Machine-2-Machine Internet of Things Real World Internet

Machine-2-Machine Internet of Things Real World Internet 2011
2011
Machine-2-Machine Internet of Things Real World Internet

M2M - "Machine-to-Machine IoT Internet of Things RWI Real World Internet
This document begins by discussing how M2M is causing an entire Internet of Things, or Internet of Intelligent Objects, to emerge. How IoT is extending its reach to the real world of RWI. It discusses and provides a neutral answer to the question of What is M2M. It defines and discusses M2M Drivers and the M2M Value Chain. It defines the M2M Communications Network and provides for a real world M2M Infrastructure HVAC example. It then defines and discusses M2M for the Enterprise What Should be Looked for in an M2M Platform, the Multiple Players and various Connectivity Services that can be offered by the different and Emerging Partners. The document then starts discussing how LTE is driving growth in the M2M market and the Network Areas associated with M2M such as Subscriber Data Management, Multiple Access Domains, Scalability and Flexibility, Identity Management, Security, Messaging, Policy and Charging Rules. A summary is then provided in conclusion discussing topics such as: M2Ms Extensive Industry Value Chain: Trends Associated With M2M Infrastructure Deployment Relative To MNOs/MVNOs/ MMOs; IPV6 Support For M2M Network Addressing; M2M and MNOs; MVNOs; ASPs; Activation Rates Optimized for IoT; Network Initiated Data Session Activation, etc.. A copy of this document can be reviewed on slideshare The Number Of Connectable Machines Is Five Times Greater Than The Amount Of Humans (Source: European Telecommunications Standards Institute [ETSI]), Although The Number Of Machines Currently Connected Is Extremely Low
Jack Brown | Telecommunications Professional 1 Jack Brown 8/23/2011

Contents
M2M -- The Abbreviated Form of "Machine-to-Machine" ....................................................................... 5 Internet of Things (IoT) ............................................................................................................................. 5 Real World Internet (RWI) ........................................................................................................................ 7 A Neutral Answer to the Question of M2M .............................................................................................. 9 Applications for Machines, for People or for Both? ............................................................................... 10 Drivers for M2M ...................................................................................................................................... 11 The M2M Value Chain ............................................................................................................................. 12 The M2M Communication Network ....................................................................................................... 13 An Application Example - Infrastructure Monitoring ......................................................................... 13 Actual Dashboard of a Real Time Sensor Monitored HVAC System ................................................... 16 M2M for the Enterprise .......................................................................................................................... 20 A Multiplayer Game ............................................................................................................................ 21 New Roles Emerge M2M Enablers ................................................................................................... 22 What Should Be Looked For In An M2M Platform? ............................................................................ 23 LTE Is Driving Growth in the M2M Market ............................................................................................. 24 Network Areas Associated With M2M Services ..................................................................................... 24 Subscriber Data Management - SDM.................................................................................................. 24 Multiple Access Domains .................................................................................................................... 25 Scalability and Flexibility ..................................................................................................................... 25 Identity Management ......................................................................................................................... 26 Security ............................................................................................................................................... 26 Support for Business Operations ........................................................................................................ 26 M2M Network Control Center ............................................................................................................ 26 Accommodating SMS .............................................................................................................................. 27 M2M Policy and Charging Rules Function (PCRF) ................................................................................... 27 Differentiate Among Devices .............................................................................................................. 28 Manage Relevant Resources ............................................................................................................... 28 Performance Management and Network Planning ................................................................................ 28 In Summary ............................................................................................................................................. 30 Jack Brown | Telecommunications Professional 2

M2M Has an Extensive Industry Chain ............................................................................................... 30 The Trend is towards Dedicated M2M Network Infrastructure Deployment .................................... 30 Activation Rates Optimized for the Internet of Things .................................................................... 31 IPv6 Support for Network Address Availability ................................................................................... 31 Network-Initiated Data Session Activation for Increased Application Robustness ............................ 32 MNOs .................................................................................................................................................. 32 MVNOs ................................................................................................................................................ 33 ASPs ..................................................................................................................................................... 33
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List of Figures Figure 1 - Internet of Things.......................................................................................................................... 7 Figure 2 - Coupling of RWI with Enterprise Systems..................................................................................... 8 Figure 3 - Cross-layer SOA Based Collaboration in the Real World Internet ................................................ 9 Figure 4 - M2M Use Cases Verticals Intelligent Devices Cloud Services and Applications ................ 11 Figure 5 - Overview of the M2M Industry Value Chain .............................................................................. 12 Figure 6 - Concept for M2M-Based Infrastructure Monitoring .................................................................. 14 Figure 7 - Expanded View of a Sensor Enabled System .............................................................................. 15 Figure 8 - First Floor HVAC Sensor Monitored Room Temperatures .......................................................... 17 Figure 9 - Room 101A Temperature, Humidity, Airflow and Air Quality Levels ......................................... 18 Figure 10- Power Usage by Subsystem Mechanical, Kitchen Receptacle, Emergency, Photovoltaic, Lights, Standby Power ................................................................................................................................. 19 Figure 11 - Real Time Electrical Systems KW Power Usage Meters by Area .............................................. 19 Figure 12 - Building Hot Water Heating System Primary, Secondary, Temperature, Pumps, Compressors .................................................................................................................................................................... 20 Figure 13 - Cumulative Inbound-Outbound Gigabyte Data Transfer Traffic across 6 of the 14 Blades of the Core Network Infrastructure ................................................................................................................ 20 Figure 14 - Basic Business Model for M2M Mobile Operator Provides Connectivity Services to the M2M Enterprise Partner ....................................................................................................................................... 21 Figure 15 - Extended Business Model for M2M Additional Revenues from Auxiliary Services ............... 22 Figure 16 - A Single M2M Platform Multiple M2M Partners with Customized Services ......................... 23 Figure 17 - M2M Subscriber Data Management ........................................................................................ 25 Figure 18 - The Role of Policy in M2M ........................................................................................................ 28

