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M2M & Telematics. A market opportunity. M2M System Telematics Consultants. M 2 M System Telematics Consultancy. Lars Odlén MSc, MBA 20 years in product & process development 8 years of wireless M2M Led M2M developments in several industries Extensive international business experience.

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slide1

M2M & Telematics

A market opportunity

M2M System

Telematics Consultants

m 2 m system telematics consultancy
M2M SystemTelematics Consultancy

Lars Odlén

  • MSc, MBA
  • 20 years in product & process development
  • 8 years of wireless M2M
  • Led M2M developments in several industries
  • Extensive international business experience
slide3

What happens in the wireless world ?

M2M System

Telematics Consultants

voice market saturates
Voice market saturates

M2M System

Telematics Consultants

churn increases
Churn increases

M2M System

Telematics Consultants

arpu decreases
ARPU decreases

M2M System

Telematics Consultants

slide7

3G mobile-phone woes

The introduction of third-generation faces technical and financial difficulties.

M2M System

Telematics Consultants

slide8

Pass the painkillers

DO MOBILE phones cause headaches? In the case of third-generation (3G) telephones, the answer is undoubtedly yes—even though nobody is yet using them. Instead, they are causing technical and financial pain for all the companies around the world that are trying to build 3G networks.

The idea behind 3G was to offer subscribers exciting new features, such as video clips and high-speed Internet access, for which they would be prepared to pay far more than they now do. Operators have spent vast sums—around $125 billion in Europe alone—buying licences to enable them to offer such services (see chart), and have run up huge debts in the process. Building the networks will cost about the same again. It is a huge gamble—and one that is looking riskier by the minute.

This has serious financial repercussions. Given the expense of the 3G licences and infrastructure, the operators want to launch their services and start generating revenue as quickly as possible. But the uncertainty has hit their share prices; and the debt burden has led to cuts in their credit ratings that have made it harder for them to raise money. Britain’s BT, for instance, was forced to sell prized Japanese and Spanish assets to Vodafone this week, to reduce the massive debts it incurred when buying 3G licences. BT, whose long-serving chairman, Sir Iain Vallance, stood down last week, now plans a huge rights issue that may further upset its long-suffering shareholders.

Worse even than these cash travails, the initial projections of how much operators could expect to charge for 3G services now look highly optimistic. It has become clear that 3G will take far longer than expected to become profitable, so operators will sink deeper into debt along the way. Amid all this uncertainty, it is clear that it will be several painful years, rather than months, before 3G becomes widely available. Even if the operators can meet their debt burdens and build the networks, it is not at all certain that they will be able to make much money from them. Today’s headaches might then seem mild compared with those that are to come.

what the future might hold
What the future might hold
  • No market growth
  • SOW (Share of wallet) not increasing
  • All playes offer same
  • Mobile communication becomes a comodity
  • Mobile com just another utility
  • Customers wants more for less
  • Technology migration require heavy investments
  • ARPU likely to decrease

M2M System

Telematics Consultants

slide10

When the future looks uncertain, why not rely on the past

- You have a GSM network

- You have spare capacity

M2M System

Telematics Consultants

slide11

Without investments

Additional revenues

  • Now
  • Without investment
  • Without cost

M2M System

Telematics Consultants

slide12

Your future subscribers might not be persons, but machines

Telematics

M2M System

Telematics Consultants

slide13

By 2005 there will be more machines communicating than people

NTT DOCOMO President Keiji Tachikawa

For the UK market this equals +100 million £ per annum, at almost no marginal cost (1p/msg, 200 msg/yr)

There is a finite number of people

but

An ever growing number of machines

M2M System

Telematics Consultants

growth in machines
growth in machines

% of devices that will be communications enabled

M2M System

Telematics Consultants

Source : Merrill Lynch, June 2000

slide15

Voice

Telemetry & Telematics

Data

total projected market

penetration

284%

171%

142%

118%

93%

72%

57%

41%

M2M System

Telematics Consultants

recognising the opportunity
recognising the opportunity
  • within the next ten years, telemetry in its various guises will reach into all areas of industry i.e. food, retail, leisure engineering and transport
  • invasive as mobile voice currently is today
  • Eventually everything will be connected

