M2M space heats up but not enough for the enterprise

It appears the race is on in the mobile operator community for the most holistic approach to machine-to-machine communications (M2M). Operators are looking for more growth in a saturated mobile market, but are they ready to target the enterprise market?  

The past four months saw some major announcements: Verizon Wireless teamed with Qualcomm, AT&T joined with Jasper Wireless and now Sprint Nextel struck a multi-year agreement with M2M DataSmart this week.

All are aiming to bring together key M2M pieces such as network connectivity, distribution, device certification and remote monitoring and management under one roof. Part of what has stifled the market is the fragmentation in all of these areas.  

To summarize: AT&T and Jasper Wireless made an exclusive deal in May, calling for Jasper to provide the activation, billing and connectivity support for all embedded wireless devices--ranging from tracking and healthcare devices to personal gaming consoles--that connect to AT&T's network.

Last month, Verizon Wireless and Qualcomm announced a joint venture for end-to-end M2M solutions that will span across healthcare, manufacturing, utilities, distribution and consumer products. The companies said the joint venture will be a one-stop shop that will automate wireless devices and provide provisioning, specialized applications and wireless network connectivity for firms that want M2M services.

And this week, Sprint signed a multi-year agreement with wireless data service provider M2M DataSmart that calls for M2M DataSmart to help add M2M devices onto Sprint's network by providing test accounts and assisting with certification and engineering applications. Further, the two companies will provide developer kits and developer test accounts for end-to-end provisioning and activation.

Benjamin Friedman, research manager with IDC company Manufacturing Insights, said that carrier deals such as these add credibility to the M2M market but they can't be recognized as enterprise in scope yet as they have yet to connect M2M technology and capabilities with the lifeblood of the enterprise: CRM and enterprise resource planning (ERP). The connectivity is there, but that connectivity requires the input of data to determine the correct response to a variety of issues, whether that's customer service or inventory control. These partnerships need to grab the attention of the Oracles and the SAPs, he said.

That's why software company Axeda, which has partnered with companies like Oracle, believes it is in a pretty position. Brian Anderson, vice president of marketing with Axeda, is working to directly take data from M2M systems and move it into ERP.

"It might be easy for 50 things to be connected, but what happens when you want to go to 100,000?" Anderson said.

Friedman also notes another key ingredient for M2M to take off in the enterprise. System integrators such as IBM, HP/EDS and CSC also need to be brought into the fold to make these initiatives more credible to the enterprise.

"When those things happen, there is a possibility for a significant amount of attention and business in this space," Friedman said.

The question is: How quickly will operators and their partners make it happen? - Lynnette