businesses. M2M Now - April / May 2015

OPINION

“Security has often been an afterthought in the manufacturing process with little consideration given to how sensitive customer and user data could be accessed.” Donald Schleede is information security officer at Digi International, a Minnesotabased manufacturer of embedded systems, routers, gateways, and other communications devices for machine-to-machine (M2M) systems. Schleede manages Digi’s Device Cloud, a cloud-based device-management solution that provides Digi’s customers with secure, remote access to Digi devices.

Eliminating vulnerabilities from M2M device manufacturing With the recent release of the US Federal Trade Commission’s report on IoT device security, now is the time to start evaluating the security of devices themselves, says Don Schleede, information security officer at Digi International. This obviously includes how they are manufactured. Security has often been an afterthought in the manufacturing process with little consideration given to how sensitive customer and user data could be accessed and what malicious actions could be taken by an IoT system if it came under the control of the wrong people. Manufacturers can take a much stronger role in protecting data and devices – and the following is a checklist of concepts that should be considered by manufacturers and included in all designs for IoT and M2M devices and processes. • Training and Tools: Invest in targeted training to ensure your engineers and testers understand security coding techniques and can properly and fully assess the risks of their designs. Utilise programs such as Open Web Application Security Project (OWASP) and look for security certifications and training from organisations like ISC2, GIAC and EC-Council. It is also crucial to invest in tools and software that can measure vulnerabilities, scan code for unsecure usage, and examine the devices’ functions.

particularly in the IoT space, when symmetric and asymmetric encryption are needed and are critical. • Hashing: Use a one-way non-decryptable technique for storing passwords. Make sure all hashes use a random salt value that will protect against many common attacks. The misuse of hashing is critical in design and has led to many breaches in the past. Recommended hashing algorithms include SHA-2 and PBKDF2. • Identification: Ensure all actions performed by a device have some form of identification. This could range from a user logging into a device with the proper role-based access controls (RBAC) to data transmissions from the device. Keep in mind that a device needs authentication as well – and be sure the device authenticates with the collection or control application. One suggested methodology is private key infrastructure (PKI) certificates to identify and authenticate devices.

• Default Configurations: When your product ships, ensure that the base threshold of configuration to get the device to work is standard and part of a secure installation process for the customer. For instance, there should be no default passwords, secure protocols (e.g. https) should be in effect, and administrative interfaces should be disabled in places that may expose features to the internet. Let the customer override those features later if desired.

• Firmware updating: Create a process for the device to automatically update itself while in service or make it easy for the customer to update the device. Most IoT devices have long lifespans - some up to 15 years. However, the secure lifetime of a device in reality is around six months or less. Because a secure device shipped today will no longer be a secure device in six months, manufacturers must create new software versions that can be easily massdeployed.

• Encryption: Ensure that all ingress and egress data and control connections are done using a secure standard such as SSL/TLS. USA Federal NIST standards (such as FIPS140-2) are also a good place to start and cover the use of encryption such as AES128 or AES256. Understand,

If you build these functional requirements into your next IoT device, you will be in a much better position to address security concerns with future products and services and your customer and user data will be far better protected.

M2M Now - April / May 2015

COMPANY PROFILE

AT&T in the Transport and Telematics Markets Telematics has over the decades reshaped the transportation industry. Fleet Management (FM) systems based on satellite positioning and wireless communication have gradually been established as crucial enablers of business-critical functionality such as vehicle, transport and driver management, and regulatory compliance and reporting. In North America, the growth of the FM solutions market has been propelled by regulatory developments such as CSA (Compliance, Safety, Accountability), and the market is now also driven by the forthcoming ELD/EOBR (Electronic Logging Device/Electronic Onboard Recorder) mandate. Rickard Andersson reports. The number of FM systems in active use on the North American market is forecast to grow at a compound annual growth rate (CAGR) of 15.3% from 4.6 million units in 2014 to 9.3 million units by 2019. The top ten fleet management providers in North America already represent more than half of the active units in the region. The industry is in a consolidation phase involving local as well as international providers. Berg Insight anticipates a future scenario where the global fleet management market is dominated by a handful of providers with installed bases measured in the millions. The North American fleet management market (2014-2019)

as a sales channel enabling wide reach among fleet-owning companies. Subscription fees for fleet management services can in some cases even be conveniently charged on the customerâ&#x20AC;&#x2122;s phone bill.

AT&T in the transportation sector AT&T has extensive experience in serving the US transportation market. Out of AT&Tâ&#x20AC;&#x2122;s close to 20 million connected devices in service, transportation-related M2M applications account for around 3 million units in North America. Nine out of the top 10 fleet management solution providers on the US market use connectivity services from AT&T. A specific focus on the transportation vertical was launched nine years ago when the company started moving beyond M2M communication to develop in-house expertise for sales of fleet management solutions to its business customers. AT&T today has 7,000 sales people trained to sell transportation solutions such as FM and 50 specialists are specifically focused on the transportation sector. In addition to commercial vehicles and its drivers, the company also offers solutions for other assets including trailers, containers and equipment in the field.

Technology developments and operator involvement AT&T has identified a number of trends related to transport and telematics. Truck OEMs are to an increasing extent expected to factoryfit on-board hardware on their vehicles, while aftermarket FM providers focus on software solutions

Most FM solutions are today delivered using SaaS models based on monthly subscriptions granting fleet customers access to web-based portals. There is also a general shift in the telematics hardware footprint from specialised on-board computers towards greater use of standardised off-the-shelf hardware and even mobile platforms for certain applications. Many mobile operators active in the M2M/IoT market have diversified beyond mere machine-tomachine communication to also offer end-to-end solutions to business customers within various verticals such as transportation. Solutions are oftentimes offered in partnership with established FM providers and mobile operators have increasingly come to play an important role

Fleet management portfolio AT&T employs a partnering strategy and works with a number of well-known solution providers. The company resells FM offerings from partners including Complete Innovations, Webtech Wireless and NexTraq using AT&T branding. The AT&T Fleet Complete suite is powered by Complete Innovations and includes the Fleet Tracker, Asset Tracker and Action Tracker products, tailored to track and communicate with fleet vehicles, assets and mobile workers respectively. AT&T Fleet Manager and AT&T Fleet Driver Center are provided by Webtech Wireless. The former is a telematics solution suitable for commercial fleets including transportation and service companies as well as government fleets, while the latter among other things enables compliance with FMCSA and DOT regulations. The solution portfolio furthermore includes AT&T Fleet Center which is an affordable and easy-touse vehicle tracking and FM solution powered by NexTraq. â&#x2013;ź

Fig. 1: The North American fleet management market is expected to experience strong growth in the upcoming years

M2M Now - April / May 2015

XRS from AT&T in addition provides a complete ELD solution based on a small piece of hardware that is paired with a mobile device via Bluetooth, powered by the Omnitracs subsidiary XRS. Mobile resource management (MRM) solutions from Actsoft are also part of AT&T’s portfolio of mobile productivity solutions. The company furthermore works with additional solution partners to fulfil specific customer requirements, commonly using a co-selling model.

Customers and common use cases AT&T’s full portfolio supports basic fleet tracking needs as well as consultative selection of more advanced solutions. Fleets commonly adopt telematics systems from AT&T to improve fleet management efficiency, proof of delivery and driver productivity by using applications supporting dispatching, routing, tracking, reporting and reduction of paperwork. Regulatory compliance, back office integration, work order management and temperature monitoring for refrigerated transports are other examples. The company serves customers having various light to heavy vehicles across all types of segments, from small field service fleets up to heavy duty trucking operations. Key segments are for example government, utilities, for-hire and LTL. Examples of customers include Saia, ConWay and Asplundh Tree Expert. The latter has adopted a fleet management system provided by AT&T in partnership with Telogis.

Competitive pressures on the US market Basic fleet management needs can be fulfilled by a wide range of providers. AT&T however portrays itself as being in an advantageous position to serve higher-end customer demands and largevolume accounts. The main competitors are the other major US operators including Verizon, Sprint and to some extent T-Mobile. The specialised fleet management solution providers are moreover seen as potential partners rather than competitors. AT&T describes its fleet management service portfolio as one of the broadest and most complete on the market. The company sets itself apart from the competition by working with a strong ecosystem of partners, offering a range of solutions designed to appeal to the needs of all segments in the transport sector. AT&T’s history of success on the transportation market as well as its network and global SIM capabilities are further pinpointed as differentiators.

Fig. 2: Overview of AT&T’s Field Solutions portfolio including Fleet and Asset Management and other mobility solutions

Future trends and IoT developments AT&T has identified a number of trends related to transport and telematics. Truck OEMs are to an increasing extent expected to factory-fit onboard hardware on their vehicles, while aftermarket FM providers focus on software solutions. The under-penetrated SMB market is characterised as an important target for future fleet telematics sales given the substantial opportunities among current non-adopters. Regulatory developments including the ELD/EOBR mandate are moreover expected to drive sales in the heavy duty truck segment in the coming years. Other trends are related to safety-oriented reporting and immediate feedback to drivers. There is moreover increasing demand for invehicle Wi-Fi hotspot capabilities, as well as solutions that improve the work environment for truck drivers by emulating the experience of connected passenger cars, thus contributing to improved driver retention. Fleets are in the future expected to use vehicle data in a more analytical fashion together with other types of data sources to realise efficiencies, including the use of predictive capabilities for maintenance as well as operations. The Internet of Things is - together with Big Data - expected to create a marketplace for data analytics, feeding into decision support for fleet management and other solutions.

Rickard Andersson, senior analyst at Berg Insight, is focused on the telematics market. He holds an MSc in Industrial Engineering and Management from Chalmers University of Technology.

Berg Insight Berg Insight is a dedicated M2M market research firm based in Sweden, specialising in all major M2M/IoT verticals since 2004. Berg Insight can offer numerous market reports, detailed market forecast databases and advisory services. We provide custom research tailored to your requirements including focused research papers, business case analysis, go-to-market strategies and bespoke market forecasting. www.berginsight.com

M2M Now - April / May 2015

INTERVIEW

Mike Lang, SVP and president, industrial IoT and M2M solutions at Numerex, recently spoke to M2M Now about the company’s strategic direction, differentiators and current focus on transport and telematics. M2M Now: Can you provide us with a brief overview of Numerex? ML: Numerex started by providing telemetry data solutions over 20 years ago. We now specialise in IoT business platform services, technologies and products for organisations worldwide. We have built solutions for many hundreds of customers, including off-the-shelf, customised and white-label installations and currently support over 2.5 million connections. Headquartered in Atlanta, we are a publicMike Lang, traded company on the NASDAQ Stock SVP, Numerex Exchange.

through a single application. Our long legacy of bringing M2M solutions to the market is another important differentiator. M2M Now: What do you see as the key trends affecting the M2M market and Numerex over the next 12 months? ML: Firstly, the adoption rate among enterprises will increase rapidly in several vertical markets. For Numerex, these markets include asset ID and tracking for emergency response; asset logistics solutions for manufacturing and distribution; remote monitoring control applications for oil, gas and water; tank monitoring of bulk liquids; monitoring for solid waste management; and remote healthcare monitoring, among others.

M2M Now: What are the key M2M capabilities that Numerex offers?

M2M data will also become much more complex as increasing numbers of ever more diverse device sensors are connected. Devices will become more intelligent, while there’ll be a growing desire to turn this ‘big data’ into actionable “smart data.”

ML: As a single-source M2M service provider, Numerex delivers comprehensive solutions across many sectors including enterprise and personal security, government, healthcare, energy and utilities, financial services and transportation.

Security will also be critical. Numerex was the first M2M service provider in North America to be ISO 27001 certified for information security. Satellite-based M2M will also grow as organisations monitor and safeguard assets in remote locations or need fail-safe strategies in disaster recovery.

There are four key verticals – safety and security solutions, asset ID and tracking, asset logistics and remote monitoring and control. Our customers can efficiently, reliably, and securely monitor and manage assets remotely, while simultaneously simplifying and speeding up development and deployment.

M2M Now: Can you explain a bit about your focus on transport and telematics?

Our solutions are positioned as Numerex DNA® - hardware Devices, Network services and software Applications. Through Numerex’s open Platform-as-a-Service architecture, we eliminate the technical, management and cost barriers often involved in deploying advanced devices and smart services. M2M Now: What are the key characteristics of Numerex that differentiate you from your competitors? ML: Essentially, these are Numerex DNA I mentioned, and the proprietary Numerex platform. Our ISO-certified global network offers cellular and satellite connections, seamlessly handling all aspects of connectivity – which includes the necessary regulatory requirements. All the necessary components that enable any M2M solution are supplied by us – so customers don’t have to work with multiple vendors. Numerex platform services enable multiple devices to be connected to multiple wireless networks

ML: Numerex has a long history in enhanced telematics systems that help fleet management companies create good driver incentive programs, managing expectations for employees and customers. There’s also FASTrack PrePaid, which provides turnkey asset and theft recovery options with a low cost of ownership. This solution provides increased ROI and productivity and enhances safety for both employees and assets, using a cloud-based platform that’s network agnostic, with plans offered through one point of contact. For fullfeatured, flexible asset tracking and telematics, our FASTrack Fleet includes a configurable web-based application, a proven messaging network and a choice of devices. SmartGuide™ is our turnkey solution for fleet management, driver behavior and monitoring of tracked drivers and vehicles and has similar features and benefits. M2M Now: And what innovations are planned for this year? ML: We have a new device called nxLOCATE™ that uses cellular, satellite and hybrid connectivity for supply chain and high-value asset tracking, especially in remote locations. It has GPS and AGPS for precise positioning, a built-in accelerometer for ‘on movement’ transmission options, and over-the-air remote updates.

M2M Now - April / May 2015

ANALYST REPORT

CONNECTED CARS, FLEET MANAGEMENT AND TELEMATICS Keeping drivers informed and entertained - and vehicles running smoothly and safely

GOLD SPONSORS

CONTENTS

ANALYST REPORT

COMPANY PROFILES

PROTECTING SUPPLY CHAINS

ANALYST REPORT 30

M2M NOW INSIGHT REPORT Our series of specially commissioned Insight reports continues with Jeremy Green, principal analyst at Machina Research, looking at the connected car, fleet management and telematics markets. M2M has a critical role to play in keeping our roads and vehicles running smoothly and safely and, with global M2M connections in the automotive sector predicted to grow to 1.2 billion by 2024, representing a CAGR of 23%, it’s not surprising that this sector is attracting interest from investors, vendors and customers alike.

COMPANY PROFILES Numerex, AT&T and ORBCOMM offerings in this market are explained

INTERVIEW Jeff Smith PhD, chief innovation and technology officer at Numerex, focuses on the company’s upcoming launch of its nx-1 portfolio of expandable device platforms and how the first of these – its nxLOCATE™ device – can support and protect assets and supply chains across a number of industries

GOLD SPONSORS

ANALYST REPORT

The author is Jeremy Green, principal analyst at Machina Research

The Connected Car, Fleet Management and Telematics Until teleportation finally arrives – or fleets of delivery drones – M2M has a critical role to play in keeping our roads and vehicles running smoothly and safely. In a report specially commissioned by M2M Now, Jeremy Green of Machina Research examines this multi-faceted market

The Transport and Telematics sector is the largest and in some ways most exciting segment within the overall M2M market. Machina Research treats the sector as made up of two main components: • Connected Car – mainly focusing on privately owned motor vehicles, but also including those owned by a third party such as a rental company, leasing agency or car club • Fleet Management – mainly focusing on specific application/s related to managing groups of vehicles that are owned by organisations, driven by employees and managed as fleets. This includes trucking and logistics companies, service organisations, and taxi companies. It doesn’t include public transport operators, which we deal with elsewhere.

with a CAGR of 25%, compared to 23% for the market as a whole. This is shown on Figure 1 below. Figure 1 1,400,000 M2M Connections (000s)

Introduction

1,200,000 1,000,000 800,000 600,000 400,000 200,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

This report is split into two sections. The first looks at connected car opportunities and the second concentrates on fleet management applications.

The connected car opportunity Machina Research estimates that, at the end of 2014, there were approximately 125 million M2M connections in the automotive sector globally. By 2024 this will have grown to 1.2 billion, representing a CAGR of 23%. Europe, followed by North America, remain the largest market in terms of connections throughout our forecast period. However, the fastest growing region is Emerging Asia-Pacific,

Developed A-P

Emerging A-P

Europe

Latin America

MEA

North America

Figure 1. M2M connections in vehicle telematics by region 2014-2024 [Source: Machina Research, 2015] This market represents the intersection of a mature, wellestablished vehicle telematics industry – perhaps the oldest and most mature part of the overall M2M market – with a much broader and more dynamic connected car market, with a wider range of services aimed at fulfilling the needs of the driver, the passengers, and the automotive industry itself. To date the automotive market has been dominated by aftermarket devices – typically ‘black boxes’ fitted by an expert

M2M Now - April / May 2015

ANALYST REPORT

installer, integrated with the vehicle’s electronics via the CAN bus, and dedicated to a single application such as usagebased insurance or stolen vehicle recovery. But the market is in transition, with factory-fitted embedded connections playing an increasing important role. By 2024 there will be some 624 million such connections, and they will be built in to the majority of new vehicles. The embedded category will be growing much faster, from about one third of connections in 2014 to more than half in 2024. This is illustrated in Figure 2 below.

