Vertical Market

Vertical Market

“A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be”

-Wayne Gretzky-
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The telecommunications industry has developed almost analogously to the computer industry in terms of information created, handled and presented. Much like the early computer processes, which were tied to the rows and columns of databases, early telecommunications relied on and were restricted by, strict rigidity and structure. The sector has, however, grown significantly into the multi-faceted entity it is today, pushing information reactively and proactively to billions of users every day through SMS messages, telephone calls, television, radio and the internet. As has been pointed out in previous blogs, the traditional sources of income in telecommunications, voice services are on a decline, even with wireless carriers providing the greatest revenue opportunities. However wireless carriers also have suffered with voice revenues having declined 7 % over the last 4 years, however; data revenues have soared 132% and now accounts for about 35% of the total revenue for the wireless industry.1 This trend is set to grow significantly, and with it the need for the development of such technologies as cloud computing (bringing the cost of management of large data bases to an acceptable level and providing the opportunity for virtual and custom designed platforms.) Couple this with the enhanced development of Machine to Machine (M2M) technology and you have created new revenue opportunities where services rather than hardware per say, are thought to represent a greater source of value. Services are defined in the context of emerging mobile business models in popular consumer and enterprise areas such as entertainment, social networking, Mobil payments, Mobil cloud services etc. As competition drives down margins, solution selling into vertical markets (a market where vendors offer goods and services specific to an industry or other group of customers with specialized needs) enables real competitive differentiation and allows increasingly sustainable profit margins. Vertical marketing open new doors, taps niche markets and builds customer loyalty. When telecom providers focus on vertical solutions, and they move away from the commodity voice sale and toward higher-margin, value-added services. The following is a sample list of vertical industries as defined according to Standard Industrial Classification (SIC) developed by the US Department of Commerce: Healthcare

Financial Services

Insurance

Utilities

Government

Retail

1) Open Mobile-The Growth Era Accelerates- The Deloitte Mobile Survey 2012

Other Sources:

Top 10 Predictions -IDC, Global Headquarters 5 Speen Street Farmington, MA (www.idc.com)

Telecom Services in Vertical Markets, 2012-2016- The Insight Research Corporation

White Paper, 2013 Outlook on Telecommunications- Deloitte

White Paper, Telecommunications in Vertical Markets: Challenges and Opportunities-Alcatel-Lucent

White Paper, Open Mobile Survey 2012 Deloitte


Machine to Machine (M2M)

AKIRIX BLOG

M2M (TRANSFORMING DATA INTO ACTIONABLE INTELLIGENCE)
M2M

M2M (machine to machine) is a technology that allows both wireless and wired systems to communicate with other devices.
M2M uses a device to capture an event which is relayed through a network (wireless, wired, or hybrid) to an application (software program).
Personal Communication has evolved from traditional phone calls to today’s text messaging using Short Message Services (SMS) or multimedia content through Multimedia Messaging Service (MMS). Cellular M2M communications use similar types of mechanisms to send short data bursts of information. (For example reporting residential meter readings)1 As mobile phone networks grew M2M applications have expanded. Specifically it is used in a wide range of fields including remote monitoring of elevators, crime prevention such as car and home security, mobile payments such as credit card authentication terminals and telematics for luxury cars.2
Starting at the end of 2000 M2M began a period of change similar to the expansion of mobile phone networks in the 1990s, brought about by the advent of cloud computing.2
Today with the improved performance of communication devices, Mobil communication, expansion of IP networks across the world and Cloud computing, the Machine to Machine market is poised for the biggest transformation in its 10 year history.3
Cloud analyst & author of the latest research report from Maravedio-Rethink, Bill Leieur said that Cloud computing will help address many of the biggest challenges to mass market M2M adoption, the main two being deployment cost and scalability.3 Through Cloud connectivity and increased cellular and wireless connection speeds, providers of M2M solutions now can offer Platforms as a Service (PaaS) which simplify machine networks allowing users to manage developments remotely. Such a central PaaS can also offer Application Program Interfaces (API) that can be used to develop custom applications.
Berg Insight, an independent wireless analyst firm, has stated that the number of cellular network connections for M2M communications was 47.7 million in 2008 with the forecast for 2014 to grow to 187 million.4
Jasper Wireless and Machina Research (a specialist and M2M research consulting firm) has announced the results of an industry research project summarized in a White Paper. (www.jasperwireless.com, to down load White Paper)
The White Paper found that mobile network operators (MNO) that implemented a cloud-based M2M services management platform could potentially see a five- fold profit increase.
The White Paper investigates purpose-built M2M platforms and the potential to significantly enhance a mobile operator’s prospects in the M2M space including:

