The rise of the machines

Brasserie Bread CEO Michael Klausen

Bread maker Michael Klausen doesn’t need to stick his finger into a loaf of bread to know its temperate. He doesn’t even need to be in the same room. All he needs is his smartphone.

His business, Brasserie Bread, uses traditional baking techniques and shuns the use of additives and artificial enhancers. That means keeping a close watch on the environmental conditions for each batch of dough – something that used to require a lot of running around.

Through the use of innovative Web-connected thermometer tags in his bakery’s cool rooms and spiked into batches of dough, Klausen can monitor the temperature of each batch in real time.

“If a fridge breaks down and we do not react, then we could lose quite a lot, because we would also lose part of the production that we would need for the next day,” Klausen says. “And we’d lose the confidence of our customers.”

The technology protecting Brasserie Bread was deployed by Cooltrax, a company that specialises in remote monitoring of refrigerated items. The data is carried on Telstra’s wireless network and managed via the carrier’s cloud-based monitoring service.

Klausen estimates it is saving him about 10 man-hours a week, which equates to roughly 3 per cent of staff costs, while saving the company thousands of dollars in lost stock when temperate thresholds have been reached.

“It is very handy,” he says. “If a door is left open there is an alarm that goes via text message to some of the operation staff, so they can react to it very fast before there is any damage to any products.”

The implementation at Brasserie Bread is miniscule in the scheme of things. But its innovative use of remote sensing technology represents the leading edge of a trend that is revamping how larger businesses monitor and control their operating environments through machine to machine (M2M) communication.

It is a clear example of how M2M can deliver benefits to businesses of all sizes. While the Internet has connected up millions of services and applications, M2M is creating a so-called Internet of Things that connects up billions of physical devices. And it is big business.

According to Billing & OSS World’s recently released study, Data-Driven Developments: US Telecom Wired and Wireless Sizing and Share 2012-2017, M2M communications is now the fastest growing segment in the telecommunications industry, with annual growth of 28.2 per cent, ahead of business fibre deployments (23.6 per cent) and business VoIP (17.7 per cent).

Companies supplying technology for M2M have been reporting strong growth in revenue, with analyst firm Machina Research estimating that the sector will grow from US$121 billion in 2010 to US$950 billion by 2020.

By then the telecommunications equipment maker Ericsson estimates there will be 50 billion connected devices in the world, and some market watchers suggest that estimate is conservative. With the human population only tipped to reach 10 billion by 2020, people will be far the minority users of the Internet.

M2M means much more than smartphones and iPads, with the range of devices that can be hooked up to the Internet growing rapidly.

Melbourne start-up LIFX raised $1.3 million through the KickStarter crowd-funding service for a multi-coloured Wi-Fienabled light bulb that can be controlled from an iPhone or iPad, and in late October Philips weighed into the market with the announcement of its own wirelessly controlled light bulb, Hue.

Existing personal devices such as smartphones and tablets will be augmented by a range of wearable devices that perform more specific purposes, such as the Pebble e-Paper Watch, which synchronises with a smartphone to display notifications such as caller ID or text messages.

Pebble raised more than US$10 million on KickStarter. Another set of devices from Fitbit assist in monitoring calorie intake, personal activity and even sleep patterns, using a smartphone to connect wirelessly to tracking devices and a smart weighing scale.

Businesses are realising the marketing potential of M2M and smart sensing technologies, particularly in vending machines. In Spain, the marketing agency Momentum has created smart vending machines for Coca-Cola’s Minute Maid Limon & Nada lemonade brands that lower the price of cold drinks when the outside temperature rises.

A collaboration between Intel and Kraft also led to the creation of the iSample vending kiosk, which uses an optical sensor fitted to the machine to recognise the shape of the human face. It is capable of estimating the sex and age of a shopper and then customising its menu accordingly.

The applications are industrial in scale. Nestle has installed connected sensors in ice cream vending machines to monitor stock levels, while numerous car makers and fleet operators have installed technology to monitor everything from vehicle location and driving habits to overall maintenance requirements.

From a research perspective the CSIRO is involved in numerous trials that employ the use of different forms of sensors spread across wide areas, primarily for agricultural uses.

M2M is emerging as a growth opportunity for many communications technology companies. Cisco chief executive John Chambers has earmarked M2M as one of his company’s ‘big bets’, and capable of giving a client a real-time view of its entire operating environment.

“We see this as the next generation of the Internet,” says Cisco’s director of public sector for Australia, Ken Boal. “While the Web has gone through multiple generations from brochureware into transactions and the social Web that we know today, the Internet itself has remained reasonably steady. Now we see billions of devices added over the next five to 10 years.”

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Cisco has even created a new term to describe M2M implementations – the field area network.

“It’s been predominantly developed for the [electricity] smart grid, but it will have a range of applications across many verticals and industries,” Boal says.