M2M System

Telematics Consultants

a glimpse into the future
a glimpse into the future
  • telecom will pervade all aspects of life
    • human to human
    • human to machine
    • machine to machine
    • machine to human

communication

interaction

transaction

control

building the connected world

M2M System

Telematics Consultants

what is telematics
What is Telematics
  • The fourth phase of the IT revolution
  • All devices communicate
  • Geography becomes irrelevant
  • Enables ”Business in real time”
  • A Productivity driver
  • Drives re-engineering and new business models

A new tool for mankind

M2M System

Telematics Consultants

slide19

Wireless

End to End Wireless Telemetry solutions

Computing

Internet

Source Ericsson

three phases of wireless
Three phases of wireless

Step one (in progress)

Extending existing systems and processes to the field. Nissan saves 40% on sales costs by giving wireless access to pricing and inventory. HBOC (drugs) reduced incorrect shipments by 80% through wireless in their warehouses

Step 2 (in development)

Re-engineering business. NTT DoCoMo increased vending operator’s profits 70% by introducing Cashless Payment . Teclion saved 50% of service visits by remote monitoring.

Step three (tomorrow)

Creation of new business models that would not have been possible without wireless

sounds great but how do we get to making money
Sounds great, but how do we get to making money
  • Understanding the market
    • End customers
    • Intermediary
    • Competitors
    • Environment
    • Economics
  • Understanding the application
    • Value chains
    • Players
    • Change drivers
    • Enablers
    • Technical requirements

M2M System

Telematics Consultants

understanding who has to be involved
understanding who has to be involved
  • It's like a team
  • the different players and the interaction between them is referred to as "the value chain"

M2M System

Telematics Consultants

the value chain
the value chain

supplier

systems

integrator

service

supplier

network

operator

end user

M2M System

Telematics Consultants

the value chain24
the value chain
  • it's very complex
  • many interested parties
  • a lack of standards
  • specialists and ways of working are specific to particular vertical markets
  • however overall framework is similar in all markets

M2M System

Telematics Consultants

what can an operator do
What can an operator do?

Help others play !

slide26

Competitors

Automation

Utilities

Vending

Security

Automotive

M2M System

Telematics Consultants

slide27

Opportunity

Automation

Utilities

Vending

Security

Automotive

Generic middleware platform

M2M System

Telematics Consultants

business model step 1
Business model step 1

Trough SI /AP

End customers in various vertical markets

Solutions and applications providers

Operator

M2M System

Telematics Consultants

slide29

Business model step 2

The telematics wrapper

End customers in various vertical markets

Operator

Partners

M2M System

Telematics Consultants

slide30

Telematics means

New customers

Substantial volume growth

Low investment

Low uppkeep

High profit segment

Low churn

Broadening of Brand name

M2M System

Telematics Consultants

cases

Cases

CASES

M2M System

Telematics Consultants

slide32

Case Operator

M2M System

Telematics Consultants

slide33

M2M System

Telematics Consultants

M2M System

Telematics Consultants

M2M System

Telematics Consultants

M2M System

Telematics Consultants

developing a telemetry managed solution

Developing a telemetry managed solution

M2M System

Telematics Consultants

overview
Overview
  • What is the Orange Managed Solution?
    • An end to end process for developing a new system
    • A Gateway to simplify the technical connection
    • A single point for customer support
    • Not restricted to a specific market

M2M System

Telematics Consultants

components
Measures

Reads

Controls

Remote

Moving

Fixed

Existing

New

Components

Device

Modem

Managed Gateway

Software

  • GSM Radio Access
  • Uses SMS
  • GPRS and 3G in the future?
  • Connects applications to a telemetry devices
  • Converts SMS messages to XML
  • Buffers Data
  • Internet Accessible
  • Operated and Managed for Orange
  • Customer Specific
  • Back-end System
  • May be an ASP
  • ERP
  • Records
  • Controls
  • Co-ordinates

