Jean-Pierre Muzard Business Development Manager, Global Service Provider Team

October 2012

Internet of things, Machine To Machine Terminology

Opportunity & Market Drivers

Use Cases

Business Models

End-2-End Architecture

Eco-system Partners

Apps Apps

Communication

IoT

M2H M2M

Robotics, Environmental sensors,

Vehicle Telematics, RFID,

IP light bulbs, LBS

, LOC sensors

Technologies

• The Internet of Things term is well-understood and widely adopted by several industries

This is new types of devices connected using IP technologies to private and public IP networks

Devices are sensors, actuators, tags, cars, engines, radars, video cameras, … not just highly constrained objects

A variety of link layers: low power and not so low power (IEEE 802.15.4, Wifi, 3G/4G, whitespaces, satellite, GPS,…)

• The Machine-to-Machine term is widely used mostly in the Service Provider environment

Machine-to-Machine (M2M) is the automatic communication between devices without human intervention.

M2M uses 2G, 3G, 4G, LTE connectivity, but also wired connectivity

Some of the most common M2M applications are telemetry (e.g. utility meters), telematics (e.g. car navigation systems), sales and payment (e.g. vending machines), and fleet management (e.g. cargo tracking).

Internet of things, Machine To Machine Terminology

Opportunity & Market drivers

Use Cases

Business Models

End-2-End Architecture

Eco-system Partners

Cisco Visual Networking Index, 2011

By 2015: M2M traffic will grow by 258%.”

By 2020: 50 billion connected IP devices

Cisco Visual Networking Index, 2011

By 2014: Managed mobile M2M services market will be $20B.”

ABI Research, 2010

CY 2012

“Vertical M2M”

Source: Ericsson

“Social Networking of

M2M”

Trillion

IoTs

IP End Points

Evolution of IP and Mobile Networks

Million

PC / Laptop

Billion

IP Device

Office & Home

Trillion

Wireless M2M End

Points

Cloud Services

The Evolution of

IP NetworksThe Evolution of

Mobile Networks

Billion

Mobile Voice,

Internet, SMS

Million

Voice

Social Networking of M2M

“Connected Network Society”

Market Category M2M Solution Examples

Insurance (Telematics) GPS, wireless

modules

Building or Home Management

Smart Appliances

Industrial Monitoring and Automation

Industrial Asset Monitoring

Fleet Management

(Telematics)

Vehicle Asset Monitoring

Public Safety and Security Environmental Asset Monitoring

Market Category M2M Solution Examples

Oil and Gas Solutions Equipment Monitoring

Healthcare and Life Sciences

Remote Diagnostics

Transportation (Telematics) Vehicle Management

Retail Sector Point-of Sale, Vending

M2M device connections by segment, worldwide, 2010–2020 [Source: Analysys Mason, 2012]

0.0

0.5

1.0

1.5

2.0

2.5

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Con

nect

ions

(bill

ion)

Utility

Security

Automotive and transport

Healthcare

Government, retail and financial services

10

Chipset • Big players dominate market

• High cost of chipsets

• Scale gains

• Cost will be driven down by 30%

Module • High cost

• High Power Consumption

• Proprietary

• Cost will be driven down by 50%

• Smaller Size

• Plug and play

Device • Operators certification

• Lack of standardization

• Standardization

• More devices

• Use of web interface

Network • 60% M2M service are based on GSM/CDMA network, 40%

on 3G.

• 70% M2M service are running on 3G, 20% on 4G ( LTE). The rest 10% on

WiMAX/CDMA, GSM.

• Lower network cost

• Higher bandwidth usage

Platform • Less than 10% M2M applications were developed by

platform.

• 70% of the M2M services come from developers that developed their

services on the M2M platform.

Application •55% revenue comes from smart grid and vehicle Telematics.

Highly concentrated in utility and vehicle markets.

• More than 60% revenue comes from asset and people tracking, logistic

management/healthcare diagnostics/ consumer touch security applications.

