It’s rarely that I am serious disappointed with an Economist story but I feel that way about the special report, “A World of Connections” (subscription required). It talks about machine-to-machine wireless communications. Most of the application use cases it lists are still speculative. What’s more, it extrapolates much too easily from RFID to mesh networks. RFID price point is cents per node; mesh networks are talking about dollars per node. Plus there is this complicated value chain involving slow moving mobile operators.
While the report acknowledges that mobile operators are impediments to any quick rollout, it blithely ignores the significance of this point. I would have liked to see a stronger treatment of the adoption dynamics. If anybody has to make a case that old status quo doesn’t change just because new technology becomes available, it should be the Economist. After all, they have been very eloquent in the past about the same issue in the context of the US healthcare provider industry. Despite new technology (electronic medical record keeping, handheld devices, EDI, etc.), the old inefficient status-quo hasn’t budged.
In any case the take-up of RFID has been slower than expected (see here and here). In a way this is not surprising because enterprise adoption is a slow process. Just look at ERP. It’s been around for donkey’s years and is only now beginning to see some level of full penetration. Despite the ‘coolness’ factor of M2M and mesh networks, its going to take quite some time before they become widely deployed.
Basically the report is just too optimistic. The right thing to do would have been to carry an abridged version of this report in the Technology Quarterly section of the magazine. What do you think?
I agree with your observations, Sharad. Perhaps Economist carrried it outside the “technology” section to get some attention from the non-technologist readers! I thought I will react to the opportunity space rather than the specific article.
For start up businesses that are looking for an opportunity to chase in an emerging space, wireless M2M can present several opportunities. Like you rightly point out, it may take several years before the solutions are widely deployed–literally and figuratively. But, early entrants are likely to get the lead advantage of learning.
I feel, the strategy to adopt is to select applications that will deliever value (e.g., cost savings or higher transaction rate) and grow one application at a time. You have also hinted this approach by indicating the cost per node. It is important to cost the solution architecture carefully to be able to return a net cost advantage in a relatively short period of time. So, business modeling is a very critical activity to undertake along with the solution architecting.
The emergence of technology elements like cognitive (software-defined) radio in the next few years can dramatically change the cost equation, as the hardware would then become more sharable (reconfigurable) among multiple wireless standards. Further advances in power management can enable new application contexts. This is an interesting domain where advances in micro-architectures (standards, devices, equipment, middleware) and macro-architectures (solution architecture, business process) are advancing concurrently. Clearly, inherently complex to manage, but the simplicity will emerge ultimately.
One of the key business drivers can be the wireless service provider’s opportunity to make money off the infrastructure provisioning. Emerging economies such as India can present several virgin application opportunities where legacy is not an issue. A good space to look at for the “India out” business plans, I feel.
So, I am for the cautious optimism that you seem to share about the possibilities of wirelss M2M. While “coolness” may draw the attention, the sustainability has to come from real business opportunities that can get uncovered on the way. Perhaps a domain for those who have the stamina to stay long haul.
Sharad
Your observations are right on. One more view is to also consider taht due to slow adaptation to RFID by Enterprises; what is also happening withing wireless industry consisting of vendors and operators is that they are not putting full efforts into this space.
This chicken and egg dilemma (customers first or solutions first) needs to be considered in context with need for innovative thinking around enterprise mobility and Enterprise Wireless Data Architecture which are soley focused on mobile Voice and Access to emails and intranet applications as primary mobile applications.
If Wireless Industry can create a compelling Vision with multi-application, multi-services platform approach that integrates all aspects of Wireless applications, Wireless Voice, Wireless Security with existing and emerging Enterprise Application interfaces, IP PBXs, IP Networks as well as Legacy databases; it will not only catapult the rise of non-human data traffic over high speed wireless data networks but may also pave way for convergence of enterprise applications and mobility applications.
It will be interesting to watch emergence of innovative approaches towards enterprise convergence coming from Wireless Industry as it spearheads IMS approach in its own core network.