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North American M2M Market to Soar over Next 5 Years

By Jacqueline Lee May 29, 2013

A new projection from Frost & Sullivan suggests that the North American M2M software and services market could quadruple over the next five years.

Revenue totaled $175.4 million in 2012. By 2018, Frost & Sullivan predicts revenue of $788.4 million.

Three major factors will drive industry growth: the desire to convert data into business insights, more partnerships between systems and demand for remote monitoring solutions.

"The increased value proposition of extracting proprietary raw data and converting it into business insights promotes new M2M applications in a variety of end-user segments," said Frost & Sullivan industry analyst Muthuraman Ramasamy.

"The impact of this driver remains high throughout the forecast period, as a number of emerging applications will surface in the M2M space owing to the vast amount of data obtained from an ever-increasing number of connected devices," said Ramasamy.

Harris Interactive estimates that data volume will reach four trillion terabytes in 2013. Also, 65 percent of IT decision makers say that their biggest M2M challenge is managing and recording the real-time data that they generate. The cloud comes into play by providing both scalability and standardized interfaces that connect data from sensors and machines.

More partnerships between systems will result from vendors' desires to offer customers a holistic solution. Ramasamy says that mobile network operators (MNO) and mobile virtual network operators (MVNO) will play a significant role. Harris says that 89 percent of IT decision makers think that LTE and 4G availability will be instrumental to M2M growth.

"The go-to-market strategy of direct sales will be replaced by a federated sales cycle, where device makers, platform providers and system integrators are partnering with these MNOs and MVNOs to provide a complete, holistic solution for the end user," Ramasamy explained.

Finally, remote monitoring of critical infrastructure, like the electrical grid, remote assets, like oil wells, and even the remote monitoring of patients in healthcare will drive M2M demand.

"A number of vertical markets are seeing tremendous potential for remote monitoring," said Ramasamy. "From monitoring assets in the oil and gas industry to remote health monitoring in the healthcare industry, the benefits of adoption are more clear to see."




Edited by Alisen Downey

Contributing Writer

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