Convergence of M2M platform and cloud computing.

• Convergence of M2M platform and cloud computing.

2011 2015

Implication: The M2M market is at an intermediate stage

Internet of things, Machine To Machine Terminology

Opportunity & Market Drivers

Use Cases

Business Models

End-2-End Architecture

Eco-system Partners

Vertical

Segment

Business Government Consumer

Automotive

Utilitie

s Finance Energy Healthcare Retail Logistics Manufacturing

Public/

Society

Consumer

Electronic

Telematics X

Track and Trace X X X X

Remote

Sensor/Monitoring X X X X X X X X X X

Smart Metering &

Grid X X

POS/Payment X X

Security X X X X X X X X X X

Connectivity X X X X X X X X X X

80% of M2M Requirements are Horizontal Capabilities (common across all

verticals)!

Internet of things, Machine To Machine Terminology

Opportunity

Use Cases

Business Models

End-2-End Architecture

Eco-system Partners

The value chain is very complex

Device Vendors

M2M Chipset Vendors

M2M Module Vendors

Application Developer

M2M SDP Platforms

M2M Service Distributors

Vertical specific/ System integrators

Infra Vendors

2004 & before 2005 2006 2007 2008 2009 2010 2011

De

ve

lop

ed

Ma

rke

ts

Em

erg

ing M

ark

ets

* Vodafone platform

* China Mobile

* Maxis

Launch

M2M

* NTT DoCoMo

* Softbank * nPHASE (Verizon Wireless)

* Telstra

* KDDI

* China Unicom

* China Telecom

* Celcom (Malaysia)

* Sprint NextTel & DataSmart & Aeris

* AT&T Platform

* SKT

* KT APAC

Early Adopters

APAC

Fast Followers * CSL

* Globe

* StarHub

* Reliance

* KPN platform

Source: Frost & Sullivan

* Telenor Connexion

M2M Chipset Vendors

M2M Module Vendors

M2M Device Vendors

M2M Service Providers

M2M Service Distributors

Vertical Industries & Enterprises Consumers

M2M Connection Providers

M2M Application Developer

Model 1: Device Driven Model Telco:

AT&T

Consumers Amazon

Kindle Amazon

Telco:

Sprint

Business &

Consumers QUALCOMM

Model 2: Consortium Model Operator Driven Model

Various Partners

Verizon

Verizon

NPHASE Verizon

Number of Connections (end of CY2010) = 7-8 million from AT&T and Sprint

YoY Growth: > 250%

Number of Connections (end of CY2010) = 8 million from Verizon

YoY Growth: 16%

Model 3: Platform Model

(usually through partnerships) Telstra

Business &

Consumers

Model 4: Operator Driven Model

Business&

Consumers

Jasper

Wireless

Telstra

M2M

Platform

Vertical Industry

& Enterprise

Various Partners

( Verizon Wireless, China

Mobile, SKT, NTT Docomo )

Verizon Wireless, China

Mobile / SKT/ DoCoMo

M2M Chipset Vendors

M2M Module Vendors

M2M Device Vendors

M2M Service Providers

M2M Service Distributors

Vertical Industries & Enterprises Consumers

M2M Connection Providers

M2M Application Developer

Number of Connections (end of CY2010) = 9.3 million from AT&T

YoY Growth: 50%

Number of Connections (end of CY2010) = 2.1 million from NTT DoCoMo

YoY Growth: 45%

1 3 4

Telco

CAPEX

OPEX

Go To Market Speed

ROI

Scalability

M2M

Application

Provider

Investment

ROI

Go To Market Speed

Flexibility (Change

Connection Providers)

Scalability

Neutral Unfavorable Favorable

1. Device Driven Model 3. Platform Driven Model 4. Operator Driven Model

Source: Frost & Sullivan

Internet of things, Machine To Machine Terminology

Opportunity & Market Drivers

Use Cases

Business Models

End-2-End Architecture

Eco-system Partners

Business

Services

SAP/ Oracle

Bu

sin

es

s

Ap

pli

ca

tio

ns

As

se

t

(Se

ns

or)

