Vodafone is (or rather will be) top dog in M2M according to Machina Research's new CSP Benchmarking Report

This week we published our M2M Communication Service Provider Benchmarking Report. If you want to download the press release as a PDF, you can find it here. Here it is in all its glory:

Vodafone takes top spot in Machina Research’s 2012 M2M CSP Benchmarking Study
Vodafone is the CSP best positioned to take advantage of the global M2M market opportunity between now and 2020 according to a new study from Machina Research.
[London, UK 18th January 2012]

Specialist M2M research firm Machina Research today revealed the results of its 2012 M2M Benchmarking Study, which found that Vodafone was the communications service provider (CSP) best placed to take advantage of the EUR714 billion global opportunity[1] presented by machine-to-machine communication. In compiling the study Machina Research rated major M2M CSPs in six key areas that will determine their future success: Pedigree, Platform, Place, Partnerships, Process and People. Based on ratings across each of these six ‘P’s, Vodafone was the top-ranked CSP.

Commenting on the result, the study’s author Matt Hatton said: “Machina Research rates Vodafone as the CSP with the best potential to exploit the massive opportunities presented by machine-to-machine. In particular, its global scale gives it a substantial competitive differentiator. While I wouldn’t say that they are streets ahead of the competition, Vodafone was our clear winner. However, the race for second spot was very hotly contested between AT&T, Deutsche Telekom, Orange, Telefonica, Telenor and Verizon, with little to choose between them. Each has strengths and weaknesses”.

Ultimately second place went to Deutsche Telekom which was praised for its partnership strategy, has a natural advantage in the M2M world with an in-house systems integrator in T-Systems, has good geographical coverage courtesy of last year’s alliances with Orange and Telia Sonera and its US presence, plus the group is focusing a lot of attention on building up M2M capability.

The aim of the study is to identify which CSPs are set to prosper in the future, rather than simply identify those which are succeeding today. AT&T and Verizon both have M2M installed bases significantly bigger than Vodafone: 12 million and 9 million respectively. As Hatton explains: “It is important to note that Machina Research’s ranking is forward-looking. It’s an indicator of who we believe is best set for future success. Of course we take account of historic experience and success by AT&T, Telenor, Verizon and the like in our “Pedigree” category, but it is only one element in this most nascent of markets”.

Vodafone’s future success will owe much to its scale and geographical coverage: by 2020 its own footprint will cover 600 million addressable cellular M2M connections[2], second only to Deutsche Telekom, courtesy of its continuing presence in the US. The Vodafone figure grows to 1.8 billion when we include partner operators such as Verizon Wireless, whereas the comparable figure for DT is just 1.1 billion. As a result, Vodafone achieves comfortably the highest ranking in the “Place” category.

Machina Research’s overall ranking is far from simply an analysis of longevity and geographical footprint. It also involves critical evaluation in a number of other areas. It includes an appraisal of the CSPs’ software “Platforms” in effectively managing large numbers of M2M connections. It also assesses the success of each of the CSPs in building “Partnerships”, a critical factor for success in M2M. Vodafone and Deutsche Telekom have been particularly strong here. The “Process” category looks at a variety of practices involved in the supply of M2M services including application development, device certification, client support and systems integration. AT&T, Deutsche Telekom, Telenor and Vodafone scored highly here. The final category is “People” which looks at the CSPs’ organisational structure and general fitness for addressing the M2M opportunity, e.g. through the establishment of dedicated M2M business units. Here AT&T is rated as the most sophisticated, although Machina Research will watch with interest how the development of the ambitious newly-established Telefonica Digital unit will progress.

Summarising the findings, Hatton comments: “None of the CSPs has a monopoly on best practice in all of the categories. Each has room for improvement. Each also has particular advantages due to their company structure or approach that can give them a lead or allow them to differentiate. Above all, however, each of them can learn from the others.”

About the report
Machina Research is a UK-based telecoms research and consulting firm focusing principally on the emerging opportunity associated with new forms of connected wireless device, specifically machine-to-machine (M2M) and mobile broadband. The M2M Communications Service Provider Benchmarking Report, 2012 provides an independent analysis of the M2M capabilities of seven key CSPs: AT&T, Deutsche Telekom, Orange, Telefonica, Telenor, Verizon Wireless and Vodafone.

The purpose of this report is to give Machina Research’s view on the likely long-term success of each of these major M2M CSPs. Enterprises looking to implement an M2M solution will be looking for a trusted and competent partner and making a long-term commitment. As a result they require a high degree of certainty that they are making the right choice of CSP.

The seven CSPs have been selected as the tier-1 M2M service providers, courtesy of their existing scale and focus and their international remit.

Machina Research analyses the CSPs on six criteria:

  • Pedigree – The experience that the CSP has in addressing the M2M market. This will often be vertical-specific. While historical success is no guarantee of what will happen in the future it does demonstrate a level of experience in delivering M2M services, which is frequently a very different proposition from traditional voice and data services.

  • Platforms – The software platform(s) that the CSP uses for supporting its M2M connections. Platform choices will often have implications for the efficiency with which a CSP can address the M2M opportunity, in particular in the provisioning and connection management process.

  • Place – Where the CSP is well placed to provide services. This includes analysis of geographical footprint as well as horizontal partnerships with other CSPs in non-footprint markets. In the latter case, particular focus is given to the ability to perform end-to-end troubleshooting. Also included within this analysis is the availability of broadband (3G and 4G) wireless networks. With regard to network technology choice, the availability (or lack of it) of broadband networks will affect the ability of a CSP to address the needs of particular applications as efficiently as a rival may. It should be noted that there is a well-defined evolution path for most CSPs from 2G to 3G and LTE. Differences related to network deployment will only be highlighted where it differs substantially from the industry norm.

  • Partnerships – Partnering is critical for the success of M2M. The focus is on vertical partnering (i.e. tying up with other players in the value chain to provide the best solution for the market). Horizontal partnering (i.e. with other CSPs to provide the broadest footprint possible) is predominantly considered in the “Place” category where it expands geographical coverage.

  • Process – Examining a variety of processes involved in the supply of M2M services including application development, device certification, troubleshooting, SLAs, project management/systems integration, and client support.

  • People – Much of the success in M2M will depend on having the right personnel in the right place. This section examines the number of dedicated M2M professionals, the CSP’s organisation and the fitness for purpose in addressing the M2M opportunity.
The report provides a ranking of each of these CSPs as well as a 3-4 page profile of each CSP, examining their capabilities in each of the six areas.

For a copy of the executive summary, table of contents and a blank sample data sheet, or to order your copy, find out more about the report or discuss annual subscriptions please contact sales@machinaresearch.com.

For further comments of more information on this press release, please contact:
Matt Hatton
Machina Research

[1] According to earlier research from Machina Research, “M2M Global Forecast and Analysis 2010-20” (October 2011), there will be 12 billion M2M connections on the planet by 2020, generating a revenue of EUR714 billion.
[2] Assuming same geographical footprint as today.