M2M Connections (000s)

700,000 600,000 500,000

• In-car entertainment & internet access – the provision of video, audio and gaming content as well as simple raw bandwidth for, for example, internet access. • Vehicle navigation – connected turn-by-turn navigation. • In-car voice – Voice as part of a vehicle platform concierge service such as GM’s OnStar. • Usage-based insurance – Pay-as-you-drive insurance. This can take several different forms, such as recording more or less granular details of vehicle usage (e.g. time of day, distance driven, acceleration, harsh breaking) and providing feedback to the insurance company and/or the driver. This is sometimes provided in real-time to indicate the impact of driving behavior on insurance premiums. • Lease, rental, HP and share car management - The monitoring and tracking of vehicles that are used by private individuals or commercial organisations - but owned by third parties such as rental agencies or car clubs.

400,000 300,000

• Vehicle diagnostics – data used by the automotive OEM themselves for vehicle diagnostics, maintenance scheduling and monitoring user experience.

400,000 100,000 -

Factory Fit

After Market

Figure 2. Factory fit vs. after market devices 2014-2024 [Source: Machina Research, 2015]

The shape of the M2M opportunity in Automotive We characterise M2M in the automotive sector as dominated by ten main application areas. These are as follows: • Vehicle platform – the central vehicle computer which supports multiple applications as well as features not separately chargeable, like ‘find my car’, remote heating activation and remote door lock/open. • Stolen vehicle recovery – vehicle tracker predominantly for the purpose of stolen vehicle recovery.

By the end of our forecast period the vehicle platform itself accounts for the greatest number of connections, with Usage-based Insurance the second largest category. Note that In-car voice, as a service provided on the vehicle platform, does not itself account for any connections. This is shown in Figure 3 below. 1,500,000 M2M Connections (000s)

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

1,000,000

500,000

• Emergency call – automatic or manual alerts to emergency services that an accident has occurred. • Roadside assistance – applications that users can use to contact their provider of roadside assistance and help with vehicle location.

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

In-Vehicle Emergency Call System Usage-Based Insurance Vehicle Diagnostics Stolen Vehicle Recovery Roadside Assistance

In-Vehicle Entertainment & Internet Access Lease, Rental, HP & Share Car Management Vehicle Navigation Vehicle Platform Fleet Management

Figure 3. Connections by application 2014-2024 [Source: Machina Research, 2015]

M2M Now - April / May 2015

ANALYST REPORT

What’s driving the advent of the connected car? A wide range of trends are behind the drive to connect the world’s vehicles. The automotive industry has its own reasons for wanting to put connectivity into its products. In developed markets growth is slowing or has stalled altogether. As with other consumer markets the mid-market is shrinking, with customers moving to either luxury or value brands. There is increased competition from new entrants, and margins are under pressure. The industry is aware that it has only a tenuous relationship with the final customer. Even though after sales service accounts for perhaps as much as half of the revenue that cars create, many car buyers go elsewhere for service once their warranty has expired. From this perspective the ability to add connected services gives the automotive OEMs hope that they can create innovative driver-oriented services that will bring in new revenue streams, reach out directly to the end customer so as to deepen the relationship, win valuable after-sales service business, and differentiate their cars from those of their competitors. In one sense, they are pushing at an already open door. The ICT industries also see automotive as a major opportunity for growth. For mobile network operators facing saturation in the personal mobility domain, M2M is a new and largely untapped market, and the automotive industry is conveniently structured as a B2B opportunity with a small number of very large customers. The arrival of Big Data, the Cloud, 4G and dedicated M2M provisioning platforms means that the telecoms industry has some new tools to offer to the automotive sector. Moreover, the major mobile OS players – Apple, Google, Microsoft and Blackberry - are all looking to the automotive head unit as the next screen to colonise, and each is bringing their own particular perspective on business models, user interface, and content and applications distribution and discovery, to the in-car experience. There are external drivers too. There is automotive-specific regulation, like the EU’s eCall mandate, which requires that car manufacturers ensure that new vehicle models can initiate an

automatically generated emergency call which includes data about the car’s position in the event of a crash. After years of delay the legislation has now been ratified by the Council of Ministers and the European Parliament, and the requirement comes into force from March 2018. A similar requirement now exists in Russia, where the ERA-GLONASS system is already operational. Regulations to require new vehicles to be tracked in the event of theft have also been mooted in Brazil, though here too there have been prolonged delays, and the eventual adoption and implementation of this seems increasingly distant. Other regulation, including more stringent pollution rules and CO2 emission constraints, also push car makers towards connectivity, not least because they make electric vehicles more attractive, and these can benefit from connectivity even more than conventional cars. Increasingly, would-be car users will simply expect cars – like most other things that they own or use – to be connected to the internet. The next generation of car purchasers simply won’t accept un-connected cars. It will seem natural to be able to access web applications and content from the driver’s seat, albeit in ways that are appropriate to an in-car context. This will include both car-specific applications like parkingspace finders, and more access to the same services that are available in other contexts, like social networks and streaming media. The idea that in-car users should only have access to media content that they physical brought with them into the vehicle, or broadcast media not targeted to their specific preferences, will seem quaint.

Changing demographics – don’t buy, rent In fact, car users may not be car buyers, or car owners, at all. In Europe and North America fewer young people are buying cars. In major cities across the developed world the proportion of households that don’t own a car is growing. The average age of first car purchase has got progressively older over the last 25 years. In keeping with the general trend towards preferring access to ownership, the sharing economy model is on the rise in the automotive domain. Car clubs like ZipCar and Mobility are increasingly popular, and there are

M2M Now - April / May 2015

ANALYST REPORT

also even more disruptive P2P car-sharing players like the US RelayRides and BuzzCar in France. Even the major car makers are now getting in on the act. BMW already provides DriveNow in partnership with German rental company Sixt, Ford operates Ford2Go, Daimler has both Car2Go and the broader-concept Moovel, and VW has Quicar. Peugeot has the Mu rental service, while GM has partnered with RelayRides, and uses its OnStar platform and embedded technology for connectivity. All of these need for cars to be connected, to protect against theft and abuse, to monitor and bill for usage, and to make cars easily available to users via smartphone apps and digital keys. And, looming like a spectre over all of these is the admittedly still-distant prospect of Google’s self-driving car. This is not only a tremendous feat of IT and artificial intelligence which will need high-bandwidth connectivity, but also follows a ‘cars-as-a-service’ model. Google doesn’t expect that customers will own self-driving cars. Instead they’ll summon them when they are needed, use them for a journey and then send them off to wait or be used by someone else. We have illustrated these dynamics in Figure 4 below.

User/buyer behaviour • Sharing economy • Digital native expectations • Car as a service

Auto Industry Dynamics • Competition and new entrants • Slowing growth • Demand for new revenue opportunities

External environment • Demographics • Regulation • Urbanisation/ traffic congestion • CO2 constraints

Connected Cars

ICT Industry Dynamics • Telecom market saturation and declining ARPU • M2M connectivity • Big Data • OS player strategies

Figure 4. Factors driving the advent of the connected car [Source: Machina Research, 2015]

M2M Now - April / May 2015

Market barriers That’s not to say that the road to the connected car is going to be all plain sailing, to mix a metaphor or two. There are a number of potential obstacles – some technical, some commercial and some even regulatory – that will tend to slow the deployment of in-car connectivity. First among these are the unresolved tensions between different models of connectivity. Automotive OEMs have taken different approaches to in-vehicle connectivity. One major difference is whether the OEM adopts a ‘built-in’ or a ‘brought-in’ approach. The former uses embedded connectivity, while the latter is typically handled via smartphone tethering. Using a handset removes the requirement for additional dedicated connections. This effectively reduces the scale of the connected car market in terms of numbers of connections, although not the impact. It also changes the commercial dynamics of the solutions. While it is hard to generalise, mass market OEMs such as Ford or Kia tend to favour a brought-in approach, whereas more luxury marques tend to opt for a built-in approach, or a combination of the two. Advocates of brought-in connectivity point to the ease of upgrade, transferability of content and lower cost. Advocates of built-in options highlight ease of use, the need for ‘automotive-grade’ user interfaces for use while driving, and the need to use some services while the driver is not in the vehicle, for instance remote activation of air conditioning. At the very least there is likely to be continued pressure from smartphones and their application environment on the potential market for embedded connectivity.

Where’s the intelligence – and the spectrum? Another factor that will have implications for the amount of traffic generated by M2M connections is whether the intelligence resides on the network or in the devices. The last few years have marked a sea-change here and much of this is due to one key factor: the advent of increasingly ubiquitous access to broadband networks. This allows the intelligence to reside on the network rather than on the device itself. The

ANALYST REPORT

next five years may herald the shift from offline to online intelligence. The availability and accessibility of networks is not quite at a sufficient level today to allow on-device intelligence to be fully abandoned. Machina Research will be watching this dynamic with some interest over the next few years. If, as expected, the shift takes the form of less intelligence on the device and greater connectivity, it will be manifested in M2M as much as in any other connected devices and the implications of the advent and timing of this shift for M2M traffic and revenue is quite substantial. A further issue relates to the uncertainty over future network standards. The most prominent challenge is that MNOs will elect to switch off 2G (or even 3G) networks and refarm the spectrum for use with LTE. In the US AT&T has already declared that it will switch off its GSM/GPRS/EDGE network in the US by the 1st January 2017, and Verizon Wireless has indicated that its CDMA network would likely be switched off from 2022). In Australia Telstra has declared its intention to switch off GPRS at the end of 2016; 2G is already gone from Japan and Korea. We expect that M2M connections in this area will be increasingly dominated by 4G as factory fitted connections grow in importance, because automotive OEMs will seek to make their platforms as future proof as possible, both in terms of network technology evolution and application requirements. However, there will remain significant niche opportunities in some applications for satellite connectivity and, more importantly, for Low Power Wide Area networks. Figure 5 below shows the breakdown of M2M connections by technology.

As a result, automotive manufacturers should be wary of allowing the installation of modems in vehicles if there is a risk that the networks upon which they depend, be they 2G or 3G, will be switched off during the anticipated lifetime of the vehicle. We expect that most OEMs will opt for multi-mode devices including 2G, 3G and LTE, with increasing amounts of LTE between 2015 and 2020. But other solutions are also under consideration, including the possibility of modular incar units and also the option for over the air (OTA) reprovisioning of the device and SIM from one network to another. Of course, none of these challenges really apply where connectivity is provided via smartphone tethering, as is the case with Ford. Here technology upgrades, or network switching, is effectively handled by the user.

Whose platform – and who pays? This points to another related issue – the automotive unit’s operating system (OS) and the ecosystem that goes with it. One aspect of this is the relative openness of the platform: whether it’s a proprietary walled garden where the manufacturer alone will develop applications, or an open platform such as Android with a large third-party application development community - or maybe some ‘half-way house’ with a closed platform supporting some open elements? The answer to that question will determine factors such as how secure the platform is, what functionality is available and, consequently, which applications can/should run over it. Some application developers are likely to be eager to access the vehicle platform whereas others will be happier with their own stand-alone black box. The nature of the vehicle platform, and particularly foot-dragging in opening up the platform, could result in slower development of applications.

M2M Connections (000s)

1,000,000

Evidence from the handset space suggests that OEMs are not the best placed to decide the OS. A more open application development environment would pay dividends in terms of superior applications, but manufacturers remain cautious towards this.

900,000 800,000 700,000 600,000 500,000 400,000 300,000 400,000 100,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2G

Low power wide area

MAN

Satelite

Figure 5. Global M2M connections by technology 2014-2024 [Source: Machina Research, 2015]

The OEMs want to stay in control of the look and feel of their products, and they fear being disintermediated by the big OS players like Apple and Google. They also believe issues of security and reliability mean that they need to maintain a high degree of control over the system. Combine this with a highly fragmented application development environment, with different OSs for different OEMs, and this makes a less-thanappealing target for application developers. Many application developers protest that automotive OEMs do not provide enough support or revenue share for the applications, or enough help on content discovery. However, there are reasons

M2M Now - April / May 2015

ANALYST REPORT

to be positive about the future. There is increasing use of standardised application development environments including traditional mobile OSs, and an open standard for vehiclebased initiatives in the form of GENIVI. It is moving slowly, but the application environment is gradually opening up. Other possible road-blocks include regulatory uncertainty, as with the shifting deadlines for both the EU’s eCall initiative and the Brazilian government’s SIMRAV mandatory requirement for stolen vehicle tracking capability. Still with regulation, there are concerns about data privacy, about the users’ freedom to choose their own roadside assistance and insurance provider independently of the choices that the OEM may make, and about the security risk from cyber-attacks. Unsurprisingly, there is a cost associated with embedding almost any of these capabilities into a vehicle. In many cases this cost will be assumed by a third party as part of a wider service subscription, e.g. insurance telematics or a stolen vehicle tracker. In other instances the automotive OEM may assume the cost in order to provide access to further revenue streams, e.g. car servicing linked to vehicle diagnostics, or vehicle platform services such as voice or satnav that the end user pays for on a monthly basis. The third scenario is where the enduser pays directly for the additional device, such as a satnav. Similarly, the model for who pays for which services and how is far from resolved yet. For aftermarket devices such as connected navigation devices there are a simple set of models for payment. However, for applications that reside on the built-in vehicle platform, the dynamics are not so clear. The tried-and-tested model for payment for cars is as a one-off payment. However, this will not really work for ongoing connectivity.

as fleets. These include vehicles in transport and distribution, but also field service vehicles and taxi fleets where a dedicated device is used for a data-oriented dispatch system Across each of these types, the applications can be thought of in three main ways: • Vehicle-related – Fleet management is the most mature and typically comprises vehicle tracking as part of supply chain management. Vehicle tracking is the main application focus for the forecasts included in this report but we would also include specific applications related to supply chain management such as scheduling and job allocation in this category. Scheduling applications would apply not just to the driver of the vehicle but also to other support workers such as repair teams. • Cargo-related - Supply chain management such as consignment tracking, job allocation, routing and freight monitoring. (For the record, we count the tracking of containers and trailers elsewhere). • Driver-related – These are typically driven by cost savings and meeting regulatory requirements. Driving style analysis allows the company to reduce fuel consumption, reduce CO2 emissions (eco-driving), and potentially reduce insurance premiums. Regulatory requirements include monitoring that drivers are taking the appropriate breaks and, in some countries, meeting duty of care requirements for lone workers. Measures to monitor and control personal use of company vehicles are also included. At the end of 2013 there were approximately 11 million Fleet Management connected devices worldwide, as shown in Figure 6 below. By 2023 we expect that to grow to 60 million, plus another 10 million vehicles connected via a factory-fit connection.

M2M Connections (000s)

With regard to high bandwidth services requiring a separate subscription, there are really three options. The connectivity could be handled through smartphone tethering and go on the driver’s bill. Alternatively it could be carried via the dedicated car connection, but with data usage billed to the user’s phone bill. GM has set out its plans to allow users more flexibility to do just this. A third option is to let users bring in their own SIM card for the car connectivity, which might be billed separately, or again to a phone bill. Audi in Europe and Volvo both permit the user to bring in their own SIM.

60 50 40 30 20 10 0 2013 2014

The long rise of fleet management Fleet management is often considered as one of the more mature M2M sectors, but it is still growing rapidly and evolving in many different ways. As defined by Machina Research, it covers the tracking and monitoring of road vehicles managed

M2M Now - April / May 2015

2015

2016

Developed A-P Emerging A-P

2017

2018

2019

Europe Latin America

2020

2021

2022

2023

MEA North America

Figure 6. Global M2M connections in the Fleet Management application 2013-2023 [Source: Machina Research, 2014]

ANALYST REPORT

Total M2M revenue (US$ million, real)

M2M device revenue (US$ million, real)

M2M service revenue (US$ million real)

Developed A-P

599

1617

10%

148

189

452

1428

12%

Emerging A-P

200

1306

21%

165

14%

156

1141

22%

Europe

637

2322

14%

164

305

473

2017

16%

Latin America

129

853

21%

122

15%

731

22% 24%

MEA North America Total

506

22%

16%

433

1291

6688

18%

325

1003

12%

966

5685

19%

2924

13292

16%

728

1857

10%

2196

11435

18%

Figure 8. M2M revenue for the Fleet Management Application Group 2013 and 2023 [Source: Machina Research, 2014]

Today Fleet Management is mainly about narrowband data. There has been some talk about adding real-time video to applications for security, safety, and even for monitoring driver behaviour where privacy regulations permit, but for the most part it is just that – talk. There have been some interesting deployments of video cameras in telematics, but these almost all use locally stored footage, recorded over when storage is full and only retrieved if required to support or defend a claim. Where devices and connectivity are being upgraded to support 3G and 4G, the main driver has been maintaining compatibility with future network plans rather than the requirements of the application. This means that 2G and 3G will hang on rather longer in this application than in others, as Figure 7 below illustrates.

