Magic Quadrant for Managed Machine-to-Machine Services
21 October 2014 ID:G00263526
Analyst(s): Eric Goodness, King-Yew Foong, Katja Ruud, Jouni Forsman
VIEW SUMMARY
The use of managed M2M service providers is important to plan and deploy digital business solutions. Sourcing
executives should consider the 13 evaluated providers, which vary by geographic coverage and service breadth.
These providers collectively manage over 70 million cellular M2M connections.
STRATEGIC PLANNING ASSUMPTION
Through 2018, machine to machine (M2M) service providers (mobile virtual network operators [MVNOs]) and M2M service aggregators
will triple their market share from large multinational corporations (MNCs) that require value-added, managed M2M services because of
an absence of investment and capabilities from dominant regional and global communications service providers (CSPs).
Market Definition/Description
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Managed M2M services are enabling connectivity services that are necessary for a number of solutions — often
categorized as the Internet of Things (IoT) — digital businesses and operational technology (OT) systems in industrial
environments. Managed M2M services enable businesses to collect, interpret, analyze and interact with enabled data
streams, thus providing businesses the ability to monitor, manage and control (manually and through automation)
assets that reflect the business process/event/incident/condition.
Managed M2M services encompass integrated and managed IT infrastructure and systems, OT infrastructure and
systems, software, applications, network services (connectivity), and IT services.
Although M2M connectivity spans cellular networks, fixed-network services, sensor networks and Wi-Fi mesh
services, this first managed M2M services Magic Quadrant focuses on cellular connectivity and related value-added
services, such as consulting, M2M device engineering, M2M application development and integration, software
hosting, and related system management.
Managed M2M services are important to improve enterprise asset utilization and business processes, as well as to
contribute to product, process and service development in one, or a combination of, the following IoT models:
Optimize: Connected assets are monitored and optimized. For example, sensors on an asset can be optimized for
maximum performance or for increased yield and uptime.
Consume: Connected assets can be monetized on a pay-per-use basis. For example, automobiles can be charged for
insurance based on mileage.
Operate: Connected assets can be remotely operated, avoiding the need to go on-site. For example, field assets,
such as valves and actuators, can be controlled remotely, or maintenance and replenishment can be carried out on a
"need to" basis rather than a "set time" interval.
Extend: Assets can be extended with digital services, such as content, upgrades and new functionality. For example,
connected healthcare equipment can receive software upgrades that improve functionality; digital signage can
provide reactive and predictive services that are dependent on consumers.
Gartner's coverage of managed M2M services focuses on providers that bundle connectivity, technology and
technology services that facilitate key business outcomes.
M2M services are broken down into the following capabilities:
Sourcing and logistics management includes the systems and services for enterprises to purchase and provision
network services (connectivity), systems, application functionality, and related devices. Included in this capability is
the use of portal-based service catalogs with self-service capabilities (for example, device acquisition, provisioning
and activation). Reverse logistics support includes engineering, kitting, depot repair and advanced replacement.
Connectivity devices are included in the scope of managed M2M services, but devices with a general user interface,
such as smartphones and tablets, are not included.
Service management includes the systems and services to track and manage network contracts, network usage
patterns, related assets and service elements. Service management may also audit and log network service
performance and availability, as well as assign qualitative and quantitative ratings to CSPs relating to negotiated
SLAs. Service management also offers the ability to audit and optimize spending on connectivity services based on
ongoing inspection of contracts, standing inventories and usage/consumption details. Additionally, service
management may allow billing and usage management based on the type of service as defined by URLs, Internet
Protocol (IP) addresses, device types (International Mobile Equipment Identity [IMEI]), access types (3G and Long
Term Evolution [LTE]), time of day/day of week (TOD/DOW), and location. The systems and services usually support
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rule-based business process automation, such as actions relating to excessive usage, usage nearing a prescribed
threshold, SIM activations or related geolocation faults.
Device and system management includes the systems and services that make connectivity devices and managed
asset information visible; applies health diagnostics to measure device performance; manages connection options
(for example, cellular, hot spot and Wi-Fi); and establishes process control for consistent change and release
management (related to OSs and support systems). This discipline also includes service desk capabilities to address
technical requests (Levels 1, 2 and 3). Some systems and services support the aggregation of rule-based and
cognitive event processing from managed asset platforms. This includes possible business process automation
relating to service impacting incidents.
Application management includes the systems and services to enable custom and proprietary M2M application
publication and distribution across diverse middleware, devices, OSs and protocols. This service offering often
includes release and change management, incident management and problem management of M2M enablement
platforms. Application development relating to the collection and analysis of M2M connected data is in the scope of
this Magic Quadrant; however, the development of front-end applications relating to B2B or business-to-consumer
(B2C) or B2B-to-consumer (B2B2C) functions is not in the scope of this Magic Quadrant.
Security management includes the systems and services to administer and enforce policies relating to the
transmission of data and consumption of business services linked to connected assets. Requests for release and
change management related to security management are generally controlled by the provider, unless the user
requests administrator rights. The systems and services allow authorized providers and customer administrators to
establish and enforce the privacy policy for their devices, machines and assets. Included in the scope of this service
level is private Access Point Name (APN) and managed VPN services.
Reporting and analytics presentment includes the systems and services to enable data presentment, business
intelligence reporting and analytics resulting from monitoring systems and the underlying complex-event processing.
Basic reporting would provide visibility into alarms by asset group, auditing reports, alarm frequency reports, and
device event and status reports. Dashboards and data visualization offer an ability to analyze trends on performance,
service-level agreements (SLAs), compliance and operational metrics. More advanced reporting and analytics would
offer actionable intelligence relating to asset utilization, contextualized data from customer engagement, more
efficient system architectures, improvements to products, and rationale for monetization of connected solutions.
