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Business Models Part III: What Is M2M?

Published 08 Oct 2021

Business Models Part III: What Is M2M?

Business Models Part III: What Is M2M?

In our previous articles, titled "What are B2B, B2C, C2B and C2C business models in e-commerce?" and "Business models part II: What are G2B, B2G, G2C, C2G, G2G and G2E?" we tried to explain different business models in e-commerce. Today we continue and focus on a technological business model: M2M. You only need a few minutes to read this article and discover the achievements of the digital age.

The World Is Changing, Needs Are Growing


Since the advent of the internet, technology has changed the way we communicate - not only with each other, but also with the world around us. Today, thanks to M2M communication and the Internet of Things, the world is more connected than ever.


Machines are able to communicate and share information without human intervention. Some time-consuming or boring processes can be automated so that people can devote themselves to useful or enjoyable activities.


In the future, M2M will play an increasingly important role, which is why it is necessary to check your own business model now and to recognize the possibilities of M2M. By the way: M2M can be easily integrated into company networks.



Definition Of M2M


M2M literally means ‘Machine-to-Machine’. It describes the exchange of information between of billions end devices such as machines, vending machines or vehicles with one another or with a central control center that are connected to the internet and to each other. These physical objects integrate computing capabilities that enable them to capture data about the world around them and share this with other connected devices, creating an intelligent network of ‘things’ or systems.


This exchange of information is increasingly taking place using the Internet and other access networks. M2M has great growth potential and a wide variety of industries are already relying on M2M applications.




Definition Of IoT (Internet of Things)


A new concept associated with the M2M business model is Internet of Things (IoT). It is a technology that makes it possible to connect physical and virtual objects, applications and products. With the various IoT solutions, you can exploit your full potential, optimise processes and expand business models. Through automated data transmission, it is also possible to achieve cost savings. The Internet of Things offers a wide range of applications and can be used in almost every industry.



What Does M2M Have To Do With Internet Of Things?


A second term is now often mentioned in connection with M2M: IoT or "Internet of Things". To understand the similarities and differences between the two terms, one can imagine that M2M-enabled machines usually exist in a closed ecosystem. Only people and machines within this network can access the machine data and act on it. Therefore, M2M is particularly relevant from a business perspective and in an industrial context.




How Does M2M Work?


As mentioned earlier, machine-to-machine communication makes the Internet of Things possible. According to Forbes, M2M is one of the fastest growing connected device technologies on the market, primarily because M2M technologies can connect millions of devices on a single network. Connected devices range from vending machines to medical devices, vehicles and buildings. Virtually anything equipped with sensor or control technology can be connected to some kind of wireless network.


This sounds complicated, but the thinking behind the idea is quite simple. Essentially, M2M networks are very similar to LAN or WAN networks, but are used exclusively to enable communication between machines, sensors and controllers. These devices relay the information they collect back to other devices on the network. This process allows a human (or intelligent controller) to assess what is going on throughout the network and issue appropriate instructions to the connected devices.



M2M Technology Is All Around Us


Networked communication between machines has been around since the mid-20th century. An early form of machine-to-machine communication is, for example, the transmission of the caller's telephone number from one telephone to another. Furthermore, the transmission of meter readings in the energy sector, for example, has been around since 1977.


Actually, M2M has been in our daily lives for a long time. It can be found in our homes, on our way to work, while shopping, playing sports and entertaining ourselves. Here are a few examples of M2M technology you might encounter in your everyday life:


Commuting: If your train is cancelled due to bad weather, a smart alarm clock can determine the extra time you need to take a different route and wake you up early enough so you're not late for work.


Smart homes: A networked thermostat can automatically turn on the heating when the room temperature drops below a certain level. You may also have a remote locking system that allows you to open the door for a visitor via your smartphone when you are not at home.


Health and fitness: Wearable devices can track the number of steps you take per day, monitor your heartbeat and count calories to determine your eating habits and whether you are lacking important nutrients.


Shopping: Based on your location, past shopping experiences and personal preferences, your local supermarket could send you a voucher for your favourite groceries when you are nearby.


These are just some of the ways that M2M technology and the Internet of Things affect our daily lives.



Application Areas Of M2M


There are of course many areas of application for M2M solutions, but proven areas are:


·         Transport and logistics

·         Fleet management

·         Building technology

·         Alarm and security

·         Intelligent energy management

·         Smart Home

·         Smart City

·         Healthcare

·         Sport and Leisure



An M2M Example From Transport Industry


M2M drives considerable benefits for businesses too. Connected devices collect information about every point of business – from product development, manufacturing, supply chain right through to point of sale – which can be used to identify and eliminate points of inefficiency.


For example: A truck manufacturer equips its vehicles with sensors that measure, among other things, pressure, temperature, vibration, speed and fuel consumption at regular intervals. Immediately after being collected, this information is transmitted by a SIM card, which is also in the vehicle, via the mobile network to a central control centre.


By automatically analysing the data, the control centre can determine whether the values are within known parameters or how much they deviate from them. The truck manufacturer can thus predict when something might break on the vehicle and is able to proactively inform its customer, the logistics company, within the framework of a special service contract and support it in maintaining the vehicles. The logistics company is enthusiastic about this service, as it not only increases the safety of the trucks but also their efficient use.



Five Things You Need For An M2M Project


1. M2M tariff

2. M2M service portal

3. M2M transmitter module

4. M2M SIM cards

5. Data tunnel for secure transmission


These are the 5 most important things you need. Furthermore, solution providers offer special services and consulting to implement your M2M solution quickly and securely.



Pay Attention On Security With M2M!


According to experts, new challenges in the area of IT security arise with M2M solutions. For example, the physical security of M2M modules (e.g. sensors) needs a lot of attention, as they can be scattered all over the world. Also the so-called Denial Of Service attacks (DOS) can have completely new consequences. Some of the M2M modules are battery operated, DOS attacks could be planned in such a way that the increased power consumption causes the M2M modules to fail over a large area.


In addition to physical protection and protection against hacker attacks, the secure transmission path is of particular importance. To ensure a secure connection between the M2M module and the central interface (e.g. monitoring platform), a so-called mobile IP VPN tunnel (Virtual Private Network tunnel) technology is used.



M2M Costs


Like any other business case, an M2M project only makes sense if all costs are carefully weighed up in advance and the targeted new business areas generate enough to justify the investment. First of all, you need to know what the costs of M2M projects are:


·         Hardware that collects data, processes it and provides the essential physical infrastructure

·         Software to control all the components and analyse the data collected

·         Network, which transmits the data via fixed and/or mobile networks

·         Services to deliver holistic projects and other services, such as system integration


In order to be able to limit the costs of an M2M project as accurately as possible, several steps are strongly recommended during the course of the project before the rollout takes place. These are:


·         Creation of a concept with definition of the use cases

·         Proof-of-concept

·         Pilot operation under real conditions


In our next blog we will focus on the topic “Internet of Things” which is a new term but has already taken a firm place in our lives. For lots more developments, news, inspiration and thoughts for the future, take a look at our blog.