M2M System

Telematics Consultants

parties
Device Integrator

Connects the Device to the Orange Managed Gateway using a GSMModem

Parties
  • System Integrator
    • Connects the Customer’s Computer System to Orange Network using the Managed Gateway and the Internet

Device

Modem

Managed Gateway

Software

M2M System

Telematics Consultants

how does it work
How does it work?

Customer’s Data Centre

Customer’s

Bespoke Software

Customer’s

Remote Devices

Sensors, GPS, etc

how does it work39

Customer Support

How does it work?

Customer’s Data Centre

Customer’s

Bespoke Software

Customer’s

Remote Devices

Orange

Managed Gateway

Managed Gateway

API

Middleware

Unix

Sensors, GPS, etc

Server Farm

how does it work40

Customer Support

How does it work?

Customer’s Data Centre

Customer’s

Bespoke Software

Customer’s

Remote Devices

Orange

Managed Gateway

System Integration

GSM Modem

+ SIM

Managed Gateway

Device

Integration

API

Middleware

Unix

Sensors, GPS, etc

Server Farm

how does it work41

Customer Support

Internet

Bill

Orange

SMS Telemetry

Data (Compressed)

How does it work?

Customer’s Data Centre

Customer’s

Bespoke Software

Customer’s

Remote Devices

Orange

Managed Gateway

System Integration

GSM Modem

+ SIM

Managed Gateway

Device

Integration

API

Middleware

Unix

Sensors, GPS, etc

Server Farm

slide42

Orange Telemetry Managed Solution will build on existing Orange Telemetry Offerings

System Integration

  • Wholesale Telemetry: Unbranded airtime via wholesale deals with Telemetry Service Providers. (Claire Betty)
  • Telemetry Kit: Orange branded modem and airtime (Roger Hill and Sam Mitchell)
  • Telemetry Managed Solution: Full lifecycle telemetry solution, including monitoring, integration, and hardware.

Device Integration

High VolumeMessaging

GSM Modem

Airtime

OrangeTelemetryManagedSolution

OrangeWholesaleTelemetry

OrangeTelemetry Kit

advantages
Advantages
  • Reduced development time
  • Scalable, High performance messaging
  • Reduced message latency
  • No single point of failure
  • Removes complexities of modem hosting
  • Flexible, horizontal approach
  • Easy Migration path from SMS to GPRS
  • End to End monitoring and support
  • Base for ASP development
key features
Key Features
  • Orange will be a ‘One Stop Shop’ for new telemetry products
  • Reduced product development time
  • Quicker customer connection
  • Not restricted to specific industries
  • Easy Migration path from SMS to GPRS
  • End to End monitoring and support
  • Built using ‘Off the Shelf’ technology
  • Designed for the b2b marketplace
case lift service
Case Lift service

M2M System

Telematics Consultants

what is the biggest saving in lift service
What is the biggest saving in lift service?

Not to visit the lift !

  • Unmanned visits
  • Need based service intervals
  • Preventive maintenance

 Reduces annual service visits by 50%

M2M System

Telematics Consultants

gsm based monitoring alarm system
GSM based monitoring/alarm system

M2M System

Telematics Consultants

icu information communication unit
ICU™ (Information Communication Unit)
  • Emergency telephone
    • Rapid connection
    • Automatic identification
    • Redial
  • Service need
    • Starts
    • Fault symptoms
  • Statistic
    • Customer reports
  • Cost reduction
    • Quick installation
    • No telephone line