M2M -- The Abbreviated Form of "Machine-to-Machine"
The term is used to refer to machine-to-machine communication, i.e., automated data exchange between machines. (Machine may also refer to virtual machines such as software applications.) Viewed from the perspective of its functions and potential uses, M2M is causing an entire Internet of Things, or internet of intelligent objects, to emerge. In our everyday lives we are using more and more automated and intelligent machines. These include vending machines, new energy meters in homes, monitoring equipment and many more. Such machines operating remotely can provide important information (e.g. various measures or alarms). They also need to be managed and monitored. Increasing numbers of machines are able to do this automatically and without the control of their owners. This sounds dangerous, especially if we imagine a scenario in which all our household appliances are capable of sending such information to the producer regarding our lifestyles and behavior. Fortunately the situation hasnt reached this stage, yet. Machines are designed to initiate communication in order to provide vital information, save time and money. What is the main benefit of such automatic communication? The owner of the machines need not visit them personally to verify their operation or interpret a machines status manually. Such machines can automatically send the information to the owner or to another machine or software application that processes the data further. Such Machine-to-Machine (M2M) communication is cheaper, faster and brings new possibilities. A common and useful definition of M2M reads - Machines using network resources to communicate with remote application infrastructure for the purposes of monitoring and control, either of the machine itself, or the surrounding environment.
Internet of Things (IoT)

The continuous progress in microelectronics and networking techniques make it now possible to envision networks formed by the interconnection of smart 'network enabled' objects and the secure and efficient deployment of services on top of them. This is the vision of the Internet of Things. We now see the deployment of a new generation of networked objects with communication, sensory and action capabilities (wireless information transport networks, RFID, WSAN, etc.) for numerous applications. The interconnection of objects having advanced processing and connection capabilities is expected to lead to a revolution in terms of service creation and availability and will profoundly change the way we interact with the environment. In short the physical world will merge with the digital/virtual world. This vision "from simple connected objects as sensor networks to more complex and smarter communicated objects as in the envisioned Internet of Things" however needs to implement a disciplinary approach for new technologies, concepts and models (IC development, energy management, communications systems and principles, embedded systems and packaging, data Jack Brown | Telecommunications Professional 5

acquisition and processing, field experimentation) and supposes to solve a number of scientific, technical and business challenges. We are going to see the ubiquity of personalized services, the generalization of location and context awareness and of services composition, the global mobility of those services across technological, administrative domain and terminal borders, the extension of the network through advance networking paradigms like ad-hoc, mesh and vehicular networks, the merge of the real world with the digital one through technologies like wireless sensor and actuator networks (WSANs), next generation RFIDs setting the cornerstone for the Real World Internet. This merge relies on technological breakthroughs in areas such as: (Hardware) advanced microelectronics for smart autonomous communication enabled objects (sensors, actuators, processors, memories, batteries and energy scavenging, transceivers - RF interfaces, base band circuits, ..), packaging that are affected by the environment and the operation mode, (Models & Software) innovative distributed intelligences and human-machine interaction approaches that are constrained by flexibility (configuration, plug and play, ..), scalability (trillions of objects could be interconnected ), security/privacy, and business models. It is expected that these smart objects will significantly go beyond present 'simple' sensors and RFID. They will be in particular based on cheap and small devices including sensor and actuator capabilities, advanced signal and information processing, one or several communication interfaces and networking capabilities, which can be embedded in most types of environments and systems, including existing communication terminals, vehicles, clothes, medical/body and most consumer electronic appliances. These systems offer an augmented perception of the reality to a local or distant user or smart entity which can act accordingly. Thanks to the integration with the Internet, users will be aware of conditions in distant places and will be able to control a remote single or a group of objects, mechanisms and environments. This concept of Ambient Intelligence has been rehabilitated and the term NED (Networked Embedded Devices) has been used to identify this large diversity of devices with computing and communication capabilities, capable of self-discovery and coordination for the provision of an integrated experience.
Figure 1 - Internet of Things
Real World Internet (RWI)

The Internet is extending its reach to the real world through innovations collectively termed the Internet of Things (IoT). The IoT concept was initially based around enabling technologies such as Radio Frequency Identification (RFID) or wireless sensor and actuator networks (WSAN), but nowadays spawns a wide variety of devices with different computing and communication capabilities generically termed networked embedded devices (NED). While originating from applications such as supply chain management and logistics, IoT now targets multiple domains including automation, energy, e-health etc. More recent ideas have driven the IoT towards an all encompassing vision to integrate the real world into the Internet The Real World Internet (RWI). RWI and IoT are expected to collaborate with other emerging concepts such as the Internet of Services (IoS) and the building block of parallel efforts, such as the Internet of Energy (IoE) is expected to revolutionize the energy infrastructure by bringing together IoS and IoT/RWI. It is clear that the RWI, will heavily impact the way we interact both in the virtual and physical world, overall contributing to the effort of the Future Internet. The ubiquity of mobile devices and proliferation of wireless networks will allow everyone permanent access to the Internet at all times and all places. The increased computational power of these devices has the potential to empower people to generate their own applications for innovative social and Jack Brown | Telecommunications Professional 7

cognitive activities in any situation and anywhere. This wireless connection is not limited to user devices, almost any artifact from clothing to buildings can be connected and collaborate as a NED. Furthermore new sensor technologies and wireless sensor networks provide environmental intelligence and the capability to sense, reason and actuate. This leads to the exciting vision of the interconnection of artifacts embedded in our real environment, forming a society of intelligent things and smart spaces. Trillions of heterogeneous NEDs such as sensors and actuators located in open space or attached to existing objects, RFID enabled items, robots and Programmable Logic Controllers (PLC), generally many heterogeneous devices with communication and computational capabilities are integrated into the fabric of the Internet, providing an accurate reflection of the real world, delivering fine-grained information and enabling almost real time interaction between the virtual world and real world. Information about location, status and situation of objects and persons, information about the places as well as influencing and changing the places (through actuation), objects and persons based on the gathered information and defined rules and policies can now flow e.g. into enterprise systems (Figure 2) and decisions can be made in real-time.
Figure 2 - Coupling of RWI with Enterprise Systems Jack Brown | Telecommunications Professional 8

