The utilitarian technology gets an electrifying boost in publicity.
All you have to do to get a peek at the future of machine-to-machine (M2M) technology is take one look at the U.S. Department of Energy’s manifesto for reforming the nation’s electric grid.
Phrases like “integrated communications” and “killer apps” leap off the page as the department discusses the national initiative to make the electric grid “smart.” Among the five core technologies driving the effort: integrated communications that connect “components to open architecture for real-time information and control, allowing every part of the grid to both ‘talk’ and ‘listen.’”
Sound familiar?
M2M technology is positioned to play a key role in updating the nation’s inefficient, dangerously outdated electric grid. Under President Barack Obama’s Recovery Act, the Department of Energy will spend $4.5 billion as a down payment to “advance the development and deployment of a smart electricity grid that employs real-time, two-way digital communication technologies to allow users to connect directly with power suppliers.”
Thanks to the “Internet of machines” high-profile role improving the electric grid, the utilitarian technology is finally getting its day in the sun. The Department of Energy says that M2M technology will help monitor the grid, increasing its reliability, efficiency and security. Utility companies can get instant feedback on problems with the grid, like transformer outages.
M2M technology also will help utilities shift between energy sources, allowing them to integrate renewable energy like wind and solar into electricity generated from coal-burning power plants. In addition, the technology can help consumers save money by adjusting thermostats and appliances up or down in relation to the variable cost of power.
WAITING FOR THE STIMULUS
Despite its promise for government and enterprise applications and despite the billions of dollars pledged toward the network, business has yet to pick up significantly for M2M companies.
“In the short term, the stimulus money has had the opposite effect because utilities have held off on projects,” says Henry Jones, chief technology officer for SmartSynch, an electrical metering company that recently signed an M2M deal with AT&T. “They’ve put in for different government grants. While those are in the pipeline, they’ve slowed other projects down.”
He compares the state of the industry to changing a single lane road into a six-lane highway. “Traffic is down a lot while there’s construction, but we’re looking forward to the day that the lanes are open and everyone is at speed.”
ABI analyst Sam Lucero agrees, though he suspects that the effect will be considerably more muted than people expect. “It’s important to point out that there’s fine print,” he says, citing the size of the grants available through the program.
Of the $4.5 billion slated for the grid, $3.4 billion is going toward developing market-ready smart grid technology. The grants coming from the remaining funds range from $300,000 to $200 million under the program’s 50 percent cost-share program, a figure Lucero characterizes as a funding source best suited for the testing and piloting phase of a project.
“It won’t cover the cost of a full deploy-ment,” he says. “It’s not a game-changer so much as just something that will help solidify and encourage investment that was already taking place.”
MARKETING THE M2M MESSAGE
Aside from potentially helping business, M2M’s prominence in the smart grid effort could play a large part in raising the unassuming technology’s public profile. Though the technology is used everywhere from water meters to tracking and delivery services, its presence has remained mostly invisible outside of the industry.
“It’s certainly in widespread use, just below the radar screen,” says telecommunications consultant Elliot Drucker. He cites third-party services that require M2M applications as an example of how the technology has been kept out of the public eye.
“In many cases, a company will imply that it uses its own network,” he says. “For instance, OnStar would like you to believe that all the communication is done by satellite. It’s not – except for the GPS – it’s them through the local cellular network.”
Back at ABI, Lucero says M2M is also attracting attention for its use in the residential arena. “Commercial and industrial enterprises have been ‘smart’ for quite a while. In the residential space it’s been a much more recent phenomenon to connect a smart meter to a wireless connection point.”
Lucero also points to M2M’s use in backhaul communication for security alarms, point-of-sale and ATM connectivity, vending machines and mobile healthcare. “The momentum is very small, but it’s generating a lot of buzz and excitement in the value chain,” he says.
Ben Friend with IDC research subsidiary Manufacturing Insights envisions a world where M2M will not only be used to monitor the grid but also will be used for public utilities and infrastructure, like gauging water usage or tracking the stability of bridges.
“The opportunity for M2M technology is not only in energy,” he says. “M2M communication is a very powerful theme and one that will become more attractive to industries and corporations as we face increasingly hard economic times.”
Analyst Julien Blin echoes Friend’s sentiment, calling smart grid applications M2M’s “biggest potential,” expanding the definition of smart grid to include managing utilities like water and gas. “Water management and electricity management are going to be the biggest markets right now,” Blin says, citing the hundreds of millions of meters deployed at homes and businesses that can be used for the smart grid.
Even AT&T has gotten behind the smart grid effort, signing up with the aforementioned electric metering company SmartSynch and utility business Cooper Power Systems to jointly market and sell smart-grid services over AT&T’s wireless network.
Verizon Wireless, too, is getting into the space in a bigger way. In July, it announced a joint venture with Qualcomm that will target M2M in several vertical industries, including healthcare, utilities and consumer electronics. Verizon’s open access network project already had a considerable focus on M2M communications.
Its M2M certifications were widely called “unsexy” in the media. Admittedly, monitoring storage tank capacity doesn’t have the same cache as the iPhone, but such is the nature of the M2M space: practical, humble, useful and low-key.
| M2M Has Needs, Too | |||
M2M is just like any other wireless telecommunication system, says Jill Lyon, vice president and general council for infrastructure communications group Utilities Telecom Council (UTC). It needs spectrum. “Most of the smart grid is M2M – it’s devices talking to devices,” Lyon says “It’s substations, transformers, power lines and meters – all those various pieces talking to each other in a two-way manner that’s not possible now.”
The UTC is trying to secure 30 MHz of spectrum, which it says it needs to make the smart grid possible. Canada has already allocated the spectrum between 1800-1830 MHz to support its electric grid, and Europe is close behind. Though Lyon acknowledges the trade-off between public networks and private spectrum, she candidly points out the importance of the grid. “Quite frankly, if you don’t have power, you don’t have anything,” she says. “None of your little devices will work if the power goes out.” Lyon points out that utility companies already function as their very own telecommunications providers, running large-scale wireless, wireline and fiber optic networks across their operations. They’ve built their own networks before and will build them again for the smart grid effort; they just need a slice of spectrum first, she says. “No service provider can build the kind of reliability that utilities need to build smart grids across the country,” she says. “It’s just something we’ll have to do ourselves.” -MR |