M2M Connections (000s)

30 25 20 15 10 5 0 2013

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2G

Satellite

Figure 7. Global M2M connections for the Fleet Management Application by technology 2013-2023 [Source: Machina Research, 2014]

Fleet Management applications will generate substantial revenue, growing from US$2.9 billion to almost US$13.3 billion in 2023. This represents a CAGR of 16%. As shown in Figure 8 at the top of the page, the largest opportunity is to be found in the North American market which is not only the biggest global market but continues to experience significant growth (CAGR 18%). The use cases for fleet management are well established and mature – job management and scheduling, vehicle tracking and route optimisation, vehicle monitoring and preventative maintenance, driver hours tracking, and driving behaviour monitoring, which often includes fuel consumption reduction and accident reduction. The business cases for these use cases also seem to be well established. Suppliers and, to a slightly lesser extent, adopters of telematics technology point to savings in fuel consumption ranging from 10% to 25%, and

reductions in insurance claims costs as high as 70%. There are similar claims about increases in labour productivity, ranging from a 10% improvement up to 50%, and savings on maintenance costs too. Driver-related applications in particular are often about meeting regulatory requirements linked to safety considerations. Although the details of the specific regulations, which are usually country-specific, are in the process of changing, the basic requirement to track the time individual drivers spend at the wheel and the length of their rest breaks stays the same. Despite the maturity of the technology and the use cases, the fleet management sector is in something of a ferment at the moment. Among the traditional specialists there has been a flurry of mergers and acquisitions. Since 2011 Trimble has acquired PeopleNet, Punch Telematix and Tata’s telematics Indian division, GEOTrac in Canada, TMW, and ALK. Masternaut merged with Cybit in 2011, one of its key competitors in the UK market, and was itself acquired by FleetCor, a fleet payments provider, in June 2014. Telogis acquired Navtrak in July 2012 to increase its presence in the small to medium business market. In February 2014, Lysanda bought stolen vehicle recovery specialist TRACKER to create a new Tantalum Corporation including both B2B and B2C products. TomTom bought the telematics operations DAMS Tracking from parent company Diffusion Artistique et Musicale SAS (DAMS) in April 2014, and Fleetmatics bought the Italian company KKT which owns the routing optimisation and scheduling software Routist in June 2014. Everywhere one looks in Fleet Management the sector is in flux. Growth is still rapid, M&A is rampant, regulation is introducing new dynamics and service propositions are evolving rapidly. While it may be one of the longest established M2M sectors, it is hard to describe it as ‘mature’.

New routes to market But the turbulence in this market is not simply a game of musical chairs among the traditional specialists: outsiders have also been buying into telematics. Mobile network operator Verizon bought Hughes Telematics (HTI) in July 2012, which included fleet management assets as well some other verticals. In 2014 Vodafone bought Cobra Technologies, which in complement with its Zelitron asset offers a strong opportunity to pursue the fleet market. Beyond telecoms operators, the diversified company Danaher, from outside the telematics sector, bought Navman Wireless

M2M Now - April / May 2015

ANALYST REPORT

in January 2013. Oskando (owned by Ambient Sound Investments, an investment company created by the engineers who founded Skype) merged with Danish telematics vendor Autolog to create EcoFleet in September 2013. Omnitracs, originally a subsidiary of Qualcomm, was acquired by private equity company Vista Equity in November 2013 and subsequently acquired Roadnet Technologies and XRS. French tyre company Michelin bought Sascar, Brazil’s largest fleet management and telematics company, in June 2014. Most recently WABCO, a manufacturer of vehicle safety systems bought Belgium-based Transics in February 2014. Moreover, the vehicle manufacturers themselves, arguably the sleeping tiger of the telematics industry, have begun to take an interest, albeit often in partnership with the aftermarket specialist companies. Within the last year Telogis has announced arrangements with Volvo for Volvo Link, Ford for Ford Crew Chief, GM for OnStar for Fleets, Hino Trucks for Hino INSIGHT, and Mack for Mack Fleet Management Services. Daimler Virtual Technician, a remote diagnostics solution offered in North America, is provided by Zonar Systems. The relationship with an aftermarket supplier goes some way towards negating the major disadvantage of manufacturersupplied fleet management solutions, i.e. the presence within operators’ fleets of trucks from different OEMs. The possibility of pairing built-in connectivity and sensors with brought-in devices for the user interface and application framework may also shift the balance somewhat; Volvo’s Dynafleet and Daimler Fleetboard both offer a smartphone app dashboard as part of the overall solution. And this last development points to another potential disruptor: the future role of the major mobile OSs – Google, Apple and perhaps Microsoft. The Google Play Store and the Apple App Store both offer many low-cost applications which can be used by individual truckers and the managers of smallto-medium fleets. Examples include MyCarTracks, Fleet

Manager, Fleet 101 K2 Transportation Management System, Spedion, and Big Road. Microsoft has fewer apps in its portfolio, but the HERE mapping and navigation platform which it licenses from Nokia has real potential. There can be few truckers who don’t own a smartphone these days, even in emerging markets. A lightweight fleet management application, downloaded to a smartphone, updated automatically and provisioned with information from the increasingly sophisticated sensors within the device, interfaced with a web portal for the fleet manager, could prove an attractive alternative, especially for small companies without any sort of legacy IT estate. These small companies are in a way the most interesting segment of the fleet management market. While big in-house fleets and logistics companies have long appreciated the benefits of using telematics solutions, penetration at the smaller end of the market remains very low. Small companies, and independent truckers, who make up the bulk of the logistics industry in most emerging markets and not a few developed ones, remain unconvinced about the business case. Perhaps those apparently un-arguable demonstrations about cost savings contain some glaring flaw visible to small business owners but not to suppliers. Alternately, perhaps there is something wrong with the commercial aspects of the fleet management products and services that make them unsuitable for small and cash-strapped businesses. The entry of new kinds of player, with new sorts of proposition, into the fleet management market may turn out to be exactly what’s needed to bring the benefits of the technology to the smaller end of the market. The current round of turbulence may be an early sign of something better to come. For more information on Machina Research’s research and forecasts on the Fleet Management sector, you can contact us on enquiries@machinaresearch.com.

Principal analyst Jeremy Green joined Machina Research in September 2014. He has worked in the telecommunications industry in the UK, Australia and Hong Kong for over 30 years, most recently at the analyst company Ovum from 1999-2014. Prior to this he worked as Head of Market Planning at the mobile satellite services company ICO, and before that at KPMG and BIS. At Machina Research Jeremy focuses on the automotive sector as well as new and emerging companies and business models in the Internet of Things. Jeremy has a PhD in Science and Technology Policy from the University of Manchester.

M2M Now - April / May 2015

COMPANY PROFILE

Company Summary Founded in 1992, Numerex is a public-traded company on the NASDAQ Stock Exchange (NASDAQ: NMRX), headquartered in Atlanta, Ga. The company specialises in business services, technology and products used in the development and support of machine-tomachine (M2M) solutions for enterprise and government markets worldwide.

Company credentials

Key differentiators

As a truly single-source M2M service provider, Numerex has evolved from primarily a proprietary network services company into a comprehensive M2M solutions provider for the Internet of Things, serving a wide range of markets including enterprise and personal security, government, healthcare, energy and utilities, financial services and transportation. Numerex’s portfolio encompasses products and solutions across four key vertical markets – safety and security solutions, asset ID and tracking, asset logistics and remote monitoring and control.

Numerex emphasises providing secure, real-time device management, network and application solutions through two unique differentiators: Numerex DNA and a proprietary Numerex platform. Its ISO-certified global network offers cellular and satellite connections to handle all aspects of connectivity – including international regulations, processes and data requirements. Numerex DNA integrates all the necessary foundational components that enable an M2M solution through a single source, rather than requiring customers to utilise multiple vendors and partners. Numerex platform services enable multiple devices to be connected to multiple wireless networks through a single application.

The company’s M2M expertise enables its customers to efficiently, reliably, and securely monitor and manage assets remotely whenever and wherever needed. Numerex DNA® features hardware Devices, Network services and software Applications that are the foundational components of Numerex customers’ M2M solutions. Numerex has a long history in enhanced telematics systems that help fleet management companies create good driver incentive programs. Numerex packaged solutions in this area include FASTrack PrePaid which provides turnkey asset and theft recovery options with a low cost of ownership; FASTrack Fleet for full-featured, flexible asset tracking and telematics; and SmartGuide™ which offers a turnkey solution for fleet management, driver behaviour and monitoring of tracked drivers and vehicles.

Competitive pressures The M2M adoption rate among enterprises will rise rapidly this year in several vertical markets as organisations seek to fully realise the efficiencies and ROI that technology can enable. For Numerex, these markets include asset ID and tracking for emergency response; asset logistics solutions for both manufacturing and distribution; remote monitoring control applications for oil, gas and water; tank monitoring for the bulk liquid markets; monitoring for solid waste management, and remote healthcare monitoring, among others. Regarding competitive pressures, the M2M value chain is comprised of multiple vendors each specialising in different solutions, devices, platforms, middleware and vertical specific applications. Numerex’s ability to shift from vertically oriented systems, towards a horizontal systems approach, allows its proprietary technology to work across a variety of M2M industries.

M2M Now - April / May 2015

COMPANY PROFILE

Company Summary AT&T provides advanced mobile services, next-generation TV and high-speed internet services, and smart solutions for businesses. The company claims the best worldwide coverage of any U.S. carrier, with data roaming in more than 210 countries and territories, and 3G in more than 170 countries and territories. AT&T serves nearly all of the Fortune 1000, as well as neighbourhood businesses all around the US. It also offers solutions like highly secure mobile cloud and corporate network management.

Company credentials AT&T connects cars, machines, wearable devices and more. It is working with top automakers and technology companies to make customers' lives easier - so they can use their car to order a pizza on the way home, and then use a connected watch later that night to track how many extra steps they'll need to take at the gym the next day. AT&T is constantly innovating to find new connections in the Internet of Things. In 2014, it was issued an average of more than one patent per day. Additionally, AT&T provides carrier-grade IoT Managed Services for storage and next generation Rapid Application Development for new IoT Solutions. AT&T has spent the past several years pushing into the connected car market, with deals with General Motors, Nissan, Audi, Tesla, BMW, Subaru, Ford Motor Co. and Volvo. Elsewhere in the transport and telematics space, AT&T has connected over 1.8 million commercial vehicles, 900,000 usage-based insurance users, and 243,000 refrigerated containers. It is in the process of re-launching a unique global AirCargo Tracking solution.

Key differentiators AT&T monitors virtually everything, everywhere. It enables asset monitoring solutions across all major verticals including Energy, Transportation and Logistics, Healthcare, Aviation, Automotive, Construction, and Retail. It has more than 20 million devices deployed across the key M2M markets, including meter reading, fleet, transportation, air cargo, healthcare, automotive, construction, digital signage and retail. Its Global SIM enables connectivity in 200+ countries. AT&T’s customisable and scalable solution stack is designed to

M2M Now - April / May 2015

meet the unique needs of an enterprise, so customers can quickly implement IoT solutions and get to the bottom line faster, with increased efficiency, productivity, and visibility. Capabilities include pre-certified devices, global connectivity with a single SIM, a single online management platform, application development tools, pre-packaged vertical solutions, and a professional services team to help every step of the way. Also, their M2M Foundry supports IoT rapid prototyping and innovation. To make sure AT&T’s customer’s needs are met, it has developed strong partnerships across industrial companies, technology enablers, and IoT service providers. AT&T is a founding member of the Industrial Internet Consortium and has partnered with top industrial manufacturers, service providers, and technology enablers to accelerate IoT development, including GE, IBM and Rockwell Automation.

Competitive pressures In addition to its success in telematics, transport and automotive, AT&T’s Digital Life home automation and security business, which is only two years old, was the number one security company in terms of net subscriber additions in the US last year. Its emphasis and differentiation is completely different from other carriers who have stayed more in the traditional sense of focusing on adding smartphones instead of venturing into what is the next era. Specific to the transportation space, AT&T tries to differentiate itself by making it easier for transportation companies to create their own solutions. It works together with customers on new IoT Managed Services, making it easier for customers to develop solutions on their own via the AT&T Flow Designer and then store and access the data using the M2X Data Service.

COMPANY PROFILE

Company Summary ORBCOMM, one of the largest space-based global M2M companies, provides a comprehensive portfolio of M2M solutions and connectivity options to customers in the transportation and logistics, heavy equipment, energy, maritime and government sectors. The combination of global multi-network services (satellite and cellular), state-of-the-art devices and robust web-based applications allows customers to match unique business needs with M2M communications solutions for mobile and fixed remote industrial tracking, monitoring, control, and management. The publicly traded company is headquartered in Rochelle Park, New Jersey, USA.

Company credentials

Key differentiators

ORBCOMM solves customers’ operational, logistics and security needs through a suite of industry-specific M2M solutions, including a broad offering of global satellite and cellular networks, hardware, and software applications. By means of a global network of low-earth orbit (LEO) and geostationary orbit (GEO) satellites and accompanying ground infrastructure, as well as Tier One cellular partners, ORBCOMM’s low-cost and reliable two-way data communication services track, monitor and control mobile and fixed assets in specific core markets.

ORBCOMM has one of the widest single source selections of capabilities, from connectivity, to hardware, to software, supported by one of the largest engineering teams in the commercial M2M industry. The company’s networks and suite of integrated products and services enable the delivery of business critical information to and from virtually any place in the world - simply and affordably. Whether the assets are global cargo containers, trucking fleets, fishing vessels or military assets, ORBCOMM delivers data that provides context and meaning for critical decision making in the areas of process and product.

Through the recent strategic acquisitions of SkyWave Mobile Communications, InSync and Euroscan, ORBCOMM has become one of the biggest global commercial providers of two-way data satellite services exclusively designed for M2M applications with a complete portfolio of M2M devices, satellite and cellular airtime and applications. ORBCOMM is able to offer its portfolio in a reliable and cost-effective way. Its latest and most diverse selection of products comes with an extremely low cost structure. This framework enables ORBCOMM to engage with customers of all sizes without compromising customisation and customer support.

Competitive pressures ORBCOMM has the technology to bring all the necessary components together in flexible and economical ways. For instance, working with ORBCOMM, an enterprise is able to track and manage cargo with a variety of fleet management applications, including dispatch, electronic forms/signatures, location-based services, in-cab messaging and equipment data monitoring. The security and productivity of mobile workers and vehicles anywhere, even beyond the reach of cellular networks, is possible as well as compliance with insurance and government regulatory requirements with the availability of vehicle maintenance data.

M2M Now - April / May 2015

INTERVIEW

Jeffrey Smith PhD: Chief Innovation and Technology Officer, Numerex

Edge, meet Centre – Centre, meet Edge If there’s one recurring theme that runs constantly throughout history – it’s the tension between the centre and the edge. When it comes to innovation, overcentralisation often stifles innovation, while too much freedom often dances with failure. The trick is to find a happy and appropriate medium between these two extremes.

Attention is now starting to shift to see how a similar evolution of devices at the edge of M2M/IoT networks can also drive innovation in original and profitable ways. Thanks to advances in hardware and software, many more functions

beyond basic connectivity can now be engineered into those devices that sit at the edge of networks in our homes, cars, trucks, trains, factories, offices and cities. The question now is, how can we best exploit these developments to add value and increase efficiency in the wider businesses that they support? It was with these thoughts in mind that M2M Now’s Alun Lewis recently sat down to speak with Jeff Smith PhD, chief innovation and technology officer at award-winning M2M/IoT specialist Numerex, focusing initially on how the company’s upcoming launch of its nx-1 portfolio of expandable device platforms and, more specifically, how the first of these – its nxLOCATE™ device – can support and protect assets and supply chains across a number of industries. ▼

In telecoms, the last two decades have seen similar shifts. The old, highly centralised infrastructure of the PSTN, characterised by dumb terminals and intelligent switches, has been replaced by architectures that largely rely instead on the amazing processing power that we’ve managed to fit into mobile handsets and tablets. As that power has grown, it’s driven the creation of entirely new services, applications, business models and, indeed, an entirely new economy already worth trillions of dollars.

IN ASSOCIATION WITH NUMEREX M2M Now - April / May 2015

INTERVIEW

The ability to easily connect new sensors as they evolve has been a complementary factor in the development of the nx-1 technology

JS: The introduction of our own family of connected devices is just a natural expansion of our portfolio. We value our relationships with our existing third-party suppliers but Numerex also has core competencies, not only in device manufacturing, but also in providing network support and applications development. Our thirdparty suppliers add additional value in that they service a wide range of clients who are looking for an off the shelf solution that does not require heavy customisation. The build-on-behalf-of (BOBO) model is one that Numerex has always embraced and offered as an alternative to the out of the box configurations that we provide. Numerex offers a wide range of solutions that conform to the needs of our clients. We recognise that some of our clients need access to a greater degree of intelligence, functionality and flexibility at the edge of the M2M networks that we build and operate for them. There is value in being able to easily and efficiently connect and integrate a growing range of sensors into devices. That need is only going to accelerate as new sensor technologies – such as nanotech - emerge, increasing the ability of devices to monitor the environment around themselves, and create new services and revenue streams. In order to do this effectively, we must work closely with the clients to understand their individual business demands to develop a customised solution for them. The additional advantages of Numerex custombuilt solutions is that they are engineered and

optimised for the very highly specialised and demanding environments that they need to perform in. This frequently involves situations where harsh operating conditions exist, battery replacement or device upgrades are difficult or expensive to carry out, and standard form factors are unsuited to a customer’s specific requirements. Finally, some enterprise clients need to be able to see the whole M2M value chain as one single integrated entity. Very often when clients come to us with a particular operational issue that needs resolving, the reality is that the problem is actually only a symptom of something else that involves the overall systems, processes and structures that support the company. Having the ability to easily add functionality, more sensors, and new types of connectivity at the edge – and readily integrate these with our new iNSITETM cloud-based platform for rapid development and prototyping – brings transparency and dynamism to industries that have historically suffered from a silo approach. M2M Now: So where specifically does the nxLOCATE device fit into this shift? Why did you focus on these particular markets first? JS: While we’d been considering the implications of putting more intelligence out in the edge for a while, one particular catalyst came from a large international enterprise customer of ours who manufactured heavy equipment and was looking to identify blind spots in their supply chain. Working together, we identified a number of specific requirements for a device platform able to resolve the issues that they were facing. They needed easy-to-replace batteries, an 'adjust sensitivity' feature that uses accelerometers to track movements in different directions, an ability for the device to enter sleep mode when not actively tracking the assets. They also wanted greatly enhanced flexibility in reporting parameters and options including frequency and triggers. ▼

M2M Now: Jeff, Numerex used the CTIA show in the US last autumn to preview the nxLOCATE, a purpose-built device for the asset logistics, remote monitoring and asset ID and tracking markets. I understand that this initiative extends your reach by continuing to build your own portfolio and family of connected devices while continuing to support third-party devices as well. Can you talk us through how Numerex is able to support not only your own products, but those of other vendors as well?

