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M2M & Telematics
A market opportunity
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Lars Odlén MSc, MBA 20 years in product & process development 8 years of wireless M2M Led M2M developments in several industries Extensive international business experience
M2M SystemTelematics Consultancy
What happens in the wireless world ?What happens in the wireless world ?
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Voice market saturates
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Churn increases
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ARPU decreases
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
3G mobile-phone woes
The introduction of third-generation faces technical and financial difficulties.
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Pass the painkillersDO MOBILE phones cause headaches? In the case of third-generation (3G) telephones, the answer is undoubtedly yes—even though nobody is yet using them. Instead, they are causing technical and financial pain for all the companies around the world that are trying to build 3G networks.
The idea behind 3G was to offer subscribers exciting new features, such as video clips and high-speed Internet access, for which they would be prepared to pay far more than they now do. Operators have spent vast sums—around $125 billion in Europe alone—buying licences to enable them to offer such services (see chart), and have run up huge debts in the process. Building the networks will cost about the same again. It is a huge gamble—and one that is looking riskier by the minute.
This has serious financial repercussions. Given the expense of the 3G licences and infrastructure, the operators want to launch their services and start generating revenue as quickly as possible. But the uncertainty has hit their share prices; and the debt burden has led to cuts in their credit ratings that have made it harder for them to raise money. Britain’s BT, for instance, was forced to sell prized Japanese and Spanish assets to Vodafone this week, to reduce the massive debts it incurred when buying 3G licences. BT, whose long-serving chairman, Sir Iain Vallance, stood down last week, now plans a huge rights issue that may further upset its long-suffering shareholders.
Worse even than these cash travails, the initial projections of how much operators could expect to charge for 3G services now look highly optimistic. It has become clear that 3G will take far longer than expected to become profitable, so operators will sink deeper into debt along the way. Amid all this uncertainty, it is clear that it will be several painful years, rather than months, before 3G becomes widely available. Even if the operators can meet their debt burdens and build the networks, it is not at all certain that they will be able to make much money from them. Today’s headaches might then seem mild compared with those that are to come.
What the future might hold No market growth SOW (Share of wallet) not increasing All playes offer same Mobile communication becomes a comodity Mobile com just another utility Customers wants more for less Technology migration require heavy
investments ARPU likely to decrease
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When the future looks uncertain, why not rely on the past
- You have a GSM network- You have spare capacity
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Additional revenues •Now•Without investment•Without cost
Without investments
Without investments
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Your future subscribers might not be persons, but machines
Telematics
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
By 2005 there will be more machines communicating than people
NTT DOCOMO President Keiji Tachikawa
For the UK market this equals +100 million £ per annum, at almost no marginal cost (1p/msg, 200 msg/yr)
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
There is a finite number of peopleThere is a finite number of people
butbut
An ever growing number of machinesAn ever growing number of machines
growth in machines% of devices that will be communications enabled
0%
10%
20%
30%
40%
50%
60%
70%
80%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source : Merrill Lynch, June 2000
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
1999 2000 2001 2002 2003 2004 2005 2009
total projected market
Voice
Telemetry & Telematics
Data
penetration
41%57%
72%
93%
118%
142%
171%
284%
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
recognising the opportunity within the next ten years, telemetry in its
various guises will reach into all areas of industry i.e. food, retail, leisure engineering and transport
invasive as mobile voice currently is today
Eventually everything will be connected
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
a glimpse into the future
telecom will pervade all aspects of life
human to human
human to machine
machine to machine
machine to human
communication
interaction
transaction
control
building the connected worldM2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
What is Telematics The fourth phase of the IT revolution All devices communicate Geography becomes irrelevant Enables ”Business in real time” A Productivity driver Drives re-engineering and new business
models
A new tool for mankind
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Computing
End to End Wireless Telemetry solutions
Internet
Wireless
Source Ericsson
Three phases of wireless Step one (in progress)
Extending existing systems and processes to the field. Nissan saves 40% on sales costs by
giving wireless access to pricing and inventory. HBOC (drugs) reduced incorrect shipments by 80%
through wireless in their warehouses
Step 2 (in development)
Re-engineering business.
NTT DoCoMo increased vending operator’s profits 70% by introducing Cashless Payment . Teclion
saved 50% of service visits by remote monitoring.
