AT&T, Verizon, Salesforce.com taking machine-to-machine mainstream

When David Rudzinsky, SVP and CIO of women's medical device manufacturer Hologic, thinks about investing in a technology upgrade for his business, it has to do at least one of four things: drive new revenue, help reduce costs, improve customer satisfaction, or increase reliability of the products -- or preferably all four.

By using machine-to-machine (M2M) communication technology, Rudzinsky says he's gotten a pretty good bang for his buck so far. M2M communications technology lets machines, whether through hardware or software, communicate and transmit information to another machine for tracking and analysis. The technology is already on 10,000 Hologic devices, "with a lot more to come," Rudzinsky says.

M2M lets Hologic workers make repairs to devices without sending a company employee to the site for a field visit, which has saved 1,000 trips since the technology was adopted. That saves Hologic money and keeps the customer happy because any issues are resolved faster. "For us, the future is real bright for us in this technology," says Rudzinsky, who shared his story at the user event in Cambridge for Axeda, a cloud-based M2M vendor.

"We're living in a connected world where everything we produce has an opportunity to be not just connected, but tracked and analyzed," says consultant Jeff Kaplan of ThinkStrategies, who attended the show. "The more tracking we have the more insight there is in being able to provide real-time services." And Kaplan says the emergence of big-name players joining the industry, such as AT&T, Verizon, Salesforce.com, Cisco and SAP, has legitimized the market.

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M2M technology is not new, says Brian Partridge, vice president of network research at analyst firm Yankee Group, but in the past it's been used mostly in fleet management to track shipping and delivery services. In recent years, M2M has become more mainstream, driven by decreased costs for of devices and modules with at least 2G network capability, if not better, combined with the decreased costs of connecting to those networks. Add in the fact the companies can quickly build custom applications on platforms, such as the one offered by Axeda, and there is a "vast and growing market" for M2M, Partridge says.

At the hardware end of the industry landscape sit players such as Telit, which creates wireless devices used in M2M communications. Telecoms are increasingly playing a heavier role in M2M. Axeda and AT&T announced a nonexclusive partnership for custom applications built in the Axeda cloud to be powered through the AT&T network.

Not to be outdone, this week Verizon purchased M2M company Hughes Telematics for $612 million. Competitors to Axeda include Aeris Communications and Jasper Wireless, both of which market platforms for M2M communications. Axeda has also begun to move into the analytics arena, and providing tools for interpreting all of the data machines collect. As it moves into the big data analytics space, however, Partridge says Axeda will be moving into space more big-name companies have made their own stakes in, such as IBM and HP. "M2M has truly arrived, given the level of interest from big companies and the activities they're pursuing," Partridge says.

AT&T is buying into M2M because it's becoming more mainstream, says Chris Hill, AT&T's vice president of advanced mobility solutions, who noted that each of AT&T's commercials now feature at least some reference to connected devices. Hill says there's an evolution of M2M technologies, starting with the basic functionality of machines being able to collect data, to being able to analyze the data and then having machines create automatic actions based the data collected from the devices.

For example, one of the most common use cases for M2M is in large machinery, such as medical devices or energy equipment. M2M devices can be installed on the device to monitor its usage, alert the owner or manufacturer of when service is needed, or when a malfunction is sensed. Customized applications can be built that would automatically order parts that are needed to fix the device, or automatically schedule a service repair.

There are hundreds of use cases, though. Trash cans alert collectors when they need to be picked up, reducing the need for extraneous pickup trips. During panel discussions at the Axeda show, there are customer use cases from members of the healthcare, technology and manufacturing industries, mostly in the customer service or system operations fields. Other use cases of M2M technology already on the market include safety-driven insurance from companies such as Liberty Mutual, which installs a tracking device on customers' cars that analyzes how safe of a driver they are and influences how much the insurance costs. The system can also be integrated in Salesforce or SAP CRM or ERP software to alert manufacturers or service providers of when some action needs to be taken before there is a problem. "You can really let your imagination run wild when you think of all the possibilities," says Partridge, the Yankee Group analyst.

The devices are usually connected through TCP/IP and an HTTPS private tunnel, or through wireless connection on a network such as form AT&T or Verizon. Wireless connections are used for mobile machines, products that don't have a direct Internet connection, or where there are more specific privacy concerns, says Bill Zujewski, EVP of marketing and product strategy at Axeda. Cisco, Kaplan says, is interested in the increased strain M2M may put on the network.

Imad Nijim is vice president of operations at Acuo Technologies, a company that specializes in storage and routing of medical images, such as X-rays and CT Scans, through the company's Unified Clinical Platform (UCP3). M2M technology is installed on most of the company's new software shipments to alert Acuo if the disk storage space is filling up and to provide historical support, indexing which images have been accessed in the past. But Nijim sees more potential for using M2M more broadly, specifically around fixing problems proactively before they even become an issue for customers. "Ideally, we'd like to serve more customers while having fewer calls for service," he says. Advanced functionality in M2M in automatically provisioning software updates could allow that to become a reality.

Network World staff writer Brandon Butler covers cloud computing and social collaboration. He can be reached at BButler@nww.com and found on Twitter at @BButlerNWW.

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