M2M Now - April / May 2015

The Numerex nxLOCATETM is a purpose built device for the asset logistics, remote monitoring and asset ID and tracking markets

M2M Now: And has the nxLOCATE been deployed yet?

One critical – and often under-appreciated – aspect of this involves identifying the right metrics to be monitored. Just because you can measure something, this doesn’t mean that it’s actually important in terms of the overall business and the often difficult task of prioritising and streamlining operations. M2M Now: So how does nxLOCATE help resolve this issue? JS: If you look at the first generation of tracking devices, they were designed with a single and, in hindsight, overly simplistic aim in mind - that is, just knowing exactly where things were, which at the time, was a fairly revolutionary development. The new generation of tracking devices exemplified by the nxLOCATE – sees location as only one of many possible data points that can and should be collected and transmitted by a device. Instead, this new generation of devices will enable the collection, delivery and analysis of multiple data points from a range of different sources and sensors, taking us from a basic ‘dotson-a-map’ perspective to one where dynamic, real-time data becomes immediately actionable.

This helps eliminate the friction and delay that often hinders decision-making where remote assets are concerned, while also providing a wide range of data for historic analysis that can help spot anomalies or emerging issues before they negatively impact customers. M2M Now: The need to add more data points implies that more a more sophisticated way of gathering data is needed. How do developments in sensor technologies fit in with this? JS: The ability to easily connect new sensors as they evolve has been a complementary factor in the development of the nx-1 technology, hence our approach of creating a universal wireless gateway to give our customers the freedom to buy the right technology for their needs. However, not all of these drivers are coming just from business-related requests, as regulatory forces from governments and industries are also playing their parts. Examples here include the US Food and Drug Administration’s legislation requiring temperature monitoring of some pharmaceuticals such as vaccines during their transport. There are legal issues also at stake here, especially when it becomes necessary to support some operations – such as the transport of chilled or frozen food – with a clear audit trail in the event that a forensic analysis of a failure becomes necessary. Advances in gas-sensing technologies here, for example, can track organic decay in fruit, vegetables and meat, providing advanced alerting to owners of possible risk. The nxLOCATE supports both wired and wireless sensor connectivity for an almost infinite range

Some enterprise clients need to be able to see the whole M2M value chain as one single integrated entity

▼

JS: We’re currently working with customers in the area of supply chain and logistics who are beta testing the product before the formal launch. Their increase in their visibility of goods and services was immediate. This in turn has lowered operational costs and maximised their ability to plan the use of the human and physical resources far more effectively. More specifically, the richness of the data now available to them gives them valuable insights into potential ‘holes’ within their overall supply chains. This allows them to specifically target gaps where intelligent investment or changes in operational tactics and strategy will provide the maximum benefit both to them and to their own end customers.

IN ASSOCIATION WITH NUMEREX M2M Now - April / May 2015

INTERVIEW

The new generation of tracking devices exemplified by the nxLOCATE – sees location as only one of many possible data points that should be collected and transmitted by a device

of business and product use cases. Humidity, light, shock, vibration, movement, acceleration and deceleration data can be assembled in different ways for a wide number of purposes. On one hand, shock and vibration measurements could be used to find the optimum transport medium or route for fragile products before any are actually shipped. Alternatively, light and movement sensors can be used to register if a shipment has been compromised by unauthorised penetration – and exactly where and at what time, helping identify and eliminate points of shrinkage and theft. In the wider security context, it’s also important to note that Numerex was the first M2M service provider in North America to carry ISO 27001 information security certification. M2M Now: The focus of our discussion so far has largely been on the supply chain and logistics sector. How do you see these developments from Numerex impacting other industries? JS: Many companies either operate in remote areas, or have equipment installed in places that are difficult or even hazardous for engineers to access, or that would involve the expense and delay involved in temporarily shutting down production lines. In this kind of environment, simply adding sensors to motors or power supplies can give early warning signs of when equipment is behaving in abnormal ways – bearing degradation causing pre-failure vibration, motors running hotter than normal, or currents spiking. Here, this kind of advance warning can often translate into asset preservation as

defective parts can be replaced as part of a standard preventive maintenance schedule rather than involve the expensive rates of an emergency technician call-out. Additionally, a simple failure in one piece of plant can often escalate down the chain, wrecking other equipment and throwing a whole production line out of action. With detailed data – both real-time and historical – machine manufacturers, product designers, plant owners, and repair organisations can work together in intelligently coordinated ways to optimise production from individual elements upwards. Time and money are also freed for reinvestment elsewhere. One important aspect here involves giving engineers and managers the ability to see and analyse problems holistically, making the whole really more than the sum of its constituent parts. This is where we see that added intelligence and capacity at the edge can really contribute to the business through a tighter integration with Enterprise Resource Planning (ERP) and workflow management systems, as well as other supporting techniques such as Just-in-Time manufacturing, automated warehousing and the like. The open API platform approach that we’ve taken with our nx-1 portfolio is mirrored by a similar approach to integration with these management systems. Customers can integrate things themselves using our own tools to build applications and experiment with them, we can direct them to the right third party vendor for their specific needs, or we can do it for them.

Dr. Smith has been an executive vice president and CTO of Numerex since October 2008. Prior to that, he was president and CEO of Ublip, Inc., a provider of M2M and location based services that he co-founded in 2007. From January 2002 until June 2007, Dr. Smith served as president and CEO of SensorLogic, Inc., an M2M application service provider that he also founded. From October 1993 until January 1997, he was president and CEO of OnRamp Technologies, an internet service provider that he co-founded.

M2M Now - April / May 2015

BIZ TALK

The author is Alexander Bufalino, Telit’s CMO

Making the IoT more inclusive – and supporting SMEs and innovation to drive global growth William Gibson, visionary writer and inventor of the term ‘cyberspace’, once famously commented, “The future’s already here – it’s just that it’s not very evenly distributed”. Alexander Bufalino ponders how to bring IoT’s future nearer.

▼

If there’s one recurring theme that runs constantly throughout history – it’s the tension between the centre and the edge. When it comes to innovation, over-centralisation often stifles innovation, while too much freedom often dances with failure. The trick is to find a happy and appropriate medium between these. That’s a very apt description of where the M2M/IoT space currently is, especially where the involvement of Small to Medium-sized Enterprises (SMEs) – generally defined as those with under 250 employees - is concerned. Research from multiple sources shows that a number of issues – such as doubts about affordability, concerns about security, operational costs once live, staff skill gaps, management control issues and a lack of in-house technological expertise – are combining to slow adoption of what could be a major strategic game changer for many companies in this sector. IN ASSOCIATION WITH TELIT M2M Now - April / May 2015

BIZ TALK

So what’s an SME and why are they important? SMEs around the world have a vital role across different economies: stimulating innovation, creating new jobs – especially for young people, enabling women entrepreneurs and supporting small, localised communities. Strategies to support their growth and encourage their investment in new technology are often also supported by regional, national and, in the EC, supra-national initiatives and funding. For example, it’s reckoned that amongst the countries that make up the EU, some 21.6 million SMEs provided work for nearly 90 million people and generate just over €3.5 trillion. While they may not grab the headlines in the same ways that multinational brands do, the great majority of businesses around the world can be classed as SMEs, employing around two out of every three workers. On top of that must be added their potential for driving innovation through technology or new business models that often – and inevitably – challenge the status quo in original and implicitly subversive ways. In many cases, this approach to innovation has entered national or industry myth. One gets the impression that there must be numerous garages, outbuildings and spare rooms that deserve heritage plaques as the birthplaces of multimillion and even multi-billion companies. Indeed, the garage in Palo Alto where Bill Hewlett and Dave Packard first began work together in 1939 is on the USA’s National Register of Historic Places.

Break on through to the other side But, these days, you need more than just a bright

idea to break through and realise an entrepreneurial dream – and fortunately many of the tools, social structures and distribution networks required are now available, some for free, in our infinitely networked world. The phrase that has been used to describe this is the ‘democratisation of innovation’, which elegantly sums up the availability to even the smallest company at affordable prices of resources that historically would only have been available to industry giants. Examples of these include cloud computing, open source software, affordable robotics, social networking and messaging apps and 3-D printing. The potential impact of these is explained in an excellent book by ex-editor of Wired magazine, Chris Anderson – “Makers: The New Industrial Revolution” – which is highly recommended reading for anyone thinking of going it alone with the next great idea. The role of enabling technologies is also emphasised by the OECD. One recent report of theirs, specifically on the potential of SMEs, says: “Information technology has great potential to narrow the information gap. It would be of great help to set up a ‘one-stop-shop’ system, where all the necessary information which affects firm strategies and decisions is made available in one place, as exists already in some countries.” Apologies for inserting a corporate plug here, but with a nice bit of synchronicity, the ‘one-stopshop’ model just so happens to be Telit’s main marketing message of the moment…. ▼

SMEs around the world have a vital role across different economies: stimulating innovation, creating new jobs – especially for young people, enabling women entrepreneurs and supporting small, localised communities

M2M Now - April / May 2015

So how can the M2M/IoT community help these vital engine rooms of global growth and trade exploit our technologies, systems, expertise and experience to innovate more successfully and compete – or partner - with those big players already well established in this space? What lessons have we collectively learned from working with such companies? As a relatively new sector – at least as far as the use of M2M/IoT terminology is concerned – it’s only natural that a lot of the focus of industry discussion so far has been on the underlying connectivity technologies and devices. As we mature, it’s essential that we expand this debate to include all the other human, cultural and organisational issues that are equally critical when it comes to influencing the success, or failure, of projects. In particular, this is going to mean recognising that the models of the world that many of us carry in our heads – and are replicated in the organisational structures and relationships that support our business activities – are undergoing deep and often unsettling change. In some cases, these traditional perspectives are becoming increasingly irrelevant to what’s actually happening out there in the areas of fastest growth and innovation. I’ve recently been lucky enough to have spent some time recently in both Europe and North America, discussing what’s ahead with some very bright – but firmly grounded – visionaries and

entrepreneurs. While our industry has been burned before – dot.com crash, anyone – by the silicon snake oil merchants, those of us who have been through the hype cycles before can usually distinguish vapourware from real potential.

‘It’s Data, Jim – but not as we’ve known it’ In this context, I can’t emphasise enough one critical change that I’ve seen reflected both by this younger cohort as well as some contemporary industry thinkers who specialise in avoiding the status quo: the implications of a world built on the torrent of open, live, dynamic data that’s currently flooding in to and out of our systems, offices, factories, homes, cities and now, even clothing and bodies. Indeed, we’ve even had to invent a new vocabulary to quantify this shift and the words exabyte and zettabyte could become commonplace as the building blocks of this new world that we’re creating for ourselves and our silicon-based companions. While the phrase ‘the death of distance’ has often been invoked over the last decade or two to sum up the implications of truly ubiquitous communications, especially in the wireless/ cellular sector, we now have a generation reaching economic - and potentially entrepreneurial – maturity for whom distance really has died. It’s as easy for them to interact with a person – or a device, a location, or piece of data – that’s on the other side of the planet as it is with someone or something next door. As an aside, is it any wonder that some parents have problems prising their children away from

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What can our sector do to stimulate growth?

IN ASSOCIATION WITH TELIT M2M Now - April / May 2015

BIZ TALK

Alexander Bufalino, Chief Marketing Officer, Telit Mr. Bufalino joined Telit in 2005. Before Telit, he worked for several years at SIEMENS AG and for one of its spin offs, Enocean. He also held the position of Sales Director in Europe at SIEMENS wireless modules, the company’s M2M business unit. Mr. Bufalino is on the founding board of governors of the International M2M Council, a trade organisation for the machine-to-machine communications industry launched in 2013.

their screen and device-filled bedrooms to go and play in the ‘real’ world? The very idea of reality may have, and probably already has, different connotations to different generations. In the business context – and this applies just as much to large companies as to small - the critical thing to remember here is that this shift to a data-centric universe is not an incremental change to what’s gone before. We can’t cope with it in the usual way by adding on another functional silo to our IT infrastructure or setting up another department within our companies. In many ways, it’s as fundamental a shift as that brought by the Copernican revolution that spelled the end of the classic model of an earthcentred universe and is likely to have as far reaching effects on cultures and societies as Copernicus did back in the 16th century. IoT and what we might call ‘vast data’ are going to invert traditional models, processes and perceptions and replace them with something that previous generations would probably have found extremely unsettling – especially when it comes to the erosion of long-established and trusted boundaries between public and private spaces and information.

Where’s the money - in the crowd or in the individual? Now, if you’re as sceptical of digital visionaries as I am, you’re probably trying to earth this metaphor to a familiar context. One example I can provide was summed up recently by an IBM spokesperson as the death of ‘the age of average’. We all use insurance – and it’s arguable that insurance has been just as historically important as the invention of joint stock companies were in the creation of the modern business world, going back even beyond the establishment of the Dutch and British East India Companies. Insurance however, depends on statistics and actuarial principles to gather data and then estimate exposure to risk, so is implicitly based on averages taken from large population sizes. Consider however the world that we’re now in where enough data can be gathered on you as an individual, your personal driving habits, the food and prescription and non-prescription medicines that you buy, pollution or crime figures for exactly where you live, the behaviours of family and even friends and acquaintances on social

networks for a truly personalised insurance package, created specifically for you and you alone.

Who controls the boundaries and who draws the maps? While this particular example invokes the potential of collaborative data it doesn’t highlight the corollary – that real value and true innovation are going to be driven by the actual and realworld collaboration of people, companies, governments and institutions. This necessary erosion of traditional boundaries goes against much of what people in large companies have been encouraged to think. Either/or binary models of customer/competitor or the power struggles between large and small companies for Intellectual Property and copyright must be replaced with an environment that’s far more open and equitable. That equitability must also extend down to the individual humans whose personal data is being used for profit or commercial advantage. Such a model carries deep implications for the growing need for efficient security across these multiple players, platforms and devices and for the legal implications when things go disastrously wrong – as they, sadly but inevitably, will. When the first fly-by-wire commercial airplanes with alldigital controls appeared a few decades ago, questions were raised by software engineers and theorists about the potential dangers of code where it was mathematically impossible to simulate all the possible conditions that the programs might encounter in real life. It’s bad enough to lose a single airliner, but when you have whole civilisations depending on the code within IoT networks controlling utilities, water supplies, transport systems and other civilisationcritical infrastructure, it’s vital that these issues are addressed collaboratively to ensure a properly holistic perspective. In this context – and the other lessons and hopefully useful insights that I’ve tried to communicate in this piece – it’s that the open networking of humans is going to be just as important as the open networking of things. Some of that change is going to challenge our traditional ways of doing this and be just as unsettling and potentially subversive as the new technologies and new business models that are now appearing in the M2M/IoT space.

M2M Now - April / May 2015

A P R I L / M AY 2 0 1 5

V O L U M E

I S S U E

IoT – Innovation and growth in a unique country IoT – あるユニークな国における革新と成長 MOVING MOUNTAINS WITH M2M Hitachi Construction Machinery’s Fujio Matsuda explains their global M2M strategy and relationship with Telenor Connexion 日立建機の松田富士夫氏が、彼らの世界的なM2M戦略およびTelenor Connexion社との関係について説明した。

PLUS: IQP Japan on the potential of a Code-Free IoT development community • The status of the Japanese IoT market • Doing IoT business in – and with – Japan • News & Reviews - www.m2mnow.biz

T H E

G L O B A L

I o T

N E W S

S O U R C E

INTERVIEW

Moving mountains with M2M One of the eternally fascinating things about telecoms is how comparatively small changes – down to shifts in quantum states in the underlying silicon – can have huge and greatly amplified effects out in the everyday real world. Nowhere is this more true than in the M2M/IoT environment.