Advances are causing a paradigm shift where devices can offer more advanced access to their functionality and even host and execute business intelligence, therefore effectively providing the building blocks of a service-oriented architecture. As such, event based information can be acquired, processed on-device and in-network. This capability provides new ground for approaches that can be more dynamic and highly sophisticated, and that can take advantage of the available context. Crosslayer collaboration is expected to be a key issue in such a highly dynamic and heterogeneous infrastructure such as the RWI.
Figure 3 - Cross-layer SOA Based Collaboration in the Real World Internet
A Neutral Answer to the Question of M2M

Finding a neutral answer to the question What is M2M? that could apply to all manufacturers or suppliers is, however, not quite so simple. For GSM and CDMA mobile network suppliers in other words, traditional mobile phone network providers who put the infrastructure for mobile phone networks in place the answer could involve, for example, automated data transmission via SMS/GPRS/PDSN, or remote maintenance and teleservice applications. The activities of suppliers of wireless modems (used in many M2M applications for data transmission via cellular networks) would lead them to interpret M2M in the same way. Meanwhile, manufacturers of Bluetooth or ZigBee radio chips generally take M2M to mean AMR (Automatic Meter Reading: in other words, wireless transmission of consumption data) or similar applications. As far as semiconductor manufacturers are concerned, there is immense market potential for these kinds of applications (hence Jack Brown | Telecommunications Professional 9

the philosophy, every radiator needs a radio chip) - and the list of examples of perspectives on M2M just goes on. To date, an M2M growth market has not established itself worldwide. However, there are a number of highly encouraging sectors within the market performance data transmission, telematics, monitoring and RFID, to name but a few. On closer inspection, however, M2M has merely become a new buzzword for demanding applications involving telemetry (automatic remote transmission of any measured data) and SCADA (Supervisory, Control and Data Acquisition). In contrast to telemetry and SCADA based projects, the majority of M2M applications are broadly based on established standards, particularly where communication protocols and transmission methods currently in use are concerned. Telemetry applications involve completely proprietary solutions that, in some cases, have even been developed with a specific customer or application in mind. M2M concepts, meanwhile, use open protocols such as TCP/IP, which are also found on Internet and local company networks. The data formats in each case are similar in appearance.
Applications for Machines, for People or for Both?

Although some industry players classify M2M applications according to category or type, it may be more useful for an operator to look at them from a different perspective: applications that are not at all related to person-to-person communications, typically involving independent devices such as industrial meters or vehicle fleet-management devices, versus applications that relate in some manner to mobile applications used by people. Examples of the latter include: Security - vehicle security and anti-theft, as well as vehicle emergency calls Transport and logistics - navigation information Metering - consumption of electricity, gas and water Health - monitoring vital signs and remote medical diagnostics Smart living/entertainment - remote controls, synchronization and smart appliances M2M applications that can be linked inside the network to peoples existing mobile subscriptions offer operators enormous potential for strategic differentiation in the competitive marketplace. If an operator can create an ecosystem of devices around an individual subscriber, all connected and interrelated, then that operator can come up with some very innovative services which can translate into strategic differentiators in the marketplace.
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Figure 4 - M2M Use Cases Verticals Intelligent Devices Cloud Services and Applications
Drivers for M2M

The initial reasons for pursuing M2M technologies are commonly a combination of both internal and external drivers. The most common internal drivers include: New Market Opportunities (E.G., The Ability To Provide A Product Or Service Unique To The Marketplace) Opportunity To Increase Revenue Through Aftermarket Services Marketplace Differentiation (E.G., Setting The Product Apart From Others In The Same Space) Ability To Control Warranty Costs For Expensive Equipment Via Equipment Monitoring Reduced Travel/Labor Costs (E.G., Not Having To Send Rep/Technician On Site To Collect Data) Constant Need For Increased Efficiencies (E.G., Saving Money By Not Paying For Meter Readers) Reduced Cost In Not Having To Lay Cable Reduced Cost Of Hardware And Networking Additional Features And Functionality Enabled By M2M (Increasing Value Of Product/Service) Need For Device/Equipment Data (E.G., Use Data Internally For Engineering Development) Ability To Access Data Real Time The most common external drivers include: 11 Jack Brown | Telecommunications Professional

New Market Opportunities (E.G., The Ability To Provide A Product Or Service Unique To The Marketplace) Customer Demand (E.G., Utility Push For Smart Meters, Remote Asset Management, Etc.) Allow Customers To Save Money Ability To Offer A Product Above And Beyond The Competition (E.G., Remote Monitoring) Ease Of Use By Customers (E.G., Simplifying The Use Of Devices) Increased Customer Satisfaction Improved Customer Experience Increased Competition (E.G., Need To Keep Current Customers Engaged By Matching Competitive Product Functionality)
The M2M Value Chain

The first issue that the mobile eco-system needs to address is the long and fragmented industry value chain that characterizes todays M2M industry. This results in numerous supplier/buyer interfaces, as illustrated below, adding costs and time to the launch of any new product offering. The fragmented structure of the supplier market suffers from concentrated pools of knowledge and poor awareness of end-user demand, service requirement and commercial issues.
Figure 5 - Overview of the M2M Industry Value Chain The value chain can be separated into two parts the first relating to devices (depicted horizontally) and the second to application development and service delivery (depicted vertically). The broad intersection between these two parts, as illustrated by the shaded zone in Figure 5, represents the means by which devices are procured and integrated into M2M solutions and services. Considering the vertical portion of the end to end value chain, one route to market for M2M devices can involve MNOs, with some operators taking a more active role than others. Equally, as shown, devices 12 Jack Brown | Telecommunications Professional

can be procured independently of MNOs by communications and applications providers, subject to having their devices certified on a host operators network. The many steps involved in producing devices combined with segment-specific service application needs limits economies of scale and adds to both costs and time to market. Economies of scale are difficult to achieve because the target segments for embedded mobile solutions are individually very distinct transport differs from healthcare which differs from utilities, for example. Matters are compounded by the fact that several sub-segments can exist within a single segment.
The M2M Communication Network

