Machine-to-machine communication, or M2M, is exactly as it sounds: two machines “communicating,” or exchanging data, without human interfacing or interaction. This includes serial connection, powerline connection (PLC), or wireless communications in the industrial Internet of Things (IoT). Switching over to wireless has made M2M communication much easier and enabled more applications to be connected.
As businesses have realized the value of M2M, it has taken on a new name: the Internet of Things (IoT). IoT and M2M have similar promises: to fundamentally change the way the world operates. Just like IoT, M2M allows virtually any sensor to communicate, which opens up the påossibility of systems monitoring themselves and automatically responding to changes in the environment, with a much reduced need for human involvement. M2M and IoT are almost synonymous—the exception is IoT (the newer term) typically refers to wireless communications, whereas M2M can refer to any two machines—wired or wireless—communicating with one another.
Traditionally, M2M focused on “industrial telematics,” which is a fancy way of explaining data transfer for some commercial benefit. But many original uses of M2M still stand today, like smart meters. Wireless M2M has been dominated by cellular since it came out in the mid-2000’s with 2G cell networks. Because of this, the cellular market has tried to brand M2M as an inherently cellular thing by offering M2M data plans. But cellular M2M is only one subsection of the market, and it shouldn’t be thought of as a cellular-only area.
How M2M Works
As previously stated, machine-to-machine communication makes the Internet of Things possible. According to Forbes, M2M is among the fastest-growing types of connected device technologies in the market right now, largely because M2M technologies can connect millions of devices within a single network. The range of connected devices includes anything from vending machines to medical equipment to vehicles to buildings. Virtually anything that houses sensor or control technology can be connected to some sort of wireless network.
This sounds complex, but the driving thought behind the idea is quite simple. Essentially, M2M networks are very similar to LAN or WAN networks, but are exclusively used to allow machines, sensors, and controls, to communicate. These devices feed information they collect back to other devices in the network. This process allows a human (or an intelligent control unit) to assess what is going on across the whole network and issue appropriate instructions to member devices.
The possibilities in the realm of M2M can be seen in four major use cases, which we’ve detailed below:
Every manufacturing environment—whether it’s food processing or general product manufacturing—relies on technology to ensure costs are managed properly and processes are executed efficiently. Automating manufacturing processes within such a fast-paced environment is expected to improve processes even more. In the manufacturing world, this could involve highly automated equipment maintenance and safety procedures.
For example, M2M tools allow business owners to be alerted on their smartphones when an important piece of equipment needs servicing, so they can address issues as quickly as they arise. Sophisticated networks of sensors connected to the Internet could even order replacement parts automatically.
2. Home Appliances
IoT already affects home appliance connectivity through platforms like Nest. However, M2M is expected to take home-based IoT to the next level. Manufacturers like LG and Samsung are already slowly unveiling smart home appliances to help ensure a higher quality of life for occupants.
For example, an M2M-capable washing machine could send alerts to the owners’ smart devices once it finishes washing or drying, and a smart refrigerator could automatically order groceries from Amazon once its inventory is depleted. There are many more examples of home automation that can potentially improve quality of life for residents, including systems that allow members of the household to remotely control HVAC systems using their mobile devices. In situations where a homeowner decides to leave work early, he or she could contact the home heating system before leaving work to make sure the temperature at home will be comfortable upon arrival.
3. Healthcare Device Management
One of the biggest opportunities for M2M technology is in the realm of health care. With M2M technology, hospitals can automate processes to ensure the highest levels of treatment. Using devices that can react faster than a human healthcare professional in an emergency situation make this possible. For instance, when a patient’s vital signs drop below normal, an M2M-connected life support device could automatically administer oxygen and additional care until a healthcare professional arrives on the scene. M2M also allows patients to be monitored in their own homes instead of in hospitals or care centers. For example, devices that track a frail or elderly person’s normal movements can detect when he or she has had a fall and alert a healthcare worker to the situation.
4. Smart Utility Management
In the new age of energy efficiency, automation will quickly become the new normal. As energy companies look for new ways to automate the metering process, M2M comes to the rescue, helping energy companies automatically gather energy consumption data, so they can accurately bill customers. Smart meters can track how much energy a household or business uses and automatically alert the energy company, which supplants sending out an employee to read the meter or requiring the customer to provide a reading. This is even more important as utilities move toward more dynamic pricing models, charging consumers more for energy usage during peak times.
A few key analysts predict that soon, every object or device will need to be able to connect to the cloud. This is a bold but seemingly accurate statement. As more consumers, users, and business owners demand deeper connectivity, technology will need to be continually equipped to meet the needs and challenges of tomorrow. This will empower a wide range of highly automated processes, from equipment repairs and firmware upgrades to system diagnostics, data retrieval, and analysis. Information will be delivered to users, engineers, data scientists, and key decision-makers in real time, and it will eliminate the need for guesswork.
The Value Of M2M
Growth in the M2M and IoT markets has been growing rapidly, and according to many reports, growth will continue. Strategy Analytics believes that low power, wide-area network (LPWAN) connections will grow from 11 million in 2014 to 5 billion in 2022. And IDC says the market for worldwide IoT solutions will go from $1.9 trillion in 2013 to $7.1 trillion in 2020.
Many big cell operators, like AT&T and Verizon, see this potential and are rolling out their own M2M platforms. Intel, PTC, and Wipro are are all marketing heavily in M2M and working to take advantage of this major industry growth spurt. But there is still a great opportunity for new technology companies to engage in highly automated solutions to help streamline processes in nearly any type of industry. We’re certain we’ll see a huge influx of companies who begin to innovate in this area in the next five years.
However, as the cost of M2M communication continues to decrease, companies must determine how they will create value for businesses and customers. In our mind, the opportunity and value for M2M doesn’t lie in the more traditional layers of the communication world. Cell carriers and hardware manufacturers, for example, are beginning to look into full-stack offerings that enable M2M and IoT product development. We strongly believe value lies in the application side of things, and the growth in this industry will be driven by smart applications from this point forward.
Companies shouldn’t think about IoT or M2M for the sake of IoT or M2M. Instead, they should focus on optimizing their business models or providing new value for their customers. For example, if you’re a logistics company like FedEx or UPS, you have obvious choices for automated logistics decisions made by machines. But if you’re a retailer, the transition to automation may not be as obvious. It’s one thing to think of a “cool” automated process—say, creating advertising that is automatically tied to a specific customer through the use of M2M technology—but before you move forward with the process, you have to consider the value you’re getting out of it. How much does it cost to implement? Will it actually target the right audience? Will it be effective?
Any company considering a move into the IoT space needs to understand what its business model is, how it will make money, and how it will provide value for customers or internal processes.