Currently operating globally, HCM relies on Telenor Connexion - the specialist M2M/ IoT arm of international telecoms service provider Telenor – to provide essential connectivity and consulting services. Working closely together, they’re able to keep HCM’s plant and machinery operating more efficiently, cost-effectively and securely than its competitors, while simultaneously creating added value for the company and its customers through the development of new business models, services and machines. One key

aspect of this involves being able to pull in data from the field to drive continuous product improvement and enhance customer relationships and loyalty even further. M2M Now’s Alun Lewis recently spoke with Fujio Matsuda, general manager at HCM’s Global Business System Centre and IT Promotion Division, about how his company’s M2M strategy has grown over the years to become central to HCM’s growth and success. M2M Now: Mr Matsuda, could you talk us through how HCM firstly identified M2M as an important area for the company? FM: We clearly saw back in the 1990s how important M2M could be to us as a business. Our machines are high-value, complex pieces of equipment, often operating in frontier or environmentally harsh conditions. Our customers want to extract the maximum working value from

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For one company in particular – Hitachi Construction Machinery (HCM) – the application of an M2M strategy over the last few years has, quite literally, allowed them and their customers to move mountains. As one of the world’s leading manufacturers of the heavy plant and machinery used in construction, mining, forestry and other heavy engineering industries, HCM has long been recognised as a major innovator in the use of M2M in its sector.

M2M Now - April / May 2015

Fujio Matsuda, general manager, Global Business Systems, Hitachi Fujio Matsuda is presently general manager at Global Business Systems, the IT Promotion Division, which incorporates both core systems and corporate strategy systems of Hitachi Construction Machinery. He joined Hitachi Construction Machinery Co., Ltd. In 1979 and was engaged in service operations for construction machinery shipped overseas. After working in Iraq and the USA for Hitachi, he became involved in M2M development at Hitachi Construction Machinery in 1996. In 2002 he became leader of the development project for Hitachi Construction Machinery's M2M & Service Support System; Global e-Service.

In this setting, it was very clear to us early on that M2M could have a critical role to play in supporting many aspects of our operations. With data coming back to us from a variety of sensors within the machines, measuring such things as oil pressure and temperatures, as well as surrounding environmental conditions such as dangerous heat, we’d be able to optimise our maintenance operations to keep our plant working harder and better for even longer. Preventive maintenance jobs can be planned more effectively, ensuring that the right staff with the right skills, tools and components will be in the right part of the world at the right time. Once you’ve got that data coming in, you’re also able to quickly spot any emerging problems with product designs and eliminate any component weaknesses in the original design or supply chain. Additionally, the ability to track and locate our plant would prove to be invaluable in deterring theft, while also supporting the second-user market for our machinery by making full service and ownership histories to new buyers. M2M Now: And your first steps into this connected world? FM: Around 2000, we began applying M2M to some of the products that we were selling into our home market here in Japan. We quickly recognised the multiple benefits that such a strategy could bring to our company and our

M2M Now - April / May 2015

customers so, in 2005, we began to look at our options for expanding this on a global basis.

Our customers want to extract the maximum working value from their machines throughout their lifetime

Initially, given our global reach we trialled satellite-based connectivity solutions, but soon found that there were a number of inherent difficulties with this approach. For a start, some countries such as India, China and Russia place major restrictions on the use of satellite communications within their territories. Secondly, reliable coverage in some of the more remote areas that we routinely operate in – especially in high latitude regions – could sometimes be problematic. Finally, satellite services and the specialised hardware required could also be expensive. Given these factors, by 2007 we started to look at other international connectivity options that were now becoming available – and that, inevitably, led us to start discussions with Telenor Connexion. M2M Now: What were your experiences in searching for a suitable supplier? FM: As part of our research we visited and spoke with a number of national and international carriers about our needs. Curiously, given the eventual worldwide potential of this whole marketplace, we found that many of them didn’t seem to be particularly interested in providing the kind of support that we were looking for. We were looking for a single provider of truly global connectivity – and we had no interest in getting into the complexity and overheads involved in managing contracts with multiple service providers. That drive for simplicity also extended to the devices to be installed in the machinery – the M2M modules and supporting SIM cards. Having

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their machines throughout their lifetime while, simultaneously, we want to keep their machinery operating at peak efficiency – and that means having the best maintenance and repair systems possible in place, irrespective of where that plant is operating, which could be anywhere on the planet.

INTERVIEW

helped simplify the process of linking those sensors into the communication modules through APIs (Application Programming Interfaces) and ensuring that only the data essential to our continued commercial and technological success was collected and transmitted. One key aspect of this experience involved the security and integrity of those devices and the communications chain. Around 20,000 pieces of equipment worldwide are now connected with M2M, connections – and that involves delivering reliable a communications environment in 130 countries. Supporting our day-to-day operations is a 24/7 help desk run by Telenor Connexion that helps us quickly resolve any technical issues, while a dedicated Account Manager has direct responsibility for the relationship with HCM.

That search led us to Telenor Connexion. M2M Now: And the result?

We needed a partner with asset management experience, who were also able to create a flexible business model based on building a long-term relationship based on mutual trust

FM: After a number of meetings, discussions and visits to Telenor Connexion sites, where we learned a great deal about the many issues involved in providing global connectivity – particularly around the complex factors involved in roaming – we started with a trial in Europe. That went extremely well, so in 2009 we signed a contract for global connectivity services with the company. The result, six years later, is a comprehensive, business-focused solution based on 2G/3G SIMs embedded in M2M modules installed in our machines, each linked to a number of sensors. Telenor Connexion’s experience and insight also

M2M Now: It’s fast becoming clear that huge commercial value can now start to be extracted from the thousands of connected devices proliferating around the world. How is HCM exploiting this new asset and what’s going to be your future direction in this area? FM: At the most basic level, there are essentially two types of data that we receive from the M2M modules and machinery. On one hand, we use data logging principles to collect information on components, usage, and the whole operating environment and this is regularly communicated back via Telenor Connexion and then to our own management systems. On top of this, we’re also able to collect alarm information when particular conditions – such as a component overheating or oil pressures falling dangerously low – and alert the operator and our local distributors accordingly to prevent serious damage and get repair teams on the road as quickly as possible. The data we collect has an almost infinite multiplicity of possible uses – but all are ultimately focused on helping HCM make better, more reliable and more cost-effective products. We can quickly learn lessons about typical usage profiles amongst our many different types of customers and develop commercial relationships

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a simplified supply chain relationship for these aspects of the value chain would also help reduce cost and complexity for us. We needed a partner with asset management experience, who were also able to create a flexible business model based on building a long-term relationship based on mutual trust. Put simply: we were experts in designing, building and supporting complex pieces of machinery – we were looking for complementary levels of expertise in M2M connectivity, services and devices from our selected supplier who’d be just as dedicated as we are to providing world-class service.

Another equally critical aspect involves the setting of appropriate SLAs (Service Level Agreements) that define in detail the availability and reliability of the service that we receive from Telenor Connexion. These obviously in turn reflect the service levels that we want to be able to offer our own customers – who in turn often have their own customers to serve, who each have their own project deadlines to meet.

M2M Now - April / May 2015

that suit their needs more elegantly and efficiently, helping them achieve their own business ambitions. Alternatively, information is fed back into our own design and manufacturing processes to make our products an even better fit for the different worlds that they’re going to end up operating in.

have the tools, parts and skills already with them to resolve the precise problem. This sharing of information is beneficial to everyone, helping to prioritise decision making where maintenance scheduling is concerned and, once again, strengthening the bonds between HCM, our dealers and our end customers.

In terms of future plans, we’re also starting to look at the possible benefits of collecting some data in real time to develop a more dynamic and flexible response for our customers. We’re sharing information about machine performance with major customers and our all-important dealer network who often provide the front line support for customers out in the field. In more remote areas, the logistics and costs involved in getting maintenance teams to sites can be large and when an engineer arrives it’s vital that they

One final aspect enhances that support even further by helping owners and operators protect their own investments in our products. With the theft of heavy plant being a major issue these days, with equipment often being stolen for export to customers in developing countries, not only are we able to track the movement of assets through GPS technology, but we can also ‘kill’ equipment remotely, rendering it useless until the intervention of an HCM-approved engineer.

M2M Now - April / May 2015

MARKET INSIGHT

More unique than others – the status of the Japanese IoT market While all countries and cultures are unique, some are more unique than others – and that’s certainly true of Japan. In only a couple of decades at the end of the 19th century, it transformed itself from almost a standing start to become an industrialised world power. Then, in the second half of the 20th century, it underwent a second transformation, revolutionising manufacturing and product quality processes in ways that the rest of the world came to learn from, while also surging ahead in many IT, robotics and consumer electronics fields. When it comes to looking at where the country now stands with M2M/IoT, many commentators expect to see a new surge of innovation and investment in the years ahead. In a number of application areas, solid and innovative work has been underway, often driven by the government, such as the ECHONET consortium formed in 1997 to develop standards for home networks to manage the remote control or monitoring of home appliances.

‘Early matured’ – and with huge potential for growth Recent research by IDC in Japan defines the Japanese IoT market as relatively ‘early-matured’, especially in terms of the manufacturing, transportation and utilities sectors, with around

Intelligent System/Device Connectivity Platform Analytics IoT Infrastructure Service Security

18,000,000 Source: IDC Japan, February 2015

16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0

2013

2014

2015

2016

2017

2018

2019

According to Yuta Torisu, communications market analyst at IDC Japan, government initiatives look set to play a major part once again in this next wave: “In the short term, the Japanese government is going to push the adoption of smart meters over the next five years or so. One reason for this comes from the crisis in nuclear power generation as a result of the March 2011 earthquake, with the country now focusing much more on smart grid and reusable energy. On top of this, a liberalisation in retail electricity will also begin in April 2016. As a result, different kinds of IoT related vendors are focusing on various energy related solutions, such as controlling energy efficiency in stores and stadiums, controlling solar panels to optimise energy generation, home energy management systems and monitoring home energy usage to protect old people.”

Olympic-level performances IDC’s Torisu adds, “However, from the long term perspective, the IoT market is not going to be led by the device market, but by an integrated ICT

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Revenue (Million yen)

Japan IoT Market Revenue Forecast by Technology Component, 2013–2019

80-90% of the domestic IoT market in 2014 occupied by intelligent systems and devices – mainly consisting of connected embedded systems in use by those markets. In 2014 alone, the number of IoT devices totalled 557 million units – growing to 956 million in 2019, with total revenues reaching well over a trillion dollars last year. Growth is similarly estimated at nearly 12%.

M2M Now - April / May 2015

Yuta Torisu: IDC Japan

market that includes cloud, analytics, vertical solutions, security services and so on. One event that’s already concentrating the mind of the Japanese government is the arrival of the Olympic Games in Tokyo in 2020 and they are starting to become interested in the role of big data analytics to support this event. Complementing this, various IoT vendors are similarly focusing on advanced analytics to exploit data, such as real-time surveillance camera data to detect criminals, in-building energy usage and smart transportation.” The role of the Tokyo Olympics as catalysing IoT innovation is also emphasised by Sano Hisayuki, senior director for emerging technologies at Fujitsu: “The government is currently preparing the City by expanding WiFi points and public connectivity and, as it prepares for large numbers of foreign visitors, IoT will become even more important. Japan is already a networked society and it’s arguable that the country is leading the way in areas such as disaster relief and agriculture. It’s also a country with a strong focus on society and with high population densities, so it’s easier to deploy certain solutions in this area.”

Demographics and demand HCL’s Sukamal Banerjee, SVP engineering and R&D, sees some particular national drivers as well as government forces at work, “Japan’s always been at the forefront of technology and automation with its focus on robotics and other cutting edge technologies. Manufacturing contributes more than 50% of Japan’s GDP – even a 1% improvement in productivity here would add value measured in the billions. Healthcare and assisted living - and Japan has the second largest medical device spend in the world according to the WHO - is also expected to be big in a country with the biggest aged tech-

Sukamal Banerjee: HCL

Fredrik Akerlind: Telenor Connexion

savvy population on the planet. Similarly, smart cities, driven by advanced urbanisation, already have subsystems in place in Japan, such as transportation management and e-wallets. He continues: “This new wave of smart products and services is based on two pillars: connectivity and intelligence. Japan’s Ministry of Internal Affairs and Communications (MIC) developed the u-Japan policy early in 2004 to accelerate network access ubiquity and policy makers have been gearing up for IoT for over a decade. Japan has been grinding out IoT applications slowly and steadily with minimal hype.” For a country that perfected automobile manufacturing, it’s also hardly surprising that Japan’s also innovating heavily here, as Macario Namie, VP strategy at Jasper explains: “The connected car space is one of the most dominant trends in the market and is one of the main focus areas for network operators and solution partners in Japan. The market has however been quite insular with Japanese mobile operators supporting Japanese deployments. That’s starting to change and vehicle manufacturers are becoming interested in working with single points of contact for the majority of the world, while the operator community is also getting interested in supporting clients internationally.” This growing trend towards internationalisation is also seen by Fredrik Åkerlind, VP sales at Telenor Connexion: “Japan is also a world leader in e-vehicles. One of our customers – Nissan – launched the LEAF, the world’s first zero-emission car. On top of that, there’s also Japan’s long history as an innovator in automated manufacturing, represented by another of our customers, Toyota Material Handling, a world leader in forklift trucks and advanced warehouse and logistics solutions.”

M2M bears fruit With land at a premium, it’s hardly surprising that Japan is focused on exploiting this limited resource. Hiro Tsutsumikawa, business development at NEC says, “According to Machina Research, Japan is number one in the world for IoT and agriculture. For example, NEC is working with the Agricultural Production Corporation GRA Inc. in Japan to provide a M2M network and cloud-based big data analytics solution to support hydroponic strawberry production for GRA’s premium strawberries marketed as ‘Edible Gems” under the Migaki-Ichigo brand. We’ve provided sensors that control the temperature, irrigation and volume of nutrients and interact with farm information and work planning systems, production volume prediction and control systems that analyse planting plans. In addition, GRA can provide remote monitoring and guidance from experts to increase yields or control disease, both online and via video conference calls.”

M2M Now - April / May 2015

INTERVIEW

Guy Kaplinsky, founder and CEO of IQP Japan, recently spoke with M2M Now, sharing his insights on IoT adoption in enterprises and giving an update on how Fujitsu is using the IQP platform to develop its vision of a “Human-Centric Intelligent Society”.

Breaking open the Chains of Code – a new development community model for the IoT IQP Japan Corporation intends to revolutionise how companies can launch strategic initiatives for a Code-Free Internet of Things (IoT) and open the door to new services and revenue streams. IQP’s solution is an IoT and business applications platform designed to enable rapid, code-free application creation by anyone – from end-users to sophisticated programmers, using a web-based visual programming interface.

GK: IoT takes us beyond M2M to a connected world that will completely change the way consumers choose and interact with a company’s brand. The focus is shifting from hardware to software across a wide range of markets, from smart cars to healthcare. As a result, the value of products and services on offer will be greatly impacted by the availability and sophistication of the IoT applications that are used to control them. The solution therefore is to enable a community that uses a Code-Free network to develop IoT applications in a low cost and efficient way. Enterprises recognise that IoT can deliver a competitive edge and open new revenue streams – but they’ll need to be agile and respond quickly

to changes in the market. Flexibility is a critical issue. IQP’s response to this issue was to create an application market platform that offers a truly end-to-end solution that addresses all aspects of corporate IoT projects, from connectivity with sensors and control devices through to app customisation and design templates. Our IoT platform allows customers to customise and change applications on the fly, helping them to quickly react to the dynamic changes in their business and use sensors based on new technologies as they come onto the market. We provide a software solution that enables the customer to create their own cloud-based server and we support multi-standard and prosperity protocols to ensure compatibility and eliminate vendor lock in. We took a holistic approach to address both a customer’s needs today - and where they need to

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M2M Now: Guy, what do you see as the main implications for corporations venturing into the IoT?

IN ASSOCIATION WITH IQP 56

M2M Now - April / May 2015

go next - because companies are concerned about the future compatibility of their solutions and Return on Investment (ROI). M2M Now: Fujitsu has launched a “Human-Centric IoT” initiative, described by them as a global ecosystem with business partners and an IoT platform that can serve as a focus for generating innovation with customers. Can you explain more about this project and IQP’s involvement? GK: Fujitsu’s vision of a “HumanCentric Intelligent Society” harnesses IoT to make use of all kinds of digital information to foster new business, social innovation and ultimately benefit people’s lives and make them happy. It’s an ambitious project that launched in November 2014 and will evolve into a global ecosystem.

Free community to help them to find the killer app. The business model should be a revenue sharing model to attract a community that is motivated to develop those apps. Establishing a Code-Free community creates a large, valuable resource compared to a limited SDK expert community. The disadvantage to an SDK-only community is that you need developers who are already experts in iOS, Android, etc. Relying on SDK development can create greater cost for the hardware manufacturer due to increased development time and test requirements, plus there’s a potential risk of risk of compromising the manufacturer’s source code.

IQP’s technology is being applied to create an easy-to-use cloud-based IoT application development environment. This includes a systems environment that brings together sensors and devices, networks, middleware and applications.

A Code-Free development community also includes the users of the hardware devices. The advantage here is that users know what they want and can identify the killer app that works best for them. This model will build longterm relationships between the manufacturer and the user, since users have an active role in the product development and can customise the product for their own use.

