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Machine to Machine, the 1st step towards the Internet of Things (IoT)


There are many definitions for the Internet of Things (IoT) and Machine to Machine (M2M), each reflecting a point of view, a particular aspect that the author wants to put forward. In this first article on M2M and IoT, I would like to raise this problem by tackling, among different definitions of usage, the associated operation mode and business model.

A few definitions

For ETSI (1), M2M concerns “the communication between machines with limited or no human intervention”. In France, the Telecommunications Regulatory Authority (TRA) requires that SIM cards of M2M-dedicated cellular networks have “precise functional purposes”. A smartphone used by its owner to surf the Internet does not fall into the M2M category. An eReader loading an eBook is an M2M device since its cell link has a precise function. Cellular technology (2G, GPRS, 3G, 4G…) is thus an M2M essential element, together with the Internet, which brings universal access and protocols. According to S. Bortzmeyer from the French Association for Internet Naming in Cooperation (AFNIC) (2), the definition of Internet of Things, already widely presented, is as follows: “enables close or remote objects, such as computers, to communicate over the Internet”. The same as the French Regulatory Authority for Electronic Communications and Postal Services (ARCEP)’s definition of M2M cells, this definition promotes the communication capacity of IoT objects but without mentioning the involved technologies. Although they may vary, we can mainly mention WiFi, short range radio transmitters (type 802.4.15, ZigBee, Wavenis, etc.), existing carriers, Ethernet.

Communication adapted to power supply

Communication involves energy used to send and receive information and to manage the connection with the environment. M2M uses cellular technologies that are radio communications at important rates and distances: radio power is measured in watts. M2M products and solutions must thus rely on a powerful source of energy to ensure permanent connection. If we wanted a long-duration service on batteries, it can be obtained via a regular alarm mechanism. For IoT, electrical energy is either widely available, since objects are network-connected (electrical household appliances, boilers, air conditioners, beverage vending machines, etc.), or totally absent (water and gas meters, for example). One of the IoT’s aspects should thus consist in ensuring Internet connection based on extremely low energy technical solutions to function with a simple battery, namely solely by recovering energy in the environment. In many cases, this translates into short-range radio systems (within a couple of meters away for sensor networks), low flow and mW radio power. A gateway establishes an Internet connection.

And different networks

In its current form, M2M is highly influenced by the connectivity brought by cellular networks: remote devices communicating with central systems. There are star information flows from or towards these central servers; there is no direct exchange among remote devices (see figure 1). Each application has its own central servers and communication modules installed on its connected products. The only shared element is the cellular transport network + Internet. This architecture is inherited from cellular systems designed, at their origin, for human-to-human communication between two phones.

Machine to machine - IoT

The M2M exchanges only take place between connected machines and servers, being specific to each application.

In its turn, the Internet of  Things seeks to take advantage of an Internet-type on its fixed part and of a sensor network-type communication mesh infrastructure on its radio proximity part. Each object can directly communicate with its neighbour to deliver and/or process network data. A part of the application intelligence can thus be deployed in the objects cooperating to provide a service. The disadvantages of this cooperation are confidentiality, data ownership sharing, rights management, information confidence level, etc.

Very different regulations

IoT and M2M ecosystems federate these players whose typologies differ significantly. M2M relies on more mature technologies. The challenge is to gather players and offer a solution adapted to each vertical market as economically viable as possible for all of them. In this ecosystem, mobile operators play a key role: their M2M offers are crucial for the balance of the M2M value chain, although they only account for 20 % of the sector’s sales figure (3). The other players (figure 3) are mainly cellular module manufacturers, SIM card manufacturers (M2M-dedicated hardened models), IT services integrators and providers. This business ecosystem relies on ETSI and more recently on ITU4 for M2M normalisation (architecture, network impacts, service interfaces). These two entities, closely linked to the telecom world, mark the link between cellular and M2M. The ecosystem is completed by the regulatory authorities of each country that defines the M2M regulatory framework related to cellular network operating licenses. The Internet of Things ecosystem is naturally larger since challenges imply the emergence of new actors. It is also less regulated since it is inspired, to a large extent, by the Internet approach. The normalisation of IoT is essentially treated by IETF (routing and addressing works) and IEEE (radio standards), namely by entities that are highly involved in the Internet. The scientific community is also very present in the IoT field since various new problems need to be dealt with (very large naming spaces, mesh connectivity, routing in a fast changing network, semantic web for information research, security, etc.).

Business models dependent on the communication type

To put it in a nutshell, we may say that the M2M and IoT typology of players influences the business models of these two fields. In M2M, the business model must absolutely integrate the non-null cost of connectivity on the cellular networks operated and supervised 24/7 by mobile operators. The cost of this connectivity seems to be obvious (M2M subscription) or hidden (fee-for-service, one-shot cost) in the end service. For IoT, the high number of objects prohibits the recurrent invoicing of connection costs for each object. This emphasises the importance of a quasi-automatic and autonomous connectivity and of passing as soon as possible to the Internet, where the cost is largely shared. The IoT business model will try to leverage the created information since everybody expects connectivity to be free of charge.

Two complementary approaches

The first comparison between IoT and M2M often tends to oppose these two approaches: open system against closed system, gratuity principle against subscription, emerging market against a $20.2 billion sales volume (5). At a closer look, there is not a relationship of opposition but rather one of inclusion. The M2M, as seen by its ecosystem players, is a cellular/Internet adaptation to meet the information exchange needs between distributed systems and central servers. Usages are professional (domestic alarm, connected GPS, digital photo frames, etc.). The IoT connectivity challenges and data processing, information preparation and its sharing often go hand in hand. Also, the M2M can be seen as a first step towards the Internet of  Things. From today, certain applications exploit both approaches. This is the case, for instance, of remote reading of water or gas meters: the connectivity terminal part is done via IoT typical low consumption and auto-configurable radio techniques. Remote concentration goes through M2M gateways, linked by GPRS to central servers. Behind the experts’ contradictory opinions on IoT and M2M positioning, their usages and value added are what counts the most. Future will tell us how the market is going to take advantage of these two approaches to create new products, new services and offer value added to the final customer.
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  • European Telecommunication Standards Institute, M2M Technical Committee, June 2011
  • French Association for Internet Naming in Cooperation (AFNIC)
  • IDATE data, April 2011
  • International Telecommunication Union
  • M2M global market: equipment, cell connectivity, software development and IT services (IDATE data for 2014)

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