M2M System

Telematics Consultants

slide49

IT system architecture

Service engineers

Alerts

Backreports

Reports

Customer info

SMS

WWW

Regional offices

WAP

GSM

SMS

ICU

data

Voice

Lift

GSM

network

GSM

Field

Customers

WWW

PSTN

Reports

Internet

Call

centre

Machine

reports

Customer

IT system

WWW

Firewall

publish-

ing

CRM

SMS

system

server

&

db

Head office

M2M System

Telematics Consultants

extranet log on
Extranet log-on

M2M System

Telematics Consultants

reporting
Reporting

M2M System

Telematics Consultants

alarm buttons pressed
Alarm buttons pressed

M2M System

Telematics Consultants

pop up screens
Pop-up screens

M2M System

Telematics Consultants

sms or wap messaging
SMS or WAP messaging

Power lost at 12.32

on lift number 12345

Main street 123, entry B

M2M System

Telematics Consultants

visit scheduling
Visit scheduling

M2M System

Telematics Consultants

tomorrow is already here
Tomorrow is already here
  • Networking
  • Virtually present
  • Self managed
  • Empowered
  • Knowledgeable
  • Access to information and support
  • Quality built into the process
  • Need based actions
  • Producing results, not time

M2M System

Telematics Consultants

service organisation case lift service
Service organisationCase lift service

Result

  • Doubled productivity
  • Reduced call outs to half
  • Increased customer satisfaction
  • Doubled profitability
  • Less churning
  • More motivated workforce

M2M System

Telematics Consultants

case gaming
Case Gaming

Problem

  • Cash shrinkage

M2M System

Telematics Consultants

slide59

Case Gaming

Solution

Monitor cash box

  • Desired effect: No cash shrinkage
  • Side effects
    • Uptime
    • Fetching profile
    • Games preferred
    • Cash handling cost

M2M System

Telematics Consultants

transforming it structures case copiers
Transforming IT structuresCase Copiers
  • Countries are pretty independent
  • The way they run service vary
  • Their IT systems also vary
  • We have left them alone as long as they made profit
  • But now the market gets tougher
  • And we need one IT system for Europe

M2M System

Telematics Consultants

case copiers con t
Case copiers con’t
  • The problem is that some countries are quite advanced
  • Sweden, for example, have an AS400 system that they have been developing for ten years
  • There is nothing on the market as good as that
  • So they would never accept a new system
  • But we need to change...

M2M System

Telematics Consultants

case copiers con t62
Case copiers con’t

Solution

Field service

New functionality

Existing country specific IT systems

ASP

SMS

  • Alerts
  • Acceptance

WAP

-Back reports

-Spares ID & order

XML

Wireless

interface

Layer

M2M System

Telematics Consultants

case copiers con t63
Case copiers con’t

Solution

New functionality

Service

management

system

X

Existing country specific IT systems

X

ASP

FIELD FORCE

SMS

  • Alerts
  • Acceptance

WAP

-Back reports

-Spares ID & order

X

XML

Call centre

X

Web access

-Customer handling

-Service scheduling

-Billing

-Reporting

X

Wireless

interface

Layer

M2M System

Telematics Consultants

case copiers con t64
Case copiers con’t

Solution

EQUIPMENT

New functionality

Service

management

system

ASP

FIELD FORCE

SMS

  • Alerts
  • Acceptance

WAP

-Back reports

-Spares ID & order

Wireless

PSTN

LAN

Call centre

Web

WAP

e-mail

e- fax

Web access

-Customer handling

-Service scheduling

-Billing

-Reporting

Wireless

interface

Layer

M2M System

Telematics Consultants

CUSTOMERS

telematics m2m apply to every business
Telematics & M2M apply to every business

M2M System

Telematics Consultants

slide66

Increase profitability with

Telematics & M2M

260 page report, covering:

Forecasts

Business cases

Value chains

Technology

Practical advice; How to

Competitive sutuation

Lessons learned

10% discount for you

Refer to The best of wireless

slide67

questions

M2M System

Telematics Consultants

thank you for listening

Thank you for listening

Lars.odlen@m2msystem.com

M2M System

Advisors to Industry Leaders