Fujitsu is helping their own customers develop a business model for IoT and apply the IoT platform to quickly launch their IoT business projects. In collaboration with IQP, Fujitsu will provide up to six months free use of an application development and execution platform via the Fujitsu Cloud.

To achieve ROI on the telco side, the key is to create an eco-system where they sell not only SIM cards, but also have a cloud-based solution for a community of developers. This will enable a telco to provide a complete service for their customers: SIM cards, app development and run-time.

M2M Now: Why did Fujitsu choose IQP?

A Code-Free platform is a good choice for telcos because they target a large market with a wide range of professional users. The Code-Free concept enables the telco to respond to a variety of customer requirements. Using a Code-Free platform also provides telcos with solutions that their sales team can use to connect with customers and drive their sales performance. These steps can effectively create a new revenue model for the telco that will deliver ROI.

GK: Fujitsu wanted an IoT environment that could monitor and manage sensors and human interaction as one system and, secondly, be quickly and easily implemented and evolve over time. They liked how our development platform collects a broad range of valuable sensing information about people, things and the environment and then provides a way to quickly respond to that data. M2M Now: How can IoT create profitable revenue streams? GK: Let’s use the example of a hardware manufacturer developing a smart device for a car. To generate ROI, the manufacturer needs to identify a ‘killer app’, and this can be very difficult since they may not have partners with this expertise. Our recommendation for the hardware manufacturer is to develop a few core applications and then create a Code-

M2M Now - April / May 2015

Key ROI takeaways for IoT: • IoT enables manufacturers to know, for the first time, what their customers really want and to build a long-term relationship with them. It provides a win-win opportunity to sell additional products and offer better services to the customer. • IoT permits the manufacturer to generate ROI from product development through the ability to continuously control and monitor products and support their ongoing improvement.

IQP Corporation has developed a first in kind Code-Free application market system with web application development tools and a run-time environment for delivering crossplatform business and IoT apps. IQP Apps run as web applications on all mobile phones, tablets, PCs and Macs while native apps are optional. Investment and app development time is typically reduced by more than 50%. The IQP solution enables telcos, systems integrators and manufacturers to reduce costs and provide new services that create recurring revenue models and generate ROI from IoT devices. IQP is headquartered in Japan, with research and development capabilities in Israel, a sales presence in the United States (NYC) and public relations support in Paris. An office in Silicon Valley is scheduled for Q3 2015. 2011: Company founded by Guy Kaplinsky, CEO 2012: Tokyo headquarters opens 2013: Jointly developed concept-car related technologies with Mitsubishi Motor Corporation for the 43rd Tokyo Motor Show March 2014: IQP solution is commercially available – first customers are Fujitsu and Denso Nov 2014: Fujitsu adopts IQP as core part of their IoT platform Dec 2014: Selected to participate in IBM’s Alpha Zone Accelerator program March 2015: IQP solution showcased at Mobile World Congress 2015 in collaboration with KDDI March 2015: IQP Corporation signs reseller agreement with SoftBank April 2015: Customers and partners include Fujitsu, NEC Engineering Fujisoft, Toyota ITC, Denso, and others.

インタビュー

M2M で山をも動かす情報通信の常に変わらぬ魅力の１つに、⽇常的な実社会で、比較的⼩さな変化（下層シリコンの量⼦状態の変化といったもの）から、⼤幅に増強された巨⼤な効果をいかにして⽣むことができるかということがある。特にこう言い切れる分野は、M2M/IoTをおいて他にはないだろう。

グローバルに事業を展開する⽇⽴建機は、極めて重要な接続サービスやそれにまつわるコンサルティングサービスの提供を、Telenor Connexion社（世界的な通信サービスプロバイダーTelenor社の専⾨的M2M/IoT部⾨）から受けている。両社が密に連携することで、⽇⽴建機では競合他社と比べより効率的で、低コストかつ安全な重機の稼働を可能にし、また新たなビジネスモデルやサービス、機械の開発を通して、同社とその顧客に付加価値を⽣み出している。さらに、継続的な製品改良を推進し、顧客関係や顧客ロイヤルティをより

強化するために、現場からデータを回収することができることも重要なポイントだ。 M2M Nowのアラン・ルイスは、⽇⽴建機のM2M戦略がここ数年で進み、同社の成長と成功の中⼼的役割を担うこととなった経緯について、同社IT推進本部業務システム統括センタ長（OK）の松⽥富⼠夫氏に話を聞いた。 M2M Now: 松⽥さん、⽇⽴建機が会社にとってM2Mが重要な分野であると最初に認識された経緯についてお話しいただけますか。松⽥：弊社では、ちょうど1990年代から、M2Mが弊社の事業にとっていかに重要かを明⽩に悟りました。弊社の機械は高価で複雑な装置であり、辺境での利⽤や環境的に過酷な状況でのオペレーションが多々ある製品です。お客様は機械の耐⽤年数を通して稼働させる上

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とりわけ、ここ数年間のM2M戦略の活⽤によって、⽇⽴建機と同社の顧客は文字通り山をも動かすことができた。建設や鉱山、林業その他の重機関連工業で使⽤される重機械を製造する世界のリーディングカンパニーである同社は、同分野におけるM2M活⽤のイノベーターとして長らく注⽬されている。

M2Mの今 - 2015年4月/ 5月

⽇⽴建機業務システム統括センタ長、松⽥富⼠夫氏松⽥富⼠夫氏は、現在IT推進本部業務システムの統括センタ長です。当部⾨は⽇⽴建機のコアシステムと企業戦略システムを統括します。松⽥氏は、 1979年に⽇⽴建機に⼊社し、輸出⽤の建設機械のサービス運営に従事しました。イラクおよび米国の⽇⽴での勤務後、1996年に⽇⽴建機のM2M開発に加わりました。2002年には、⽇⽴建機のM2M&サービス・サポートシステム、グローバルe‑サービスの開発プロジェクトのリーダーとなりました。

このことを背景に、多くの弊社事業を⽀えるものとして、M2Mが⾮常に重要な役割を担うということは、早い段階ではっきりしていました。機械内のさまざまなセンサーから返ってくるデータをもとに、油圧や温度、また周辺の気温などの環境条件を計測すれば、より高い稼働率で装置がより長時間稼働していけるよう、メンテナンスオペレーションを最適化することができます。適切なスキルやツール、部品などを持った適切な人員を適切な時間に適切な地に配置することで、予防保全作業をより効率的に計画することも可能になります。そのようなデータが⼿に⼊るようになれば、製品設計における問題点を素早く発⾒し、当初の設計あるいはサプライチェーンにおける部品の弱点を取り除くこともできます。さらに、弊社の装置を追跡し位置を特定する能力は、盗難の抑⽌にとって、またフルサービスの実施や新たな購⼊者に対するオーナー履歴の提供といった弊社機械の中古市場をサポートするうえで、計り知れないほど貴重なものになりました。 M2M Now: それでは通信世界への第⼀歩については？松⽥：2000年頃に、ホームマーケットである⽇本国内市場向けに販売していた製品にM2Mの適⽤を開始しました。この戦略が弊社や弊社のお客様にもたらす多くの利点がすぐに明らかになったため、2005年には、 M2Mの適⽤を世界的に拡⼤していくことを検討するようになりました。

M2Mの今 - 2015年4月/ 5月

当初は、弊社のグローバルネットワークを活かし、衛星を利⽤した接続ソリューションを試みましたが、ほどなくこの⽅法には多くの問題が備わっていることが分かりました。まず、インド、中国、ロシアなどの国々は、自国内での衛星通信の利⽤に厳しい制限を設けています。次に、弊社が⽇常的に業務を⾏うより辺境な地域や両極に近い高緯度地域においては通信が安定しないことが問題となりえます。最後に、衛星通信サービス費や必要になる専⽤ハードウェアなどもまた高価であることです。

お客様は機械の耐⽤年数期間中の稼働において、最⼤の価値を求めています。

以上の理由から、2007年くらいには、その頃実現しつつあった別の国際的な携帯通信を使った接続のオプションに⽬を向け始めていました。そこで、必然的に Telenor Connexionとの話し合いを始めることになったのです。 M2M Now:適切なサプライヤーを探す中で、どのような経験がありましたか？松⽥：調査を進める中で、国内外のたくさんの通信事業者を訪れ、弊社のニーズについて話をしました。おもしろいことに、世界的なこの市場全体の将来像を考えたとき、ほとんどの通信事業者が弊社の求めるサポートを提供することには特に関⼼がなかったようでした。弊社では真にグローバルな接続性をもつ⼀社のプロバイダーを探していました。いくつものサービスプロバイダーとの契約を管理する⼿間や経費は省きたかったのです。シンプルでありたいという考えは、機械にインストールする機器、つまりM2Mモジュールとサポート⽤SIM カードにも及んでいました。バリューチェーンのためにシンプルなサプライチェーン関係を持つことは、弊社のコストや⼿間の削減にも役⽴ちます。弊社は資産管理を

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での最⼤の価値を得たいと望んでおり、弊社ではお使いの機械が最⼤効率で稼働することを望んでいます。つまり、その装置がどこで稼働するかにかかわらず、現場が地球上のどこであれ、最良のメンテナンスや修理システムを⾏えるようにしたいということです。

インタビュー

業や技術の継続的な成功に⽋かせないデータのみを確実に収集し、伝達できるようにしてくれました。この経験のうちで、重要な点のひとつは、デバイスやコミュニケーションチェーンの安全性と整合性です。現在、世界中に展開している合計20万台の弊社製品にM2Mが装備されており、130以上の国と地域で安定した通信環境を得ています。弊社の毎⽇のオペレーションを⽀えているのは、 Telenor Connexion社が運営する週7⽇間24時間体制のヘルプデスクです。専任のアカウントマネジャーが弊社との関係を直接担当してくれており、何か技術的な問題が発⽣すると迅速に解決できるよう⽀援してくれます。

このような事業者を探すうち、Telenor Connexion社に⾏き着きました。 M2M Now:そして、その成果は？

弊社は資産管理の経験があり、相互信頼に基づき長期にわたる関係を築くうえで柔軟なビジネスモデルを構築できるパートナーを探していました。

松⽥：Telenor Connexion社とのミーティング、話し合い、現場訪問を何度も繰り返す中で、弊社はグローバルな接続の提供（特にローミングに関わる複雑な要因に関して）に関わるたくさんの問題について、⾮常に多くのことを学びました。その後、ヨーロッパでの試験を開始し、これがとてもうまくいったため、 2009年には同社とグローバルの接続サービスの契約を結んだのです。それから6年経ったいま、成果として得たものは、弊社機械にインストールされ、ひとつひとつが多くのセンサーにリンクしているM2Mモジュールに内蔵された、 2G/3GのSIMをベースとした包括的なビジネス型のソリューションです。Telenor Connexion社の経験や⾒識は、そうしたセンサーがAPI（アプリケーションプログラミングインターフェース）を通してコミュニケーションモジュールとリンクするプロセスを簡便化し、弊社の事

M2M Now:世界中に広がる何⼗万という接続デバイスから巨⼤な商業価値が回収できるということが、今まさに、急激に分かってきています。⽇⽴建機としてはこの新たな資産をどう利⽤し、将来的にこの分野でどういった⽅向性に進むことを考えていますか？松⽥：もっとも基本的なレベルにおいて、M2Mモジュールや機械から受け取るデータには本質的にふたつのタイプがあります。まず、弊社は部品や利⽤状況、作動環境全体に関する情報を回収するのにデータログの原則を⽤いており、情報は通常Telenor Connexion社を経由して、そこから弊社の管理システムへと発信されます。また、機器がオーバーヒーティングしたときや油圧が危険なほどに下がった場合などの特殊な状況時に警報を収集して、オペレーターや弊社の現地販売元に適宜警告して、深刻なダメージを防⽌し、できるだけ早く修理チームを向かわせることもできます。弊社が収集するデータは、その多彩な利⽤法についてほぼ無限の可能性を秘めています。しかし最終的には、すべての情報は、より優れた、より信頼性が高く費⽤対効果のある弊社の製品開発に役⽴てるために⽤いるものです。弊社ではたくさんの異なるタイプのお客様の平均的な使⽤プロファイルから得られることを迅速に学び、お客様のニーズに即した取引上の関係をよ

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⾏う上でのパートナー、しかも相互信頼に基づき長期にわたる関係を築くうえで柔軟なビジネスモデルを構築してくれるパートナーを探していました。簡単に言えば、弊社は複雑な機械製品の設計、建設、サポートのエキスパートであり、弊社が求めていたのは、弊社とまったく同じように世界有数のサービスを提供することに専⼼している事業者によるM2Mの接続、サービス、デバイスにおける補完的な専⾨知識であったというわけです。

また、同じように重要な点として、適切なSLA（サービス品質保証契約）の取り決めがあります。これは弊社がTelenor Connexion社から受けるサービスについて有効性や信頼性を具体的に定義したもので、それぞれに締め切りのあるプロジェクトをもつ顧客を抱えている弊社のお客様に対して、弊社が提供したいと望むレベルのサービスが明確に反映されています。

M2Mの今 - 2015年4月/ 5月

りスムーズに、より効率的に発展させて、お客様の事業の狙いを達成するお⼿伝いをすることができます。あるいは、製品が最終的に稼働する様々な地域でより適したものとなるよう、情報を弊社自身の設計や製造のプロセスにフィードバックすることもできます。将来的な計画に関しては、弊社ではまた、お客様に対してよりダイナミックで柔軟な対応を⾏えるよう、ある種のデータをリアルタイムで収集することで得られる利点について検討し始めています。弊社の主要なお客様や、現場の最前線でサポートを⾏うことの多い極めて重要な弊社ディーラーネットワークと、機械性能に関する情報を共有しています。さらに辺境の地域になると、メンテナンスチームの現場派遣に含まれる物流やコストが増し、また、確実に問題を解決する上では、エンジニアが到着した時にツールや部品あるいは

M2Mの今 - 2015年4月/ 5月

スキルが備わっていることが不可⽋になります。こうした情報共有は皆にとって有益であり、メンテナンスの予定を組む際に優先順位をつけるのに役⽴ちますし、先ほども言いましたが、弊社と弊社ディーラー、そして最終的なお客様の間のきずなを強めることにもなります。そして、これから申し上げる最後の点が、ご購⼊いただいた弊社製品を所有者やオペレーターが守るのを弊社がお⼿伝いすることによって、サポートをさらに強化しています。重機の盗難が⼤きな問題となっている昨今の状況を受け、途上国の顧客への輸出にあたってよく盗まれる製品に関しては、GPSで資産の動きを追跡するのみならず、弊社承認のエンジニアが介在するまでの間、遠隔操作で製品を利⽤できないように停⽌させることもできます。

MARKET INSIGHT

Doing business in – and with - Japan

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While some Japanese brands are famous the world over and their products familiar in our homes, factories, offices and garages, the country – and particularly its business culture – remains an opaque mystery to most outsiders. Given the huge growing potential for M2M/IoT in the country and the fact that many Japanese exporters, as highlighted in our first article, are now looking to partner with foreign companies to get connectivity and other services on a global basis, what’s it actually like when it comes to trying to do business in the country?

Foreign vendors are often very good at creating and adding new business value for their customers

M2M Now - April / May 2015

Yuta Torisu: IDC Japan

Once again, IDC Japan’s Yuta Torisu sets the scene: “While native Japanese IoT vendors have obvious advantages that shouldn’t be ignored by new entrants, foreign vendors also have their own when it comes to entering the market. For a start, foreign vendors are often very good at creating and adding new business value for their customers that involves far more than just the supply of underlying technologies and resources.” He adds: “This is in contrast to the approaches of many Japanese vendors who are relatively cautious and conservative by comparison, concerned by possible standardisation issues, the impact of regulatory changes, or possible exposure to failure. Foreign companies also seem far better at building ecosystems by acquiring or partnering with other vendors that have technologies or services that they don’t. Finally, foreign vendors often have access to broader sets of IoT use cases and the associated best practice principles than those who have only worked in Japan. This is especially important in areas such as evaluating security threats or looking at the implications of privacy and identity issues. If non-native IoT vendors can take some of these insights on board, they’re well set to expand their businesses in Japan.” When it comes to actually doing business in Japan, there are as one might expect numerous variations in cultural and business practice that entrants have to be sensitive to. For Thomas Strandin, head of account management at Telenor Connexion, one very important issue involves trust: “In terms of doing business in Japan, companies there in general investigate their suppliers extremely thoroughly. They are very careful and ambitious but, once you have earned their trust, you normally have a very long relationship and partnership with them – such as our story with Hitachi explored in the accompanying interview. In my experience, the Japanese are very trustworthy and honest in business and keep their word. Some outsiders might find the work setting quite oldfashioned and conservative compared to the West, especially where business hierarchies are concerned.” Trust – and associated qualities of openness – are also emphasised by Denis Miyauchi, senior consultant at the customer engagement division of Ericsson North East Asia. He observes, “Japanese companies have extremely high quality requirements. Processes to deliver high quality products and services are well-established within companies so suppliers and vendors are similarly required to follow these rigorous processes themselves. New ideas or processes also need to be well-proven before they are adopted – which makes the idea of ‘first to market’ a challenge in environments where speed is of the essence.” Miyauchi continues, “It’s essential that foreign suppliers need to understand the culture that they’re dealing with and learn to read between the lines if they’re to meet the expectations

M2M Now - April / May 2015

Denis Miyauchi: Ericsson

Keith Kreisher: IMC

Thomas Strandin: Telenor Connexion

of their customers. This involves an appreciation of both the intended goals of the project and the customer’s state of mind. Discussion and flexibility are essential, supported by both detailed and insightful engagement with clients, if one is to build a relationship and win solid trust. This requires perseverance!” He concludes, “That said, this is already an advanced market for M2M and many end-user companies are well-established in using the technology to advance their businesses. However, in comparison to say European companies, business development has often been comparatively self-contained for geographical and cultural reasons. That’s somewhat limited their opportunities to reach out across multiple other countries and to companies that have global operations.” When it comes to actually setting up business in Japan, Telit’s country manager, Osamu Sato believes that, “You need to establish partnerships with operators, set up a local company and form a proper technical support team. Technical support in the local language is a key necessity here as are sales functions. In terms of Japanese business culture, it is important not to push customers too much. Also, don’t expect to get ultra-clear requirements from your customers and remember that you might need to take many steps to reach a final agreement. You have to adopt a consultative style of approach and that sometimes involves empowering a local employee to make a decision in negotiations.” One of the most obvious difficulties involved in understanding and working with a new culture and country involves language – and this naturally can present problems with Japan which, while it has a very successful and internationalised business sector, is also a huge internal market in its own right. As Keith Kreisher, executive director of the International M2M Council (IMC) explains: “As a highly developed economy, Japan has its own sources of content covering IoT/M2M and there’s less exposure to English language media and news than there would be in other Asian countries such as Indonesia, Malaysia and, of course, India and Pakistan. This is also compounded by a reticence sometimes to use English. “That said,” he adds, “we see signs that this is changing with a younger cohort rising up companies. A lot of the enquiries that we get from Japanese companies tend to come from the energy and logistics sectors, while many respondents list marketing as their job function. Interestingly, these are often at the ‘manager’ level – the lowest job function that we provide for as most of our members are active at senior executive and decision maker levels. Are we getting more people coming from marketing in Japan compared to all the other countries represented in our membership lists because they are more likely to speak English? Or, are these comparatively lower-level people responding because they are younger – and therefore more likely to speak English? It’s hard to know.”