The communication network in an M2M application is the central connection component between a DEP (data end point) and DIP (data integration point). In terms of physical components, this kind of network can be established using a LAN, Wi-Fi, telephone network/ISDN, GSM, CDMA mobile network, or similar. An Application Example - Infrastructure Monitoring Today, countless applications use complex networks of devices, in which most systems perform their services 24 hours a day, 7 days a week, without any human monitoring. Should an individual subsystem fail, the entire application will be damaged, at least in part. However, detecting the precise failure as promptly as possible is a problem. A typical example in the field of IT is an individual switch within a large Ethernet LAN. If this switch fails to perform its duty, certain computers within the LAN will no longer be accessible, or will be unable to communicate via the LAN. If, with one of these computers, the companys e-mail server is involved, considerable problems may arise. Therefore, ideally each switch and the accessibility of the e-mail server (as well as each of the companys other servers) should be permanently monitored. Every fault must be immediately reported to the appropriate administrator, who should generally be able to rectify it within as short a time as possible, as quick response times are possible within a companys premises. Presumably, the longest duration of time that would elapse in such cases would be the time leading up to a user noticing a malfunction and informing the administrator.
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Figure 6 - Concept for M2M-Based Infrastructure Monitoring This kind of situation is considerably more difficult where widely distributed applications are concerned. Let us take the example of the infrastructure for an energy supplier, which consists of a number of distributed pumping, transformer and substations used to operate the water and electricity supply for a region unattended. Whether within a company building or distributed across an entire country, using an M2M based infrastructure monitoring solution (i.e., "infrastructure monitoring") enables failures in individual function units to be detected considerably more quickly. As is well known, the quicker a failure and its cause are detected, the shorter the total downtime. In many cases, fault signals on individual modules are even able to detect the imminent failure of individual system components (by means of an appropriate signal lamp, for example). These kinds of visual warning signals do, however, frequently go unnoticed. Figure 6 above illustrates the use of an M2M-based solution for infrastructure monitoring. The data end point (DEP) in each case permanently checks the availability of any given infrastructure component by means of special monitoring sensors. Any potential failures can then be detected immediately by the DEP concerned. The individual DEPs are connected to a monitoring software application by means of the communication network: This application is used on the data integration point (DIP). It receives failure, error and fault messages from the individual DEPs with respect to the infrastructure to be monitored (X, Y and Z in the above figure). In addition to the connection to the DEPs, the DIPs monitoring software has two other interfaces, for configuration and notification. Among the facets of the configuration interface is the ability to determine who is responsible for the system and when. This generally makes it possible to envision a number of different notification scenarios (table below). This interface also enables the monitoring 14 Jack Brown | Telecommunications Professional

behavior to be defined precisely. The notification interface sends the message in each case (SMS, e-mail, automatic fax sending, or calling a telephone number and playing an audio file).
Figure 7 below gives a more expanded and detailed view of a sensor enabled system. It is fundamentally showing that low value information is acquired from various device types, that this information can be aggregated and transported across standard cellular and various gateway devices, and then transformed into high value information via a cognitive sensor platform.
Figure 7 - Expanded View of a Sensor Enabled System
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Actual Dashboard of a Real Time Sensor Monitored HVAC System Figures 8 12 are example dashboard views of an actual Universities enterprise, real time, and sensor monitored HVAC system application. H-V-A-C or H-VAK stands for Heating, Ventilation, and AirConditioningthree closely related fundamental functions found in homes, offices, and other building structures. M2M technology has changed the HVAC field as a great deal of development of the HVAC system lies on ever-changing technology and continuous innovation. Using PLCs (programmable logic controllers) in HVAC is certainly the trend nowadays. Companies are adopting wireless technology after they found out that networking HVAC controllers, which often use sensors, can eventually cut installation and labor costs. A lot of engineers are also focused on further improving this technology through the use of mesh wireless setup, which will work for both the wireless sensor and wireless controller networks. This continuous innovation fits directly into the core model of M2M and the associated and evolving standards that are all driving towards IoT and RWI. These types of M2M capabilities allow service technicians, facility managers and business owners to check the status of any piece of equipment, and much more from virtually anywhere using affordable, easy-to-install sensors to monitor a variety of HVAC equipment around the clock: rooftop units, boilers, heat pumps, chillers, air handlers and more. An M2M HVAC control system gives insight into the cost of operation utilities and helps assess operational efficiency. You can even see historical operational analysis. Plus, you receive automatic alerts when conditions indicate a problem. If conditions are right for an equipment failure the M2M enterprise application will alert personnel, and it can find the nearest service technicians to correct the alarm or issue at hand. Automatically, you get a just-in-time response that extends the life of expensive mechanical equipment: Repair small, low-cost failures before they require high-cost replacements Reduce technician response time and time to repair Increase life expectancy of high-value assets Diagnose issues remotely before making service calls Increase first-call resolution rates Eliminate business downtime for customers to ensure long-term loyalty Increase service revenues with performance guarantees and premium service contracts Proactively manage maintenance for customers
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Figure 8 - First Floor HVAC Sensor Monitored Room Temperatures Figure 9 below is a drill down of room 101A from figure 8 above showing in real time the actual room temperature and humidity, the rooms airflow temperature and humidity and the last chart showing the rooms airflow quality expressed as CO2 levels. Figure 10 and 11 are showing the buildings real time electrical systems KW power usage by area subsystem Mechanical, Kitchen Receptacle, Emergency, Photovoltaic, Lights, and Standby Power. Figure 12 is showing real time the buildings hot water heating systems primary, secondary supply and return and feeder building supply temperatures; the amperage being drawn by the multiple feeder pumps and compressors plus the buildings supply and return differential pressure in psi. Figure 13 is showing the cumulative inbound and outbound gigabyte data transfer traffic in real time of 6 of the 16 bladed core network infrastructure server(s) that host the HVAC M2M and other Universities applications.
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Figure 9 - Room 101A Temperature, Humidity, Airflow and Air Quality Levels
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Figure 10- Power Usage by Subsystem Mechanical, Kitchen Receptacle, Emergency, Photovoltaic, Lights, Standby Power
Figure 11 - Real Time Electrical Systems KW Power Usage Meters by Area
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Figure 12 - Building Hot Water Heating System Primary, Secondary, Temperature, Pumps, Compressors
Figure 13 - Cumulative Inbound-Outbound Gigabyte Data Transfer Traffic across 6 of the 14 Blades of the Core Network Infrastructure
M2M for the Enterprise