“It is there to connect everything from the smart meter through to the charging infrastructure to support electric vehicles, and all of the substation and distribution automation infrastructure, etc.”

For example, in Canada, Cisco has teamed with the smart meter maker Itron on a US$270 million project to modernise the electricity grid operated by BC Hydro. The utility is using Itron’s OpenWay smart meters to run a multi-application communication network powered by Cisco, which is expected to eventually save US$500 million for customers.

Boal says Cisco has also been invited to merge clinical technology into the hospital networks.

“There is a significant run of new hospital builds here in Australia, where the network is supporting the traditional building management systems and new types of sensors and CCTV infrastructure, and then all of the clinical and medical apparatus like the MRI machines.”

Swedish firm Ericsson is also getting into the M2M market, with its Ericsson Device Connection Platform.

This platform has found use in automotive, fleet management, security, utilities and healthcare, as well as a project undertaken with the Institute for Broadband-Enabled Society (IBES) at the University of Melbourne which assists sufferers of knee osteoarthritis through monitoring of movements in everyday life via an Android application.

Another project undertaken with the China Agriculture University in Jiangsu is enabling local farmers to use their mobile phones to monitor and control the water quality of crab ponds in real time.

But M2M is also becoming a victim of its own explosive growth. According to Ericsson Australia’s strategic marketing manager, Warren Chaisatien, many of the core elements are still being worked out, such as the ability to authenticate devices and connect across different device platforms, and along with means to provision, manage and secure devices.

While much of the industry has converged around the 3GPP standards for mobile communications, the M2M market is plagued by fragmentation and a lack of standards.

“This is inhibiting adoption and growth,” Chaisatien says. “Once you have that horizontal platform that fits between the various application servers and the devices at the other end, we believe that would encourage the uptake.”

But the rise of M2M is creating new opportunities within the technology industry. Australian-born company Ninja Blocks is putting M2M technology into the hands of anyone who wants it, by creating devices that can easily attach to a wide range of sensors and be managed through a cloud-based platform.

Company founder Marcus Schappi says he has received strong interest in using his company’s devices as safety sensors, and in the aged care sector. In the latter instance Ninja Blocks can be connected to motion sensors and other sensors to monitor household activity patterns to unobtrusively determine activity levels.

Part of the reason behind the recent explosion of interest in M2M communication is the plummeting cost of hardware. For example, the UK-based Raspberry Pi project is now selling a complete Linux board for just US$25.

Hence the value segment of the market is proving to be in the management platforms that bring these devices together. That is where Ninja Blocks is now concentrating. “I don’t think there is going to be one polyglot device – it’s just not practical,” Schappi says. “I think it is going to a world where we will have a whole heap of deeplyvertical Internet-connected devices.”

That is also the hope of Canadian-based company QNX Software Systems (a wholly-owned subsidiary of Research in Motion), which has now deployed its microkernel real-time operating system in more than 9 million vehicles in 2011, as well as many other devices.

Director of product management Grant Courville says the strongest interest in M2M has come from the automotive industry and utilities, although the healthcare sector is also getting involved for both tracking health equipment and remote patient monitoring.

More recently he says the company has received significant interest in the concept of connected digital signage. “Advertisers are getting smarter, so rather than having a standard advertising that is played over and over, they want to have it be more context and time-sensitive,” Courville says.

“The real value is not so much the data, but what you can do with the data. And there are companies out there that are starting to put together platforms that will help businesses do that.”

Earlier this year German car maker BMW’s group IT infrastructure chief, Mario Müller, described how, by 2017, his company’s connected cars will be generating a petabyte of data every day.

The consequences of M2M for the data management industry are enormous. According to Cisco, M2M traffic in Australia will grow 13-fold from 2011 to 2016, at a compound annual growth rate of 66 per cent, to reach 8929 terabytes per month.

It is those kinds of numbers that have data companies such as Oracle excited.

“The biggest issues that CIOs have got to get their heads around is the amount of data traffic that we are talking about,” says UK-based Oracle senior vice-president Chris Baker. “Some of the analysts are talking about compound annual growth of 86 per cent or above.”

A recent study into M2M released by Oracle found that 75 per cent of participants thought that enabling new services and revenue streams was fuelling M2M projects, but 85 per cent of users said an increased focus on better managing large volumes of M2M-generated data was necessary to address performance and costs issues.

According to Baker, as businesses start to make use of the data generated from M2M, the true examples of business advantage will emerge.

“We are starting to see some of those, not yet in the public domain,” Baker says. “Instead of doing technology projects, which is all about how you make the technology work, it becomes more about getting the information to do the things we need to do.”

For Michael Klausen, however, all he needs to know is that his company’s bread is OK. For that, he receives an automated email every morning with a history of activities for the previous 24 hours. Should there be a more immediate problem, one of his colleagues will receive an alert message.

In a technology-driven bakery, M2M technology enables him to focus on what is most important – making bread. “The only thing that stays old fashioned is the main part of actual bread production,” he says.