Step three (tomorrow)
Creation of new business models that would not have been possible without wireless
Understanding the market End customers Intermediary Competitors Environment Economics
Understanding the application Value chains Players Change drivers Enablers Technical requirements
Sounds great, but how do we get to making money
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understanding who has to be involved
It's like a teamIt's like a team
the different players and the the different players and the interaction between them is referred to interaction between them is referred to as "the value chain"as "the value chain"
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the value chain
supplier systems
integrator
service
supplier
network
operatorend user
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
the value chain it's very complex many interested parties a lack of standards specialists and ways of working are
specific to particular vertical markets however overall framework is similar in
all markets
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
What can an operator do?
Help others play !
Competitors
Vend
ing
Vend
ing
Secu
rity
Secu
rity
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M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Opportunity
Vend
ing
Vend
ing
Secu
rity
Secu
rity
Au
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Au
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Au
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Uti
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ies
Generic middleware platformGeneric middleware platform
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Business model step
1
End customers in various vertical markets
OperatorOperator
Solutions and applications providers
Trough SI /AP
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Business model step
2
End customers in various vertical markets
OperatorOperator
Partners
The telematics wrapper
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M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Telematics means New customers Substantial volume growth Low investment Low uppkeep High profit segment Low churn Broadening of Brand name
CASES
CasesCases
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Case Operator
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Developing a telemetry managed
solution
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What is the Orange Managed Solution?
An end to end process for developing a new system
A Gateway to simplify the technical connection
A single point for customer support
Not restricted to a specific market
Overview
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Components
Device Modem Managed GatewaySoftware Measures Reads Controls Remote Moving Fixed Existing New
GSM Radio Access Uses SMS GPRS and 3G in
the future?
Connects applications to a telemetry devices
Converts SMS messages to XML
Buffers Data Internet Accessible Operated and Managed for
Orange
Customer Specific Back-end System May be an ASP ERP Records Controls Co-ordinates
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Parties
Device Integrator
Connects the Device to the Orange Managed Gateway using a GSM Modem
System Integrator
Connects the Customer’s Computer System to Orange Network using the Managed Gateway and the Internet
Device Modem Managed GatewaySoftwareM2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Customer’s Data Centre
Customer’sRemote Devices
Customer’sBespoke Software
Sensors, GPS, etc
How does it work?
OrangeManaged Gateway
Customer’s Data Centre
Customer’sRemote Devices
Customer’sBespoke Software
Customer Support
Managed Gateway
Unix
Middleware
API
Server Farm
Sensors, GPS, etc
How does it work?
Customer’s Data Centre
Customer’sRemote Devices
Customer’sBespoke Software
GSM Modem+ SIM
DeviceIntegration
System Integratio
n
Sensors, GPS, etc
How does it work?
OrangeManaged Gateway
Customer Support
Managed Gateway
Unix
Middleware
API
Server Farm
Internet
Orange
Customer’s Data Centre
Customer’sRemote Devices
Bill
Customer’sBespoke Software
GSM Modem+ SIM
DeviceIntegration
System Integratio
n
Sensors, GPS, etc
How does it work?
Orange Managed Gateway
Customer Support
Managed Gateway
Unix
Middleware
API
Server Farm
SMS TelemetryData (Compressed)
System Integration
Device Integration
Orange Telemetry Managed Solution will build on existing Orange Telemetry Offerings
Airtime
GSM Modem
High VolumeMessaging
OrangeWholesal
eTelemetr
y
OrangeTelemetry
Kit
OrangeTelemetryManagedSolution
Wholesale
Telemetry: Unbranded airtime via wholesale deals with Telemetry Service Providers. (Claire Betty)
Telemetry Kit: Orange branded modem and airtime (Roger Hill and Sam Mitchell)
Telemetry Managed Solution: Full lifecycle telemetry solution, including monitoring, integration, and hardware.
Wholesale
Telemetry: Unbranded airtime via wholesale deals with Telemetry Service Providers. (Claire Betty)
Telemetry Kit: Orange branded modem and airtime (Roger Hill and Sam Mitchell)
Telemetry Managed Solution: Full lifecycle telemetry solution, including monitoring, integration, and hardware.
Reduced development time
Scalable, High performance messaging
Reduced message latency
No single point of failure
Removes complexities of modem hosting
Flexible, horizontal approach
Easy Migration path from SMS to GPRS
End to End monitoring and support
Base for ASP development
Advantages
Orange will be a ‘One Stop Shop’ for new telemetry products
Reduced product development time
Quicker customer connection
Not restricted to specific industries
Easy Migration path from SMS to GPRS
End to End monitoring and support
Built using ‘Off the Shelf’ technology
Designed for the b2b marketplace
Key Features
Case Lift service
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What is the biggest saving in lift service?
