THE RISE AND RISE OF THE MACHINE
For years we have debated, philosophised and in some cases fantasised about the demand curves and factors that will shape our industry. The purpose of this paper is to discuss one of the key trends that I think will drive demand for the development of new infrastructure – M2M. Back in the old regulated days it was much easier to deal with supply and demand. Consortiums formed in a regular cycle to plan out the next trans-Pacific, Asian or Atlantic cables. These groups were typically dominated by incumbent telcos, or PTTs as we were quaintly known in a utilitarian kind of way. Deregulation was still a public policy concept. Its principles and finer details were being debated and litigated in many a court room. However even with the overwhelming market knowledge of the incumbents, albeit often driven through the rear vision mirror, we (because I worked for one of those PTTs) often got the demand projections and drivers wrong and not in a small way. But then again we were not the only ones. I recall the launch of PacRim East which was hailed as future looking and essential infrastructure as indeed it was. We invited leading “futurists like Richard Saul Wurman and Nicholas Negroponte (of MIT MediaLab & “One planet One computer”) to discuss the exciting prospects we faced. We used the latest video-conferencing technology (yes it was a killer application in 1993 as well) to facilitate the event across multiple countries. Yet in the entire video conference proceedings over a couple of hours, the word “internet” was not uttered once, not by a futurist or PTT spokesperson alike. So it proved to be that PacRim, long in the gestation, proved woefully under designed in terms of capacity. So much so that less than five years later we had our first Southern Cross Cable Data Gathering Meeting (sales meeting for those of the new generation). The revolution of private cables had come to Asia-Pacific, led by three forward looking telcos (though I am biased in my assessment), Telecom New Zealand, Optus and MFS (prior to its acquisition by WorldCom) at the
By By Brett Brett O’Riley O’Riley
helm. These historical ramblings are necessary to set the scene for the proverbial, “putting my neck on the chopping block”. Because I would like to share with you my views on one of the key factors that I think will drive future growth in our industry, the rise and rise of the machine, or M2M as it is now increasingly being called. Demand for capacity, has traditionally been based in our industry on people, or users – subscribers for some who have long memories. Penetration rates have been our mantra, and countless demand studies, industry forecasts and models have been produced based on users to assist us calculate future demand. Now new factors will change demand in a way we have not seen before across many if not all industries – M2M. Machines communicating with machines are not new in itself as a driver of bandwidth growth. The Defence and Banking & Finance industries have always been big consumers on a comparative basis of international and domestic bandwidth, normally through dedicated international private leased circuits (IPLCs). But this is small scale compared to what I believe is revolutionising our industry. Several factors will drive the rise of M2M: • Moores Law has transformed the economics of processing power, and size, enabling much more sophisticated and/or smaller devices to be deployed at the edge of networks. • Access technologies have been enhanced with greater throughput now possible and on a much wider geographical coverage area, via wireless (EVDO, HSDPA, WiFI, WIMAX), wireline (ADSL, FTTH, Ethernet) and satellite. • There has been an explosion in the software and applications development industries, based around common standards like Microsoft, Sun and 30