Why Sprint is dialed in to machine-to-machine communications ...

Most customers of wireless phone companies don?t know about ?machine to machine? communications, or M2M, as it?s come to be known. But behind the pricing and quality-of-service wars waged in the United States by AT&T, Sprint and Verizon ? and by their counterparts around the world ? lies a fast-growing opportunity. Instead of just connecting people making calls, M2M allows machines to similarly converse ? often without any human intervention.

M2M ? and its collaborator, the Internet of Things ? is shaping up to be a massive business opportunity: nearly a trillion-dollar market by 2020, according to one recent forecast. As the cellular calling market saturates ? nearly everyone on the planet has a mobile phone these days ? M2M will become a growing focus.

Where is the M2M biggest? Where is the untapped opportunity ? and the opportunity after that? I recently spoke with Wayne Ward, VP for M2M at Sprint Nextel. Ward is a 23-year veteran of the company. In 2009, as the company began to invest in M2M, Ward was asked to create an Emerging Solutions Group. Today, that group has 4 million M2M subscribers, leading the company to rethink the business unit?s name. As Ward told me, ?It?s really not emerging anymore. It?s here.?

Also, while in Kansas City last month, I visited Sprint?s Executive Briefing Center and got a show-and-tell tour about some of the company?s M2M technologies. You can view that video further down this story.

Here is an excerpt from my conversation with Ward, edited for clarity and length.

Joel Makower: How do you view the M2M opportunity at Sprint? Is this bigger than the wireless phone business?

Wayne Ward: It?s not bigger in terms of revenue than the smartphone business ? people calling people, people texting people, people accessing the Internet from their smartphones. Let?s call that ?P2P,? if we?re going to call this M2M. That business has been around almost 20 year now, and there?s still a lot more revenue there. So, I don?t think we?re going to catch up for a long, long time on the machine-to-machine side because there?s just so much money in our industry on the P2P side of the house.

Makower: We ran a story recently about a study that came out of the Carbon War Room. It looked at four M2M applications ? energy, buildings, transportation, and precision agriculture ? and basically said it was just shy of a trillion-dollar opportunity by 2020. So, does this become bigger than P2P at some point?

Ward: It could. My crystal ball?s not clear enough that far out, but I can tell you that we?ve been seeing significant doubling of the growth of subscribers over the last four years and pretty much every research study out there says that there?s going to be this hockey stock of year-over-year growth and CAGR growth associated with M2M.

And if you want to be quite literal about it, at some point the old voice systems that we have today for P2P will eventually go away. It will all be data transmissions and voice technologies when you get to voice-over-LTE on smartphones. So who knows how we will record the revenue ? whether it will be called P2P or M2M. At some point, it will all be data transmissions, and those transmissions will either be carrying voice, data or video.

Next page: "Things with wheels" vs. "things without wheels"?

Source: http://www.greenbiz.com/blog/2013/04/01/why-sprint-dialed-machine-machine-communications

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