Program management and financial management include the ability to act as an agent on behalf of a customer
with third-party providers, such as third-party network operators, M2M application independent software vendors
(ISVs), M2M device OEMs, and potential alliance partners and device resellers. This category regards ongoing and
project-based services (for example, service outages, network performance and coverage issues; warranty
management; and device upgrade management). Financial management relates to audits, payments, disputes and
allocation of expenses. Included with this service offering may be service contract novation (to become customer of
record), along with the assumption of ownership of devices and customer-owned service, and device management
software. Solution financing is also considered within program and financial management.
Provider Models
M2M services are, in general, provided by three types of providers: M2M service providers, CSPs and M2M service
aggregators.
All the providers extend solutions as a monthly recurring charge (MRC) per-cellular connection unless otherwise
noted. Most providers include service management capabilities in the per-connection MRC. Ultimately, MRCs
extended to users can also bundle in, and amortize, connectivity devices, gateways and device management, along
with M2M application development software. More advanced solutions may also bundle value-added M2M
applications, such as content distribution, smart city, geolocation and fleet management software in the MRC.
M2M Service Providers
These providers are MVNOs and companies associated with an operator that can piggyback on that operator's
roaming agreements. Providers in this Magic Quadrant that fall within this provider type include Aeris, Arkessa,
Eseye, Kore Telematics, RacoWireless and Wyless.
Communications Service Providers
Some CSPs, such as Orange in Europe and AT&T in North America, have quietly supplied M2M services for several
years. However, CSPs are now marketing M2M services more vigorously, and those without a strong M2M presence
so far are treating it more seriously by increasing their marketing or creating dedicated M2M service divisions.
Providers in this Magic Quadrant that fall within this provider type include AT&T, Deutsche Telekom, KPN, Orange,
Telefonica, Verizon and Vodafone.
M2M Service Aggregators
These providers encompass traditional outsourcers (for example, HP, IBM or Accenture), application service providers
(for example, Tracker, IPS Group or CallPass Tech), and system integrators that bundle connectivity into system
resale and integration (for example, Integron, Avic or Open Terra). Often, deep vertical market acumen is the true
point of differentiation in these providers' offerings to the market. Although Gartner expects this market to show
explosive growth during the next three to five years, no vendors within this provider type qualified for this Magic
Quadrant based on the inclusion criteria.
Magic Quadrant
Figure 1. Magic Quadrant for Managed Machine-to-Machine Services
Source: Gartner (October 2014)
Vendor Strengths and Cautions
Aeris
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Aeris is an M2M service provider. Aeris was founded in 1992 and is based in the U.S., with an office presence in the
U.K. Aeris has its own purpose-built core mobile network, M2M connectivity, application enablement and data
platforms. The company is also striving to increase value through applications and analytics. System integration,
application development and support are provided through partners. Aeris goes to market with a direct sales force
(based mostly in North America) and resellers, as well as with a self-serve portal. Successes in connected M2M
solutions are mainly in the automotive and fleet management sectors. Gartner estimates that Aeris managed about
2.0 million cellular M2M connections as of the end of 2013, with approximately 85% of those connections located in
North America.
Strengths
Feedback from multiple Aeris customers cites strong cost competitiveness for managed M2M services relating to
value (that is, price to value in relation to performance and SLAs). Many customers also cite strong postsales account
management.
Aeris' customers cite good customer satisfaction due to its consulting and IT services support and its understanding
of customers' business challenges. Aeris interacts and works closely with its customers to further enhance business
value.
Aeris invests a high proportion of its revenue in research and development (R&D), demonstrating its commitment to
technology leadership. Aeris has developed and maintains a complete M2M core network, including a custom home
location register (HLR), Home Subscriber Server (HSS), Policy and Charging Rules Function (PCRF), billing system,
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and other components. This complete M2M core network is the primary difference relative to MVNOs, which leverage
the consumer network core and build a provisioning layer/portal on top of it.
Cautions
Although Aeris is able to support global M2M connected solutions, it is currently focused primarily on North America.
Some customers indicate that the company's current operations make it difficult to continue expansion of their
managed M2M solution, should they decide to expand globally.
The majority of Aeris' M2M connections are on 2G technology — it will therefore have to address challenges around
migration plans and retaining its customer base, because CSPs' 2G cellular networks will eventually be shut down.
Aeris' sales and support processes are currently geared more toward large accounts. It is in the process of adopting
these processes for the small or midsize business (SMB) segment.
Arkessa
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Arkessa is a U.K.-based M2M service provider, with approximately 90% of its revenue coming from related solutions.
It aims to make M2M communications and data management easy for clients, based on its management platforms
and a staff dedicated to orchestrating CSP relationships and connectivity offerings. Arkessa is largely industryvertical-agnostic in its approach to the market, but it generates most of its revenue from energy and utilities —
particularly, smart metering solutions. Its route to market is with leading global system integration partners. Arkessa
has approximately 200 M2M enterprise customers. Gartner estimates that Arkessa currently manages approximately
0.5 million cellular M2M connections and devices. About 75% of the installed base is on 2G, and approximately 25%
of the installed base is on 3G.
Strengths
Arkessa's network operator- and technology-agnostic platform is attractive to system integrators (SIs), and the
company has invested in partnerships with three SIs: CGI, Capgemini and Hitachi Consulting.
Arkessa has more than 10 years of experience in serving SMBs with M2M connectivity assurance and tariff
optimization, as well as presale services, such as device optimization, and protocol and network design. SMBs often
cannot afford the required full-time equivalents (FTEs) and will often not qualify for preferential packages from large
CSPs.
