Strategic Thinking of the Internet of Things and M2M Services

Editor’s Desk:The Internet of Things is an important part of the emerging high-tech industry and has been recognized as one of the important technologies for addressing global financial crisis and revitalizing the economy. Therefore, at the beginning of the new year, we are honored to have invited Mr. Samuel Qi (Qi Qingzhong), a famous Chinese communication technology expert and GM of Shanghai Symphony Telecommunications Co., Ltd., to give his views on the development strategy of the Internet of Things and Machine to Machine (M2M) Communications.

    Mr. Qi believes that M2M is currently the leading and most practical service in the Internet of Things. Globally, many governments have a high regard for M2M services, and M2M has had or will have large-scale applications in some industries and will gradually influence more industries.

    Mr. Qi points out that M2M will become one of the core LTE applications in the coming years. Moreover, M2M terminals will provide a high degree of innovation and integration in form and service support. For M2M application in some industries, they will increasingly support wireless access bandwidth flexibility and service scheduling management and may also integrate with neighboring services to some extent. In other industries, they may deeply integrate with a series of sensors and equipment used for remote monitoring and controlling.

1 Concept and Development of the Internet of Things
In recent years, the concept and application of the Internet of Things has attracted much attention from communication technology R&D powers (including China). Japan and South Korea have both put forward “Ubiquitous Network Society” strategies launching “U-Japan” and “U-Korea” plans respectively. Chinese President Hu Jintao, in his report to the Seventeenth National Congress of the Communist Party of China in 2007, proposed to “integrate IT application with industrialization”, for which the Internet of Things would be an important basis. The concept of a “Smarter Planet” was put forward in a roundtable discussion between U.S. President Obama and business leaders in January 2009. This discussion included smarter infrastructure. Chinese Premier Wen Jiabao said we should plan the future early and acquire core technology early in the development of the sensor network, when he visited the Chinese Academy of Sciences (CAS) Wuxi Hi-tech Micronano Sensor Network Engineering and Technology R&D Centre in August 2009. He pressed for the establishment of the sensor information centre of China, so called the Center of “Sensing China” as soon as possible. In September 2009, the China Information Technology Standardization Technical Committee, approved by the Standardization Administration of China, set up a working group on sensor network standardization. In November 2009, the R&D center of China’s Internet of Things was established in Wuxi, having been jointly developed by CAS, Jiangsu Province and Wuxi City. China Mobile and Wuxi Municipal Government signed a strategic cooperation agreement on “jointly promoting the convergence of TD-SCDMA and the Internet of Things”, and China Mobile announced that it will set up a China Mobile Research Institute and an data center in Wuxi. These will both be related to the Internet of Things. The Zhongguancun Industrial Alliance of Things was set up by several organizations, including Tsinghua Tongfang, China Mobile, Beijing University of Posts and Telecommunications, Institute of Software of CAS and Beijing Transportation Information Center. These organizations will support the Beijing Municipal Government to develop the “Perceived Beijing” Demonstration Program. For some time, the study on the Internet of Things will become a trend.

    The Internet of Things is an intelligent network for automatic information interaction and processing between things, or between people and things. Things equipped with smart sensors can communicate to other objects through a transmission network, and overall perception, reliable transmission, and intelligent processing are fulfilled. ITU, in its Internet Report in 2005, explained that Information and Communication Technologies (ICTs) were moving towards a stage of connectivity. This implies connectivity between anything at anytime, regardless of place, and that the connections of things will lead to the Internet of Things. China Mobile defines the Internet of Things as an information network connecting things themselves. Things have the capability of comprehensive perception and information can be reliably transported and intelligently handled. IBM, China Mobile, and China Telecom, similarly summarize the three fundamentals of the Internet of Things as follows: comprehensive perception (obtaining information about things anytime and anywhere by short-range communication technologies such as sensors, two-dimensional codes and Radio Frequency ID (RFID)); reliable transfer (correctly transporting information in real time through the convergence of various telecom networks and the Internet); smart processing (implementing intelligent control by using cloud computing, fuzzy pattern recognition and other intelligent computing technologies to analyze and handle mass data and information).   

