Amazing growth of M2M data traffic

Cisco has released last month their (usual) forecast on data growth and staggering numbers are given on the increase of data communications based on cell phone.

As you can see in the graph on the left the expectation is that by 2016 the cell phones ” data chatting” will exceed 120 EB per year, that is more than the total traffic we had in communications only 5 years ago and one fifth of the traffic we had on Internet in 2010 (670 EB).

I suggest to read the paper to get all their forecast.

What impressed me is the estimate of an 18 old growth in mobile data traffic in six years, that is slightly faster than the Moore’s law (in the same period Moore’s law would forecast a 16 fold growth).

This is clearly fueled by the growth of mobile phone, they expect the number of cell phones to equal the number of people on Earth by the end of 2012 to go on up to 1.4 cell phone per capita in 2016! Better screens are also playing a role in the forecasted increase of data traffic.

Personally, I think that part of this growth is going to be fueled by a progressive shift towards an all you can eat – flat rate. Possibly, for the next few years we are still going to see bundled offer with a data volume cap, but this is likely to increase in size and by 2016 I can easily predict that the data ceiling (the amount of data contained in the flat offer) will be significantly bigger than today’s 500MB/1GB.

By the end of this decade I find difficult to believe that we won’t have a real all you can eat data tariffing on mobile, as we already have on fixed line. Particularly for the youngster, we have seen that they are pretty good in consuming all what you allow them in the bundled price and never exceed the thresholds. Once Operator will learn how to make money indirectly they will start to increase the ceiling and that won’t take long. At least, this is my bet.

Some days ago I’ve found an interesting website called “M2M APPS” that is a platform for the global machine-to-machine communication value chain.

The goal is to aggregate companies in the M2M market and share info to create new ideas and business opportunities.

I knew other websites where companies inside the same market can register to promote themselves, for example the Green Economy Network website promoted by Assolombarda. In this case every company can declare their activities and business in the value chain but at the end it’s just a repository 1.0.

In the M2MAPPS portal, instead, I’ve found 2.0 concepts because there is also the opportunity to share ideas, to communicate and so to develop the borning business of M2M and related Applications and Services. Using social media channels and functionalities, blogs, and forums everyone can engage in professional discussions, Q&A sessions and polls, get in touch with leading M2M experts and keep ears to the ground of the global M2M industry.

Sharing info and ideas  is the best way to enhance and develop business.

The Internet of Things is a whole new world as shown in this Beecham Research diagram

Recently also Cisco has announced dedicated routers for the M2M market, stating that it believes it will become an important mass market. This is just the latest announcement of a series of recent initiatives in the M2M market, both in the US and in Europe.

In April of this year Ericsson (another OEM!)  announced the acquisition of long-time  M2M platform provider Telenor Connexion, while in July TeliaSonera announced that it had signed the cooperation agreement with France Telecom-Orange and Deutsche Telekom to increase the quality of service and interoperability for M2M services.

In May of this yeat the operator T-Mobile USA announced that it had cast-off its M2M operational business to long time service partner Raco Wireless, although in July T-Mobile USA struck a partnership with asset protection provider IContain and Asset Protection Products LLC (APP) to help reduce operating costs in the US$7 billion US rent-to-own (RTO) sector.

These and other initiatives signal that the M2M market is deemed ready to become a truely mass market, and players (from hardware providers to M2M specialists passing through telco operators and sytem integrators) are trying to position themselves to reap the benefits.

Does eveyone have a clear strategy? For telco operators a few ideas:

• The market is exploding now (Yankee Group forecasts that SIM volumes will almost triple from 23 million in 2011 to 61 million in 2015, a CAGR of 22%.), the time to have a clear vision on the M2M market is now, tommorrow could be too late… Cisco stated it wanted to position itself as a trusted hardware provider, but others have more ambitious plans…
• Being a complex market, where it is highly improbable to have all the competencies required for a complete M2M offer in one company, it is essential to form partnership and reinforce a balanced ecosytem for all the actors involved. Each party should be able to bring its distintive skillset – Telco operators should be able to leverage its tradition of network building & management – to build a complete offer.
• Using their experience in the Cloud, and continuing to develop their distinctive offers for that market, Telco operators can leverage that experience since many of the problematics of an M2M service can be solved and/or alleviated by using Cloud technology. One offer could reinforce the other.

Any other ideas?

Free Connectivity gives way to another important fact, the pervasive communication paradox: it states that “the more the communication is available and cheap, the more it is pervasive”. This is another way for saying that communication is becoming a commodity. Many users will take the availability of a cheap network for granted. The rich availability of connectivity, the cheapness of networking devices for home networks and the always decreasing price of public network connectivity will allow a great availability of cheap and ubiquitous bandwidth that will be used by pervasive applications that will be “always best connected” both in term of maximum bandwidth and of price.

This is why I don’t think the M2M paradigm pushed by Operators (privileging the SIM based connectivity) will have an easy way. Probably a trade off will be the result: many end points with short range connectivity will send info and data to a few public network connected nodes.

Btw, it will be quite interesting to know what is the possible traffic generated by sensor, actuators and “things” over the public network. Is it something Operators should be ready for or is it negligible? Just think to billions of sensors exchanging data …