Jeffrey Smith, President and CEO, SensorLogic

Jeffrey SmithSome people think
machine-to-machine communications will fuel the next tech boom. Jeffrey Smith is one of them.

M2M, as it’s often called, encompasses radio frequency identification (RFID)
technology, which provides automatic exchanges of data over relatively short ranges,
as well as wired and wireless sensor networks and Internet-connected appliances
and machinery.

SensorLogic, which Smith founded in 2002, is an M2M application service
provider. It offers M2M Portal, a Web-based platform for building wired and wireless telemetry
applications as a managed service, and the M2Mstarter line of development products for easily
prototyping and field-testing applications for vertical industries. And last year,
SensorLogic partnered with Dust Networks to provide an interface for Dust’s
self-configuring SmartMesh wireless sensor networks.

SensorLogic uses M2M XML, a protocol built on XML that the company put into the
public domain in hopes it will become a standard. Until there’s a common IP
network for M2M communications, SensorLogic has a niche that
lets devices communicate and be controlled through disparate networks.

Smith spoke with about the future of intelligent communications and
how SensorLogic intends to get us there.

Q: What exactly do you mean by M2M?

Many machines out there now have processors inside them. I think of M2M as
adding networking capacity to an intelligent device. And part of the enabling
technology is wireless.

As you distribute more and more intelligence to the end points, then in M2M
applications, you can have a very intelligent device sitting on a tank someplace
that knows when a leak occurs, for example. The “Internet of Things” becomes a
network of intelligent things.

Q: SensorLogic comes from the sensor network side. Will sensors and RFID converge?

You’ll see in the next five years active sensors and active RFID tags basically
becoming the same thing. My belief is the two will become one market rather than the
two they are currently. It’s a lot like any technology market: Things are separated
by application at first, then, when they get embedded, it smushes together.

Q: Beyond the supply chain, what uses will business find for RFID and machine networks?

In RFID, everybody talks bout Wal-Mart and supply chain management. When you have
a hammer, everything looks like a nail. Success in M2M is when you don’t know that it’s
there. Eventually, it will be completely unnoticeable. People won’t care whether the
technology originated with RFID or sensor-based networks. They’ll only care that
there are more information and control capabilities in the machine network.

An analogy to RFID and business processes is what happened with EDI [electronic data interchange].
Why did EDI happen? Because companies work at particular speeds, and the ones that work the most
efficiently force their supply chain folks to work at the same speed. Wal-Mart forced
RFID down suppliers throats because it has to compete and work at a particular pace.
RFID allows it to work at a much higher speed and to get inside other companies’ technologies.

Q: Will we see the same kinds of efficiency gains that we saw in e-business?

You don’t know the efficiencies you will gain — there will be unintended
consequences of deploying RFID.

For example, we have a customer that provides an application to manage cell towers.
The antennae on top have motors, but tower operators typically tune them once then
leave them. But the reality is that customers in that area during the weekend may not
be in a downtown area, so you want to move those motors depending on the day of week. Or,
you might want to move them as weather conditions change. The next phase would be
dynamically tuning the antenna array based on the signal strength of each of your customers.
You’ve moved from “set it and forget it” to a constant optimization of revenue, signal
strength or a combination of both.

The cell phone operator originally just wanted to avoid having a guy climb a tower.
It was five steps later they realized they could optimize their signal.

Q: What are the adoption barriers still in place and which have been eliminated?

The cost of the device needs to be much, much less than that of the machine it’s monitoring.
And networks need to become ubiquitous. Hardware costs are dropping; that’s obvious. M2M
applications use the guts of a cell phone, now in the $25 range, and in a few years
they’ll be a fifth of that. Bluetooth dongles are now $2. Halving the hardware or network
cost will double the market.

More awareness needs to occur within the marketplace, although certainly Wi-Fi over
the last five years has created huge awareness for wireless, and federal regulations —
like Amber alert or cold chain monitoring, tracking the temperatures of foodstuffs as
it moves through the market — have added to awareness. But in the M2M sector, there’s
still some education that needs to occur.

From the application standpoint, people need to see some successful deployments of

Q: How do you size today’s market and what do you see for its future?

Right now, I estimate half a million WAN devices a year, doubling every year for
the next five years. So that would add up to $16 million a year in five years, with
total deployment of probably 35 million devices in five years. I’m talking about wireless
wide area network-type devices. If you include personal and local area network devices,
multiply that by a factor of five. The growth will taper off after five to 10 years.

That means that over the next five to 10 years, you’ll see a market that’s larger
than the consumer market for phones. My audacious call is a billion devices in 10 years.

It’s in your future to be able to pick up the chicken from the supermarket cooler
and look at its temperature history. You’ll have a common portal to manage all the
devices that happen to be in your life.

Q: Will the Internet of Things change business and culture as much as the Internet

Yes, maybe more. There are five times as many machines in the world as people. It will
be subtle changes — all these little changes that have occurred as technology makes life
more efficient and improves the economy. M2M is the next wave of that.

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