Networked Society

Through Machine-to-Machine Communications

What will be the role

for operators?
IT/IP Business Competence Development Programme - June 12th 2013

KTH Royal Institute of Technology

Andrs Laya
Research Engineer

Part I Introduction to M2M

Overview of M2M
Common Applications
M2M Characteristics
M2M and the Forecasts
Challenges

Part II Application Cases

Access Control and Time Reporting for Homecare

e-Home Care in Vsters town
Stockholm Royal Seaport
Building Automation in Halmstad
Final remarks
3

Q1

What is Machine-to-Machine?

M2M

a Definition

Machine-to-Machine (M2M) communications refer to the exchange

of data between devices:
With minimal human intervention,
Controlling and monitoring applications.
5

M2M Networks
Wired Solution cabling between devices and gateways:
- Pros: reliable, high data rates, secure, little delays.
- Cons: expensive, not scalable, no mobility.
Wireless Capillary Solution shared short-range network:
- Pros: cheap, scalable, low power.
- Cons: low data rates, interference, lack of ubiquitous coverage.
Wireless Cellular Solution dedicated cellular link:
- Pros: excellent coverage, mobility, roaming, secure.
- Cons: expensive operation, not energy efficient, expensive to maintain.
From M2M in Smart Grids & Smart Cities Technologies, Standards, and Applications, Mischa Dohler and Jess Alonso-Zrate

Devices
(Sensors/Actuators)

Processing
Management
Application

Any type of network that

facilitates end-to-end
conectivity

Q2

What profitable applications

are feasible with M2M?

Smart Parking.
Smart Traffic.
Pay-as-you-drive Insurance.
Automatic maintenance scheduling.
Self-driving vehicles.
Fleet Managment.

Key technical aspects:

Vehicle to Infrastructure communications.
Vehicle to Vechicle communications.

Transportation

 Realtime symtoms report.

Automatic report for medicine intake.
Remote patient monitoring.

HEALTH

10

Smart bin collection.

Dynamic traffic lighting.
Building Automation.
Facility Management.
Smart lights.
Utility metering.

SMART CITIES

11

Smart Grids.
Industrial automation
Manufactoring automation
Telemetry.

AUTOMATION

12

M2M

Characteristics

Huge amount of devices

Need for Interoperability
Autonomous operation
Mainly uplink data to report sensed information
Small data transmissions, on/off or readings from meters
Duty cycling to report information
For many applications, mobility is not a major concern
Heterogeneity in terms of information priority
Energy efficiency and network lifetime
13

M2M

and the Forecasts

This 5,1% corresponds to
1.7 Billion M2M devices
out of 10 Billion total
[Cisco, 2013]

[IoT European Research Cluster Vision and Challenges for Realising the Internet of Things]

Low revenue per connection (ARPU)

Network has to be dimensioned for a number of devices transmitting few bits.

14

M2M

Technical Challenges

There is a need to

Provide connectivity to large number of devices

Prevent traffic peaks: congestion control.
Energy-efficient mechanism for autonomous devices.
Provide charging mechanisms suitable for M2M.

Specific Requirements

Reduce mobility signaling.

Time controlled transmissions.
Small data transmissions.
Interoperability.
Priority Alarm Handling.
15

M2M

Business Challenges

Existing solutions are typically dedicated to single applications.

Business model focused on provider-customer model.
Interoperability between M2M products vendors and networks.
Difficulties to analyse value.

16

M2M

Values and Drivers

Values

Low ARPU But high revenue per

application.
Consumers can be part of the
aftermarket in the co-creation of
values.
Data represents valuable
information:

Improved and customized services.

Reduce expenditures.
Optimize working times.

Drivers

Saturation of human market.

Declining costs in hardware and connectivity.
Expanding coverage of mature technologies.
Particular to each application:

Smart metering and UE 2022 mandate.

Health and change from episodic to continuous-care.
Large scale applications and incentives from public
funding.
17

Q3

How can TeliaSonera

make profit from M2M?

18

 Indirect relationship with M2M applications (Connectivity provider).

Emerging trend Global partnerships, solutions and services.

Application

Service
Management
SIM, Modules...

Beginning to understand the role of the data.

Application
Service
Enablement
DATA
Service
Management

Connectivity

Connectivity

Devices

Devices

Future revenues
Support business
decisions with data
intelligence.
Secure and Manage
data.
Creation of new
applications.

Revenues lay in service enablement and support of data management.

How will telcos evolve?

D. Boswarthick (ETSI) http://www.etsi.org/plugtests/COAP2/Presentations/03_ETSI_M2M_oneM2M.pdf

19

Part II

Phone Keys
Remote Monitoring
Smart City
Building Automation
Final remarks

Application Cases

20

Homecare

Access Control
and Time Reporting

Digital key using mobile phones

Handles access authorization and processes time registration data

Homecare authorities can prove service delivery

Relatives can monitor who enters the home of the patient

Big values:
Reducing complexity in keys management
Providing accurate reporting times

www.bluegiga.com/solution?g=Consumer&n=Phoniro

21

Showstoppers

MNO in charge of the application management

phased out the service, claiming:
Small market
Lack of suitable phones
Complex product for the sales force
Long sales cycles in the public sector

Change in
business model

Source: Jan I Markendahl Mobile Network Operators and Cooperation :

A Tele-Economic Study of Infrastructure sharing and Mobile Payment Services. 2011 KTH PhD dissertation.