Figure 14 below presents a very basic M2M communication business case from a mobile operators perspective, where connectivity is provided to an M2M IT enterprise partner. As the level of M2M traffic increases and devices become more common, the price of individual hardware components falls, boosting M2M popularity even further. According to Gartner, the average price of an M2M module (one that is attached to a connectable machine and contains the necessary communication capabilities such as SMS/GPRS) will amount to approximately $ 28.67 by this year 2011. Compare this to the average price of a similar module in 2007 which was almost $ 57.34 and we can see that the hardware cost has almost halved. In addition to the reduced hardware costs, the declining price of data services renders more M2M business scenarios viable. Scenarios that a couple of years ago were deemed useless due to high costs, are now an attractive business opportunity. Instead of taking the market share away from mobile operators, the companies that use M2M services introduce new business opportunities for them. 20 Jack Brown | Telecommunications Professional

Other aspects important for operators should also be considered. The churn rate for M2M subscriptions is extremely low, the machines can be controlled in groups, and the data from machines does not usually overwhelm the network. Additionally, most of the M2M subscriptions do not require complex customer service. Of course, the ARPU of an individual M2M subscription is lower than that of one person, but the amount of connectable machines is higher. M2M is certainly a promising area which is continuing to develop, with machines becoming an increasingly important customer segment for mobile operators.
Figure 14 - Basic Business Model for M2M Mobile Operator Provides Connectivity Services to the M2M Enterprise Partner A Multiplayer Game Telecom operators are not the only players in the Machine-to-Machine world. At this moment in time they offer connectivity services to M2M partners who own or operate these machines. The second group, M2M partners, represent various business sectors for example, vending machine operators, electricity suppliers, monitoring companies and many more. If the operator is only offering M2M connectivity services, the revenue stream in most cases originates solely from monthly fees for M2M subscriptions. However, there are numerous other possibilities and services which can be offered to M2M partners helping operators to maximize this revenue. Figure 15 presents a scenario whereby a mobile operator gains additional revenues from the services it offers to the M2M partner. Compare this to Figure 14, in which the mobile operator only provides connectivity services the difference between the levels of revenue can be quite significant.
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The most substantial difference is in offering services like provisioning, self service portals, B2B gateways, rating, charging services and resource management. This decreases the complexity of the IT systems required by M2M partners, enables faster and easier startup of M2M businesses and simplifies the management of M2M subscriptions. Such services can be delivered by the mobile operator through the platform, which operates like a gateway (or service enabler) placed between existing mobile operator systems and various M2M partners. Delivering such services to M2M partners facilitates mobile operators with increasing revenue.
Figure 15 - Extended Business Model for M2M Additional Revenues from Auxiliary Services New Roles Emerge M2M Enablers In addition to the operators that are expanding into M2M, new types of players have arisen as a result of M2M business growth M2M enablers offering services to M2M partners. A typical M2M enabler can be described as the owner of the M2M platform (depicted in Figure 14) delivering services to various partners and in most cases with a connection to more than one mobile operator or ISP. An M2M enablers business model bears many similarities to the business model of a Mobile Virtual Network Enabler (MVNE), already known in the telecommunications world. Both types of business offer the necessary network connectivity (that can be obtained from the MNOs), back-office operations and IT platforms allowing end operators to concentrate on their core businesses. The enablers role in the M2M business is very important, especially when considering how many of the new M2M partners and enterprises on the market derived from industries other than 22 Jack Brown | Telecommunications Professional

telecommunications (e.g. utilities, security and automotive markets) and that lack the sufficient expertise to cooperate closely with mobile operators. What Should Be Looked For In An M2M Platform? What features are essential for an M2M platform used by a mobile operator or an M2M enabler providing services for M2M partners? Figure 16 presents an example of a business case, in which an M2M platform is integrated with the existing systems of a mobile operator and which exposes services to M2M partners.
Figure 16 - A Single M2M Platform Multiple M2M Partners with Customized Services Lets take a look at the typical features of an M2M platform and how they support the business of a mobile operator or an M2M enabler. With these features, they can both attain additional revenue by offering advanced services to their M2M partners. These features include:
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Provisioning of services such as activation and deactivation of SIM cards; the M2M partner does not need to perform complex integrations with mobile operator systems, yet the mobile operator can provide easy-to-use interfaces allowing the partner to perform mass provisioning operations on M2M SIM cards on an ad hoc basis. Data mediation for the M2M partner to collect, unify and correlate data from the machines (e.g. meter readings) and then send it for further processing Rating of events allowing the mobile operator to charge the M2M partner for the service usage, as well as provide charging services for end users of the M2M partner as a value-added service; in this case the M2M partner does not need to have their own billing system Integration with inventory as a repository of M2M SIM cards and M2M equipment with customized structure, lifecycle management and logistics A self-service portal for M2M partners and end-customers enables the operator to lower costs by shifting the focus of customer service to the web Mass SIM card management enables M2M partners to control the SIM cards (such as mass activation or deactivation in a specific building or area) on their own, without involving the mobile operator B2B gateway making it possible to safely expose all features of the platform to multiple partners with easy-to-use interfaces (e.g. Web Services) and integration of the M2M partner systems It is important that operators can add the M2M platform to their existing systems similarly to the way in which the MVNE platform can be added to the MVNOs infrastructure. With the M2M platform, mobile operators can enter the M2M market without performing complex changes to their existing systems, limiting the risk and increasing potential profitability.
LTE Is Driving Growth in the M2M Market

