Product Assessment

Vodafone Global M2M Services and Strategy

Market: Business Network and IT Services Class: Global M2M Services Report Date: April 5, 2012
Summary

Current Perspective: Leader

Kathryn Weldon
Current Analysis Principal Analyst, Enterprise Mobility

Vodafones M2M solutions position the operator as a leader in the global M2M services market, as it has been on a focused M2M path since 2009, when it launched a Global M2M Platform, global automotive-grade compliant SIM, touted attractive tariffs for international roaming, and demoed a Web-based customer portal. By the end of 2011, Vodafone had an installed base of about 7 million connections. While Vodafone has been providing M2M connectivity for 20 years, it formed a dedicated M2M team in July 2009 (which now has 150 customer facing sales employees, soon to grow to 200, and there are also about 100 other employees focused on M2M engineering, platform development and R&D) to focus exclusively on this market. Its position as the largest global wireless network operator has made it a likely go-to provider of M2M services for global enterprises, especially those with pan-European or far-flung facilities or customers. Its global SIM (known as the Super-Nation IMSI SIM or MCC 901) can be mounted in the factory and works on any GSM network, offering in-country local pricing currently in 120+ countries. Vodafone has also been working with Verizon to combine sales and technical resources to offer M2M to MNCs that have connectivity requirements in both the U.S. and Europe and the two service delivery platforms (nPhase, now called the M2M Management Center, from Verizon, and The Global Data Services Platform, known as the M2M Platform, from Vodafone) have now been fully integrated. Vodafone is focused on all major verticals, but it currently sees the largest current opportunities in the automotive, smart metering, consumer electronics, and healthcare industries. The automotive sector has been particularly active, as all major auto manufacturers are planning advanced connected car services; Vodafone has a strategic relationship with Hyundai for the auto manufacturers next-generation service plans and also recently announced an earlier win with BMW. In the utility space, named customers include AMS, a New Zealand provider of smart metering systems, Bglobal, which implemented a smart metering program to manage energy consumption, British Gas and Southern & Scottish Energy. Healthcare M2M is also growing and Vodafone announced a recent win with Boston Scientific for a remote healthcare

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Product Assessment
Product:

Vodafone Global M2M Services and Strategy

Business Network and IT Services

monitoring device; as Vodafone Global Enterprise also has a separate m-health business unit, it can provide integration and professional services in this segment. Vodafone also announced a recent deal with Amscreen, for 3G based digital signage, and is gaining connections in consumer electronics connections such as E-readers. Other customers are named in the metrics section. While Vodafone does not position itself as an end-to-end integrator, it often brings in partners within the modules, devices, and application ecosystem and may re-sell selected hardware/ software at the customers request. It is working on an integrated pre-tested M2M terminal that combines connectivity and hardware modules, is connected to the GDSP, and is configured with APN settings for security. It is also working on M2M Service Enablement offers, in partnership with Zelitron (a Greek integrator in which it holds a majority position) and with a partner in Germany, Device Insight; these offers will provide device management, data analytics, device-level diagnostics, and reporting. Vodafone also works with a variety of SIs for M2M deployments, including IBM, Logica, HP, and Accenture. Vodafone touts its extensive M2M knowledge, its dedicated service organization, and its technically knowledgeable sales and implementation teams that help customers with proof of concept and testing of M2M applications. The operator stresses not only its large European and extended global footprint (including an increasing number of opportunities in India and Asia Pac), but also its ability to provide SLAs for global connectivity, even on partners networks. This positioning has always been a core value proposition of its global managed services.
Target Markets

End Users, Consumers, Small to Medium Enterprises, Large Enterprises, Global 2000, Web Portals, Systems Integrators, IT Implementers, Third Party Implementers
Strengths and Weakneses

Strengths

As a dedicated team in Vodafone Global Enterprise, Vodafones M2M division has more than 150 customer-facing sales people dedicated to M2M (with another 50 soon to be added) and a further 100 employees focused on M2M engineering, platform development and R&D. Vodafone Global Enterprises value proposition, for M2M and other mobile services, includes the ability to manage global network connectivity for enterprise customers with a dedicated account team, consistent SLAs, and a single global contract. However, the Vodafone M2M team also delivers services to customers outside the traditional Vodafone Global Enterprise core multinational corporate base. Vodafone and Verizon appear to be getting traction in their efforts to work together for deals that span the U.S. and Europe. While they can either offer an M2M service with two different SKUs (for CDMA and GSM) or with a multimode SIM with both radios, this advantage may be even more compelling and important once interoperable 4G LTE technology has been widely deployed by both operators. The partners have already integrated their SDPs so customers can see all connections from the same portal, and are capturing new business opportunities. Vodafone has a number of publicly announced M2M customers across multiple verticals, for applications that range from automotive telematics to smart metering, theft detection and fleet tracking, parking management, digital signage, healthcare, consumer electronics and financial transactions. This is evidence that Vodafones solution has gained significant market traction; not all M2M service providers have disclosed such a large list of reference customers. Its current base of more than 7 million SIMs in service is evidence of good market traction, which is

