M2M, short for Machine to Machine communications, is something of an enigma for the majority of business executives today. Yet, M2M is becoming a major factor in the ability of market players to compete and is also bringing significant benefits to our personal lives.

M2M is often seen as an evolution of telemetry as it allows the remote measurement and reporting of information to a central location. The objective is to allow machines to interact with a company information system or an organization, without human intervention. The breadth of applications is wide and nearly unlimited!

The technologies used for M2M are the same as those typically used for wireless communications. While the cellular network and the Internet are preferred for long-range communications, Bluetooth , wi-fi and RFID are typically used for short to medium-range. Some of these existing technologies have been upgraded for industrial needs and new technologies such as Wavenis or Zigbee have also emerged to meet the requirements of certain M2M applications.

The most widespread use of M2M is still in the Transport & Logistics industry, where M2M is harnessed to enable route optimization and product traceability within the logistics chain. M2M is also used to improve the real-time scheduling and optimization of on-site technician repair and maintenance work, using fleet-management solutions.

But increasingly we’re seeing M2M solutions moving into other verticals.

Recent pilot projects reveal that M2M is also gaining traction in a number of new vertical sectors such as Health Care, where M2M allows remote patient monitoring, including emergency-response services in case the system detects problems. An example in case here is the Columbia Bracelet for Alzheimer Patients. The bracelet, equipped with GSM/GPS allows for geo-localization of an Alzheimer patient who wanders off or becomes disoriented. This solution meets the challenge of providing Alzheimer patients with a safe and secure environment without curtailing their freedom of movement.

In Energy & Utility, we see a strong demand for “smart readers” that allow for remote meter reading, increasingly creating real-time insights into the usage of water and electricity in factories or in our homes. An example of a successful application in this sector is the development of a supervisory control and data acquisition system for the Bangalore Electric Supply Company (BESCOM) to monitor and control the power distribution network. After experiencing energy losses of up to 40% on its network, BESCOM now has the ability to collect, store and analyze data to simulate power operation and prevent outages and faults before they occur, thereby reducing revenue loss and increasing customer satisfaction.

Another illustration is the development of a residential heat management system in Finland involving a heating regulator that can be remotely controlled by mobile phone: settings can be adjusted, measurement data can be read and alarms can be received. With this new technology in hand, customers can, for instance, turn on the heating remotely with their phone so that they can come home to a house at the right temperature.

Retail is an obvious candidate. M2M solutions based on RFID (radio frequency identification) tags are replacing handheld barcode scanning solutions, in order to provide retailers with real-time visibility into their inventory. These RFID tags contain a computer chip, which allows them to store data, such as origin, content and shipper, and a minuscule antenna that lets the chip communicate this information via a wireless network. Combine this capability with global positioning system (GPS) and companies have increased abilities to track and trace goods around the globe. As a result, store managers can see automatically which items are stocked, which ones they need to order, and how effectively certain items are selling.

Insurance companies have been looking at M2M with particular interest to be able to offer new innovative and competitive solutions. Norwich Union’s “Pay as Your Drive” car insurance, whereby a smart modem installed in customers’ car tracks every journey, is an excellent example of how M2M offers advantages to end-customers by providing cheaper premiums for people who avoid driving at high risk times like rush hour and late at night.

Despite successful case studies around, however, the reality is that any M2M solution still requires significant integration work. The M2M market is highly fragmented and M2M offerings are often complex as clients have to collaborate with numerous providers to get solutions that meet their requirements.

In order to counter this industry fragmentation, some industry players are developing fully integrated ”Platform-as-a-Service” solutions, like Orange’s M2M Planet, thereby greatly simplifying the M2M solution building process.

With these exciting developments, we are already finding that indeed machines can talk!

This blog is an abbreviated version of an article that I co-wrote for Hong Kong Echo (Focus upon Innovation & Technology, which was published in Summer 2009.