Western European Machine-to-Machine Communications Market Ready to Take Off

IDC: Machine-to-machine communications have long been expected to revolutionize the wireless industry, but market uptake has been hampered by lack of vendor push, poor solution implementations, and technical difficulties. Strong demand from the enterprise segment, however, is set to drive the Western European machine-to-machine communications market, which is expected to grow from $3 billion in 2005 to $19.8 billion in 2010.

The Western European machine-to-machine market holds huge potential. Most of the market infancy problems are being properly addressed and vendors are starting to see the first signs of the promised market potential being fulfilled. The prime growth drivers are regulation on automatic metering and declining prices on data transfers and RFID tags.

Machine-to-machine communications take many forms, with the most widespread solutions in automatic meter reading, RFID solutions, and fleet control systems. In principle, however, the only limit on deployment is the imagination.

To take advantage of market opportunities, vendors should introduce an integrated machine-to-machine solution, as customers, particularly in the larger and more complex deals, are looking for end-to-end providers that can handle integration of data flow to back-end systems and design internal processes around the machine-to-machine solution. Due to the nature of machine-to-machine solutions — comprising software, hardware, and communications — systems integrators, hardware vendors, and communications providers all have a part to play in delivering the solution.

The fight for this market is a battle between vendor types, namely hardware vendors, software vendors, systems integrators, and telcos. These players are fighting fiercely for market dominance with their respective competitive advantages. Until now the systems providers have had a head start due to strong competencies in business process understanding, which is a key element in most machine-to-machine implementations. However, hardware vendors and telcos are starting to look at how to gain similar competencies on their own.

Machine-to-Machine Communications in Western Europe, 2005–2010: Crossing the Chasm to Success, but Who Takes the Pot? Publ 20060621