TELEMETRIC COMMUNICATION
NEW OPPORTUNITIES FOR B2B
INDUSTRY OVERVIEW
BACKGROUND
According to the Gartner Group, Inc., Frost & Sullivan and various telecommunications industry sources, wireless and wire-based networks are converging to create a new global marketplace. The Gartner Group calls this convergence the Supranet. The Supranet integrates at least three types of communication media into each interaction, the "e-world" (the world of electronic devices such as computers, phones and televisions) and the "p-world" (the physical world of paper, houses, people, vehicles, etc.), and the world of natural human interactions. Building Supranet applications involves linking all of these together, to create new experiences, not just presenting a cut-down Web page on a cell phone's four-line display. With wireless technologies, the Web can dramatically expand its connection to the physical world and thus interconnect sub-networks not previously considered as part of the Internet. Thus, this report will examine one technology enabling this convergance and the opportunities it provides for B2B activities, namely - Telemetric Communication.
BEYOND WIRELESS INTERNET - TELEMETRIC COMMUNICATION
Telemetry refers to any remote transmission of data for monitoring, decision-making or control. Telemetry can be accomplished through wireline networks. However, the availability of wireless telemetry -- particularly when combined with universal Internet access -- is creating entirely new products and services. Telemetry solutions can transmit a variety of data or information that can be converted to digital format. In some applications, the data of interest are available directly in digital format from a microprocessor. In others, a sensor picks up a physical or electrical signal, then the system converts it to digital data. These signals can include anything from vibration to temperature to heartbeats, and when used with GPS technology - physical location.
Note: the wireless tranceiver or application interface transmitts data to the base station (this may be unclear in the illustration above).
Source: Yankee Group
Whenever a key piece of data is not where it needs to be, wireless telemetry may provide an answer. In addition, collecting data is only a start, telemetry also provides a link back to the front line if control signals are needed to perform some action. A few of telemetry's numerous applications are listed below.
Source: Yankee Group
Until recently, the primary communications technology used by mobile telemetric applications has been packet switched radio networks (Mobitex). These are data-only networks found in taxicabs and emergency services vehicles. While the benefits of packet switched radio networks are well understood it is not a 'mass market' technology. In fact, mobile data applications have not grown as much as expected. However, many new types of telemetric equipment, systems, and services have resulted in new opportunities for widespread use. Some of the major players in this market and their respective technologies are listed below.
Source: Yankee Group
DRIVERS OF GROWTH
According to a White Paper from Freedom Technologies, sometimes data and information are not in the right place at the right time, delaying or degrading business decisions and customer interactions. Too many employees spend too much time collecting vital operating data, whether it is walking through a plant or driving across town to read a meter or respond to a service request. Operational actions are often based on schedules rather than actual need. Imagine any geographically dispersed operation that requires filling or emptying machines of some sort. Route drivers on a set schedule visit each machine at regular intervals, even though demand might fluctuate. By switching to demand-based, just-in-time servicing, operators can run their systems closer to capacity and improve productivity while cutting costs. Car rental companies have been among the first to use wireless telemetry to take data to their customers, rather than forcing customers to come to the data. By meeting customers carside with handheld retail terminals, the companies get customers on their way sooner and make better use of their assets. By alleviating these frustrations, wireless telemetry promises to improve customer service, enable new product and pricing configurations, increase productivity, lower operating costs and give people more control over data that affects their lives. More importantly, both consumers and businesses expect data, answers, feedback and solutions immediately. Products and services that do not deliver on this expectation will eventually find themselves at a disadvantage. According to BT, a telemetry solutions provider, other key drivers influencing growth include:
Operational Efficiency
In many industries where there are remote terminals or devices they are managed by a system of routine visiting whether there is a need or not. Introducing telemetry ensures that they are only visited when there is a real need. Breakdowns and faults can be communicated once telemetry is introduced, often pinpointing the exact nature of the fault. This enables not only rapid repair, leading to improved utilization but can also ensure the engineer has the correct parts with him when carrying out the repair.
Regulation
Regulation particularly affects the utility market place and has been influential in increasing the number of telemetry connections across the electricity, water and gas markets. Regulators in the utilities sector are increasingly forcing the suppliers to meet performance targets and reduce prices, while at the same time the suppliers have an obligation to their share holders to create value. These pressures have forced the suppliers to improve their efficiency and to demonstrate that they are meeting their performance targets. The utilities have increasing turned to the use of telemetry to assist them in doing this, some examples being the monitoring of leakage in the water industry, continuity of supply in the electricity industry and accurate billing of big users of gas in that industry.
Legislation
Legislation like the monitoring and recording of food temperature or the hours worked by personnel or machines puts a legal requirement on industry to record and produce an audit trail. There are many areas where the law must be shown it has been complied with. Automated methods eliminate the need for human intervention.
PROSPECTS FOR MARKET GROWTH
There are many potential vertical markets for telemetric communication. Imagine a scenario where a pipeline sensor signals a loss of pressure, and a service crew is dispatched to the area. While on its way, the crew downloads an electronic map of the area around the break to assess the extent of the risks. Upon reaching the site and surveying the situation in person, the crew chief then accesses a multimedia emergency manual for specific instructions. Along with higher bandwidth will come improvements in size, reliability and price/performance ratios. As the cost of telemetry drops, more and more industries and products will be able to make the economic case for adopting it. In addition, wireless presents very attractive scalability with low installation costs, making it easy to ramp up applications on a regional, national or even international scale. Considering these factors, Yankee Group forecasts sharp growth for both telemetry equipment and service revenues. As telemetry becomes more widespread, it is safe to assume that more and more equipment, vehicles and other products will have telemetry built in as a standard feature.
Source: Yankee Group
PURSUING THE OPPORTUNITIES
According to a Yankee Group report, telemetry revenues will reach $6.6 billion by 2004. The vertical nature of telemetry applications, the specificity of each solution, and the number of components involved in a complete telemetry solution are perhaps the three biggest challenges when considering opportunities for B2B hubs or exchanges. As with any technology moving into mainstream use, customer education will play a key role in accelerating the process. As each successive vertical application takes hold, economies of scale will increase, making new applications that are more accessible. Indeed, wireless telemetry presents novel business opportunities for equipment manufacturers, system integrators, wireless service providers, and B2B activities alike.
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This report was completed in October 2000 for the class B2B Electronic Commerce given by Professor Erran Carmel in the program of Management of Global Information Technology at the Kogod School of Business at American University in Washington DC.
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