Arkessa more than doubled the number of connections it manages from 2012 to 2013, and it doubled its head count
during the same period.
Cautions
The market for connectivity alone is experiencing severe pricing pressure, and solutions must move toward offering
"business" value beyond just efficiency for end users. While this situation impacts the base of Arkessa's offering
(M2M Connectivity as a Service), this is an industry challenge, but it is particularly pertinent to Arkessa, given that it
is a small company reliant on M2M connectivity revenue for its existence.
A significant part of Arkessa's market differentiation has been built on its ability to offer both CSP-agnostic solutions
for connectivity and CSP tariff management. Both of these are now being challenged. CSPs are increasingly seeing
M2M as more than connectivity and are building a more competitive portfolio that will compete with Arkessa. CSPs
are also becoming more flexible in their M2M connectivity pricing.
Arkessa's offering is about managing connectivity and data for business efficiency. Its offerings do not extend to the
"revenue generation" side of business models, and it does not have application and application developer visibility,
which will need to come (for example) from its system integration partners.
AT&T
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AT&T is a CSP based in the U.S. The company's M2M business focuses on broad connected solutions, which are
generally predicated on cellular connectivity that leverages AT&T's various service delivery platforms (SDPs) and IT
services. The company goes to market with a balanced direct and indirect channel model with partner MVNOs and
some SIs. AT&T's success in M2M connected solutions has been in the automotive, energy and utility sectors. Gartner
estimates that AT&T currently manages more than 17 million cellular M2M connections and devices, with nearly 5%
of those devices residing outside of North America. The majority of those connections leverage 2G connectivity.
AT&T's areas of major focus for value-added IT services are consulting, device engineering and application
integration.
Strengths
AT&T invests in all layers of M2M solutions, including noncellular connectivity management; global connectivity
enhancement; its next-generation SDP; and cloud-based application development and enablement, including
security, data management and device management. These investments in infrastructure lower customer barriers to
build, deploy and manage applications in the cloud, and they present AT&T as a single point of expertise and value.
AT&T is increasingly focused on value-added application solutions, such as its Cargo View and heavy-equipment asset
tracking. The company has improved its breadth of experience by working in multiple vertical industries, and it has
hired specialists from those industries to accelerate solution development, suggesting AT&T will continue to commit
to sector-specific value and innovation.
AT&T has grown its professional services capabilities with the company's own head count and through targeted
partnering with solution integrators. These augmented capabilities, along with the Mobility Solutions Services team,
allow the vendor to present a credible source of value-added IT services that spans horizontal technologies and
sector issues.
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Cautions
While AT&T's M2M business growth is strong, with double-digit annual growth, its growth is slower than its large
global CSP competitors.
AT&T's installed base has been historically focused on the lower-cost 2G connectivity and related devices. Since AT&T
is scheduled to shut down its 2G network in 2017, it will need to carefully manage the migration of its installed base
from 2G to newer technology so it does not impact contract renewal and cause instability in its installed base.
Although AT&T has proved that it can manage global deployments of M2M connected solutions, its installed base is
less geographically diverse than its major global CSP competitors, when compared on a country basis. With the
launch of a GSM Association (GSMA)-compliant Global SIM, AT&T is positioned to grow its installed base of global
connectivity.
Deutsche Telekom
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Deutsche Telekom is a CSP based in Germany. It has a strategic approach, extending from access products to more
horizontal functional solutions and also end-to-end solutions, with T-Systems as a key internal driver for IT and
integration services. Gartner estimates that Deutsche Telekom, a large provider in the segment, has more than 9
million M2M connections and serves three geographic regions. Deutsche Telekom also has a broad vertical focus,
including health, automotive and logistics, industrial automation, energy, and the public sector, with a portfolio of
available solutions in all areas. The go-to-market approach is direct to both the larger and the SMB segments — in
addition to an indirect sales channel.
Strengths
Deutsche Telekom spends one of the highest portions (in this peer group) of its M2M revenue on R&D related to this
segment, with a structured innovation approach that includes both internal and external ventures — including a large
developer community.
Deutsche Telekom is the provider with the largest percentage of connected devices outside of its home territory, and
it has a well-balanced distribution in Europe and North America.
Deutsche Telekom's solutions are supported in the most languages by far — more than 30 — which helps support
local users in a global environment and paves the way for inroads into markets where it currently has a relatively low
presence.
Cautions
Most of Deutsche Telekom's M2M connections are currently on 2G technology. Given the fact that the CSPs' 2G
cellular networks will eventually be shut down, Deutsche Telekom will have to address challenges around supporting
existing customers (who initially decided to go with 2G technology) migrating to its 3G and 4G networks.
T-Mobile USA has long been for sale, but this has yet to be realized. However, such a sale could negatively impact
the possibilities for North American capability and delivery.
Although Deutsche Telekom is augmenting its relatively small direct sales force with channel/internal partners, such
as T-Systems, we would not expect it to aggressively pursue a deal with you unless you are an organization with
European headquarters.
Eseye
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Eseye, based in the U.K., and founded in 2007, is an M2M service provider delivering solutions through its cellular
connectivity agreements with CSPs. It has its own M2M management platform and hardware division (through the
acquisition of its hardware partner, Dataflex Design Communications, in 2012). Eseye has a small sales force and is
therefore reliant on channel partners elsewhere. Eseye specializes in the energy and utility, retail, finance, smart city
and vending sectors — where solutions have low bandwidth, fixed deployment (little or no return to deployment
sites) and multiregional footprint characteristics. End-to-end connected solutions are achieved through its partners.
Gartner estimates that Eseye has more than 400,000 M2M connections (mostly on 2G technology), most of which are
in Europe and Africa.