Not to visit the lift !
Unmanned visits Need based service intervals Preventive maintenance
Reduces annual service visits by 50%
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GSM based monitoring/alarm
system
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Emergency telephone Rapid connection Automatic identification Redial
Service need Starts Fault symptoms
Statistic Customer reports
Cost reduction Quick installation No telephone line
ICU™ (Information Communication
Unit)
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IT system architecture
Lift
ICU
GSMnetwork
Internet
CRM system
& db
WWW publish-
ing
Firewall
Call centre
PSTN
GSMField
Service engineers
Customers
WWWReports
WWWGSMdata
SMSWAP
AlertsReports
BackreportsCustomer info
Regional offices
Head office
SMSVoice
Machinereports
CustomerIT system
SMSserver
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Extranet log-on
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ReportingTraffic reporting tocustomers viaInternet.
Data on:Traffic per dayTraffic per weekNumber of runsAnomalies detected
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Alarm buttons pressed
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Pop-up screens
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Power lost at
12.32
on lift number
12345
Main street 123,
entry B
SMS or WAP messaging
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Visit scheduling
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Networking Virtually present Self managed Empowered Knowledgeable Access to information and support Quality built into the process Need based actions Producing results,
not time
Tomorrow is already here
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Service organisationCase lift service
Doubled productivity Reduced call outs to half Increased customer satisfaction Doubled profitability Less churning More motivated workforce
Result
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Case Gaming
Problem Cash shrinkage
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Case Gaming
Monitor cash box Desired effect: No cash shrinkage
Side effects Uptime Fetching profile Games preferred
Cash handling cost
Solution
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Transforming IT structuresCase Copiers
Countries are pretty independent The way they run service vary Their IT systems also vary We have left them alone as long as they
made profit But now the market gets tougher And we need one IT system for Europe
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Case copiers con’t The problem is that some countries are quite
advanced Sweden, for example, have an AS400 system
that they have been developing for ten years There is nothing on the market as good as
that So they would never accept a new system But we need to change...
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Case copiers con’tSolution
Existing country specific
IT systems
ASPASP
Wireless interface Layer
XML SMS -Alerts-AcceptanceWAP-Back reports-Spares ID & order
New functionalityField serviceField service
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Case copiers con’tSolution
X
Existing country specific
IT systems
ASPASP
Wireless interface Layer
XML SMS -Alerts-AcceptanceWAP-Back reports-Spares ID & order
Service management
system
New functionality
XX
Call centre
Web access -Customer handling-Service scheduling-Billing-Reporting
XX FIELD FORCE
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Case copiers con’tSolution
ASPASP
Wireless interface Layer
SMS -Alerts-AcceptanceWAP-Back reports-Spares ID & order
Service management
system
New functionality
Call centre
Web access -Customer handling-Service scheduling-Billing-Reporting
WirelessPSTNLAN
WebWAPe-maile- fax
CUSTOMERS
EQUIPMENT
FIELD FORCE
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Telematics & M2M apply to every
businessFunctions & Applications Matrix
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Sig
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Wir
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Tele
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AdvertisingAlarmsAlertsBenchmarkingCashless PaymentsCross SellingCustomer Loyalty ProgramsCustomer Relationship ManagementDemand ControlElectronic SignatureEmailEnterprise Resource ManagementEquipment HistoryEquipment IdentificationFault VerificationGeofencingInfotainmentInformation AccessInvoicingLoad PlanningMeasuringMessagingMonitoring CashMonitoring FunctionalityMonitoring Stock LevelsNavigationPaperless TicketingParts OrderingPaymentsPlanningPositioningRemote OperationRoutingSchedulingSelling ConsumablesSelling Replacement ProductsSoftware UpgradingSupply Chain ManagementSurveillance CamerasTechnical DetailsTracingTrackingTraffic Control
M2M SystemM2M SystemTelematics ConsultantsTelematics Consultants
Increase profitability with Increase profitability with
Telematics & M2MTelematics & M2M
260 page report, covering:260 page report, covering:
ForecastsForecasts
Business casesBusiness cases
Value chainsValue chains
TechnologyTechnology
Practical advice; How toPractical advice; How to
Competitive sutuationCompetitive sutuation
Lessons learnedLessons learned
10% discount for you
10% discount for you
Refer to The best of wireless
Refer to The best of wireless
questions
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Thank you for listening
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