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Most businesspeople replace their cell phone roughly every two years. At the other extreme is machine-to-machine (M2M) wireless devices, which often are deployed for the better part of a decade and sometimes even longer. That's because it's an expensive hassle for an enterprise to replace tens of thousands of M2M devices affixed to trucks, utility meters, alarm systems, point-of-sale terminals or vending machines, to name just a few places where today's more than 62 million M2M devices reside.
Those long lifecycles highlight why it's important for enterprises to take a long view when developing an M2M strategy. For example, if your M2M device has to remain in service for the next 10 years, it could be cheaper to pay a premium for LTE hardware now rather than go with less expensive gear that runs on GPRS or CDMA 1X, the networks of which might be phased out before the end of this decade.
Confused? Mike Ueland, North American vice president and general manager at M2M vendor Telit Wireless Solutions, recently spoke with Intelligence in Software about how CIOs, IT managers and developers can sleep at night instead of worrying about obsolescence and other pitfalls.
Q: M2M isn't a new technology. For example, many utilities have been using it for more than a decade to track usage instead of sending out armies of meter readers every month. Why aren't more enterprises following suit?
Mike Ueland: It's very similar to what it was like before we had the Internet, Ethernet and things like that, where you had all of these disconnected devices. There's an incredible opportunity, depending on what the business and application are, to connect those devices and bring more information back, as well as being able to provide additional value-added services.
There have been some significant improvements in terms of technology and the cost to deploy an M2M solution. All of the M2M solutions have gotten much more mature. There are so many more people in the ecosystem to support you.
But we haven't seen the uptake within the enterprise community. Part of that is due to we've been in such a recessionary period over the past couple of years. No one really wants to start new projects.
Q: What are some pitfalls to avoid? For example, wireless carriers have to certify M2M devices before they'll allow them on their network. How can enterprises avoid that kind of red tape and technical nitty-gritty?
M.U.: The mistake that we see a lot is that people try to bite off too much. They'll say: "I need this custom device that needs to do this. Therefore I need to build a custom application." They overcomplicate the solution.
There are so many off-the-shelf devices out there that can be quickly modified for your application. One of the benefits of that is you reduce technical risk and time to market because often those devices will be pre-certified on a carrier's network. There are also a number of M2M application providers out there -- like Axeda, ILS and others -- that have an M2M architecture. That allows people to very quickly build their own application based on this platform.
Q: Price is another factor that's kept a lot of enterprises out of M2M. How has that changed? For example, over the past few years, many wireless carriers have developed rate plans that make M2M more affordable.
M.U.: Across the board -- device costs, module costs, air-time costs -- all of these costs have come down probably by half in the past few years, if not more. So any business cases that were done two or three years ago are outdated.
In addition, there have been great technological improvements. For instance, the device sizes have continued to shrink. They use less power. So it opens it up for a whole range of applications that might not have been possible in the past.
Q: About 10 years ago, a lot of police departments and enterprises were scrambling to replace their M2M equipment because carriers were shutting down their CDPD networks . Today, those organizations have to make a similar choice: Do I deploy an M2M system that uses 2G or 3G and hope that those networks are still in service years from now? Or should I go ahead and use 4G now even though the hardware is expensive, coverage is limited and the bandwidth is far more than what I need?
M.U.: It depends on the application. For instance, AT&T is not encouraging new 2G designs. They've deployed a 3G network, and they're starting to deploy a 4G network. They'd really like people to move in that direction. Verizon and Sprint have their equivalent version of 2G: CDMA 1X. Both Verizon and Sprint have publicly declared that those networks will be available through 2021. At the end of each year, they're going to reevaluate that.
So depending on the planned time-length of your application and where you plan to deploy it -- North America or outside -- 2G networks will have a varying degree of longevity. Having said that, if you look at a 4G deployment outside of Verizon in the U.S., there are not many significant 4G deployments. We're early days in 4G.
As module providers, we rely on lower-cost handset chipset pricing to drive M2M volumes. The cost of an LTE module is over $100 right now. Compare that to 2G, which is under $20 on average. It's a big gap.