Keeping M2M platform development in-house could help operators to exploit M2M opportunities by lowering their costs, according to new research from Heavy Reading Insider.
“Telecom operators have their eyes firmly set on winning M2M market share,” said Simon Sherrington, a research analyst with Heavy Reading Insider and author of the report. “While many telecoms operators appear inclined to buy expertise from third parties in order to speed their market entry, there are some significant players not taking this path, and others may be planning to go it alone longer term.”
Perhaps the most prominent platform specialist is Jasper Wireless (Mountain View, CA, USA), whose system is used by the M2M alliance that includes Etisalat (Abu Dhabi, United Arab Emirates), KPN (The Hague, Netherlands), NTT DoCoMo (Tokyo, Japan), Rogers Communications (Toronto, Canada), SingTel (Singapore), Telefonica (Madrid, Spain), Telstra (Melbourne, Australia) and VimpelCom (Amsterdam, Netherlands).
But Sherrington believes an increasing number of operators will rely on internal expertise for platform development as they seek to lower costs and spur M2M growth.
“Managed, cloud-based M2M solutions offer telecoms operators a swift means of entering the M2M market with services that cater for a wide range of different customers and industry sectors,” said Sherrington. “Ultimately, many of the biggest telecoms operators will want end-to-end control of their M2M platforms, and we can expect to see more of them launching their own in-house platforms, despite their existing or imminent relationships with managed service providers.”
Seeing third-party options as a “quick fix”, compared with the “long-term solution” of in-house development, Heavy Reading Insider argues that operators must adjust their operational processes to cope with average revenue per user (ARPU) of just a few dollars per device.
Unless they do so, “they have no hope of profitability,” writes Sherrington.
Despite this, the report recognizes that cloud-based managed M2M platforms have made it easier for network operators to enter the M2M market, and says “the jury is out on whether cloud-hosted solutions will be used long-term, or whether operators will develop in-house platforms once they have learned how the market works”.
If managed platform providers are to survive in the long term, they will need to combine global reach with vertical market support, says Heavy Reading Insider.