Vodafone: Providing a global M2M service

Vodafone is one of the major players among the emerging M2M global delivery service platform providers. Jari Salminen, business development leader, telecoms, M2M at Vodafone, tells James Atkinson how the company’s offering is helping to drive the adoption of M2M

Vodafone: Providing a global M2M service

Mobile phone operators have been involved in connecting machines for 20 years, but it is only in the last few years that it has become known as machine-to-machine (M2M) and begun to rapidly expand as a business. 

This has coincided with the emergence of a number of players, such as Vodafone, offering end-to-end M2M global delivery service platforms (GDSPs) with a host of value added services on top.

Jari Salminen, business development leader, telecoms, M2M at Vodafone says: ‘We started developing the platform in-house three years ago and we consider in-house development to be an advantage, because it gives us full control over the platform and its functionality. 

‘We think that is beneficial for our customers,’ he continues, ‘because M2M is still developing, the standards are still evolving and that means if we face a decision as to whether to implement something pre-standard or not, we have full control over these decisions rather than having to wait for our partners to develop something.’

Key strengths

Salminen believes Vodafone’s M2M offering has a number of key strengths with footprint being a particular advantage. ‘A lot of M2M deployments have been regional or national, but we are global, so having a platform designed for that is important,’ he notes.

Vodafone’s footprint includes the 30-plus countries the company has an actual presence in. It also has partner network agreements in a further 50-plus countries, while additional roaming agreements push the total to more than 120. 

‘Some features, such as security, are still seen as a barrier to M2M adoption,’ says Salminen, ‘but we’ve taken that into the design from the start to ensure secure end-to-end transmission and that should get more customers adopting it.’

This is backed by the company’s pre-provisioned M2M SIM card, which can be used in all 120 countries at local rates and can be pre-integrated into M2M modules. Vodafone also offers
full SIM management across the globe with consistent service level agreements and a single global contract. 

Customers have access to a central point of control so they can activate, suspend and deactivate SIMs to help them optimise their business processes, increase efficiency and potentially reduce their operational costs. Vodafone provides a single point of contact and control via its platform.

Value added services

Beyond this, the ability to provide value added services through applications is becoming a very important part of any M2M offering. There are two schools of thought on just how deeply a delivery service platform should integrate applications.

‘You can integrate applications very tightly into the core if you want, or you can go for our option, which is to run them on top of the delivery platform,’ says Salminen. ‘We think that gives us flexibility over the APIs. The GDSP is a big piece of software, but things in the application space move much faster and components change, so we prefer to do things in the application layer; that way we don’t need to continually upgrade the core platform,’ he argues. 

Salminen says that aside from having a scalable, robust and secure platform, its offering is also underpinned by an experienced team of 250 dedicated M2M staff and 100 engineers. ‘Solutions are delivered from our central globalised support centre, but it is not just the delivery platform and the value added applications, it is also about having that experienced team and the customer support processes to back things up.’

While he feels Vodafone is well positioned in the M2M market, Salminen does not anticipate any one player or type of business model dominating M2M in the future. Nor does he see the big service delivery platforms necessarily gobbling up some of the roles currently provided by third party application providers.

Partnering 

‘Partnering is critical in M2M and that includes all types of partners. In the hardware space you absolutely need the module and SIM manufacturers – the fragmentation in the market necessitates this. But you also need partners in software and on the system integration side. Customers want more end-to-end solutions. SMEs don’t have the resources to build their own M2M stack and I don’t think a single player can deliver all of this,’ says Salminen.

Partnership also extends to the likes of Vodafone partner Wireless Logic, a UK firm with its own M2M management and service delivery platform working across Europe. ‘These types of partner are critical as well,’ says Salminen. ‘You need players in the value chain who are better at serving smaller customers or who are better at building verticals in niche areas such as waste management, vending machines or petrol forecourts.

‘Yes, if they are big enough we might start bundling offerings to them and deliver more end-to-end solutions and we will do that as well. But you need these value added resellers that run on top of our operating infrastructure. They also provide a good route to market and are good lead generators regionally and nationally.’

No single M2M vendor today will be able to provide an end-to-end solution on its own across the myriad M2M market segments. But one trend Vodafone does see is that both small and large customers want an off-the-shelf solution if possible, although some of the biggest enterprises may still require something more bespoke. 

Open platforms

Salminen believes that open platforms, partnering and more standardisation are the ways to attract more innovation and encourage businesses to invest in M2M. ‘I think in the long term – and we are not there yet – I would expect that the M2M stack will develop like the normal enterprise stack with a more open application environment, so third parties can contribute their solutions,’ suggests Salminen. 

‘We are waiting for standards such as those for device management to be put in place and the Open Mobile Alliance is working on it. This will provide more control of the application layer to manage and develop things as we go forward.’

Just how this open environment will change things is hard to predict, says Salminen. ‘The role of the mobile operator will be essentially the same. Operators will still be very closely involved in the connectivity and SIM management side. But it will mature and applications will become more off-the-shelf and less custom built and that will open M2M up to smaller customers,’ he says. ‘SMEs have had little involvement in M2M so far, but we see this is starting to change.’

Cost concerns

Worries over security may be one barrier to entry, but cost is, as ever, another particular for SMEs. But this too is changing, according to Salminen. ‘If you look at the trends on hardware and connectivity, costs are falling in both areas. But it is still quite fragmented, especially in hardware where you have modules, terminals and chips. There are not too many big players to really drive volumes on the hardware side yet, although that may change if there is consolidation in that segment.’

Connectivity prices will go down too, Salminen believes. ‘The future is more about value creation on the application side. How do we create true business value for the enterprise? What we see is that there is a huge opportunity for smaller enterprises to benefit from M2M. It’s about improving you business processes, the way you do things. 

‘Making that kind of organisational change in huge companies is more difficult, but smaller organisations are more nimble, so that is opening up an opportunity to drive more value at least in the short term. SMEs can move faster to realise the benefits of M2M and see a larger return on investment,’ he says.

Future trends

Looking ahead, Salminen says: ‘The perception of high cost and complexity will reduce as M2M evolves and Vodafone has a clear role to play in this. More standards are emerging and the hope is that will speed up adoption too.’

Regionally, he notes that the US has led a lot of the investment in M2M so far, followed by Europe, but now the APAC region is investing heavily and looking to take first place. ‘Some verticals, such as smart metering and automotive (e.g. the eCall initiative in Europe) are dominated by regulations, so that can both hold up and drive take up, but we see other verticals like consumer electronics picking up, as a wider variety of connected devices develop. After that, we think there is a lot of potential to come in the industrial and manufacturing sectors, particularly for asset monitoring and tracking,’ concludes Salminen.

Written by Wireless magazine
Wireless magazine

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