Prospective customers of Machine to Machine (M2M) service providers are pushing back, a Gartner analyst surveying the field says, because they are concerned about unclear ROI and vendor promises that look a lot tamer once a sale is closed than they did before the deal was done.
Gartner’s Eric Goodness affirms that the M2M market will be massive someday, but cautions that the market will likely fall short of its promise in 2012. German M2M specialist Jan Behrmann affirms this analysis in a comment on a post by Goodness, alleging that a major part of the problem is providers with backgrounds in telecom and without sufficient knowledge of their customers’ industries.
Goodness offered his analysis informally last week but will be publishing a research paper based on interviews with over 600 companies interested in using M2M technologies. The results of the analysis will be published early next month. M2M service providers should be forewarned.
In terms of market objections, we found among the 377 respondents with no plans to deploy M2M solutions that the biggest objection to M2M investment, across all geographies, is a lingering doubt that connecting OT and IT, or simply applying M2M connectivity to IT, will provide measurable business value. This feedback is likely based on a lack of knowledge and ineffective solution positioning by providers. In my inquiries I hear user’s frustration with how their provider’s enable inflated expectations in the pre-sales phase only to back off claims when confronted with the user’s real world requirement to establish an ROI expectation in a contract. The gap is sometimes massive…and off-putting.
In follow-on coverage of Goodness’s raising alarm, Adriana Hamacher of the Knowledge Transfer Network asks whether the state driven policies of China in support of M2M and the Internet of Things could help motivate adoption faster than will occur in free markets where the radical change to a connected world will be met by skeptical B2B consumers. Hamacher’s organization is organizing a trade mission to China in March to explore the possibilities.
Profitable and international firms like Axeda and SensorLogic/Gemalto have customer stories they can tell. It is likely in the entire industry’s best interest that those stories be told and the value proposition of M2M connectivity be made more clear. It can be hard to communicate market potential so broad, but the forthcoming Gartner report indicates there is an unmeet need for that communication.
Earlier this month, Gartner predicted that global IT spending this year would be less than had previously been forecast.