LTE technology certainly is one factor driving the growth of the M2M market, specifically for highbandwidth applications such as connected vehicles and video sharing. Yet LTE-based service will exist for some time in coverage islands that are located in a larger 2G/3G environment. From a subscriber data management (SDM) perspective, operators obviously cannot separate 2G, 3G and LTE devices into discrete silos, so they will need solutions that ensure seamless management of shared subscriber and device context and data between and among the different networks. By delivering a consolidated view of the subscriber and device across all three domains, such solutions ensure system performance and database integrity.
Network Areas Associated With M2M Services

M2M will have an impact on several areas of a Service Providers network: SDM; messaging services; the policy and charging rules function (PCRF); and performance management. The following is a look at each of these areas and how operators can optimize them for M2M services. Subscriber Data Management - SDM SDM is usually the first network area to be affected by M2M services, primarily because of the scale of devices and the need to incorporate related information within associated databases, including the 24 Jack Brown | Telecommunications Professional

Home Location Register (HLR). There are several opportunities to optimize and improve legacy HLR platforms, which are designed for voice-centric human-to-human communications, so they can accommodate M2M services (see Figure 17).
Figure 17 - M2M Subscriber Data Management Multiple Access Domains Operators need next-generation SDM platforms that are more than just next-generation HLRs. These M2M-optimized platforms must be able to track and manage devices across multiple access domains, from 2G and 3G to LTE, Wi-Fi and WiMax, each of which uses its own authentication and authorization functions. Further, such platforms not only have to maintain all those domains but also need to be able to select among them to ensure they can terminate the message to the appropriate domain. They also must tackle all the IP-domain functions, such as dynamic/static allocation of IP addresses; SIP-registration tracking; and network-initiated packet data protocol (PDP) context set-up. If these functions co-exist in the same database and data server, within the same run time and application framework, operators can build and maintain smarter network capabilities, such as terminating SMS messages to the IP domain when the device is in, for example, the home Wi-Fi environment, or establishing network-initiated connections. The ability to create such scenarios translates into the ability to conserve important network resources. Scalability and Flexibility Another critical set of capabilities for M2M-optimized SDMs includes scalability and flexibility. The required scalability comes from appropriate resource management which allows for the independent scaling of databases and applications. In addition, dynamic, i.e., intelligent, management of the memory 25 Jack Brown | Telecommunications Professional

for both active and dormant devices enables the system to scale to millions of devices in the most resource-efficient way possible. The flexibility of the database and data model is extremely important for keeping critical information, such as device serial numbers and firmware information, close to information about the devices location and network state. The proximity of these information sets enables operators to create custom fields about specific devices and via such fields for all devices, obtain an instantaneous view of what is happening in the network right now. Identity Management Management of identities in M2M services is another requirement for next-generation SDMs, and it is a particularly important one because of the predicted deployment of billions of devices in conjunction with the coming shortage of expensive identifier resources such as phone numbers and mobile station international subscriber directory numbers (MSISDNs). One way in which an SDM solution could tackle this challenge is to pool these identifier resources and dynamically assign them on an as-needed basis. Another approach is for the SDM solution to make other, more plentiful types of identifiers equivalent to phone numbers. For example, a device could use a SIP uniform resource identifier (URI), which would allow the termination of SMS and other types of sessions. Security Securing M2M services is an essential aspect of next-generation SDM platforms. Device authentication must include multiple simultaneous algorithms and a single sign-on function which can follow the device across any type of network. In addition, an EIR is essential, so the operator can identify and block stolen devices immediately. Support for Business Operations A strategic differentiator in M2M services is the ability to tailor operations to individual customer needsin other words, to provide: An application programming interface (API) that is oriented to Web services; A framework for extensible markup language (XML) event-based notifications; and Provisioning capabilities based on automated templates For example, an electricity company or a vehicle fleet-management company wants to find a given device and check its health. This type of M2M service requires a rich business API which, in turn, requires a flexible framework to support these simple object- access-protocol (SOAP) operations. Finally, a next-generation SDM should incorporate a frontend query server which features a highperformance, open, lightweight directory access protocol (LDAP) API; offline access; and reporting/integration with back office operations. Such a solution is essential to support database queries, analyses and reports. M2M Network Control Center Any successful M2M solution must work across network domains and protocols, i.e., the SS7 domain which manages the 2G and 3G worlds and the Diameter/SIP router for the LTE and IMS infrastructure. To control these M2M devices and address the scalability and security issues, operators can dynamically build a subscriber-aware point in between the two. This M2M Network Control Center (NCC) can receive 26 Jack Brown | Telecommunications Professional

copies of very specific information from the network and store these data alongside other important M2M information. As the NCC grows, the operator can use it for multiple purposes, among them: Push information to the policy server to enrich the policy rules; Analyze and monitor the network and, using that base of information, make the appropriate routing decisions; and Use that same information to block access to the network for devices with specific firmware-in other words, control the floodgates when a security issue arises or an overload is imminent.
Accommodating SMS
The second network area on which M2M communications has a significant impact is messaging, first because of the sheer volume of messages that M2M services must handle. Secondly, many M2M devices still leverage SMS, which has a global reach. Next, although SMS remains perfectly suitable for monitoring and controlling small-message traffic, its use of the traditional store-and-forward approach makes delivery times uncertain. Operators can resolve this issue by using SMS routers and first delivery attempt (FDA) technology to forward the message instantaneously. By handling SMS traffic cost-effectively, SMS routers enable operators to lower the cost per SMS message. Basically, SMS routers free up legacy SMSC capacity by using FDA for mobile-originated MO)/application-originated (AO) messages. That means SMSCs have to handle only about 15 percent of the message traffic that truly needs to be stored until delivery can be completed. This approach extends the life of capacity-stretched SMSCs.
M2M Policy and Charging Rules Function (PCRF)
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Figure 18 - The Role of Policy in M2M Differentiate Among Devices As policy control becomes more tightly integrated with the SDM infrastructure, the emergence of M2M services creates critical requirements for the third network area on which M2M services will have a direct impact-the PCRF. These requirements include the ability to distinguish these M2M devices from devices used by subscribers and, using M2M profile, application, location, network condition and time of day, to differentiate among various device classes. Depending on the type of device in question and its network status, the policy server also must be able to offload traffic to different networks (see Figure 18). Manage Relevant Resources In addition, the PCRF must be able to manage and, in some cases, to guarantee bandwidth. Some M2M applications, for example, electricity metering, consume very little bandwidth, while others, such as surveillance cameras, need a great deal of guaranteed bandwidth to function properly. Clearly, an operator does not want to provide the same levels of quality of service (QoS), uplink and downlink bandwidth, latency, jitter, etc. to the two device types. Further, those required levels likely will vary even for one device, say, a wirelessly connected security system in the home. The systems periodic stay-alive and health checks will require a certain priority level but not necessarily significant bandwidth. However, if the alarm system detects movement and triggers the camera to function and send a recording feed to a central server, a different QoS level becomes necessary. In other words, based on an ongoing M2M communications session, the ability to change policy rules, even for one device, is essential-not for the lifetime of the device but only when circumstances dictate. It is the job of the PCRF to handle all these requirements. Located at the center of the policy architecture, the PCRF basically links the applications on top, the devices on one side and the subscriber and device data-residing in the subscription profile repository/ home subscriber server (SPR/HSS)-on the other side. Although it is the same policy architecture in current 3G and LTE networks, it must have some M2M service-specific rules to be an efficient, effective solution.
Performance Management and Network Planning