M2M April May 54-55.qxp_Layout 1 21/04/2015 07:35 Page 1

市場を読む

どこよりもユニーク ‑ 日本のIoT市場の状況世界のどの国もどの文化もユニークだが、特に際立ってユニークなものがある。日本はまさにそれにあてはまる。 19世紀終盤のわずか二十余年の間に、ほとんど立って歩き始めたばかりの状態から一気に世界の工業大国へと変貌を遂げ、さらに20世紀の後半には第二の変貌を成し遂げて、製造と品質向上プロセスを改革し、その内容は全世界が学ぶところとなった。それと同時にIT、ロボット、家電分野など多くの分野で先頭を切っている。

「早く成熟した」 ‑ そして巨大な成長の可能性を秘めている

日本でのIDCによる最近の研究では、日本のIoT市場は、特に製造、輸送、電気ガス水道等の部門に関しては、2014年あたりにインテリジェントシステムと装置

技術要素別の日本IoT市場の収益予想、2013－2019

接続プラットフォーム分析 IoTインフラストラクチャーサービスセキュリティー

18,000,000 16,000,000 14,000,000

資料：IDCジャパン、2015年2月

インテリジェントシステム/装置

12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0

2013

2014

2015

2016

2017

2018

2019

（主にその市場で使用される接続された組み込みシステ

ムにより構成）を中心としながら比較的「早く成熟した」と説明されている。2014年だけでも、IoT装置の数は合計5.57億台に達し、昨年の総売上高が1兆ドルを優に超えていることからみて、2019年には9.56億台まで伸びると思われる。成長率も同様にほぼ12パーセントになると推定されている。 IDCジャパンの通信市場アナリスト鳥巣悠太氏によれば、政府の取り組みは、今回のこの波に対しても再び大きな役割を果たすべく計画されているように見えるとのことだ。「短期的には、日本政府は、今後5年くらいにわたりスマートメーターの採用を推進しようとしています。その理由の一つは、2011年3月の地震の結果生じた原子力発電の危機から来ています。それにより日本は今、スマートグリッドと再生可能エネルギーに、さらにいっそう焦点を合わせるようになりました。それに加えて2016年4月には、小売電力の自由化も開始されます。その結果として、各種のIoT関連のベンダーたちは、店舗やスタジアムでのエネルギー効率の制御や、発電の最適化のための太陽電池パネルの制御、または高齢者を保護するための家庭用エネルギー管理システムや、家庭用エネルギー使用量のモニタリングなど、様々なエネルギー関連ソリューションに焦点を当てています」

オリンピックレベルの性能

さらにIDCの鳥巣氏は続ける。「しかし、長期的な視点から見れば、IoT市場は、装置市場により主導されるのではなく、クラウド、分析、バーティカルソリューション、セキュリティサービス等を含む統合されたICT 市場により主導されるでしょう。既に日本政府が注 ▼

今日本がM2M / IoTに対してどのような立場に立っているかを考察する際に、多くの解説者は、今後新たな革新と投資が急増することを期待している。多くのアプリケーションの分野では、既に堅実で革新的な作業が行われており、それらは家電製品の遠隔操作またはモニタリングを管理するホームネットワークの水準を向上させるために1997年に創設されたECHONETコンソーシアムのような政府機関によって推進されていることが多い。

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鳥巣悠太： IDCジャパン

目している一つのイベントは2020年の東京オリンピックであり、政府はこのイベントをサポートする上でのビッグデータ分析の役割に関心を持ち始めています。これを補完するものとして、さまざまなIoTのベンダーたちも同様に、犯罪者を検出するためのリアルタイム監視カメラデータ、建物内のエネルギー使用量やスマート交通などのような、データ活用のための高度な分析に焦点をおいています」富士通の新技術担当シニアディレクター、サノ・ヒサユキ氏も、IoTの革新に対して果たす東京オリンピックの触媒的役割を強調している。「政府は現在、無線 LANポイントや公共の接続性を拡大することによって、市の環境を整備しています。こうして政府が海外から多数の訪問者を迎えるための準備をする中で、IoTの役割がさらに重要になってきます。日本はすでにネットワーク社会となっており、そういう中で国が災害救援や農業などといった分野で先頭を切っていると言えるでしょう。日本はまた、社会に重点を置き、高い人口密度を持つ国なので、こうした分野で特定のソリューションを展開することはより容易くなります」

人口動態と需要

HCLのエンジニアリング及び研究開発のシニアバイスプレジデント、スカマル・バネルジー氏は、政府の力と同時に、ある種の国民的原動力が働いていると見ている。「日本は常にロボット工学やその他の最先端の技術に焦点を置いた、技術と自動化の最前線に立ってきました。製造業は日本のGDPの50％以上を占めており、そこにおいてわずか1パーセントでも生産性が改善されれば、数十億単位の価値が追加されることになります。ヘルスケアと生活支援 (日本の医療機器の支出はWHOによれば世界第二位である )も、地球最大のテクノロジーに精通した熟年人口を持つ国にとっては、重大事となるでしょう。それと同様に、高度な都市化によって促進されたスマートシティは、既に輸送管理や電子財布などのサブシステムが導入されています」

スカマル・バネルジー： HCL

フレドリック・アカリンド：テレノールコネクション

バネルジー氏は続ける。「スマート製品とサービスのこの新しい波は2本の柱が基盤となっています。それは接続性と知性の二つです。日本の総務省 (MIC) は、ネットワークアクセスの遍在化を促進するために、 2004年の早期にu-Japan政策を展開し、政策立案者たちは、10年以上にわたってIoTに対する準備を進めてきました。日本は、宣伝を最小限に抑えながら、ゆっくりと着実にIoTのアプリケーションを構築してきているのです」自動車製造を完成させた国として、日本がこの分野でも大革新を進めていることは、あまり驚くようなことではないとジャスパーの戦略バイスプレジデント、マカリオ・ネーミー氏は説明する。「コネクティッドカーのスペースは市場で最も支配的なトレンドの一つであり、日本のネットワーク事業者とソリューションパートナーの大きな焦点領域の一つです。しかしその市場は、日本の携帯電話事業者が日本国内での展開を支援しているため相当閉鎖的でした。その傾向は今変わりつつあり、自動車メーカーは世界の大多数のために、単一の接点で働くことに関心を持ち始めています。それと同時に、携帯電話事業者のコミュニティも国際的に顧客をサポートすることに関心を持ち始めています」テレノールコネクションの販売バイスプレジデントであるフレドリック・アカリンド氏も、こうした国際化に向かう傾向に注目している。「日本はまた、電気自動車の世界的リーダーでもあります。当社の顧客である日産は、世界初のゼロ•エミッション車リーフを発売しました。それに加えて日本には、当社の別の顧客であり、フォークリフト、高度な倉庫や物流ソリューションの世界的リーダーであるトヨタマテリアルハンドリングに代表されるような、自動化された製造の分野での革新者としての長い歴史もあります」

M2Mは実を結んでいる国土の狭い日本が、この限られたリソースを活用することに焦点を当てていることは、ほとんど驚くことではない。NECの事業開発のツツミカワ・ヒロ氏は言う。「マキーナリサーチによると、日本はIoTと農業では世界一です。例えば、NECは、日本の農業生産法人GRA社により『ミガキイチゴ』のブランドで『食べる宝石』として販売される高級イチゴ用の水耕イチゴの生産をサポートするために、M2Mネットワークとクラウドベースのビッグデータ分析ソリューションを提供するという形でGRA社と協力しています。当社は、栄養素の温度、灌漑状況や量を制御し、農場の情報と作業計画システムや生産量予測と植える計画を分析する制御システムと情報のやり取りをするセンサーを提供してきました。さらに、GRAはオンライン及びテレビ電話会議により、収量の増加または病気の制御のために、専門家からの遠隔監視指導を提供することもできます」

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市場を読む

日本で－日本と－ビジネスをする

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日本のブランド品は、世界中で有名であり、日本製品は、家庭、工場、オフィスやガレージでおなじみだが、日本という国、特にそのビジネス文化は、部外者にとっては未だに不透明な謎に包まれている。日本でのM2M / IoTの巨大な成長の可能性と、最初の記事でも強調したように、多くの日本の輸出業者は、今やグローバルベースでの接続性や他のサービスを取得するために、外国企業との提携を求めているという事実を考えてみた時に、実際に日本でビジネスをしようとした場合にはどのようになるだろうか。

海外のベンダーは、顧客のために新しい事業価値を創造し、追加するという点に、非常に優れていることが多い。

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鳥巣悠太 (トリスユウタ)： IDCジャパン

IDCジャパンの鳥巣悠太氏が再び状況を説明する。「もちろん日本人のIoTベンダーは、新規参入者が無視できない明らかな利点を持っていますが、市場参入という話になれば、海外ベンダーも、彼ら独自の利点を持っています。まず第一に海外ベンダーのほうが、基礎となる技術や資源の単なる供給というレベルをはるかに超えた新しい事業価値を、顧客のために創造し、追加するという点において、非常に優れていることがよくあります」鳥巣氏はさらに言う。「これは起こる可能性のある標準化問題、規制の変更の影響、または失敗する可能性などを心配するゆえに、比較的慎重で保守的な多くの日本人のベンダーのアプローチとは対照的です。外国企業もまた、自分にない技術やサービスを有する他のベンダーたちを、買収したり提携したりすることにより、エコシステムを構築するのにはるかに優れているように見受けられます。最後に、海外ベンダーは、日本でしか働いたことのない人々に比べ、しばしばIoT使用状況のより広範な実例や、それに関連するベストプラクティスの原則に通じていることがあります。これは、セキュリティ上の脅威の評価や、プライバシーとアイデンティティの問題の影響を調査するような分野では特に重要です。日本人でないIoTベンダーが、これらの洞察のいくつかを理解し、受け入れることができたとすれば、日本での事業展開は非常に希望的でしょう」実際に日本でビジネスを行うとなると、文化やビジネス実践において新参入者が気をつけるべき様々なバリエーションがある。テレノールコネクションのアカウント管理のトップ、トーマス・ストランディン氏によれば、非常に重要なのは信頼だということである。「日本でビジネスを行うという点でみると、現地の企業はサプライヤーに対して徹底した調査をするのが普通です。彼らは非常に慎重で野心的ですが、一旦彼らの信頼を獲得すれば、通常は非常に長続きのする関係と連携を得ることになります。添付のインタビューで検証されている当社と日立との関係はその一例です。私の経験では、日本人はビジネスでは非常に正直で信頼でき、約束を守ります。ただし部外者の立場から見ると、特にビジネス上の上下関係に関しては、西洋に比べて仕事のやり方がかなり時代遅れで保守的と見えるかもしれません」信頼 (とそれに関連した資質としてのオープンさ)は、エリクソン北東アジアの顧客エンゲージメント部門のシニアコンサルタント、デニス・ミヤウチ氏も強調するところである。彼は言う。「日本企業は高品質に対する要求が非常に高いのです。高品質の製品とサービスを提供するプロセスは、企業内で十分に確立されているので、サプライヤーやベンダーも、同様にこうした厳格なプロセスに従わざるをえないのです。新しいアイデアやプロセスも、それらが採用される前に、十分に実証される必要があります。ですからスピードが最重要な環境の中での、『真っ先に売る』という考えは困難に直面するのです」ミヤウチ氏は続ける。「外国のサプライヤーたちが顧客の期待に応えようとするならば、相手の文化を理解して、行間を読むことを学ぼうと努力することが必要不可欠です。それはプロジェクトの意図

M2Mの今 - 2015年4月/ 5月

デニス・ミヤウチ：エリクソン

キース・クレイシャー： IMC

トーマス・ストランディン：テレノール・コネクション

する目標と、顧客の心の状態の、両方に対する理解が必要であるということです。顧客との関係を構築し、確固たる信頼を獲得するためには、顧客との緻密な洞察力による交流によって支えられる話し合いと柔軟性が欠かせません。そのためには忍耐力が必要です！」ミヤウチ氏は、次のように話しを締めくくった。「そうは言っても、ここはすでにM2Mの先進的な市場であり、多くのエンドユーザー企業は、事業を進めるためのその技術使用を十分に確立しています。しかし、例えば欧州企業と比較すると、事業開発は多くの場合、地理的文化的な理由のために、比較的自給自足になっています。そのせいで、他の国々やグローバルに事業を展開している企業に手を差し伸べる機会が限られてしまっているのです」実際に日本でビジネスを設立するとなるとどうだろうか。Telit社の日本カントリーマネージャー佐藤修(サトウオサム)氏はこう考える。「まず事業者とのパートナーシップを確立し、地元の会社を設立し、適切な技術サポートチームを作ることです。現地の言語での技術サポートは、販売機能と同様にここでは絶対不可欠です。日本のビジネス文化では、顧客をプッシュしすぎないことが重要です。そして、顧客から超明確な要求がくることを期待できません。最終合意に至るまでには、多くの手順を踏まなければならないこともあるのを覚えておいたほうがいいでしょう。協議スタイルのアプローチを採用するのがよく、地元の従業員に交渉での決定権を与えることもしばしば必要になります」新しい文化や国を理解し、そこで仕事をする上で、明らかな最大の難関の一つは、言語の問題である。日本は非常に成功し国際化された事業部門を持っていながらも、それ自体が巨大な内部市場でもあるので、自然とその点が問題になりやすい。国際M2M評議会（IMC）のエグゼクティブ•ディレクターであるキース・クレイシャー氏は、この点を次のように説明する。「高度に発達した経済として、日本はIoT / M2Mを取り扱うコンテンツの独自の情報源を既に持っており、インドネシア、マレーシア、そしてもちろん、インド、パキスタンなどの他のアジア諸国に比べると、英語のメディアやニュースに対する露出度が低いのです。そして英語使用に対する消極性がしばしばそれに輪をかけます」クレイシャー氏はこう付け加える。「そうは言っても、こうした傾向は、企業を立ち上げる若い世代により変りつつある兆候が見えます。私たちが日本の企業から受ける問い合わせの多くは、エネルギー、物流部門から来る傾向がありますが、応答者の多くは、マーケティングを彼らの職能と記入しています。興味深いことに、これらは多くの場合「マネジャー」レベル－私たちのメンバーのほとんどはシニア・エグゼクティブや意思決定のレベルにいるので、これは私たちが供給している中では最も低いレベルの職能なのですが－です。私たちのメンバーシップリストにある他の国々と比較して、日本のマーケティングからより多くの人々がきているのは、彼らがより英語を話しやすいからなのでしょうか。それとも、こうした比較的低い職位の人々が応答してくるのは、彼らが若いのでもっと英語を話しやすいからなのでしょうか。そこはよくわかりません」

INTERVIEW

The business alchemy of the IoT The medieval alchemists searched long and hard to find the Elixir of Life and turn base metals into gold. Our generation – and especially the M2M/IoT community – is now carrying out a similar transformation, turning silicon, copper, rare earth elements and the airy ether of the radio spectrum into new products, services, business models and profits. M2M Now recently spoke with Roberto Siagri, CEO of Eurotech, about the role his company is playing in this transformation and what the future holds.

