Blog & Company News
Nov 23, 2012
M2M Market – 115 Million Connections by 2016
In a recent report, global consulting and market analytics firm Compass Intelligence simultaneously released their own M2M (Machine to Machine) forecast while at the same calling out other M2M forecasts as mostly “wrong.”
Although it all seems a little bit contradictory, Compass Intelligence said their forecast is valid with “key vendors and service providers at all levels of the M2M ecosystem, lending credibility to its high-level of accuracy” – company information for credible sources, not listed.
Nevertheless, Compass Intelligence said the cellular M2M market will reach 33.3 million connections in the United States in 2012. By 2016, however, the M2M market will grow to 114.7 million connections with a compound annual growth rate of over 36 percent.
Explaining why most forecasts are wrong, Senior Strategist at Compass Intelligence James Brehm said, “While there are many companies providing annual data on the M2M market, most analyst firms make assumptions that are not grounded in reality.”
According to Brehm, “The majority of firms do not take availability of components, migration paths from 2G to 3G to 4G LTE, end-user behavior, socio-economic factors, and so on, into consideration when building forecasts.”
Key findings from Compass Intelligence’s M2M research include the following:
- With over 40 percent market share, the largest B2B (Business to Business) vertical market is the transportation vertical.
- Areas with the most ROI (Return on Investment) will see the most growth. Two areas that will drive M2M adoption include cloud computing and simple hosted applications.
- Industry consolidation will occur rapidly over the next two to three years.
- More than 40 percent of M2M connections in the United States could be running on 3G/3.5G/4G networks by 2015.
In more M2M forecast news, Oracle also recently released the results of their “Designing an M2M Platform for the Connected World” research. The study examined the evolving drivers behind M2M projects and how those changes are impacting solution requirements.
Produced by M2M analysts Beechman Research, Oracle found that the main drivers behind M2M projects are evolving, with 75 percent of participants noting that enabling new services and revue streams is fuelling M2M projects.
“The substantial growth prospects for the M2M market can only be achieved through successful deployment of M2M solutions end-to-end, many of which are complex,” said Robin Duke-Woolley, chief executive officer of Beechman Research. “This research helps to confirm the real trends under way for solution requirements in the M2M market, including the growing business-to-business-to-consumer opportunity, and how these can best be supported.”
The research also found that most participants use M2M data for strategic decision making, providing feedback on product and services performance in the field and tailoring products and services to meet specific customer needs.
Oracle notes that leveraging the cloud will greatly reduce the cost and complexity of delivering M2M solutions. In fact, 90 percent of respondents said leveraging the cloud is “vitally important” to M2M projects.
“Cheaper, more powerful devices and low cost mobile network connectivity are driving an explosion in the number of connected devices and the data generated by them,” said Chris Baker, senior vice president ISV, OEM and Java Sales, Oracle Alliances and Channels. “The ‘Designing an M2M Platform for the Connected World’ research shows a shift in focus towards extracting value from that data and capitalizing on new business models which are enabled by the pervasion of connected devices.”