Nearshore Americas

Getting Ready for the New Machine-to-Machine Era

The proliferation of mobile devices – smartphones, tablets and notebooks – along with the evolution and development of smart devices, is turning companies’ attention to the machine-to-machine (M2M) trend as a new revenue source with great potential.

M2M communication refers to digital communication between an endpoint and an enterprise’s back-end system over cellular networks. To give an example, M2M can be a sensor-based monitoring system that controls liquid in a storage tank and sends an automated message to the central station when the liquid goes below a certain level.

Various “integrated” services, such as smartphone applications that can be used to monitor remote endpoints, are increasingly becoming available as mobile device penetration increases rapidly. In Latin America for example, the average mobile penetration is above 120%, which represents more than one mobile device per person, and it is expected to increase in the future. By 2020, the world is expected to have 10 connected devices per house, five connected devices per user and five billion internet users.

Internet of Things

With most of the population connected as well as an increasing number of machines – mobile devices, cars and smart tags just to mention a few – the market faces the Internet of Things (IoT) in which everything and everyone is connected. Companies are therefore increasingly addressing this trend. Google for instance has recently announced the acquisition of hardware players such as Nest in a movement to prepare for this growing demand.

Latin America already has examples of M2M adoption. The city of Rio de Janeiro is applying this concept for city management. In 2010 the city government signed an agreement with IBM to build the Rio Operations Center. This center is helping the city to improve response time to different types of incidents including flash floods and landslides by integrating and consolidating data from urban systems for real-time visualization, monitoring and analysis regarding the city.

Another similar initiative can be found in Lima, Peru. The startup Lima I/O is dedicated to monitor the city environment. The solution is based on a network of devices equipped with sensors related to the environment condition. These devices, which are placed in different parts of the city, can report real time analysis regarding temperature, humidity, levels of radiation or environmental noise. All this information is stored in the cloud and big data is used to analyze all data gathered.

In the meantime, in Santiago, Chile we can discover an additional startup dedicated to develop M2M solutions. The company called Tag.cl has developed a tag based on radio frequency identification (RFID) that is attached to the car. This tag connects with readers distributed in Santiago’s railroad and helps railway companies to get a clear vision of the traffic map, additionally allowing them to communicate with users and send updates on traffic conditions. Brazil has a similar solution named “Sem Parar” in which RFID devices installed in the car communicate with readers to charge them for parking lots and railroads.

For now, M2M is still not a major reality but it is starting to be implemented on a smaller scale, especially with smart tags helping on transportation and logistics as well as asset management as it simplifies the monitoring and management of products. The total lines in service in Latin America for M2M reached 12.9 million in 2013 and it is forecast to reach 54.1 million by 2019.

Tomorrow’s World

In the future, the market will be looking at a scenario in which people will be able to connect their houses with smartphones, wearable devices will notify the healthcare system about your conditions, coffee machines will communicate directly to the distributor in order to order more coffee, smart tags will be simplified and increase efficiency on management, monitoring services and security.

In order for this projection to become a reality, it is necessary to overcome some important challenges including leveraging benefits of mobility, nurturing the M2M application development community, dealing with the lack of standardization in M2M communications, and focusing on integrated M2M solutions, among others.

There are huge opportunities for M2M as mobility increases and more verticals look at ways to optimize their business. It is still a nascent market but the demand for this type of solution is expanding and soon the market will start witnessing a major adoption regarding M2M.

Bruno Tasco

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