Monetizing the M2M services revolution

Karl Whitelock/Stratecast
27 Feb 2012

The M2M phenomenon isn't new. Whether one believes the number of machines that are supposed to talk with other machines to make life better is four billion -- roughly equal to the number of mobile devices now in service -- or several billion more by adding in smart meters, sensors, health monitors, logistics nodes and nanotechnology, the direction of the M2M movement is clear.

Connected devices are growing at an accelerated pace and will likely exceed 60 billion by the end of this decade. In addition, M2M service growth is accelerating but requires much more effort to bring data to a level of actionable and usable intelligence than that needed to maintain a simple connection.

From the human perspective the M2M movement delivers a collection of information and insight previously not possible, to make the challenges of social interactions, the work environment, cultural exchanges and day-to-day living more predictable, more informed, more secure and easier to address. In the broadest sense, M2M is about connecting people, devices and systems in new and transformative ways.

M2M offerings span the imagination from entertainment to sports to retail to manufacturing and everything in between. For example, automobile insurance is typically sold today as a flat-rate policy for a fixed period based on several parameters about how a driver uses an automobile along with certain aspects about the vehicle.

Enter the world of M2M. Metered driving management, now used by at least three North American insurance companies, involves a monitoring device attached to the vehicle by the owner for an upfront discount. The device measures how fast the car is driven, how it accelerates, decelerates, backs up, if it makes abrupt course changes, how far it is driven and at what times of the day.

Collected data is used by the insurance company to show how policy premium rates are affected, with suggestions to customers, via a smartphone app or through a web portal, on how to improve driving behavior to improve rates. Such improvements ultimately reduce insurability risk for the company and driving becomes a safer experience for all.

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