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Product Assessment
likely to ramp up significantly once services are deployed to these new customers. Although AT&T and other carriers are forging relationships with cloud based application delivery and management platform vendors such as Axeda, Vodafone has its own set of European-based partners to add service enablement features such as device level diagnostics, data analytics, and software updates. These include Zelitron, a Greek company in which it holds a majority stake, and a German analytics company, Device Insight.
Weaknesses

Product:

Vodafone Global M2M Services and Strategy

Business Network and IT Services

Vodafone does not position itself as an end to end systems integrator for M2M, unlike Orange Business Services (which provides such services on an end-to-end basis in certain vertical niches such as fleet management) or AT&T (which describes itself as providing definition, design, deployment, and support services and is increasingly bringing in its own MSS professional service organization to M2M deals). This may imply that Vodafone is relying more on its footprint and less on vertical solutions and value-added services for M2M revenues. It does, however, work with SIs such as HP, IBM, Logica, and Accenture for M2M deployments. While Vodafone touts its internally developed service delivery platform as covering all the bases, other operators such as AT&T, KPN, and Orange Business Services are adding deeper device-level visibility and diagnostics capabilities and considering more application-level enablement. For example, recent alliances with Axeda by AT&T (with which Vodafone also partners) as well as Sierra Wireless and ILS by competitors are resulting in integration of application platforms with SDPs (already in progress between AT&T and Axeda), bringing in managed application services opportunities. (Vodafones partnerships with companies such as Zelitron and Device Insight, however, may play a similar role in adding device level diagnostics and updating). Vodafone is, however, continuously working on new features and technical enhancements for its platform. Vodafone competitors in Europe such as Orange and Telefonica are also getting good traction in M2M and have disclosed recent deals; these include Oranges deals with Nespresso and with Qualcomm for its 2net healthcare platform; and Telefonicas deal with the nonUS portion of the GM OnStar service. Telefonica is also closing in on a similar number of connections with 6.6 million now in service (according to Current Analysis estimates) and it is enlarging its M2M footprint with partnerships with DT, TeliaSonera and China Unicom. These competitors are also providing integration and other professional services.
Continued

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Product Assessment
Metrics

Product: Vodafone Global M2M Services and Strategy

Metric M2M Organization Network Coverage for M2M Vertical Target Segments Service Delivery Platform Elements SIM Options Value Dedicated M2M organization, launched in March 2010; 150 customer facing sales people soon to grow to 200, and there are also about 100 other employees focused on M2M engineering, platform development and R&D. Vodafone can offer M2M services across its own network footprint (31 countries) and its partner network footprint (44 countries) without incurring traditional roaming charges. However, with its Super-nation global IMSI SIM, it can now reach 120+ countries where it can offer in-country pricing. Also, it can provide connectivity in the U.S. through Verizon Wireless. Environmental monitoring, remote maintenance and control, payment, security, tracking and tracing, healthcare, metering, consumer electronics, industrial computing, automotive telematics, eet management & electronic toll, digital signage Automated SIM pre- and post-provisioning/activation/de-activation, post-distribution conguration, reporting/alerting with usage thresholds, policy management, API integration with customers systems, and on-the-y tariff charge management. Is working with Zelitron and Device Insight, among others, to add device-level diagnostics and software upgrades as well as data analytics Ultra-compact robust, solderable global IMSI SIM (ITU MCC 901) works in over 120 countries for in-country pricing. as well as traditional form factors. The Bosch Group, a leading global supplier of technology and services, and Vodafone have announced a global partnership to integrate their respective M2M platforms. The joint solution is aimed at making it easier to manage products with embedded SIM cards. It aims to simplify the management of workow business processes in a variety of industrial domains in an intuitive, integrated, and cost-efcient way. Examples of products that could benet from embedded SIMs include lifts, air conditioning systems, and escalators with automatic warning systems that alert maintenance staff in case of problems. 7 million connections disclosed to analysts at the end of December, 2011 Vodafone has a strategic relationship with Hyundai for the auto manufacturers next-generation service plans and also recently announced an earlier win with BMW. In the utility space, named customers include AMS, a New Zealand provider of smart metering systems, Bglobal, which implemented a smart metering program to manage energy consumption, and British Gas. Vodafone announced a recent win with Boston Scientic for a remote health care monitoring device; as Vodafone Global Enterprise also has a separate m-health business unit, it can provide integration and professional services in this segment. Vodafone also announced a recent deal with Amscreen, for 3G based digital signage, and is gaining connections in consumer electronics connections such as E-readers. Others include: Technocon, a theft detection provider; Ctrack/Digicore, a provider of track and trace systems for eets of vehicles; Taxameter Centrale, a provider of parking management systems; CCV, which provides online authorization of nancial and loyalty card transactions; Transpoco for eet management; Keenan Systems - farm diet feeders; Bluetree Systems for Fleet management and vehicle monitoring; Drivecam Europe; Cantaloupe/Pepsifor vending machines, through a 3rd Party (Cantaloupe Systems); The New Motion, a Track & Trace solution for eet management; and TRxCARE for home health care Vodafone manages all the elements of a global M2M deployment from consultancy through user support (although it may use third-party integrators for many of these functions); plus, it offers a single administrative interface and support channel, as well as a single global contract supported by a single global SLA. It provides help in analyzing ROIs, proof of concept, and live and simulated network testing for third-party devices/applications.

Traction Named Customers

Professional and value-added Services

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