Finally, operators competing in the M2M marketplace need solutions that enable them to manage the networks performance, so they can comply with service level agreements (SLAs); detect and troubleshoot problems; and plan/optimize the network. For operators, the M2M customer is not each individual device but an enterprise such as a utility or a fleet-management company. Such customers require different, more stringent SLAs specifying the level of network support and service the operator is to deliver-than operators provide to consumers. In the case of a utility, for example, an SLA might specify that a penalty will apply if for whatever reason an electricity meter is not able to submit its reading at the end of the month. Or, a customer may request an SLA that guarantees the ability to refresh the firmware of that customers devices a set number of times per hour, using over-the-air provisioning. Because such a 28 Jack Brown | Telecommunications Professional

capability will be critical for such M2M customers, operators must be able to track the relevant information to comply with these SLAs. Because ARPU in M2M services likely will be much lower than for consumer services, the PCRF is essential for network planning and optimization as well. For example an operator can obtain statistics on PDP context activations within a certain period of time for an M2M service, compare those with the number of PDP context activations in that same time period for a consumer service and then optimize M2M-related network resources accordingly. Since many M2M services are new, it can be difficult for operators to determine the cost and expected revenues, for example, of adding 20 million meters and to determine the impact on the network of adding those meters. The answer to both questions will vary from operator to operator. Consequently, the ability to obtain accurate statistics related to M2M services is an operators first step in determining whether it makes sense to sign that 20-million-device contract, and how much it is going to cost in new radio bandwidth and other network resources.
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In Summary
M2M Has an Extensive Industry Chain This chain requires the participation of various enterprises (see Fig. 5). Horizontally, M2M equipment vendors provide sensor network and terminal modules. Telecom operators provide transmission network and M2M middleware. Application developers provide industrial application servers. Vertically, telecom operators provide service operation, promotion, management, and maintenance, while M2M integrators engage in service integration. M2M integrators assist the industry users in small-scale applications by providing them with solutions. While for large-scale applications, M2M integrators are limited by their capital and influence in the industry chain. In this context, telecom operators can give full play to their advantages in capital, creditability, and channels, acting in the dominant role of the industry chain. Operators can engage in service operation, promotion, management, and maintenance, integrating the industry chain. M2M has distinct features and its applications are closely related to specific industries. The industry needs unified standards, open architecture and standardized terminal and interfaces. With the introduction of a M2M services platform, various application servers can be connected to the communications network through standard interfaces. The M2M service platform helps to realize network connection and data management, giving operators a control point for the entire M2M value chain. Separately developed M2M terminals can hardly generate an economy of any scale. M2M terminal standardization has become a key concern. The introduction of an M2M gateway would help to provide a unified interface for different terminals, while bridging the sensor and communications networks. The M2M gateway can also provide functions like data transmission, terminal management and terminal access control. For operators, a profitable M2M service is the key. Less investment is required if M2M service is based on existing networks, but operators need to analyze the impact of M2M service. Large investment is required if a new network is built for the M2M service. In this case, operators should consider how long it takes to be profitable. The Trend is towards Dedicated M2M Network Infrastructure Deployment MNOs and MVNOs/MMOs are increasingly deploying network elements such as GGSNs, PDSNs and HLRs specifically for the provisioning of M2M services. In the case of MNOs, separate network elements provide several benefits: Simplification of Internal Business Operations - An M2M business unit within the MNO can run all M2M data traffic over the dedicated M2M network elements, without having to negotiate with other business units for access to the core data network. This is important because negotiation with other business units can lead to lags in service provisioning. Optimization Of Network Utilization - The separate sets of network elements, for traditional data services and for M2M, can be optimized for their respective needs and use cases. For 30 Jack Brown | Telecommunications Professional

