M2M Managed Services May Represent Future Opportunity

Kathryn Weldon
Kathryn Weldon

Summary Bullets:

  • Mobile operators are all going up the M2M value chain beyond connectivity services, adding end-to-end solution bundles for particular applications that may include connectivity, hardware, software and basic services such as provisioning, activation, SIM management, alerting, device management and troubleshooting, along with Tier 1 or Tier 2 customer support.
  • However, actual managed services, where the operator hosts and manages an application and runs a service on behalf of the customer (which provides value such as remote monitoring of assets that belong to the customer’s customer), are less common but seem a likely opportunity for the future, especially to cater to SMBs that have fewer resources.

A recent service launch by Vodafone, called Vodafone Remote Monitoring and Control Service (RMCS), is indicative of where Vodafone and many competitors are focused in adding value to their solutions.  RMCS provides a bundle including hardware, wireless network connectivity and application software that can help any company with remote assets to collect data and gain a real-time view of asset status and performance; this kind of capability is applicable to many different verticals and use cases.  When I first read the Vodafone press release, however, I saw the word ‘service’ and initially misconstrued this to mean that the operator would run this as a managed service for its customers.  It turns out that, at least for most large companies, not only are enterprises the expert on their equipment and how it is supposed to function, but they also want to remain the face to their customers and run these kinds of services themselves.  Some enterprises will offer this capability as a free service, as remote monitoring can save manufacturers on their own costs for onsite repairs; while others may turn it into a revenue-generating opportunity, charging the customer for the remote status monitoring and analysis.  In any of these models, the operator is still generating incremental recurring revenue, but this would not include a management fee for running the service itself.

With the advent of cloud-hosted applications, IT service providers and operators are offering app development and even access to the app itself as a service fairly often to businesses with a large field force or ‘white collar’ information workers using mobile devices.  The size of the company does not seem particularly relevant; both small and large companies can benefit from a cloud-hosted ‘apps as a service’ model, as it is starting to be viewed as a secure, reliable and convenient way to access and pay for mobile applications.

In M2M, it may just be too early for this model to have caught on, or the focus of the mobile operators may still be on the largest regional and international prospects.  While operators are going up the value chain, their customers are not yet asking them to actually run and manage the services they are setting up to add value to their end customers.  In consumer services such as home monitoring for security and energy management, we are starting to see more services offered directly by the operators (such as AT&T Digital Life and Verizon’s FiOS-based Home Monitoring and Control system).  It seems likely that operator-run (or at least operator-branded) managed M2M B2B services may become a future opportunity, especially for smaller customers.

What do you think?

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