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Is small-scale mobile M2M a viable business model for resellers?

Jack Wetson, Product Developer at Bamboo Technology Group, addresses the common misconceptions around the commercial viability of cellular M2M in the channel

This article can also be found in the Premium Editorial Download: MicroScope: MicroScope: April 2017

Everywhere you turn, it is hard to avoid the hype around M2M (Machine-to-Machine), the connectivity for the even more hyped ‘Internet of Things’ (IoT). But the hype train does not start rolling without a fair amount of steam behind it. And here the analysts are only too happy to stoke the fire.

Machina for example predicts a global M2M market of USD1.6 trillion by 2024[1], with cellular connections specifically growing from 256 million to 2.2 billion during this time. Beecham Research on the other hand expects 30% year-on-year growth of mobile/cellular M2M over the next few years, reaching 1 billion cellular M2M connections by 2020[2]. Big forecasts indeed, but not everyone believes them. It is not uncommon for naysayers, and dare I say it, realists, to question the hype. They should. The forecasts are big and should be scrutinised. But there is also a lot of unfounded scepticism and even misperception among the channel about M2M and how profitable it can be. Let’s address those here.

Believe the hype

In business, it is healthy to be a little sceptical when presented with such eye-watering analyst forecasts, but you don’t want to be so sceptical that you fail to act on the opportunity in front of you. We are routinely told that M2M will drive the next wave of technology innovation, with some going as far as to say it will deliver a new surge of growth and disruption not seen since the dotcom boom. So the question is, will it?

As a reseller, the only thing that matters to you is the commercial viability of every product or service you offer. We know that launching a new proposition can take a considerable investment of time, money and energy. You need to know you can make money on it (and that the demand is there).

From our experience we know mobile M2M works - and generates profits for our resellers. Our partners both large and small are making money from M2M every day. It succeeds in almost every scale too, from just a handful of IoT devices to many thousands. But we know there is still a lot of disbelief and confusion out there. Do any of these sound familiar?

You need significant quantities of data to make enough margin in M2M

This is the big one, and the misconception we see most often. There is a general view in the market that M2M is only viable with large quantities of data and lots of SIMs. This has likely come about because most people’s direct, end-user experience of M2M/IoT services is with large-scale projects, such as smart meters or their new car. From this comes the perception that only the large providers can provide M2M. This simply isn’t true. M2M is a value proposition, so there’s plenty of opportunity for smaller players too. Profitability does not rely on sheer numbers and volume. You can make money on small-scale M2M. It is all about the value of the services that the connectivity supports, not the amount of data it consumes.

 M2M is such a vast area – where will we fit?

It is true that M2M can fit into many areas. Every industry has the potential to be disrupted, so it can be daunting to see where you will fit. But this is where the opportunity lies. The trick is to decide where you can add value in the M2M supply chain. Find out where it can fit into your existing business – you don’t have to learn the whole stack to deliver value in M2M. Do you already specialise in a specific vertical for example? If you’re a specialist in say healthcare, then stick to that. Or do you want to go horizontal and bring a broad solution to all industries, such as digital signage or surveillance? Focus on where your expertise is and build a solution there. And it could be as simple as just concentrating on the airtime.

M2M is too different. We don’t have the expertise

This comes down to a fear of the unknown. But you can’t fear change in business. When mobile first emerged people were sceptical of it. Some were even scared of it. But even the hype around that proved to be conservative. Mobile data was greeted with the same reluctance by many. All I can say here is embrace the change! You’ve learned and adapted before, so you can do it again. It may also be helpful to de-mystify what M2M actually is. Behind the acronym it’s just mobile data or airtime. You already sell that, so why not sell some more?  And take time choosing the right provider with the right level of support for you – from pre-sales to technical.

We are in no doubt at all that the hype around mobile M2M is real. Month on month, we see the growth from our partners and customers. For our partners, M2M has opened up a whole new revenue stream, often starting with their customer base. They are retaining and expanding the profitability of their existing customers with M2M. It is not a replacement to their core mobile or fixed line businesses – it’s an extension to it. So why leave money on the table?

There is still time to get on board the M2M Express and take that first-mover advantage. Just don’t wait too long, as by the time the train comes to your stop again, you may find it is already full and you’ll have to walk.

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