Editor’s Note: RCR Wireless News teamed with the Yankee Group to conduct a series of market surveys of RCR Wireless News subscribers to gauge their thoughts on various technology issues. RCR Wireless News will publish the exclusive results from our joint project, with Yankee Group’s expert analysis. More than 2,600 readers responded to the second wave of surveys. Congrats to David Hicks, program manager at AT&T Mobility, who won an American Express gift certificate.
Get your reading glasses on to read highlights from this second series of survey results on the M2M industry. We asked the wireless communications vendor community about the M2M opportunity in North America. Questions focused on end-user adoption drivers, industry growth goals and partnerships. The survey was conducted in partnership with RCR Wireless News and Yankee Group between June and July 2008. Response rates increased four-fold over the inaugural survey and topped out at 326 responses from the RCR Wireless News readership. Respondents included wireless operators, module manufactures, SIs, TEMs and other M2M value chain members. First let’s take a look at the experiences vendors face when engaging a prospective adopter. 
B2B2C on the rise
Of all the results, the M2M industry leaves little doubt that end-user adopters deploy solutions to realize operational benefits. Reducing maintenance costs and increasing data creation and capture ranked No. 1 and No. 3 respectively when asked why end-users deploy an M2M solution (See chart 1). There was a clear alignment between vendors who cited cost reducing solutions by end-users and the heavy skew of these same respondents toward B2B revenue streams. For example, more than 64% of respondents said that 60% or more of their 2007 revenue came from B2B sales. However, respondents saw a greater share of revenue originating from B2B2C sales by 2011. In fact, almost half of all responses, 49%, believed that by 2011, company revenue would split between B2B and B2B2C sales, up from only 25% in 2007. The expected shift in revenue mix is reflected in building awareness of consumer M2M business opportunities leaning on alternative device initiatives, broadband wireless availability and life after the cellphone market. 
Cost concerns
Out in the field, little is left to the imagination regarding the importance of proving a solution’s impact to the adopter. Return on investment or total cost of ownership was selected three out of four times when asked how investments were justified by adopters of M2M (See chart 2). There was almost no difference between responses whether cited by a decision maker, a decision influencer or research support member. Compared to other Yankee Group Anywhere surveys e.g. Mobility & Business Applications 2007 survey suite (mobility solutions adoption), M2M vendors are held to a higher standard of proof. That is M2M solutions are expected to return more measurable results when it came to wireless based solutions. A number of reasons can explain this firm need for measuring outcomes. Plausible reasons revolve around adopters seeing M2M as a tactical investment as well as a result of the industry’s custom approach to building solutions. Enterprise software vendors and infrastructure providers can help bring a higher level of visibility to the M2M industry. Though, M2M vendors find the sale easier via a services model sans I.T. decision makers. 
Determining the challenges end-users have when considering M2M adoption reflect a market with measured M2M exposure but nonetheless has a healthy appetite for cost effective solutions. Affordability/
price of solution captured first place when asking about the top challenge an adopter faced (See chart 3). This standard early market response reflects solid interest, but few reference points to price like solutions. Such is the case with today’s M2M industry, where most implementations have been the domain of SIs deploying customized services. Ranking No. 2 and No. 3, lack of core technology familiarity and perceived solution complexity, are consistent with the average number of vendor involved in creating a solution. Specifically, when asked about the average number of vendors used to develop a solution, only 14% responded two or less, and almost 50% said three to six on average. These figures reflect the reality of a pioneering industry where innovation is its hallmark, but fights to be heard among a cacophony of competing technology project ideas. So then how does the M2M industry rise above the noise?
By the time you read this, you may already be in complete fact and figure fatigue. But let’s revisit last quarter’s survey for one moment. When asked in March what the most pressing challenge the M2M industry must solve, an overwhelming 41% of responses answered market education. In this second survey, fielded in June, we followed up asking how vendors educated the market to provide further detail into the industry’s approach and shed some light on potential changes.
Evidently, including the fingers that type this note, industry analysts serve a key function in educating the M2M market. When vendors were asked how they educated the market, 71% of respondents stated industry/market analysts were important or very important. In fact so important that analysts captured the top response. No. 2 and No. 3 were traditional media services and PR/industry events at 64% and 58% of responses, respectively. Now this may come as unorthodox from an industry analyst, but analysts are not a panacea. I would further argue that the 2nd and 3rd ranked responses are limited in effectiveness to serve the needs of this industry in its vast diversity. Rather, a mix of market building activity coupled with increased emphasis on partnerships outside of the M2M industry may yield measurable results.
Hitting the streets
M2M can be called a lot of things, but it can’t not be called static. The industry serves a mix of mature, growing and emerging market segments. In emerging segments, analysts and PR professionals help create awareness, provoke discourse, and act as a sentry for new business opportunities and trends. Such is the case with B2C M2M services, which barely register on the radar today. In growing segments, market education is aptly served with feet on the street, putting sales and marketing resources directly in front of prospects to sell a solution. Growing a market requires real money and time. Seemingly, the aggregate vendor community can find a more balanced approach that builds on partnerships and direct dialogue with business end-user adopters to grow. And that includes moving outside of a comfort zone and taking on higher risks to build market awareness.