Strengths
Eseye has strong technical expertise at the device level. Eseye engages clients in project-specific device engineering,
and the company has strong product development and device management capabilities.
There is good feedback from customers on the quality and coverage of cellular connectivity provided. Eseye is able to
perform "network steering" for optimal device connectivity performance, because it has a choice of CSP partners for
cellular connectivity in a given market.
Eseye invests a high percentage of its revenue in R&D (management portal, hardware development and new
services).
Cautions
Due to Eseye's strategic focus on a limited number of industry verticals, it does not have the same depth of expertise
in other vertical segments.
Eseye's data center presence (in EMEA and North America) is currently limited compared with its competitors.
Users' experience related to account management, the customer portal (reporting and visualization), and device
activation is mixed. When working with Eseye, special attention must be focused on these service components in the
sourcing process.
Kore Telematics
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Kore Telematics is an M2M service provider based in the U.S., and it provides managed cellular satellite and fixednetwork services across many geographies. The company's primary business is as an MVNO, and it also has provided
mobile virtual network enabler (MVNE) services in certain markets. The company goes to market directly for
multinational companies and also partners with many CSPs and SIs. Kore successfully services multiple vertical
markets, including automotive, healthcare, energy and utilities, insurance, transportation, and retail. Gartner
estimates that Kore actively manages about 2 million cellular M2M connections and devices through its platform
services, with more than 15% of those devices residing outside of the U.S. The majority of those connections are 2G,
although we estimate that Kore's 3G/LTE connections will grow more than 300% during 2014. Kore's major areas of
focus for value-added IT services are technology consulting, device engineering and M2M application integration.
Strengths
Kore positions itself as being "beyond connectivity," providing end-to-end managed network services over multiple
technologies on a global footprint. Kore's solution encompasses the multiple point services required in an end-to-end
M2M solution — such as hosting, applications enabling toolkits and advanced service quality tools — as one
integrated service solution for customers.
Kore invests significantly in three areas related to platform intellectual property: carrier integration, platform
development, and network architecture and data center operations.
Kore has made significant investments in its M2M business operations and scale. In addition to investing 10% of
revenue in R&D, Kore has expanded its business during the past five years through three acquisitions: Mach
Communications, an M2M MVNO in Australia; the technology, customers and relationship assets of nPhase, the joint
venture between Verizon Wireless and Qualcomm; and Jazz Wireless, a U.S.-based MVNO.
Cautions
Kore's managed M2M service business grew connections and revenue more slowly than its MVNO competitors. Kore's
slower growth creates some low-level concerns regarding the medium-term to long-term viability of its managed
M2M service activities.
Although Kore has proved that it can manage global deployments of M2M connected solutions across five regions, its
installed base is not as geographically diverse as some of its major MVNO competitors.
Based on direct customer conversations, Kore's pricing is generally higher than many of its MVNO competitors.
KPN
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KPN is a CSP based in the Netherlands. Building on M2M connectivity and related assets, its mission statement is
"aiming to improve quality of life." It targets industries that have a large impact on the quality of life: transport and
logistics, healthcare, utility, retail, and government (smart cities, public transport and critical communications). The
utility vertical is responsible for more than half of KPN's current M2M business. KPN currently manages 1.25 million
cellular M2M connections and devices, with the vast majority of this installed base in the Netherlands and the rest
mainly in Belgium, the U.K., France and Germany. Approximately 75% of these connections are 2G, and 25% are
3G-enabled.
Strengths
KPN aims to provide connectivity, as well as consulting and integration to existing assets, in the context of bringing
together partners and industry participants for smart cities, smart harbors and smart supply chains (or what it calls
"smart systems"). What sets KPN apart is that it is extremely well-integrated into Dutch society, and the Netherlands
is a small, technologically advanced nation that needs to work hard and fast on improving competitiveness for key
industries. KPN has developed early use cases for smart systems, and it has an estimated 20% of its M2M revenue
coming from nonconnectivity sources, versus the significantly lower 5% to 10% from most providers in this study.
More than 50% of KPN's M2M business is in the utility vertical. What is especially noteworthy is that the company's
utility business has built an independent big data platform for all three energy networks in the Netherlands. The
platform is aimed at creating business cases for utility app providers and helping them to understand their business
better.
Cautions
KPN is Netherlands-centric. Expanding its innovative solutions internationally will require go-to-market partnering
with large industry players that have their own agendas and many other suitors. In addition, KPN's Netherlands
industry and society relationships are not easily repeatable abroad.
KPN's solution relies heavily on partners such as Jasper and M2M World Alliance that have many other larger
partners. KPN also has relatively little influence on this larger solution ecosystem.
KPN has limited application developer community activity and is still building a formal platform. In addition, the
relatively small size of its M2M installed base limits its attractiveness to international developers.
Orange
Orange Business Services is the enterprise unit of French CSP Orange. The company's M2M business focuses on endto-end M2M service implementations and IoT solutions built on M2M communications services. The company's
primary route to market is direct and extends indirectly through partnerships with MVNOs, hardware providers and
software providers, as well as SIs. Gartner estimates that Orange actively manages 4.5 million cellular M2M
connections and devices, with nearly 5% of those devices residing outside of Europe. The majority of those
connections are 2G. Orange's major focus for value-added IT services are technology and business process
consulting, device engineering, and application development and integration.
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Strengths
Orange's continued investments in technological innovation and research are driven by both Orange Applications for
Business (OAB) and Orange Mobile Enterprise, with the close support of Orange Labs and Technocentre. Three
technological assets developed include its Fleet Performance platform for the fleet management market; the Orange
M2M framework, called "Intelligent Apps Enabler," which integrates all required M2M service layers to sustain all
specific business applications dedicated to customer needs; and Orange's Traceability-as-a-Service for RFID
applications, to facilitate integration and deployment.