    Internet of Things services have various definitions and application forms in different industries and in different countries. For example, a typical concept is to connect things to the Internet by short-distance information sensor devices like RFID in order to fulfill local “smart recognition and management” of the things. Machine to Machine (M2M) services defined by mobile service operators is another narrow definition of the Internet of Things. It specifically refers to interactive communication services between wireless terminal devices (at least one part is a device) that can automatically implement program controlled communications via cellular mobile communication networks (including CDMA 1X/EVDO, GPRS, WCDMA and TD-SCDMA).

    In my opinion, M2M services are now the most important and most practical form among various Internet of Things services due to the following factors: the broad coverage of the data transmission networks has been realized, which is the basis of M2M service ; the telecommunication industry, compared with many other industries, traditionally pays more attention to the open architecture and standardization of the overall process and  network; telecom operators have important impacts and driving forces in ICT industrial chain construction and application promotion. These factors can push M2M services into a rapid, large-scale development.

    Following in the path of computers, the Internet and mobile communication networks, the Internet of Things and M2M have emerged as the third wave of the global information industry. The consultancy institute Forrester predicts that the ratio of thing-thing internet services to people-people internet services will reach 30:1 by 2020, and that the next trillion-level communication industry will be thing-thing internet. The Research Institute of China Mobile indicated in the M2M Summit China 2009 that M2M would be China Mobile’s next application on a 100-million-user scale.

2 M2M Service Application and Operation Progress
For mobile service operators, M2M services have the following strategic values: M2M is a typical blue ocean market with large market capacity, which helps strengthen business differentiation of mobile operators; a large number of M2M services are non-real time or consume low bandwidth, which relieves pressure on wireless access networks and core networks thereby improving network resource efficiency; by adding M2M services, the information application solutions aimed at various industries will be deeper, more complete and more coherent. In fact, the innermost value of M2M services is the promotion of social informationization to develop in depth, the penetration of information technology into the end systems of production and operation in diversified industries, and accordingly the effective support of “the integration of IT with industrialization”.

   
    M2M services can be applied to numerous industries, including vehicle, electricity, finance, environmental protection, petroleum, individual and enterprise safeguard, hydrology, military, fire protection, meteorology, coal, agriculture and forestry, and elevators. I believe priority should be given to the M2M application in intelligent electricity networks, public transportation, individual and enterprise safeguard, and finance.

    By September 2009, Japanese KDDI had sold about 2 million M2M communication modules, of which 50% of the terminals are active. KDDI’s M2M mainly serves two industries: vehicle management (accounting for 50% of its total M2M business volume, mainly sold to automobile manufacturers) and children positioning (accounting for 10% of its total M2M business volume, mainly sold to security service companies instead of end users). KDDI has the following M2M service strategies: to focus on the provision of high-quality communication services, charge data communication fees, but not offer industrial application services itself; customize embedded communication modules for various industrial terminals and applications to gain control of industrial value chains. 

    In Europe, France Telecom is the first operator to provide a complete end-to-end M2M solution. It currently has more than 1.1 million M2M UIMs users. France Telecom has two M2M related brands: “M2Mdata” for data channel service, and “M2MConnect” for management and application service. It has three sub-brands under “M2MConnect”: “Fleet Link” for positioning-based comprehensive vehicle management, “Lone Work” for positioning-based personal management, and “Cell ID” for positioning service in mobile networks.

    Sprint has certified M2M terminal equipment from 160 vendors through its ODI（Open Device Initiative) Program. These terminals have been widely used in industries like smart meter reading, wireless POS machines and vehicle management. Sprint, in mid 2009, signed a multi-year strategic partnership agreement with virtual M2M network operator DataSmart. According to the agreement, DataSmart provides clients of Sprint with complete end-to-end solutions (including terminal testing, application trial, development support, charge system and terminal management).

    Verizon Wireless and Qualcomm announced a joint-venture company to provide M2M products in July 2009. The company is expected to provide M2M services for diversified market segments, such as health care, manufacturing, public management and consumer goods, by making full use of the multiple M2M solutions of Qualcomm and the advanced network and professional equipment certification technology of Verizon Wireless.

