Growth of One-stop Shop Suppliers to Drive M2M Application Enablement Platform Revenues Past $800 Million by 2018

22 Oct 2013

Application Enablement Platforms (AEP) are slowly and steadily cementing themselves in the M2M ecosystem. These platforms ease the data extraction and normalization activities so M2M applications and enterprise systems can easily consume machine data. These platforms also assist in device and machine management. Revenues from these core capabilities are expected to drive AEP revenues past $800 million by 2018—a 32% growth rate.

Practice director Dan Shey comments, “For a broad swath of firms pursuing M2M, application development is still done in the traditional manner using SIs, ISVs, and internal teams, but the time-to-market advantages of AEPs is significant. As M2M moves to a broader set of small, medium, and increasingly larger businesses, AEPs will be a critical and necessary enabler.”

Other forces will play a role in growth of AEPs, including greater acceptance of cloud services, the attractiveness of new business models for machine leasing (Machine as a Service), warranties, and SLAs, “free to try” platform offers, and cheaper communication devices and connectivity costs.

However, an equally important, if not more important force driving the growth of AEPs, is evolution of the supplier ecosystem.

“The M2M value chain is still complex which is a drag on adoption,” adds Shey. “More suppliers are augmenting their capabilities to offer nearly one-stop shop services. Pure-play AEPs, SIs, and other mobile suppliers are all leading the charge. For device OEMs, adding services capabilities is almost a necessity to avoid commoditization pressures and capture revenues in the largest revenue segment of the M2M value chain – value-added services.”

The ABI Research report, “M2M Application Enablement Platforms”, provides an in-depth view of the AEP market including analysis of drivers, inhibitors, trends and the supplier ecosystem. AEPs are quantified by revenues, connections, and connection penetration, highlighting their relative position in the overall connected machine market.

These findings are part of ABI Research’s M2M Service Delivery Platforms Research Service.

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