In addition to investments in organic intellectual property related to managed M2M services, Orange has also made
key investments and acquisitions. Orange acquired Data Mobiles International, and this acquisition was the platform
for creating OAB. Orange also created a joint venture with Veolia Water to create m2ocity, a company specializing in
remote water meter reading.
Orange offers the market one of the most established and advanced professional services organizations dedicated to
managed M2M services. Orange's legacy outsourcing business that spans network, data center and applications has
shown strong capabilities to manage IoT-connected solutions that go beyond managed M2M services.
Cautions
Of the global CSPs in this Magic Quadrant, Orange's installed base of managed M2M services is the smallest. Yearover-year growth projections also lag behind its competitors, and the installed based is Europe-centric, with modest
connectivity in the rest of the world. Orange has yet to demonstrate that it can handle large, globally distributed
opportunities.
Conversations with several Orange customers identify an organization that can be difficult to work with at several
levels of a managed M2M service engagement. The primary area is navigating the sourcing and acquisition process,
as well as navigating multiple Orange Business Services units to create nonstandard solutions.
RacoWireless
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RacoWireless is an M2M service provider based in the U.S. It has no office presence outside of North America, but it
has a route to market through partnering with Tier 1 CSPs in all regions except for Asia/Pacific. As of early 2014,
RacoWireless also has a partnership with satellite provider Inmarsat. The company's portfolio centers on two
offerings: the management suite (delivered as platform as a service [PaaS]), and its location-based service offering
(its own platform delivered as SaaS). RacoWireless focuses on a broad set of vertical segments, albeit with,
seemingly, a current emphasis on automotive and location-related services.
Strengths
RacoWireless has a dedicated M2M network and recently launched an associated Application Marketplace (an M2M
application store). The recent introduction of a RacoWireless application development platform is focused on
simplified M2M application development and the removal of development hindrances associated with standardization
in the M2M industry.
RacoWireless has a pragmatic approach to commercial terms, and it offers both flexible and guaranteed pricing
structures.
RacoWireless articulates a good understanding of market requirements and vision related to its IoT enabling services.
Cautions
RacoWireless currently has presence in only two of the five geographies covered in this Magic Quadrant. Global
requirements are addressed through partners.
RacoWireless is heavily reliant on the CSP channel, and with a relatively small direct sales force, this reliance may
affect its focus on delivering services directly to enterprises.
Telefonica
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Telefonica is a global CSP based in Spain. Its M2M business leverages its strong direct presence in Europe and Latin
America, together with its leadership role in the M2M World Alliance. Telefonica employs the Jasper M2M connectivity
platform, as well as its own in-house platform, depending on client requirements. The company goes to market
through a combination of direct and indirect sales channels. End-to-end service capabilities are delivered through
ecosystem partners, including SIs, solution providers and device manufacturers. There have been prominent
deployments in M2M connected solutions in the energy and utilities, automotive, and transportation sectors. Gartner
estimates that Telefonica currently manages more than 10 million cellular M2M connections (close to half were
already on 3G technology as of the end of 2013), with the majority in Europe and Latin America.
Strengths
Telefonica has the largest sales and operations head count dedicated to M2M services, and it has established strong
delivery capabilities in Europe and Latin America.
Telefonica's vertically aligned commercial team for marketing and sales activities enables it to have a good
understanding of a broad range of industry verticals and their associated business challenges.
Global market awareness of Telefonica's M2M capabilities is high (due to its strong multichannel marketing), and its
conversion rates for sales leads are higher than those of its competitors.
Cautions
Telefonica has little direct presence outside Europe and Latin America. While it can leverage the M2M World Alliance
elsewhere, global execution through this alliance (with standardized and consistent service-level quality and user
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experience across multiple partners and regions) is still unproved, because there are as yet no truly large global M2M
deployments.
With the rapid growth of Telefonica's partner ecosystem and channel partners, maintaining a consistent customer
experience can be a challenge in the short term. Telefonica's deployment of global and local business units for M2M,
while good for local responsiveness, can lead to business prioritization challenges centrally if there is no clear
governance.
Customer satisfaction is generally good, but there is room for further improvement. Customer feedback on the
quality of cellular network connectivity varies.
Verizon
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Verizon is a CSP based in the U.S. The majority of its M2M business is based on cellular connectivity, but the
company is also now "aggressively" targeting other network modalities. Its route to market is mainly directly in the
U.S. and through partners internationally. The company's focus is to be a hub for ecosystem innovation, in which
Verizon's connectivity management, data center and security offerings (as well as the network in the U.S.) are
combined with developer platforms and ecosystems. Gartner estimates that Verizon currently manages
approximately 15 million cellular M2M connections and devices, with about 5% of those devices residing outside of
North America.
Strengths
Verizon is making significant investments to grow its M2M capabilities organically and inorganically. Besides the
supporting U.S. network and global cloud assets, it is investing in module makers to help drive down cost. It acquired
the nPhase management platform and Hughes Telematics to provide end-to-end solutions, and it is aiming to grow
M2M-related support personnel almost thirtyfold during the next year. The goal of its investments is to enable endto-end M2M solutions that can reduce customer complexity — with end-to-end SLAs, pricing and support from
Verizon.
Rather than focus on certain verticals, Verizon is taking a platform approach to M2M. This approach aims to build
repeatable and exposable assets from the Verizon cloud, security and management portal that Verizon's partners can
then "verticalize."
