Businesses make the wireless connection: machine-to-machine (M2M) technologies are evolving and competing for dominance as companies examine how M2M can streamline business processes.

WHEN GUGLIELMO MARCONI FIRST TRANSMITTED a wireless signal back in 1895, do you think he envisioned the impact it would have on our daily lives? It's hard to go anywhere without benefiting from wireless systems. Radios, satellites, cell phones, and even garage door openers all communicate wirelessly. While current attention has focused on using wireless transmissions to access sports scores, stock updates, and e-mail, these applications represent the tip of the iceberg. Soon, wireless data applications for everyday devices (cars, traffic signs, consumer goods) will change how we track packages, interact with our surroundings, and optimize work flows. Ultimately, wireless data will be able to provide a continuous and persistent stream of information about products, devices, machines, environments, and more.

In the August issue of MOBILE BUSINESS ADVISOR, we wrote an article titled, "Connect, Monitor, Manage" which described how machines, equipment, and other devices are being networked to collect information and streamline processes, also known as machine-to-machine (M2M) technologies. Mobile communication technologies such as Wi-Fi, Bluetooth, infrared, and other radio frequency (RF) options are already deployed into more than 40 percent of all information appliances. Microchips and sensors are being installed in vehicles, building systems, industrial machinery, home appliances, and more.

Although wired connectivity still dominates the landscape, businesses are eager to explore how wireless technologies can redefine their processes and service delivery models. In our surveys of major original equipment manufacturers and other adopters, approximately half expressed an interest in networking their products, devices, and equipment. Of this group, nearly 40 percent intend to use wireless technology, including cellular, Wi-Fi, ZigBee, and other modes.

Wireless device connectivity is vast in its applications, modes, and standards, and the arena continues to evolve. Several trends are shaping the future of wireless technologies including:

Opening of the unlicensed spectrum--For decades, the licensed spectrum has required strict adherence to FCC specifications. These specifications created stability, but stifled innovation. As these specifications have eased over the past decade, the unlicensed spectrum has become an important means for connecting people and devices in new ways, and at far faster data rates. In fact, in the past 10 years, data rates available over unlicensed wireless systems have increased tenfold from 10 kilobits per second (kbps) to 100 megabits per second (Mbps).

Creation of killer apps--Despite all the recent hype about wireless, no one is going to implement wireless communication technologies until there are good reasons to do so. And, until recently, there haven't been enough good reasons. This is rapidly changing. The number of small innovative firms offering solutions that let a business owner track, manage, control, and optimize assets is growing. As these companies develop new services for wireless communications, customers will be better able to find services suited to their particular needs. (For an example of firms innovating killer applications, visit http://www.M2MPoint.com and check out the list of highlighted technology companies.)

Feasible pricing structures--Companies make buying decisions based on value, not price. But, the fact remains that the price for wireless has been too expensive an option for many. Wireless requires users to either build their own infrastructure (proprietary, home-grown systems) or to pay subscription fees to network owners (such as cellular carriers). Many of the network operators have priced themselves out of the wireless data market--that is, until recently. Now, cellular companies such as T-Mobile, Sprint, and AT&T Wireless have begun offering competitive data rate plans.

Integration of long-range and short-range technologies--In the shipping industry, trucks traveling across the country have an obvious need for reliable long-range telemetry. However, the radios used for tracking trucks don't help track shipments at the loading dock. Companies are using short-range of LAN technologies to scan and track packages. This creates a disconnect when trying to get information about the shipment because the data is collected through two separate systems. But, as data plans come down in price, and wireless footprints expand, there is an intriguing opportunity for cross-over wireless applications. Already, manufacturers are developing cell phones with multiple modes that let users migrate between cellular networks on the road, and Wi-Fi when within a LAN. This integration between long-range and short-range connectivity may create the incentive for stronger adoption of connected devices.

But, the integration hasn't happened yet. The following section is a review of how long-range and short-range technologies differ and can be used in various environments.

Long-range options

Long-range communication is generally any transmission mode that reaches more than several hundred feet. This includes cellular, satellite, and analog control channel transmissions. Cellular has become the most popular long-range option. First, most businesses already have a relationship with a cellular carrier. Second, most of these networks offer good coverage. Third, cellular operators such as T-Mobile and Sprint are beginning to offer wireless data services. Until recently, network operators were hesitant to offer data services because of the lower average revenue per user (ARPU); machines online rarely need to transmit $60 a month worth of data. But, as our research has shown, the number of machines being connected will surpass the number of human users online. This potential data revenue is too large to ignore. Last, other long-range options are either unpopular, too expensive (e.g., satellite), or slated for retirement (analog control channels will be phased out by 2006).

Short-range options

The real innovation and disruption of late has come from the short-range players. These include Wi-Fi, Bluetooth, ZigBee, microwave, and other RF technologies. The freeing up of the unlicensed spectrum has encouraged these technologies to emerge. Another key driver of the short-range explosion can be attributed to the inability of cable, DSL, and dial-up ISPs to easily or affordably connect devices.

In our surveys and interviews, we find Wi-Fi to be the most popular choice for short-range wireless communications. This is probably due to three main factors:

1. Wi-Fi has gotten an extreme amount of press coverage.

2. Other technologies are somewhat more expensive and difficult to deploy.

3. Other modes have either fallen short in delivery or have only just begun to form (as is the case with Bluetooth and ZigBee, respectively).

The widespread adoption of these short-range networks will be a revolutionary event. Any type of machine that can collect, process, and transmit data will soon be on a network. It will quickly be commonplace for home appliances, factory machinery, people, retail products, and more to have some degree of connectivity with their environment.

Evolution continues

Wireless communication will play a large part in the way we live our lives. The ability to track and monitor remote assets or nodes, without running wires, is clearly a benefit. Research shows that wireless is a major priority for industry and business users. The benefits are clear, but hurdles remain. As the industry works to resolve some of the technical, business, and application issues in this space, expect to see important advances in the way business and lives are conducted--on the go and in constant change.

MOBILE BUSINESS BENEFITS

Machine-to-machine communications let businesses remotely track, monitor, maintain, and control equipment. Considering the high cost of dispatching specialized labor to travel to a piece of equipment of, even worse, the detrimental effect of downtime, M2M is much needed by companies with large numbers of machines, or those that manufacture of service devices and machinery over a wide geographic area.

Ian Barkin and John Williams are co-founders and managing directors of The FocalPoint Group, Inc. a market intelligence and research firm committed to providing information and support to the suppliers and beneficiaries of M2M technology. FocalPoint recently completed extensive research on market size, revenue opportunities, and strategic opportunities for M2M technologies. http://www.thefpgroup.com.