Northern Sky Research

Big Data Moving Satellite M2M/IoT to New Heights

Dec 3rd, 2014 by Alan Crisp   More from this Analyst | Profile

Transportation represents the lion’s share of the satellite M2M/IoT market, with over 44% of total units and over 20% of total satellite M2M/IoT market revenues. With the mass market of deeper analytics tools now taking hold across the Transportation sector, its dominance affects the entire market more than ever. To what extent will big data push the limits of M2M via satellite? And what sort of bandwidth requirements are we looking at?

Utilizing data from NSR’s recently released M2M and IoT via Satellite, 5th Edition report, the Transportation sector is poised for strong growth, growing from $245 million in annual revenues in 2013 to a forecasted $625 million by 2023, for a CAGR of 9.8%.

North America continues to dominate here – taking up just under 61% of the market in 2013. However, this is expected to decline to 52% by 2023 as other regions get up to speed in this industry and fleets continue to modernise, and as global shipping and transport continues to shift towards the Asia-Pacific.

Growth within the M2M sector is expected to be particularly robust in regions that lack a developed terrestrial communications infrastructure, most notably Latin America and Africa/Middle East regions with CAGRs of 9.9% and 8.9%, respectively. With the Transportation and Cargo sectors in control of high-value goods, high reliability with high-end SLAs are compulsary for most users of M2M services.

This requirement is forecasted to rise in the future, with the increasing use of data analytics. In the Transportation sector there is an increasing demand for keeping track of literally everthing that’s trackable, to discover any insight possible to assist in optimising businesses – often referred to as ‘big data’ or ‘deep analytics’.

Because of its nature, these requirements will drive up bandwidth needs for M2M services, as anything and everything will begin to be monitored, with reporting frequencies in minutes rather than in hours. Although specific platforms remain narrowband – and NSR believes this to remain the case long-term – the aggregate number of connections is pushing satellite requirements slowly higher. Packet sizes here continue to remain in the bytes to lower kilobytes range.

Usage of deep analytics data can pay huge dividends for end-users. In the aeronautical sector for instance, tracking of near real-time engine telemetry to see continuous performance of an engine using M2M via Satellite, can assist in reducing maintenance from a fixed schedule to times when maintenance is actually required – a ‘just-in-time’ model in other words. These savings can be huge and are driving up M2M units across the board.

Fleet management companies are also implementing satellite M2M technologies for the same purpose of maintenance, and in some cases this is combined with broadband access for drivers’ entertainment in long-distance hauls. This is critical to reducing employee churn, which annually can amount to over 100% of the workforce – a significant investment but also a significant return.

What does this mean for operators? Satellite M2M providers will need to get on board and develop, or acquire, deep analytics application layers in order to thrive in this sector in the future. In terms of frequency, HTS usage is still forecast to remain minimal for the M2M sector – approximately 1% of revenues in 2023 – next generation L-band systems such as Iridium NEXT having the advantage for big data in the Transportation vertical, in order to handle higher volumes of narrowband connections.

Bottom Line

Despite M2M/IoT often being considered more of a “niche” market for satellite operators, the sheer size of the total addressable market moving forward means that even a small percentage of the total leads to significant revenues. While a number of different applications will see demand growth, Transportation in particular does offer significant opportunities through the consistent need for companies to innovate and improve processes through tracking and the use of “big data”, where higher numbers of narrowband connections will become the new normal.