22

e-Homecare

in Vsters town

Patient needs assistance several times per day

With ICT technology some physical visits can be replaced by
video conversation
Checking if medication is taken
Reminders
First contact in case of alarms
Big values:
300 e-home care customers
will result in 2 M annual cost saving
P. Forsstrm, BoIT 2.0. Lokala projekt 2012 , presentation for SABO, 20 February 2013.
www.sabo.se/aktuellt/Documents/BoIT2%25200%2520_20feb2013.pptx

23

Once again,
Showstoppers

Less than 30% of people of age above 70 have Internet

For the ISPs, the e-home care service represent:

A very small, price sensitive market segment
Customers that require a lot of customer care

Customers tend to mistrust the ISP installation

New Setup

E-home
service
provider

Actor
within
the town
External
actor

Home
care
authority

Internet
service
provider
Leasing
capacity
Urban
broadband
network
Landlord

Installation
by home
care staff

Service
fee
E-home
service
provider

End-users
(the elderly)

Home
care
authority

IT service
of the
town
Leasing
capacity

Broadband fee as part of monthly rent

Service
fee

Broadband fee as part of monthly rent

End-users
(the elderly)
Internet subscription

Installation
staff

Urban
broadband
network
Landlord

Source: J. Markendahl and A. Laya Business Model Challenges For Internet Of Things:
Findings From e-home Care, Smart Access Control, Smart Cities And Homes. 2013 IMP Conference.

Customers do not pay for a broadband

subscription
e-Homecare is part of the overall
homecare package
Installation done by homecare staff
The town IT service department:
Buys broadband connectivity
capacity
Acts as service provider
Is responsible for the technical
solution.
24

Smart Cities
The case: Stockholm Royal Seaport
Actors tend to think on terms that
Our services should be provided by our infrastructure
E
N
E
R
G
Y

T
R
A
N
S
P
O
R
T

H
E
A
L
T
H

M
E
D
I
A

Cellular, fixed or private

Uniform data access point

over any network
from any equipment

Connectivity

Even when sharing, service providers want to control the customer interface.
Fragmentation is expected, even if these services are technically very similar.

25

Smart Houses
& Facility Management
The case: Halmstad town

Stovepipe within the very same industry sector

Parallel applications are present

Typically provided with entirely vertical solutions:

Network deployment and operation

Connectivity

Billing

Customer relationship

26

The proposed solution is a horizontal and open business model using a shared common infrastructure.
The common infrastructure is operated by a neutral actor, a communication operator.

27

Key Factors
CASE

Technical
issues

Business model

Mobile phones for access control &

time reporting

No main
issue,
installation

MNO left, new

actor in charge

Big.
Clear.

Already
here

e-Home Care

No main
issue,
installation

ISP role unclear,

new setup

Big.
Clear.

Already
here

Stovepipe

Not there, many

sectors

Yes.
How to
exploit?

Yes

Stovepipe

Not there, one

sector

Yes.
How to
exploit?

Yes

Smart Cities Stockholm Royal

Seaport
Smart Houses and Facility
Management

Values

Entry barrier

28

Solutions based on
mobile communication
do not have a proper
M2M connectivity
model.
Traditional models are
based on
provider-consumer.

Consumers

Consumers

Change
in the
Relations

Application
Providers
Information
Brokers
Mobile
Operators

Mobile
Operators

}
Service
Providers

M2M services are often part of a complex value constellation.

Consumer not directly involved with communication provider

Change in Mindset

29

Some Remarks

Easier to assess the benefits of small and isolated solutions.

But M2M is heterogeneous, from end devices to technologies and applications.

Solutions involved changes in the traditional business thinking.

Including shift from stovepipes solutions to common infrastructure.

Successful cases have been addressed with tailored approaches.

An open research challenge is the study of applications in context; analysing
the inter-application coordination.
For example, the Phoniro application in Facility management.

Shared infrastructure should work for horizontal components that are

common across diverse vertical businesses.
Coherent vertical application should be build out of this horizontal components.

30

The Takeaways
Possibility to enter in the core business of any type of service.
Some solutions are out there, but no major player still making profits.
Market penetration will follow different time-cycles
Consumer Electronics are renewed every 1-2 years.
Vehicles, appliances and industrial devices have longer life-cycles (5-10 years)

How to use the manage data to deliver information?

this is the business!
How to achieve economy of scale?
Apple and Google application model to M2M.
If considering the independent software vendors,
how are they going to deploy industry-specific applications?

?
31

Further reads
Forbes - The Massive M2M Business Opportunity
Sanjay Poonen.
http://www.forbes.com/sites/sap/2013/02/18/the-massive-m2m-business-opportunity-part-1/

Machine-to-Machine in Smart Grids & Smart Cities. Technologies, Standards, and Applications
Mischa Dohler, David Boswarthick, Jess Alonso-Zrate.
http://cttc.es/resources/doc/121203-m2m-tutorial-alonso-boswarthick-dohler-globecom2012-4961955251780189470.pdf

Ericsson Service Enablement

http://archive.ericsson.net/service/internet/picov/get?DocNo=28701-EN/LZT1380878

DZNet - Tapping M2M: The Internet of Things

http://www.zdnet.com/topic-tapping-m2m-the-internet-of-things/

The Economist - Rise of the machines:

Moving from hype to reality in the burgeoning market for machine-to-machine communication
http://digitalresearch.eiu.com/m2m/report

laya@kth.se

http://wireless.kth.se/m2m/