By Avi Kachlon, CEO, FTS
February 3, 2016
Analyst house Machina Research’s strategy report, ‘M2M Global Forecast and Analysis 2014-24’, made for interesting reading. The key finding was that the M2M market is expected to grow to 27 million devices, generating USD 1.6 trillion in revenue in 2024. Those are some impressive numbers.
Cellular machine to machine connections will grow from 256 million at the end of 2014 to 2.2 billion by 2024. And whilst M2M will only account for 4% of cellular data traffic by 2024, as Machina Research acknowledges, M2M devices are incredibly diverse and their demands on network capabilities will go beyond volume of traffic with requirements for increased signalling and real-time communications.
This big picture viewpoint is invaluable and a useful reminder that, whilst M2M may look relatively small as an overall percentage of the telco industry, its impact will be huge. And there will be other demands, too, on operators and M2M providers.
The complex many-to-many relationships of M2M and IoT depend on partnerships – M2M providers cannot work in isolation. As we’ve already discussed, every M2M transaction that takes place must be part of a structured business model that takes into account all the related parties, but M2M and IoT monetization is not only about billing for these services, but also about the ability to share revenues.
The M2M and IoT environment is a complex multi-partner one and the key to making the most of it is a flexible revenue management platform that enables fast on-boarding of new partners as well as the settlement, commissioning and billing between each and every partner and segment of the Internet of Things, whilst simultaneously keeping costs to a minimum.
Irrespective of the application – telematics and connected cars, utilities, smart cities, security, retail, healthcare, industrial and so on – a horizontal software solution that is smart, agile and which offers support for an unlimited number of partners is the key to monetization.
It must also enable service providers to offer new pricing plans and services quickly and easily and be flexible enough to support multiple industry segments and business models to ensure low TCO in a low-revenue, high volume transaction scenario. It should also offer a combination of recurring and usage-based payments and micro-payments, including tiered pricing, usage-based fees, time-base charging, M2M policy control and real-time balance management, as well as a seamless integration with existing billing platforms.
With the right IoT billing solution in place, being a key participant in trillion-dollar industry is within the grasp of every M2M and IoT provider that wants it.
Read more about FTS’ convergent billing solution.