The provision of machine-to-machine (M2M) solutions is fast becoming a hot market opportunity with demand projected to grow significantly over the coming decade.
Although often seen as a nascent industry sector the market is already worth $10bn worldwide with forecasts for $88bn by 2023, according to a report by Analysys Mason.
M2M solutions have been less affordable to SMEs than to large enterprises and the public sector, but all that will change and affordability will not be a prohibitive factor in the SMEs segment as M2M solutions become less expensive to implement at the application layer, and operators and service providers start offering off-the-shelf solutions.
"Operators are already generating strong revenue, and Future growth opportunities will be realised in emerging regions as applications are tailored to local markets and the cost of solutions declines," explained report author Morgan Mullooly.
"The forecast predicts that SMEs will account for an increasing percentage of total M2M device connections. Excluding connections in the utilities sector, the proportion of SME M2M connections will increase from 14.6% of total connections in 2013 to 24.6% in 2023, representing a CAGR of 33%."
Operators have already been successful in selling productised M2M solutions such as fleet management to SME customers, he pointed out.
"We believe operators will find success in selling security and surveillance, some healthcare solutions and some retail sector M2M solutions to SME buyers," added Mullooly.
He also forecasts that the number of M2M device connections will start to increase in emerging markets by 2015.
"Developed markets' share of connections will decline from 68% to 62% during the forecast period as operators in emerging markets seek additional customer connections and the cost of deploying M2M solutions declines," added Mullooly.
"As operators in developed markets have learned, it takes 18 months or more to organise the various aspects of an M2M business. Operators that have assembled the appropriate teams and resources will be poised for greater success as the market begins to grow."
Emerging market operators are currently focusing on growth in the number of mobile handsets, he pointed out.
"Running an M2M business carries a higher risk than a traditional mobile handset and broadband business," commented Mullooly.
"However, we expect that M2M solutions in the utilities, automotive and security sectors will have more easily understood business models by 2016, and operators will be more willing to sell these M2M solutions."