Verizon has engaged with, and listened to, the requirements of mayors, CIOs and city planners, and it is taking a
sensible step-by-step approach that enables cities to start with smaller business cases. It is working on building
repeatable solutions that combine M2M, cloud and security assets for cities with a dedicated organization.
Additionally, Verizon enables federal, state and local, and municipal organizations to acquire managed M2M solutions
through flexible financing options. Financing is often an impediment to solution adoption across the private and public
sector. Verizon's financing options remove the impediments to acquisition.
Cautions
Verizon is still U.S.-centric regarding its M2M capabilities, thinking and case studies, apart from underlying data
center assets and some success in the automotive and oil industries. International presence with Verizon, therefore,
is likely to include other large CSPs, with Verizon coordinating these activities under a single contact. Delivering the
company's end-to-end vision internationally could be more complicated than in the U.S.
Conversations with some Verizon customers find that the managed M2M service delivery and support processes, as
well as methodologies, are still immature and require review and optimization.
Vodafone
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Vodafone is a global CSP supplying cellular and fixed-network services across many geographies. The company's
M2M portfolio is structured as a stand-alone profit-and-loss center and operates as an independent business unit. The
company goes to market directly to multinational companies. Vodafone successfully services multiple vertical
markets, including automotive, energy and utilities, insurance, public sector, transportation, and retail. Gartner
estimates that Vodafone actively manages 20 million cellular M2M connections and devices, with nearly 30% of those
devices residing outside of Europe. The majority of those connections are 2G, although Gartner estimates that
3G/LTE connections will grow by 80% in 2014. Vodafone's major areas of focus for value-added IT services are
technology consulting, device engineering and high-value program management of third-party access services.
Strengths
Vodafone leads the market in terms of investment in its M2M business. Vodafone's managed global M2M connectivity,
global SIM management, is based on its own M2M service delivery platform (Vodafone Global Data Service Platform
[GDSP]). The company has acquired Zelitron and recently acquired Cobra Automotive Telematics to solidify its
capabilities in the automotive sector and extend those capabilities into other industry sectors. It bought Device
Insight, an M2M application provider, and it owns a majority stake in XLink Communications, a provider of M2M
hardware and services. Such investments provide access to technology and experienced resources, creating a
dedicated and capable organization to manage global M2M services.
Vodafone has proved it can deliver value and innovation in managed M2M service engagements through its organic
professional services resources. It is also successful in leveraging partnerships with specialist companies serving
vertical markets to provide solutions that meet both the technology and business process needs of target markets.
Among all the Magic Quadrant participants, Vodafone manages the largest pool of M2M connections, with a diverse
geographic distribution. It also uniquely markets its ability to manage competitor network contracts on behalf of the
client. This MVNO-like characteristic appeals to large multinational companies that are just creating their M2M and
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IoT strategies and wish to mitigate the risks of dealing with much smaller (in terms of revenue and resources)
MVNOs.
Cautions
Although Vodafone has made significant investments in its service management platform, the company does little in
terms of extending deeper and broader value through additional hosted and cloud-based applications. The market is
increasingly expecting hosted device and application management services from its CSP and MVNO relationships, and
Vodafone may lose some of its large global customer base without continued investment and innovation in adjacent
software value.
Gartner is fielding increasing numbers of client calls from Vodafone partners and user customers related to concerns
around incident management and the time required to respond to technical issues and crises. Based on our
conversations with customers and partners, emerging market countries, including China, are the areas of most
concerns with technical and account support.
Wyless
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Wyless is an M2M service provider based in the U.S., and it provides managed cellular and fixed-network services
across many geographies. The company's primary business is as an MVNO, and its secondary business is as an
MVNE. The company goes to market directly to multinational companies, and it also partners with many CSPs and
SIs. Wyless serves multiple customers in vertical markets, including automotive, energy and utilities, insurance,
transportation, and retail. Gartner estimates that Wyless actively manages more than 1.5 million cellular M2M
connections and devices, with nearly 25% of those devices residing outside of the U.S. The majority of those
connections are 2G. The company's major areas of focus for value-added IT services are technology consulting,
device engineering and M2M application integration.
Strengths
Wyless is one of only three providers in this Magic Quadrant with a presence in all five geographies. It also has a
broad geographical distribution of operational, professional services and product development employees.
Additionally, Wyless offers engineering support in four regions to deliver, for example, design reviews and
certification assistance.
Wyless is known for its strong focus on customer experience, with quality and operational performance metrics (such
as order to ship, turnaround and response times) covered by SLAs.
Wyless is considered the most cost-effective MVNO in the market — from simple connectivity to solutions focused on
end-to-end functionality.
Cautions
Gartner considers Wyless to be less competitive in Asia/Pacific and the Middle East and Africa, from an operational
resource and sales and marketing perspective.
Wyless is focused on horizontal technologies and connectivity, and its vertical expertise is less broad and less deep
than many of its competitors, limiting the potential benefits of sector experience.
Vendors Added and Dropped
We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of
these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor's
appearance in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we
have changed our opinion of that vendor. It may be a reflection of a change in the market and, therefore, changed
evaluation criteria, or of a change of focus by that vendor.
Added
This is the first version of this Magic Quadrant, so all vendors are new.
Dropped
This is the first version of this Magic Quadrant, so no vendors have been dropped.
Inclusion and Exclusion Criteria
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Providers must meet all of the following criteria:
Providers must have at least 300,000 connected devices under management.
Providers must solicit and deliver panregional or global services. Panregional services require delivery of services to
at least two geographies (for example, Asia/Pacific and Japan, Central and Latin America, Eastern Europe, the Middle
East and Africa, North America and Western Europe).
Providers must recognize at least $10 million in managed M2M related revenue. Revenue may include bundled
connectivity, IT and IT services for M2M solutions.