*Supporting the need of clients, who are looking for partners to integrate into end-to-end business processes, rather than simple providers of connectivity. To this end, clients of cloud-based providers of M2M platform services are also able to benefit from the wider operator and M2M ecosystem across different geographies.

*Maintaining a leading edge proposition in a rapidly changing, and technically sophisticated, marketplace. A third –party, cloud-based, M2M platform capability can potentially be positioned as a competitive differentiator in this context.

*Supporting multi-country client solutions. Given the level of systems integration that is required between mobile operators and companies offering (or using) M2M solutions, there is a considerable benefit in using the same platform to support solutions in multiple geographies.

*Reducing operator costs, in the context of a typically low-ARPU environment. Cloud-based platforms offer operators a low-cost, low risk entry into providing M2M connectivity and associated services without disrupting or burdening their core lines of business.
M2M is widely recognized as being a significant future growth opportunity for mobile operators. Machina Research predicts that there will be 2.1 billion cellular M2M connections worldwide by 2020 and expect that the addressable market for mobile operators in M2M will total USD 373 billion in 2020.5

1) White Paper by Juniper Networks (www.juniper.com) “Machine-To-Machine (M2M)-The Rise of the Machines”

2) White Paper by Tatsuzo Osawa (www.fujitsu.com/downloads/MAG/vol47-4/paper05.pdf) “Practice of M2M Connecting Real-World Things with Cloud Computing”

3) RCR Wireless News Americas (www.rcrwireless.com)

4) M2M Machine Evolution Article (M2M Connections May Reach 187.1 Million by 2014) www.m2mevolution.com & SmartBrief Press Release www.smartbrief.com

5) Jasper Wireless (www.jasperwireless.com) & Machina Research (www.machinaresearch.com) White Paper

Additional references:

Atlantic-ACM (www.atlantic-acm.com)”Luck ’13 Wholesale Forecasts

Capacity Magazine “Current Analysis Cloud Survey 2012”,” Wholesale Reborn”

M2M World News (www.m2mworldnews.com) market research report “Machine to Machine (M2M) Market

Global Forecast & Analysis (2012-2017)by Hardware Components, Technologies & Applications.

Companies and Market.Com (www.companiesandmarkets.com) “Global M2M Wireless Market to Increase by 23% Over the Next Five Years”

Wikipedia “Machine to Machine”


U.S. Wholesale Market Trends

The US wholesale market, estimated to decline in revenue generated from TDM voice and traditional data products the next five years, is projected to remain relatively stable due to adding an estimated $700 million through new revenue sources such as wireless wholesale and M2M (machine to machine technology). These new emerging growth engines will help stave off the decline driven by migration of buyers to IP based voice services and Ethernet based transport services.

Wireless backhaul has been the wholesale growth engine for several years due to the heavy demand for data provided to users, smartphones and apps. The use of Ethernet has been increasing as a result of the demand1.

Atlantic-ACM2 estimates that the total US VOIP wholesale TDM voice market will decline by a CAGR (compound annual growth rate) of 11% from 2011 to 2017. At the same time the emergence of voice-over-LTE3 will help drive traffic toward a greater amount of IP-based voice traffic, enabling greater interconnection and direct connection. The wholesale voice system will undergo an immense shift over the next five years as companies roll out the next generation of wholesale voice services1.

1 Information from report on US Wholesale Telecommunications Industry (Atlantic-ACM)

2 An independent research consultancy serving the telecommunication and information industries.

3 A standard for wireless communication of high speed data for mobile phones and data terminals.


2013 International Telecoms Week Tradeshow

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Akirix will be on display at the 2013 International Telecoms Week tradeshow in Chicago, May 14-16. Stop by and meet the team and see how we can increase the efficiency of your business with Simplify, our proprietary software platform. We’ll have on-site demonstrations and training. We can’t wait to see you.
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