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The Rise of the Machines?
23-06-2006
by Maxim Kelly

The long anticipated 'Internet of Things' could be one step closer based on new research from IDC.

According to IDC analysts, strong demand from Western European corporations is to drive machine-to-machine communications -- an aspect of the so-called "Internet of Things" -- and revolutionise the wireless industry.

IDC predicts the machine-to-machine (M2M) communications market will grow from USD3 billion in 2005, to USD19.8 billion by 2010.

The news follows a recent visit to Dublin by founding father of the internet, and Google Internet Evangelist, Vint Cerf, who predicted that by 2010 household appliances will communicate online via a broadband-enabled electricity supply.

"I suspect we will see device-to-device interaction which will dwarf human e-mail traffic," he told reporters while visiting Google's European HQ.

Machine-to-machine communications take many forms, with the most widespread solutions currently in automatic meter reading, Radio Frequency Identification (RFID) applications, and fleet control systems. According to IDC senior analyst Brian Troelsen, in principle, the only limit on deployment is imagination.

"The Western European machine-to-machine market holds huge potential," he said. "Most of the market infancy problems are being properly addressed and vendors are starting to see the first signs of the promised market potential being fulfilled. The prime growth drivers are regulation on automatic metering and declining prices on data transfers and RFID tags."

Already there have been many reports of M2M applications. In 2004 mobile phone operator Orange introduced an M2M Connect package in France which offers data pricing and a suite of software tools to help European companies jump on the machine-to-machine bandwagon

Confectioner Nestle has been installing hundreds of ice-cream vending machines in France and England that send daily reports on their sales and notify drivers if they're running low on ice lollies, while Canadian train and plane maker Bombardier has reportedly fitted railcars in Britain with radio devices that transmit reams of preventive maintenance data to central servers.

"The fight for this market is a battle between vendor types, namely hardware vendors, software vendors, systems integrators, and telcos," said IDC's Troelsen. "These players are fighting fiercely for market dominance with their respective competitive advantages. Until now the systems providers have had a head start due to strong competencies in business process understanding, which is a key element in most machine-to-machine implementations. However, hardware vendors and telcos are starting to look at how to gain similar competencies on their own."