Providers must offer an integrated M2M PaaS to its customers. The capabilities of the PaaS may include service
management and device management, as well as application development and management.
Providers must offer, directly or through partnerships, end-to-end solutions, including professional and support
services (inclusive of reverse logistics) as a component of their managed M2M solution (for example, device
engineering, consulting and advisory services, service contract management, device warranty management, device
disposal, depot repair, kitting, help desk, and service desk).
Providers must extend to enterprises a portal and related service catalog for devices and modules pretested and
certified to function across diverse operator networks.
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Providers must deliver against multiple use cases per vertical market served.
Providers must complete a Gartner survey relating to capabilities and go-to-market approaches.
Evaluation Criteria
Ability to Execute
Gartner evaluates service providers on the basis of the quality and efficacy of the processes, systems, methods and
procedures that enable their performance to be competitive and that benefit their revenue, retention and reputation.
We judge providers on their ability to capitalize on their vision, their success in doing so, and their European foothold
in terms of resources, coverage, seamless delivery within different countries, and ability to meet clients'
requirements.
Ability to Execute is judged by seven main criteria. Each criterion is described below, and its respective weighting is
shown in Table 1.
Product or Service
For this criterion, we review and evaluate each provider's network and IT services delivery capabilities and the
related portfolio offered. We scrutinize service capabilities from the perspective of companies with global
requirements: service definitions that meet predominant use cases, diverse connectivity offerings, effective
resourcing capabilities (organically and partnered), and account management.
Overall Viability
This criterion includes a best-effort assessment of the overall financial health of the provider's organization, the
success of its M2M communications service business, and the likelihood that the M2M communications service
business unit (if distinct and separate) will continue investing to support innovation and delivery of the organization's
portfolio of services.
Focused consideration within this analysis included the organization of the relevant business units, the rate of
investment and innovation, and multiyear revenue growth rates. Additionally, Gartner worked to understand
divergent, and possibly dilutive, strategies within many MVNOs, which are pursuing parallel strategies to become
enabling software providers for competing CSPs and mobile network operators.
Sales Execution/Pricing
For this criterion, we assess each provider's capabilities in presales activities and the organization that supports
them. We consider teams in charge of deal management, street pricing (based on a Magic Quadrant survey and user
feedback), and clarity of scope.
Focused consideration within this analysis included users' perception of affordability, the sales organization to sell
value and future-proofed solutions predicated on diverse connectivity beyond 2G.
Market Responsiveness/Record
For this criterion, we assess each provider's ability to respond, change direction, be flexible and achieve competitive
success as opportunities develop, competitors act, customers' needs evolve and the market dynamics change.
Focused consideration within this analysis included users' feedback on the provider's flexibility, continuous
improvement and innovation.
Marketing Execution
For this criterion, we assess the clarity, quality, creativity and efficacy of programs designed to deliver an
organization's message to influence the market, promote its brand and business, increase awareness of its services,
and establish a positive association in the minds of buyers between the company and its services and brands.
Focused consideration within this analysis included users' feedback on the provider's reinforcement of value to its
users and Gartner analysts' perceptions of the provider's marketing execution.
Customer Experience
For this category, we evaluate reference customers' overall satisfaction with the services and the provider
relationship, taking into account additional Gartner-client interactions (for example, customer inquiries and one-onone conversations at events). We obtained access to reference customers by asking each provider to identify five
reference customers for its managed M2M communications services. We required their selection of reference
customers to observe the geographic distribution needed to participate in the study and the different industries
addressed.
In particular, we consider the important elements of a successful M2M communications service customer experience.
These include overall client satisfaction, value-added management platforms and services, and continuous
improvement processes in place — both centrally and within the account management team.
Operations
For this category, we assess each provider's ability to meet its goals and commitments, including contractual service
delivery obligations to clients. Factors include the quality of the organizational structure, skills, experiences,
programs, systems and other vehicles that enable the service provider to operate effectively and efficiently on an
ongoing basis.
We speak to the service providers about their main procedures (operational, transitional and relating to program
management, relationship management and change management) and ask their reference customers for feedback
about those procedures. We also ask the providers to supply information about the platforms and services they
provide, the networks they manage, and their partnered access capabilities and resources.
Focused consideration within this analysis included investments in resources and the efficiency of the delivery
organization.
Evaluation Criteria
Weighting
Product or Service
High
Overall Viability
Medium
Sales Execution/Pricing
High
Market Responsiveness/Record
Medium
Marketing Execution
Low
Customer Experience
High
Operations
High
Table 1. Ability to Execute Evaluation Criteria
Source: Gartner (October 2014)
Completeness of Vision
Gartner evaluates service providers on their ability to articulate logical statements convincingly about the market's
current and future direction, innovations, customer needs and competitive forces, and on how well these correspond
to Gartner's position. Ultimately, we rate providers on their understanding of how they can exploit market forces to
create opportunities for their organizations.
Completeness of Vision is judged using eight main criteria. Each criterion is described below, and its respective
weighting is shown in Table 2.
Market Understanding
For this criterion, we assess each provider's global view of the managed M2M communications service market. We
evaluate how each provider is working to serve the main requirements of multinational companies. We also look at
the main effect that new connectivity requirements, delivery platforms and protocol support requirements are likely
to have on each provider's business and offerings in the short term and medium term.
Focused consideration within this analysis included a review of existing and planned value-added services, ranging
from service management, device management, application development and management to data management and
analytics.
Marketing Strategy
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For this criterion, we assess each provider's main marketing messages relating to managed M2M communications
services.
