They're in vending machines, parking meters, home security systems, and even healthcare devices for the elderly. They are wireless sensors, a key component of the burgeoning machine-to-machine (M2M) industry where devices use wired and wireless connections to communicate with each other. Though far from new, M2M technology is expanding its reach at a dramatic rate.
M2M connections will grow to 2.1 billion by 2021, up from roughly 100 million last year, according to research firm Analysis Mason. The dramatic growth of global smartphone usage is a major factor in M2M's popularity, of course, as are industrial applications in the transportation, emergency services, security, and retail sectors.
A good chunk of M2M hookups are done via fixed lines, including DSL, ISDN, cable modem, and Ethernet connections. But the real growth is in the wireless arena, and it's being spearheaded by cellular carriers.
"Faced with diminishing rates of growth in handset sales and declining residential ARPU (average revenue per user), these mobile operators have latched onto a new area of device growth: the connecting of all things in the world, rather than all people," wrote Analysis Mason analyst Steve Hilton in a November 2011 report.
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John Horn is witnessing M2M's transformation first-hand. President of RACO Wireless, a Cincinnati, Ohio-based company that provides wireless data services to the M2M industry, Raco is undeniably optimistic about a not-too-distant future where wireless sensors do all sorts of interesting things.
"This is like the early days of the Internet. You have all of these companies that are creating solutions that people couldn't have even imagined 12 months ago," Horn said in an interview.
So what types of wireless M2M applications are we talking about?
"It's all over the gamut," Horn said. "We have over 500 solution partners today, and they offer a myriad of products. It's getting out into thousands of different applications."
Home security, for instance, is a growing sector. People are using mobile devices to manage their home alarms, lights, and energy usage.
"Their mobile devices can talk to applications running on sensors in their home via wireless connectivity," said Horn.
M2M technology is changing the vending machine industry as well.
"The guy used to get in his truck, go to every vending machine, and fill the ones that were empty," Horn said. "But he wasted his time at the ones that didn't need to be filled."
But with an M2M application, the machine processes sales, manages inventory, and orders more products when it needs them. Not only does this reduce the number of delivery drivers needed, it also makes it easier for vending machines companies to restock their machines in a timely manner.
Parking meters are another growth market for M2M technology--albeit a revenue-generating "upgrade" that might not sit well with most motorists.
"Parking meters have been dumb for decades. And now parking meters are wirelessly connected, which allows you to do a whole lot of things," Horn said.
Example: A city has a large festival downtown. It can jack up parking meter rates--making it more expensive to park in select neighborhoods--to draw more revenue from the event.
"Cities are struggling for money, here's a great revenue stream. And they can manage all of this remotely," said Horn, who claimed that some cities are already seeing a 40% boost in their revenue stream via this method.
On the plus side--at least from a driver's perspective--cities can also reduce parking rates or turn off meters temporarily during holidays or shopping promotions, Horn added.
While the management of large numbers of wireless sensors is certainly a Big Data issue, Horn says most M2M devices generate relatively small quantities of information.
"Ninety-plus percent of these applications use very, very small amounts of data. Your average device uses a total of maybe 100 kilobytes per month," he said.
Horn added: "That's one of the advantages for cellular carriers. The draw on the network and the drain on the spectrum are very small."
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