    In China, China Mobile has provided over 3 million M2M terminals mainly to the electricity, transportation and finance industries. As of June 2009, China Mobile had opened M2M services in the country’s 31 provinces. It has released five M2M applications, called “Vehicle Service Communication”, “Elevator Guard”, “Fire Monitoring System”, “Baby Care Communication” and “Old Care Communication”, and its next five-year average growth of M2M services is expected to reach 60%. As earlier as 2007, China Mobile set up its M2M support center in Chongqing for M2M product R&D and  construction of M2M platforms. Moreover, it is predicted that China Telecom’s M2M end users will number close to 1 million by the end of 2010.

3 Key Technologies for M2M Services
A typical M2M system consists of sensors (or monitoring equipment), M2M terminals, cellular mobile communication networks, terminal management platforms and terminal software upgrade servers, operation supporting system, industrial application system etc. Many key technologies are related to M2M, including system architecture, terminal management, special chip technology, module and terminal technology, Quality of Service (QoS) and traffic control, and sensor network technology.

    (1) System Architecture Design
    It is necessary for the design of M2M system architecture to take into account both broadband and narrowband wireless access applications, and both real-time and non-real-time applications. The system should be open in order to facilitate SI access and secondary operations.

    (2) Terminal Management Platform
    A terminal management platform should implement unified authorization and authentication of all M2M terminals in the network, support remote terminal diagnosis and remote automatic upgrading of the terminal software (requiring the support of a software upgrading server). Depending on the requirements of different clients, the terminal management platform can be selected to bear the transmission of client data or not. There can be one set of the terminal management platform for the entire network, or multiple local platforms for different regions that may use cloud computing structure.

    (3) Special Chip, Module and Terminal Technology
    The interface and AT instruction set between M2M modules and terminals should be standardized. The standardized management protocol stack embedded in the terminal can be moved into the module, thereby reducing terminal cost.

    On one hand, terminals in many industrial applications, once installed, cannot be conveniently maintained, or have high reliability requirements making it urgent to develop M2M terminals and modules with low power, high reliability and long life. On the other hand,
low-cost M2M terminals should be developed for cost-sensitive industries, and the solution of a fixed ID card might be more appropriate for those applications. As the number of terminals required for the Internet of Things and M2M services will be large, it is necessary to introduce an individual 13-digit terminal number segment for the M2M service system, and gradually implement terminals support of IPv6.    

    (4) QoS and Traffic Control
    M2M terminals transport data information via mobile networks, so service providers have to balance QoS with the efficient use of wireless network resources. Accordingly, a traffic control and terminal dormancy mechanism should be introduced. A reasonable handling mechanism is also specifically required in some applications in which over-use of wireless access resources or where simultaneous access of mass terminals might occur, or QoS may be worsened and services even interrupted.

    Another basic issue for the development of M2M is the standardization of the interface between M2M terminals and sensors/sensor networks.

4 Challenges to and Development Trends of M2M Services
Currently, M2M services are facing several difficulties and challenges, although they have a bright future:
    (1) It is urgent to develop national-level standards, even for the three major Chinese mobile operators are developing different M2M standards. Only when standardization is achieved can M2M modules and terminals fulfill large-scale and cost-effective manufacturing, and the industry value chain match the potential of M2M sercices.

    (2) The business model is another problem to solve. It is necessary to study deeply, innovate and test the service process in each select industry. However, solutions to different industrial applications may vary greatly; the early-stage costs are often high, while service prices must be kept as low as possible. Therefore, achieving a win-win model in the M2M industry value chain has yet to be explored.

    (3) Some key technologies are challenging the development of M2M services including sensor technology, low-power technology, and terminals with high reliability and long life.

    (4) There are still various forms of industry and policy barriers, and the policy environment is yet to be improved.

    In summary, M2M services are now the most important and most practical form among various Internet of Things services. M2M has been widely applied in certain industries, and is increasingly influencing more sectors. M2M services will rapidly penetrate into many industries in the coming years, and the number of end users is expected to grow quickly. It is estimated from my point of view that end users of M2M services based on mobile cellular communication technologies will reach 30-40 million by 2012 in China, and M2M will be one
of the core applications of LTE in the future.

    In addition, M2M terminals will see great innovation and integration in forms and service support. In some industries, they will support wireless access bandwidth flexibility and service scheduling management, or converge with neighboring services to some extent (for example, supporting more flexible, mobile video monitoring, and data cooperation service). In some other industries, M2M terminals may deeply integrate with a series of sensors, and monitoring and control equipment.