The Future Looks Bright for M2M Market

Automatic communications between machines will become a thriving market in the next four years, with the interest in RFID giving a boost to IT spending in general, according to one research firm.

The worldwide market for machine-to-machine communications, including sensors, PDAs and RFID tags, will grow to $31 billion in 2008, according to a market research report released Monday by Wireless Data Research Group (WDR). According to the report “Wireless Machine-to-Machine Communications: Disparity of M2M Activity in Key Verticals Challenges Vendors to Deliver Solutions” there’s been a significant rise in M2M activities over the past year, especially in logistics and supply-chain operations sparked by the RFID mandates of Wal-Mart and the U.S. Department of Defense.

Machine-to-machine communications, variously known as M2M, pervasive computing or the Internet of things, refers to automatic communications between mechanical objects taking place without human intervention. There are several factors driving what Ian McPherson, principal analyst for WDR calls “an industrial revolution for connectivity,” as McPherson calls it: embedded intelligence in devices, communication ports and new flavors of wireless networking.

The great potential of RFID technology to give businesses new kinds of intelligence is the top driver of the M2M trend, McPherson said. A mix of tags and sensors could let a company monitor the state of perishable or high-value items. For example, placing a tag on a package of ice cream bars gives it an identity. If the tag can communicate with a sensor in the warehouse, one in the truck and another one in the store’s freezer cabinet, the supplier can be sure that the ice cream was kept at the proper temperature during shipment and storage. If a reading is out of range, the system can automatically alert a technician to service the cooler, or automatically adjust the thermostat.

“The ability to start managing the environment around the parameters connected with a thin, promise efficiency and quality in the production and delivery of goods,” he said.

A web of various kinds of connectivity is a critical element. “Before, the cost of cabling was too great,” McPherson said. “Wireless technology is unlocking a lot of that potential. When single points of info are unlocked, pretty soon you get a rich view of the enterprise, with new capabilities.”

McPherson said that a menu of connectivity options now available lets businesses choose those that best suit the throughput they need. At the shortest range, RFID offers a small amount of data exchange at ranges from a couple of meters to about 90 feet. Personal area networks, or PANs, use Bluetooth, ZigBee and ultra-wideband for transmissions from one to 30 feet; they’re appropriate for remote sensors, monitoring and control. Wireless LANs, or Wi-Fi, provide broadband connections that can be used for high-speed data transmission from computers and PDAs as well as machines. At the longest range, 2.5 and 3G cellular networks combine voice and data communications.

McPherson forecasts that network services and professional services will rake in nearly half of the $31,210 billion to be made; the shift will be due to the large installed base of devices by that time. McPherson pointed out that once deployed, devices such as RFID tags and remote sensors can stay in place for a long as 20 years, each using a relatively modest $$5 to $7 worth of connectivity per month. “That’s nothing in comparison to a teen-ager’s cell phone,” he said, “but en masse, it’s very significant.”

“These are all things that companies know already,” McPherson said. “And that’s one reason this is so appealing. You’re not asking someone to conceive of a brand-new world.”