&

M2M

GW

Applications

mHealth/ Fleet

Management / Industrial

Automation

Connectivity

Service

Ca

rrie

r S

P M

2M

Clo

ud

Se

rvic

es

Sys

tem

s I

nte

gra

tor

3G/4G/Wireline M2M GW

3G/4G/WiFi GPS M2M GW

2G/3G Modem

Data Mgmt

Service

Integration

Service

Application

Service Remote Service

Device Mgmt

Admin Service Security Service

Sensor # 2 Sensor # n

Sensor # 1

DevTools &

Open API

Asset Mgmt Billing Service

Policy Manager

Maintenance Mgr Big Data Mgmt

EPC

Netw

ork

-A

ware

VA

S

2G/3G Modem

2G/3G Modem

EPC

Personalization

Manager

Identity Mgmt

Ne

two

rks

EPC / BNG

Network, subscriber and Services Abstraction and Orchestration Layer

HTTP RESTful – SOAP XML – XMPP – One API

Apps Orchestration Layer

Data Analytics

Real-Time

Subscriber Mgmt

Network

Intelligence

Transport

Optimization

Inte

llig

en

t M

2M

N

etw

ork

Serv

ices

Compact Hardened

Services-Rich

Built for challenging environment –

shock/vibe, humidity, splash water,

temperature, dust

IOS-Based – ISR Compatible, Secure

native SMS Gateway with GPS Support

Industry’s Most Compact Hardened

M2M Gateway with Dual SIM

Flexible operations with ease of installation/deployment and lower TCO

Cisco ISR 819

Increased revenue with new business models

Greater efficiency with remote real-time monitoring with existing management

Mobile IP and IPv6 Ready

Internet of things, Machine To Machine Terminology

Opportunity & Market Drivers

Use Cases

Business Models

End-2-End Architecture

Eco-system Partners

• Manage Data Plan

(raise / lower

bandwidth)

• SIM management

(enable / disable)

• Report on data usage

• Powerful Rule Engines

(Automated control of

Assets)

• Firmware Over The Air

(Upgrade firmware,

push content to

Assets)

• Business Intelligence

and Reporting

Adjust Rate Plans Select higher-data Rate Plan before Asset receives a firmware

upgrade

Activate / Deactivate SIMs Deactivate SIMs when Assets are being seasonally warehoused

Track month-to-date Usage Lower reporting frequency of all Assets before Bandwidth Exceeded

Send single or bulk SMS Send SMS to “wake up” Assets and have them report data /

download updates

+

• SP(s) are key Partners for Cisco and will play a big role in the M2M market

• But it is not just a traditional Service Provider play!

• Both an Enterprise (e.g. Utility, Cars, …) and SP play

• Will stimulate the rise of new types of “Service Providers”

• Strong potential for Over-the-Top players

• Crucial Enterprise, Public Administrations, Government role

• Cisco End to End Infrastructure for IoT/M2M leverage Service Provider mobile and fixed

network and cloud infrastructures, it is the foundation for delivering network aware business

mission critical application.

• To develop and deliver M2M services Service Provider need to build partnership with M2M

platform vendor, application developer, system integrator and enterprises.

• ABIresearch® Maximizing Mobile Operator Opportunities in M2M: http://tools.cisco.com/search/display?url=http%3A%2F%2Fwww.cisco.com%2Fen%2FUS%2Fsolutions%2Fcollateral%2Fns341%2Fns523%2FABI-

CISCO_M2M_Operator_Opportunity.pdf&pos=1&strqueryid=2&websessionid=DJMvPuefgiNniOw-Ym3FBqP

• Machine-to-Machine and Cloud Services: Monetize Next-Generation Communication http://www.cisco.com/en/US/solutions/collateral/ns341/ns849/ns1098/white_paper_c11-663879.pdf

• M2M http://www.cisco.com/go/m2m

Thank you !