Where “All Things Connected” Come Together

The M2M Zone @ CeBIT

CeBIT Reception

10 January 2013

CES, Las Vegas

Welcome: Intro to CeBIT & the M2M Zone

I would like to thank everyone here and especially the organizers of this event from Deutsche Messe for the opportunity to speak to you today. First I would like to provide a few words of introduction for my organization – the M2M Zone – and our relationship to the big show.

The M2M Zone is the exclusive partner for M2M exhibitions and conferences to the CTIA shows in the US, and to CeBIT in Europe. The organization has been active in M2M since 2001, and is owned by the media concern Horizon House, with offices in Boston, London, and Hong Kong.

The M2M Zone has exhibited at CeBIT since 2010, and it’s exhibition presence at the show has grown by an average rate of over 30% since then. At last year’s CeBIT, the M2M Zone Pavilion had 19 exhibitors in over 240 sqm, and the Conference featured 12 sponsors – it has become the largest US-based exhibitor to the show.

At CeBIT 2013, the M2M Zone will be located in Hall 11 – the Internet of Things Hall – which will be directly adjacent to CeBIT’s own special showcases on Intelligent Transportation, Smart Cities, and Connected Home, with a fully integrated conference area and lounge.

M2M Zone Partners

Recent Participants

in the M2M Zone

include many well-

known firms, and a

solid cross-section of

the M2M ecosystem.

What is Machine-to-Machine?

Just some of the end-use applications for M2M technology include….

• Intelligent Transportation: in-car GPS and Infotainment systems, pay-as-you-drive insurance, fleet management, traffic-flow management, emission control.

• Smart Energy: grid management, smart meters, consumer in-home/remote energy control, energy pipeline management (transmission/distribution).

• eHealth: patient home monitoring, wearable technologies, in-hospital connected medical devices, digitized record keeping/sharing systems (EMR and more).

• Smart Buildings: security monitoring, maintenance, construction management, emission control.

• eLogistics: asset tracking, management, and control.

• Connected Retail: integrated POS, in-store messaging, signage, vending machines.

• Public Security: safety monitoring, disaster relief.

What is Machine-to-Machine?

Beecham Research

Endnote #1

A recent Beecham Research survey of 178 companies that are deploying M2M technology showed that they are using a wide range of connectivity technologies – it’s more than just cellular!2

Breadth of M2M Connectivity

M2M Growth: Driving Factors

• Government Stimulus: governments around the world have already invested $20 billion in Smart Grid technology, which will result in 200-300 million installed smart meters.

• Eco-Friendly Push: governments look to curb emissions of Greenhouse gases from transportation and, more recently, building systems (example: EU Directive on building emissions).

• Healthcare Cost Management: uses of IT in healthcare is expanding rapidly, through EMRs, physician order entry, and other tools – digitized information increasingly shared.

• Public Security: the threat of terrorism has led to increased legislation calling for the tracking of goods and services, protecting assets – technology solutions bridge the gap.

• Transport Infrastructure Overload: increased traffic congestion and decaying infrastructure to support it will grow the need for traffic flow management systems of various kinds.3

M2M Growth: Market Forecast

Machina Research estimates that there will be 820 million connected M2M devices worldwide by 2015, with the potential market size of the global industry to be over 3.3 billion devices.4

Evolution of M2M Business Models

M2M business models have evolved from cost-saving tactics to new revenue-producing strategies:

• Automated Data Input: early applications included RFID tagging of inventory items, and it’s still a growing application – suppliers continue to quote huge growth rates.5

• Real-Time Monitoring: mature technologies comprise many mHealth, Smart Meter, and public safety applications, most aimed at reducing the physical cost of visiting remote targets/assets . Recent forecasts for these applications predict continued growth of 17% annually until 2015.6

• Location-Based Services: GPS technology makes has more recently made possible entirely new businesses – often tied into the car – including PAYD insurance and car-sharing hourly rentals. Avis just purchased Zipcar – with 720,000 members – for $500 million.7

• Subscriptions Services: the new “subscription economy” gives providers of hard goods new revenues, binds customers more tightly. Some high-end hardware providers now claim that 40% of their revenues come from long-term SLA’s.8

M2M Issues Here and on the Horizon

There are several major issues confronting M2M that will either spur or limit growth:

• Big Data Integration: managing data produced by M2M deployments will be the key to benefitting from that data, requiring integration of M2M, newer Cloud systems, and more traditional IT areas (e.g., ERP) as never before.9

• Data Security and Consumer Privacy: at both the network and device level, M2M deployments have shown themselves to be extremely vulnerable to hacking. End-to-End Encryption regimes and Trusted Integrated Environments are just some of the partial answers10

• International footprint: the requirement for connectivity to seamlessly bridge coverage as devices move between countries is increasingly dramatically. A recent survey of M2M adopters in North America and Europe shows that roughly 60% of deployments now require coverage in over 21 countries, up from around 30% in 2008.11

• Integrated Design: as Big Data from M2M deployments is better managed, the natural tendency will be for hard goods manufacturers to use the data collected in product design. Example: US military experience with its Humvee fleet is a case in point.12

Why CeBIT is the Place for M2M

As you have seen, the M2M sector is about as far-ranging as it gets, and CeBIT is unique in its scope. We at the M2M Zone think that CeBIT has a breadth of audience in critical vertical markets, international geographies, and vested shareholder influence that is difficult to match. Just some of the attendee constituencies at the recent show include:

• 44,000 Public Infrastructure Visitors

• 40,000 Telecom Visitors

• 17,000 Energy & Construction Visitors

• 13,500 Healthcare Visitors

• 13,500 Finance & Credit Industry Visitrs

• 10,200 Automotive Industry Visitors

• 10,200 Traffic & Logistics Visitors

[based on CeBIT 2011 attendance]

Why CeBIT is the Place for M2M

CeBIT’s New Hall 11

Endnotes

1) Beecham Research, “Keynote Address: Current State of the M2M Ecosystem,” M2M Zone @ CeBIT, March 2012.

2) Beecham Research, “M2M Service Enablement Services,” 2010. 3) Harbor Research, “M2M & Smart Systems: Market Opportunity 2010-2014,” 2011. 4) Machina Research, “M2M: Neural Network for a Digital Society,” Nokia Siemens

Networks Let’s Talk, 2011. 5) Persinos, John, “Avery Dennison: Sensing Growth in RFID Tags,” The Stock Advisors,

July 5, 2012. 6) Economist Intelligence Unit, “Rise of the Machines,”

http://digitalresearch.eiu.com/m2m/, 2012. 7) Carrozzo, Mike, “Avis/Zipcar: A Study in Business Transformation,” Connected World

Magazine, January 3, 2013. 8) Kreisher, Keith, “M2M Fuels the Subscription Economy Revolution,”

www.telecomengine.com, June 6, 2012. 9) Economist Intelligence Unit, Opp.Cit. 10) McDaid, Cathal, “Securing the Coming M2M Communications Boom,” Security Today,

December 1, 2012. 11) Beecham Research, Opp. Cit. 12) Kreisher, Opp. Cit.

Thank You

Thank you again for your time & consideration.

For more information, contact:

Jared Bazzy, Executive Vice President

M2M Zone

+1 617.669.9178

jbazzy@m2mzone.com