Telefonica Takes M2M Global with Holistic Approach that Leverages the Cloud

By Peter Bernstein January 29, 2013

It is no surprise that that the vision of “The Internet of Things” is fast becoming reality. This past year, the number of devices attached to the global network surpassed the number of people. Plus, we are just on the bottom of the on-ramp of all of the exciting new things the proliferation of network-aware devices and connectivity has to offer as the machine-to-machine, M2M, market evolves. 

I had the pleasure at ITEXPO Miami to talk with Telefonica about its approach to M2M. I sat down with Mauricio Coronel, Global Product Manager Mobility Telefonica Multinational Solutions, to discuss  how the capabilities of one of the world’s largest service providers (with a footprint that literally spans the globe) are being employed in a unique way using cloud-based capabilities to enable enterprises to extract maximum value from their M2M deployments.

Overcoming challenges

As Coronel pointed out, traditional telecom service providers have had challenges overcoming their ability to really drive the M2M market and assert their centrality as focal points for innovation and growth. What he called, “restrictions on the market,” from a traditional service provider perspective have included: low average revenue per user (ARPU), high administration costs, restricted access to service platforms, no flexibility for integrations with other systems, and the same being used for voice and data applications. 

Plus, they have been facing a demanding market where customers require such things as: 

  • Ease of use provisioning with no-cost testing, activation control and the ability to apply service restrictions.
  • Surveillance and control to perform trouble shooting, use of sophisticated diagnostic tools, flexibility to be able to customize alarm monitoring capabilities and notifications, high availability and reliability, and all of this in a secure environment.
  • Administration capabilities that enable pay- per-use services, simplified billing, the ability for customers or administrators to change service plans online, sophisticated reporting tools so enterprise customers can be proactive as well as reactive, and API interfaces for integration with existing capabilities.

As Coronel says, “Telefonica has been working all of these challenges for quite some time, and we realized we had a valuable set of people, processes, products, tools and the network, to be able to help companies manage their M2M capabilities consistently, simply and on a global basis.”  He added, that they can also do so where everyone in the value-chain prospers.

In fact, as we discussed, multinationals, whether they be global brands like consumer goods companies, oil companies, or financial services entities have to be responsive and M2M is their eyes, ears and can activate voices so that enterprises minimize risk and can build sustainable differentiated value.

A strategic look at M2M

To state it succinctly, Telefonica has put it all together. 

Source: Telefonica

 It is likely to be an equation for success. It all starts with the SIM card, which is proving popular with device manufacturers. Purpose built to meet the needs of global enterprises with dispersed operations in a multitude of locations, it enables those devices to leverage the value of a global interconnected secure mobile network (through Telefonica owned and operated networks or those of partners) while providing a consistent look and feel, under centralized management via the cloud and under a pricing plan tailored to the customers’ needs.

Indeed, the value proposition is powerful as illustrated below.

Source: Telefonica

As Coronel explained, “Telefonica does not want to be a ‘dumb pipe’ company in this business. We want to be a trusted partner as leads or in collaboration with our own extensive network of collaborators in evolving ecosystems helping customers in the verticals we have focused on. These include: smart transport, smart consumer electronics, smart utilities and sustainability, smart industry. These are all areas where Telefonica has been a pioneer, and as Coronel noted, the company was also a pioneer in hosted services for multinationals.”

That hosting experience, which we now all associate with the word cloud, is a critical aspect here. Not only do customers get quality managed access to the Telefonica network and a consistent experience with its affiliated networking partners, but they also get centralized control with some impressive business intelligence tools. 

The API integration piece also is something of note. Nobody who has already started deploying M2M is interested in stranding investment or expensive forklifts. And, nobody who is in the process of consideration of the value of M2M wants to be trapped in an environment where a lack of interoperability creates costs and confusion. The nice thing about this is that product managers with global responsibilities, let’s say in a vending machine stocking scenario, can tie in not just status on individual vending machines and their sales and inventory, but also fleet management systems so that trucks with the right restocking inventory onboard are the ones sent when a machine gets low. This dashboard on the world also ripples through the rest of the supply chain creating significant operational savings along with increased responsiveness.

Coronel summed it up well saying, “Telfonica has its own network and strong partner relations that enable mobile solutions for enterprises that give customers the tools, support and infrastructure they need to meet today’s needs and develop long-term value by being adaptable for whatever tomorrow holds in store. “

Telefonica will be dealing directly with its top 200 global accounts and working with partners throughout the world. The goal is to assure that consistent, integrated, holistic approach that sets the bar high in the service provider space and meets or exceeds the requirements that multinational customers desire. As noted above the equation of purpose-built SIM+Network+Platform+Customer foucs+People (Telefonica and partner expertise) = success in M2M makes sense. Like good wine it may have taken time, but in terms of what it is going to take in a world where business is everywhere and all the time, having the ability to enable enterprises to be more (pardon the expression) alert, “smarter” and more responsive, is a strategic approach that was worth the investment.

Telefonica is working with some household name multinationals based on the above.  I can tell you that having been walked through a series of demos showing the ease of management and highlighting a number of their tools, that you would be well-advised to do a little tire kicking.

It looks like 2013 is shaping up as a promising year for them, and for M2M in general. It is safe to predict that there are some exciting developments in terms of solutions and deals that are already in the pipeline that will be headline news in the not too distant future.

Edited by Brooke Neuman
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