Despite the slow economy, there are signs of hope from some IT industries and positive reports from analysts about sectors such as mobile data services.
The machine-to-machine, or “M2M” market, is another sector that hasn’t been engulfed by the recession.
NSR, an international market research and consulting firm, recently reported that satellite supervisory control and data acquisition and machine-to-machine satellite communications services experienced growth in 2008 and showed sustainable growth levels throughout the first quarter of 2009.
Numerex, a provider of secure wireless machine-to-machine solutions, is one of several companies contributing towards the growth in M2M segment. In 2008, Numerex’s revenues grew to $72.3 million, up from $68 million in 2007.
Numerex recently announced that Dolink, a French provider of satellite-based geo-location services for yachts and pleasure boats, selected Numerex SX1-powered tracking platform for its remote reporting and monitoring applications.
TMCnet recently caught up with Michael W. Lang, executive vice president of sales and marketing at Numerex, to discuss the trends prevailing in the M2M market.
Our exchange follows.
TMCnet: What are the focus areas of Numerex?
Michael Lang (pictured left): Simplification of the Machine-to-Machine experience while providing single source end-to-end Numerex DNA (Device, Network, Application)-based solutions. We target sizable and growing markets such as residential and commercial security, healthcare, financial services, energy and utilities and government and transportation.
TMCnet: What is your perception about M2M market?
ML: M2M is the key to make our planet smarter and more efficient (re. Government’s smart grid projects and IBM’s (News - Alert) smart planet initiative, therefore, with over 50 billion machines in the world, the potential is significant). M2M has become mainstream amongst the largest companies in the world. For more than 15 years, Numerex has been entrenched in the M2M marketplace and is well positioned to capture its growth potential.
TMCnet: How do you expect the market to grow in the coming years?
ML: Cautious optimism – certainly more resilient than other markets through the current economic challenges. Recent ABI Research (News - Alert) released in March 2009 showed relative optimism. Reasons for the relative optimism were as follows: Industrial customer base: M2M applications typically are not subject directly to negative trends in consumer spending. Operational efficiency benefits: M2M applications oftentimes help to save money for corporate end-adopters. New revenue streams: M2M applications can sometimes represent new revenue streams for corporate end-adopters. Regulatory mandates: Many M2M applications, such as smart metering, are driven by regulatory mandates.
TMCnet: How has Numerex performed in the past one year?
ML: We are very happy with our performance. For the full year of 2008, revenues grew to $72.3 million from $68 million in 2007. We transitioned successfully our analog customer base to digital during the year, while increasing the number of connections on our M2M networks. The total number of digital connections grew to 701,000 at the end of 2008 from a base of 285,000 at the beginning of the year, excluding analog connections. At the end of the first quarter 2009, we had reached 758,000 digital connections.
TMCnet: Tell us about your Open Platform as a Service offering for the M2M market? How do your customers benefit from this special offering?
ML: This platform is built on a cloud computing architecture. This means in simple terms that our customers benefit from the processing power of the Internet. Through our foundation, i.e., Numerex FAST (News - Alert), we help customers transform an M2M idea into a business reality. Our customers do not need to have software expertise. We sell a service. We help them with the design, development, deployment and maintenance. Instead of having to face huge upfront investment costs, our customers deal with much lower operating expenses. We like to refer to this platform as and Internet-based “Service Bureau.” A key differentiator of this platform is that it is “open,” we do not use proprietary language and share source code with our customers.
TMCnet: You have procured a new client, Dolink. Tell us more about your offering to them.
ML: This is a satellite-based service that used our rugged HERO (Hazards of Electromagnetic Radiation to Ordnance) – certified SX1. This is an exciting opportunity for the French market. With more than 700,000 pleasure boats in France, the market potential is quite large.
TMCnet: What are the most potential consumer verticals for Numerex?
ML: In the immediate future, services to the home, e.g., residential security, GPS vehicle tracking, etc., and remote patient monitoring offer interesting growth avenues. In addition, consumer electronics is an area that will provide a fertile ground for M2M applications that merge RFID and LBS (Location Based Services) technologies.
TMCnet: What next?
ML: At the end of the day, markets are shaped by demographics. The aging of the baby boom generation coupled with hospital capacity constraints will generate the need for more M2M-based applications aimed at the healthcare market (remote diagnosis and care, etc.) while the young tech-savvy “NET (News - Alert)-generation,” individuals who are 30 and younger, will push for more M2M innovation at home and at work.
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Rajani Baburajan is a contributing editor for TMCnet. To read more of Rajani's articles, please visit her columnist page.
Edited by Michael Dinan