example, processor cards on the M2M mobile packet gateways can be architected for larger numbers of connections but lower throughput per connection. For MVNOs deploying their own mobile packet gateways and HLRs (and thereby become MMOs), the key benefits are the ability to: Enable Quicker Provisioning and Diagnostic Capabilities to Their ASP Customers: MVNOs working as re-sellers of airtime essentially have to work through their MNO partners to create service tickets on behalf of their ASP customers. While extremely large MVNOs can negotiate excellent deals with the MNOs for rapid MNO response, in general the use by the MMO of its own network elements offers the ability to directly control and thereby speed up these important M2M business functions for their customers. Activation Rates Optimized for the Internet of Things Mobile data applications based on smartphones and PC modem devices primarily need high throughput at the mobile packet gateway for a successful user experience. In contrast, most M2M applications typically have low throughput requirements as they are only sending small amounts of data, often intermittently or even on an exception-only basis. M2M applications do benefit from the ability of the mobile packet gateways to rapidly scale up to a large number (e.g., hundreds of thousands or millions) of PDP context activations; that is, the activation of an open packet data session between the remote device in the field and the mobile network infrastructure and, by extension, the application back-end infrastructure. If very large numbers of remote M2M devices were to attempt to initiate an active context/session after recovery of the local mobile network infrastructure from a catastrophic outage, for example, it would be critical for the mobile packet gateways to have the ability to adequately scale up to initiate the contexts and properly connect them to the appropriate back-end networks. IPv6 Support for Network Address Availability On January 19th, 2010, the Numbers Resource Organization, the entity tasked with protecting the unallocated pool of remaining IPv4 Internet addresses, issued a statement indicating that less than 10% of IPv4 addresses remain un-allocated. Clearly, if millions to hundreds of millions of new devices are going to be networked in an Internet of Things in the coming years, this shortage of IPv4 addresses poses a challenge, particularly for countries outside of North America that were allocated comparatively fewer IPv4 addresses to start. While there are technical short-term fixes to this dilemma, including dynamic IP addressing, the optimal long-term solution is a shift to IPv6, which enables orders of magnitude larger numbers of available IP addresses. Most MNOs are in the planning stages for this transition to IPv6, or have already made the transition. M2M-optimized mobile infrastructure can help with the transition by future-proofing applications through the use of techniques such as IPv6 tunneling over IPv4. Essentially, this capability would enable remote M2M devices to use native IPv6 addresses that are translated to IPv4 for transport across intermediate networks to the ASPs private data network.
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Network-Initiated Data Session Activation for Increased Application Robustness Very large numbers of data-capable devices are coming onto mobile networks, both for M2M as well as traditional smartphone and PC connectivity. While M2M-optimized network elements can aid in managing extremely large numbers of PDP context activations, MNOs are still becoming more concerned about reducing idle time to make their networks more efficient. It is becoming increasingly common for MNOs to require idle devices (that is, remote devices that have an active packet data networking session in place PDP context but are not actually transmitting data) to drop their session after one to four hours of inactivity. This frees up network resources for other remote devices to activate PDP contexts. It is not too significant a burden for traditional smartphone and PC modem data users to have a context dropped if idle; if the session is idle they are simply not using the service and can renew the PDP context as soon as they need to be reconnected. For M2M applications, decreasing idle time can be a significant burden, as it is often the server-based application software that needs to communicate with the remote device. Take, for instance, a new emergency firmware upgrade that needs to be immediately delivered to a set of remote devices. Given that with traditional mobile network functionality PDP contexts cannot be initiated from the network side, that is, by the server-based application software, ASPs have needed to rely on either rules-based embedded software on the remote device telling it to initiate a PDP context at certain intervals or at certain specified events, or have had to rely on SMS shoulder-taps to cause the remote device to initiate a PDP context. MNOs MNOs already operate the entire network infrastructure needed to offer mobile data service and deploying specific network elements is not an absolute requirement for them to be active in the M2M market. Nevertheless, many MNOs do find that separate, M2M-specific network elements do offer a number of benefits. As the number of M2M devices increases in the field, it is believed many MNOs will find they pass a threshold at which it simply makes more financial and operational sense to split M2M devices onto separate network elements than to continue to run all traffic over the same network. Further, is believed that as increasing numbers of MNOs deploy M2M-specific network elements, they will also seek to use the opportunity of the M2M-specific use case to optimize the infrastructure for the specific needs of M2M applications. The technical benefits of M2M-optimized network elements, specifically around the mobile packet gateway are available today in equipment from networking and telecom equipment providers. Fundamentally, deploying M2M-optimized network infrastructure will enable MNOs to provide a more robust and functional connectivity service to their ASP customers. This serves to differentiate the MNO in the M2M marketplace, compete more successfully, and ultimately increase their revenue opportunity. It is important to note that other elements and capabilities, specifically billing systems and management portals (also known as connected device platforms) are also important in an M2M-optimized network infrastructure. More flexible billing systems allow the MNO to respond in a more innovative fashion to the needs of M2M ASPs; for example, bundling in airtime with the purchase of an eReader, to obviate the need for the eReader buyer to commit to yet another subscription. 32 Jack Brown | Telecommunications Professional

MVNOs MVNOs have built successful businesses re-selling MNO airtime to ASPs in a way that meets the specific and unique needs of the M2M market. Some of the very largest of the MVNOs have been able to develop very close relationships with their MNO partners such that they have the ability of offer services that appear little different from what could be offered if they indeed had their own HLRs and mobile packet gateways. Nevertheless there are real, material advantages for MVNOs to deploy their own network elements, including mobile packet gateways, to intersect with their MNO partners radio network infrastructure. As with MNOs deploying M2M-specific network elements, MVNOs increasingly will choose equipment that is technically-optimized to serve M2M applications, rather than deploying generic data infrastructure. No less than for the MNOs, M2M-optimized equipment enables MVNOs to differentiate the connectivity service offering to their end-customers and thereby increase their revenue opportunity. ASPs Likewise, for the ASP, M2M-optimized network infrastructure provides the benefit of being better able to serve their end customers with new features and functionality, as well as more efficient, robust, and responsive services, and thereby differentiate their own offerings in the market and deepen their own customer relationships. This ultimately results in more revenue for the ASP, as well. Technical details of the underlying mobile network infrastructure supporting their businesses are opaque to many ASPs. However, ASPs have a vested interest in the capabilities of their connectivity partners. The network infrastructure deployed by MNOs and MVNOs directly impacts the capabilities of an ASP in such areas as rapid service creation, ensuring a high level of QoS, and enabling granular management and diagnostic tools. In short, the underlying MNO/MVNO network infrastructure impacts on the ability of ASPs to enhance their own service offerings to their end customers and thereby increase revenue. Mobile network elements will be increasingly optimized for the specific needs of M2M applications, and that there will be a corresponding increase in the differentiation among connectivity service providers in the capabilities they can offer to their ASP customers.
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Machine-2-Machine Internet of Things Real World Internet

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Machine-2-Machine Internet of Things Real World Internet 2011