RS: We’re one of the leading players in the embedded market. We offer a broad product portfolio including computer boards, purposebuilt computer devices and high performance, embedded computing systems. This gives us a solid basis for our IoT/M2M solutions. Purpose-built devices in particular are the building blocks for many industrial, commercial, transportation, medical and defence systems and applications - and have been our specialty for 20 years. Our broad range of M2M Multi-Service Gateways plays an important part too. State of the art M2M solutions also require welldesigned software and communication services to run on top of that hardware, so another important element that we offer involves software, tools and services. This gives our partners and customers a complete set of M2M technology building blocks.

It’s all about making the IoT accessible and lowering the Total Cost of Ownership (TCO), dramatically lowering initial investment, reducing project risks in M2M/IoT and cutting time to market. We achieve this by providing a full ‘IoT operating system’ that gets companies connected quickly and simply and frees them up to concentrate on their applications. It’s about dissecting - and encapsulating - the complexity of an end-to-end distributed system, from field devices to the cloud or enterprise application, with support that extends beyond just the development phase. M2M Now: What are the basic elements that Eurotech offers and incorporates into its IoT offerings - and what specific business problems do your products address and resolve? RS: As I said before, state of the art solutions require a well-designed stack of software and communication service layers and here we’ve simplified the IoT architecture by what you might call a ‘divide and conquer’ approach. Every dissected part has been encapsulated into a building block that then interacts with other building blocks through standard protocols and simple interfaces.

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M2M Now: Roberto, can you give us an overview of Eurotech’s approach to IoT, both in terms of its product portfolio and wider business strategy?

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Above that, there’s the communication layer that connects devices to the cloud or data center and is optimised for distributed and mobile systems. We’re agnostic about the media the customer uses which could include cellular, satellite, WiFi, Ethernet or others - as long as they support TCP/IP. We can also provide SMS as an alternative for some applications. On top of the communication layer lies our cloud-based IoT/M2M platform - Everyware Cloud - which integrates easily into existing enterprise IT infrastructures, offering simple access through standard APIs to real-time and historical data from devices. This IoT Integration Platform also offers device life-cycle features to ensure smooth deployment and management of devices in the field and is also available for deployment in a customer’s own premises. Finally, I’d like to highlight carrier certification issues - required in many markets for cellular-connected devices. For companies selling their products or services internationally, these certifications take time, effort and costs and are a major barrier. Our ReliaCELL product range therefore offers a very attractive, pre-certified modular solution. In addition to these hardware and software solutions, we provide consulting services and a scalable pay-as-you-go model to facilitate our customers’ adoption of IoT, minimising risk and simplifying IoT proofs of concept. M2M Now: Eurotech has said that it takes an end-to-end holistic architectural approach to IoT. What does that that means for enterprises considering IoT deployment in the short term? RS: This means that customers can stay focused on their businesses without having to become hardware, software, communications or infrastructure scalability experts. Modularity and standard interfaces were the elements that made the x86 PC architecture so successful in the 1990s. By mastering IoT complexity in the same way and applying the divide and conquer strategy I mentioned earlier, we’ve isolated and simplified things through modular hardware and software building blocks. These can be easily coupled together or combined with third party building blocks, just like Lego. This concept applies from the Gateway through to the cloud management platform. By turning a complex problem that required a lot of skills into a simple problem that customer can solve with readily available IT capabilities, they can prototype their IoT solutions rapidly and cost-effectively. We’ve transformed a distributed architecture of hundreds - or even hundreds of thousands - of devices to a simple client-server architecture. M2M Now: What are the basic elements of M2M/IoT infrastructures and what should organisations do to prepare their environments for IoT migration, ensuring that they get it right the first time to minimise disruption? RS: Our IoT architecture layers are:

M2M Now - April / May 2015

• Field sensors and actuators at the edge • Multi-Service Gateways - computers that locally aggregate field sensors and actuators • ESF middleware installed on the gateways • Communication networks - 2G/3G, LORA, SIGFOX, Satellite, PRN, etc • Everyware Cloud - IoT/M2M Integration platform-as-aservice • Apps developed on top of the platform accessing the distributed device infrastructure through the REST API. IoT infrastructures are a business overhead - just like CRM and ERP systems – and IoT complements CRM. With CRM you contact the product through the customer, but with IoT you contact the customer through the product. Combine the two together and you increase customer insight and business knowledge, improve maintenance and repair services, and can transition to new device-as-a-service business models. Our building block strategy also dramatically minimises risk. Instead of increasing risk, IoT is actually a complementary tool that enhances an organisation’s dexterity, agility and efficiency at many levels. In factories and logistics, IoT can increase efficiency and reduce opex, while in distribution and maintenance it will improve customer experience and increase sales. It also provides the flexibility required to bring business models and processes into the digital age. M2M Now: Can you expand on Eurotech’s Multi-Service Gateway concept and the IoT/M2M Integration Platform? RS: This is where our Java and OSGi-based application framework – ESF – that I mentioned earlier comes in, abstracting the hardware to protect software investments. In smart-home applications, for example, rapid hardware obsolescence can jeopardise a business, so new services need to be easily deployed, loaded and activated at any time. Another vital building block is the Everyware Cloud I also touched on. We’ve created a seamless interface between enterprise servers and in-field devices, allowing IT managers to program in-field devices using the same tools used to program servers. Via the Gateway, data can be processed at the edge, minimising data transfer to the cloud or data centers and improving reliability and real-time reactions. This decouples the data producers and the data consumers, increasing the value of historic data produced. Opportunities for data fusion are also maximised, as well as the value of data analytics. M2M Now: How can multiple, complex and changing services and tasks be performed in a smart edge device to help an organisation achieve tangible business results in real time? RS: Take vending machine applications. Historically, these let us understand the number of goods stocked in machines and when to refill them. But vending machines today come with touch screens, electronic payment solutions, environmental sensors and video systems that can identify target customer groups. These now involve two-way communication and frequent updates with new software elements and features which, in turn, require M2M/IoT solutions that are more ITcentric in nature. It’s no longer about simple telemetry. These IT-centric solutions open new doors. Companies that traditionally implemented and integrated embedded devices relied on developers skilled in C++ and with a deep understanding of embedded systems. Programming business

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From the Gateway hardware layer up, Eurotech provides an application framework called the Everyware Software Framework (ESF) to increase flexibility and interchangeability. Based on Java and OSGi, ESF is one particularly important building block in the device software, speeding up the development of specific vertical applications or business logic. By abstracting the hardware it protects the customer’s investment in software, while also allowing new services to be dynamically loaded onto our Multi-Service Gateway.

INTERVIEW

logic in Java on embedded devices significantly lowers entry barriers, allowing more ITcentric system integrators to exploit purpose-built devices for specific vertical markets. M2M Now: IoT is all about connecting systems and devices and using embedded Big Data, analytics and business intelligence. But with so many ‘moving parts’, there’s a real fear for some that IoT may be too complex for them to tackle this early on. What’s Eurotech’s response to that? RS: Yes, IoT will be the new Big Data generator, so its wider architectural implications must be appreciated. IoT implementations have to be future proof if they’re to capitalise on the data generated. One of the drivers for our IoT architecture has been the reuse and mash-up of data through a type of Enterprise Service Bus for machine interfaces which are easily connected to the most popular BI and analytic tools like Hadoop, Pentaho and Actuate. Another driver has been aimed at designing a modular architecture that reduces anxiety and uncertainty for ‘Roll Your Own’ IoT implementations. We’ve put a lot of investment into encapsulating industry-standard ‘moving parts’ in easy-to-use building blocks. Encapsulating - and consequently hiding - the inherent complexity of distributed device solutions through this approach, based on open industry standards, gives customers the confidence to start exploring the benefits of IoT. M2M Now: Security represents another huge challenge in an IoT environment. If everything’s connected, there’s potentially much more collateral damage in the event of a successful hack or penetration. What’s Eurotech’s IoT security strategy? RS: Security in IoT projects involves more than just combining some perimeter defence solutions like white and black listings, firewalls and encrypted communications. While these are important, we believe that security is significantly improved by incorporating proper authentication methods; the use, storage and management of certificates; and, especially, an overall architecture and design that can eliminate many possible attack scenarios. Eurotech’s IoT building blocks offer best-in-class authentication, security transport and software validation mechanisms, as well as anti-tampering features on the service Gateway. Cloud platforms also have to be validated and audited on an on-going basis by external security specialists. M2M Now: Finally, what‘s Eurotech’s prediction for how quickly mainstream businesses will transition to IoT? RS: Today’s M2M technologies scale a lot better than before. They can now be deployed by customers who previously couldn’t have used embedded systems or appropriate communication technologies. Customers can now get valuable device data into their business applications at an affordable price, faster and better than ever before.

Roberto Siagri, chairman and CEO, Eurotech

The holistic approach we have taken will speed up this business transition. While IoT for homes and buildings might require a new product class, this isn’t necessarily true for Industrial IoT, or for many legacy machines already in the field. IoT can be retrofitted just by adding a service Gateway, while the remaining elements simply consist of software components in the cloud. A proper IoT implementation can be like an Elixir of Life for many companies – or, at least, a must-have tool. Global competition is based more and more on efficiency, customer experience and the revenues that come from new services. Who would turn down the offer of the IoT Elixir?

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M2M Now - April / May 2015

A Deep Understanding of M2M and IoT. When given an opportunity to take your place ±ĵŅĹč ƋĘå ŞåŅŞĬå ±ĹÚ ƋåÏĘĹŅĬŅčƼ ƋĘ±Ƌ ±ųå ųåÚåĀ ĹĜĹč “smart,” there’s no time for testing the water. %Ĝƴå ĜĹ Ęå±ÚĀ ųŸƋ ±Ƌ Fe ƚŞåų aŅÆĜĬĜƋƼ ƖǈŎĂţ From the hardware, software and services that form the infrastructure of the IoT, down to the end-user applications that are changing the way we live, work and play, this is where you’ll immerse yourself in the industry’s newest and biggest breakthroughs. BåųåØ ±Ƌ ƋĘå eĵåųĜÏ±Ÿű Ĭ±ųčåŸƋØ ĵŅŸƋ ĜĹā ƚåĹƋĜ±Ĭ üŅųƚĵ ŅĹ ĵŅÆĜĬå ĜĹĹŅƴ±ƋĜŅĹØ ƼŅƚűĬĬ ĹŅƋ ŅĹĬƼ Ƌ±ĩå ±Úƴ±ĹƋ±čå Ņü Ƌ±ųčåƋåÚ ÆåĹåĀ ƋŸ like the Mobile Innovation Conference, Connected Life Stage and M2M Zone; you’ll also meet face-to-face with like-minded professionals who can help you take the next giant leap forward. In the process, you’ll reach an important conclusion: when it ÏŅĵåŸ ƋŅ Ā ĹÚĜĹč ĹåƵ Ƶ±ƼŸ ƋŅ ĜĹĹŅƴ±Ƌåó±ĹÚ ŞųŅĀ ƋóÆåĜĹč ĜĹ over your head is a beautiful thing.

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OPINION Sensor technologies allowed wearable technology to become a reality - now it is the advances in sensors that will help take it from hype to commercial success James Hayward is a technology analyst with IDTechEx. He has a first-class MSci degree in Medicinal Chemistry from Imperial College London. During his research, James worked on making lipid-based protocells intended for use in intelligent drug delivery systems. James has commercial experience in brand creation, development and marketing and at IDTechEx, he is researching markets and enabling technologies for wearable electronics.

New sensor technologies will take wearables from hype to commercial success There will be over 3 billion sensors in wearable technology devices by 2025, with more than 30 percent being emerging sensors types, says James Hayward of IDTechEx. This is one of the main conclusions from the company’s latest market research report, Wearable Sensors, 2015 – 2025. As you attend the wearable technology conference circuit, most recently at the Wearable Technology Show in London’s ExCel, you feel the mood is changing around this exciting sector. At this point, it makes sense to remind ourselves of one key component driving this excitement: sensors.

measurement units, optical sensors (including optical heart rate monitoring, PPG and wearable cameras), wearable electrodes, chemical sensors, flexible stretch, pressure and impact sensors, temperature sensors, microphones and other emerging wearable sensors.

Sensors are the most diverse component type in wearable devices and they enable the key functions that will make wearables be worn. The majority of current solutions have been directly adapted from mobile phones, and in turn from automotive applications. Inertial measurement units (IMUs), comprising combinations of accelerometers, magnetometers, gyroscopes and sometimes even pressure sensors are produced in their billions every year. Optical sensors used as proximity sensors, motion detectors or even chemical sensors (portable spectrometers) are also adapted from other industries, but have found excellent use cases in wearable devices. Adapting sensors from other applications provides device designers with very attractive solutions at very competitive price points, making the most of well-established manufacturing infrastructure set up for large volumes.

The report finds that the largest market sectors in the long term are in chemical sensors, due to large volumes of adoption for medical use, and strong resistance to commoditisation thanks to healthcare regulation and advanced technologies. By volume, IMUs will remain the most common for the foreseeable future, making up just under half of the 1.09 billion wearable sensors by 2020. However, it is the emerging flexible pressure, stretch and impact sensors that will see the largest growth, overtaking IMUs in the long term.

A new wave of sensor innovation has arrived However, the set of requirements for wearable technology components varies from that of a smartphone or vehicle. Properties such as flexibility and washability become prominent, and many of these adopted sensors cannot meet these needs. Therefore, a wave of innovation of new sensor types specifically developed for wearable technology is upon us. Stretch, pressure and impact sensors are also being used, with applications including impact monitoring, body motion capture and healthcare monitoring all being targeted. Measuring electrical signals from the body is also prominent, with electrode technologies seeing a wave of innovation; traditional Ag/AgCl hydrogel electrodes for medical monitoring are not suitable for consumer wearables, so many options for dry electrode solutions are being explored.

Sensor technologies allowed wearable technology to become a reality, and now it is the advances in sensors that will help to take it from hype to commercial success. Their incorporation alongside new energy harvesting and storage techniques, efficient power management systems and low power computing - in form factors that will be increasingly flexible, fashionable and invisible - will drive the wearable technology market to US$70 billion by 2025. Relative Market Size by Wearable Sensor Type in 2020 Other

Inertial Measurement Unit Sensors

Chemical sensors

Biopotential sensors

Stretch and pressure sensors

Optical sensors

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EVENT DIARY

M2M World Congress 2015

IoT World

Grand Connaught Rooms, London 28-29 April 2015 http://www.m2mconference.com

San Francisco, USA 12-13 May 2015 http://iotworldevent.com

IoT-X Live

Japan IT Week

Digital Catapult Centre, London, UK 30th April 2015 http://www.streamtechnologies.com/events/iot-x-live

Tokyo, Japan 13-15 May 2015 http://www.japanit.jp/en/ConcurrentShows_Spring/M2M/About/

M2M Forum CEE Vienna, Austria 9th June 2015

LiveWorx Westin Copley Place Hotel, Boston, MA, USA 4-7 May 2015 http://liveworx.thingworx.com/

Mobilize the Enterprise: Productivity and Possibilities Ottawa, Canada 5-6 May 2015

2nd Annual China International Energy Harvesting Summit 2015 Crowne Plaza Shanghai, P.R. China 27 May 2015 www.globalsmarthomesummit.com

Wearable and Flexible Technologies World Crowne Plaza Shanghai, P.R. China 27-28 May 2015 www.wearableandflex.com

Global Smart Home Summit

http://www.wavefrontsummits.com

Crowne Plaza Shanghai, P.R. China 28-29 May 2015 www.globalsmarthomesummit.com

IoT Summit Boston M2M+ Symposium Milan, Italy 27 and 30 April 2015 http://www.m2mplusforum.com

M2M Forum

Boston, USA 28-29 May 2015 https://www.re-work.co/events/iotboston

IoT Business Platform Asia

http://www.m2m-forum.eu

5th Smart Communications & Technology Forum Poland 11 June 2015 http://cbepolska.pl/en/v-smartcommunications-and-technologyforum.html

Data-Driven Production Optimization Conference Houston, TX, USA 16-17 June 2015 http://www.upstreamintel.com/data -driven-production-optimization/

Public Policy in the Internet of Things Birkbeck College, UK 17 June 2015 www.beechamresearch.com/

Future of Wireless International Conference - Cambridge

Milan, Italy 28-29 April 2015 http://www.m2mforum.it/en/

Thailand 28-29 May 2015 http://m2mbusiness-platform.com/

The Emirates Stadium, London, UK 23-24 June 2015 www.cambridgewireless.co.uk/futur eofwireless/

Smart to Future Cities

TM Forum Live!

Connected Cars

London, UK 28-29 April 2015 http://smarttofuture.com

Nice Acropolis Convention Centre, Nice, France 31 May - 4 June 2015 http://www.tmforumlive.org/

Amsterdam, The Netherlands 23-25 June 2015 http://connectedcarsworld.com/

Telematics Detroit

4th CAR Hmi Concepts & Systems

Detroit, USA 3-4 June 2015 http://www.tuauto.com/detroit/exhibit-index.php

Berlin, Germany 25-26 June 2015 http://www.car-hmi2015.weconect.com/en/

M2M For Oil & Gas London, UK 29-30 April 2015 http://www.smionline.co.uk/energy/uk/conference/ M2M-for-the-Oil-and-Gas-Industry

M2M Now - April / May 2015

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