In particular, we consider:
Current and future value propositions for managed M2M communication services
The importance of M2M communications services within the providers' broader portfolio of business and capabilities
Channels for internal and external communications
The differentiation of a provider's message from its competitors' messages
Sales Strategy
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For this category, we require each provider to illustrate its overall sales strategy for M2M, its reactive answers to
RFPs as compared with its proactive activities, its stand-alone offerings as compared with offerings bundled with
other services, and its dedicated sales force as compared with its general sales force.
In particular, we consider:
The number of dedicated M2M sales personnel globally
Countries covered by direct local teams, as opposed to centralized teams
Client retention rate
Offering (Product) Strategy
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For this criterion, we require each provider to specify the most important aspects of the service offering that
differentiates it in the market and delivers value to its clients.
In particular, we consider each provider's:
Ability to both integrate client requirements and support global business process flows
Ability to extend value-added IT services to support its clients' global connected solutions
Approach to combining standard service elements into customized service delivery, including partnered capabilities,
to provide flexible, low-cost and cloud-enabled service offerings
Business Model
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For this criterion, we asked each provider for both a high-level description of its business model for M2M services and
an explanation in terms of how this fits within its overall business model. To evaluate how well each provider's
business model addresses account management, we asked for information about:
The structure of the management teams used to support and manage customers
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Processes to address customer issues locally, as compared with centrally, including customers' access both to an
appropriate level of management within the service provider and to escalation procedures
We asked each provider's reference customers for their judgment about their provider's business model, including
account management and service delivery, and we factored their answers into our evaluation.
Vertical/Industry Strategy
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For this criterion, we assess each provider's strategy to direct resources, skills and offerings to meet the specific
needs of individual market sectors.
In particular, we consider each service provider's:
Penetration of different industries for managed M2M communications services
Past performance evidence relating to the breadth and depth of sector-specific uses cases based on managed M2M
communications services
Innovation
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For this criterion, we evaluate each provider's position in the market as a thought leader and an innovator. We also
evaluate how each provider establishes leadership, including the investment activities to achieve its vision, and how
the providers develop innovative strategies in the M2M market.
In particular, we asked providers to answer the following questions:
What investments is your company making to sustain and enhance its vision for innovative M2M services?
What global alliances do you have with other leading suppliers, and what investments support these alliances?
We also asked reference customers for their judgment of their provider's ability to innovate (including the technical
aspects of innovation), ability to lower costs and to improve service by delivering innovative utility-based services,
and degrees of responsiveness and proactivity, adaptability, and service flexibility.
Geographic Strategy
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For this criterion, we examine each vendor's regional and global capabilities, as well as local alliances and
partnerships, including:
Relationships with product and service providers to add value, provide full-service solutions or bring innovation closer
to clients
How each provider takes responsibility for managing the service delivered, even when using subcontractors or
partners
We also asked reference customers for their feedback about local capabilities and the current or potential effects of
consolidation and global delivery processes.
Evaluation Criteria
Weighting
Market Understanding
Medium
Marketing Strategy
Medium
Sales Strategy
High
Offering (Product) Strategy
High
Business Model
Medium
Vertical/Industry Strategy
High
Innovation
High
Geographic Strategy
High
Table 2. Completeness of Vision Evaluation Criteria
Source: Gartner (October 2014)
Quadrant Descriptions
Leaders
Leaders believe in the promise of the IoT, and they invest in that future. Leaders perform skillfully and often exceed
expectations. Leaders have a clear vision of the market's direction and develop competencies to maintain their
leadership. They shape the market, rather than follow it. This year, the Leaders quadrant includes (in alphabetical
order): AT&T, Deutsche Telekom, Orange, Telefonica, Verizon and Vodafone
Challengers
Challengers execute well today, but they have a view of the market's direction that is not aligned with the biggest
and most demanding customers. They need to be more aggressive in outlining and communicating their strategy for
the future. They must also be more aggressive in how they invest in innovative offerings and adjacent capabilities. In
this Magic Quadrant's first year of publication, there are no providers in the Challengers quadrant.
Visionaries
Visionaries have a clear view of the market's direction, and they have focus on providing services to meet future
market needs. Visionaries need to improve their ability to deliver and to expand to penetrate the global managed
M2M communications service market. This year, the Visionaries quadrant includes: KPN.
Niche Players
Niche Players focus successfully on a particular service, a limited number of regional markets, or both. This narrow
focus may affect their ability to outperform or innovate. This year, the Niche Players quadrant includes (in
alphabetical order): Aeris, Arkessa, Eseye, Kore Telematics, RacoWireless and Wyless.
Context
As enterprises become more familiar and comfortable with the value and capabilities associated with digital business,
IoT and OT, their approaches to deploying these solutions will need to mature. Today, many of these connected
solutions are planned, deployed and maintained within invisible silos within business units, such as marketing or
operations and engineering.
It is time for sourcing and vendor management professionals to insert themselves in the process of solution and
vendor selection. This strategy will ensure the cost-effectiveness and security of these solutions.
This Magic Quadrant assesses the Ability to Execute and Completeness of Vision of 13 managed M2M service
providers. CIOs, infrastructure and operations managers and sourcing managers can use this information and
analysis to help them select provider contracts that support critical functions and business objectives.
Market Overview
Global Trends in Managed M2M Services
Customers That Invest in Managed M2M Services Are Believers
Customers that have invested in M2M connected solutions, which have focused on internal savings and improved
asset control, are satisfied with the results (even if not satisfied with their providers). Gartner has spoken to many of
these companies that will begin to extend their experience to areas of the business beyond cost-takeout scenarios to
both improve customer service and extend into adjacent markets.
Security Can No Longer Be Ignored in the Acquisition of Managed M2M Services
Cost reduction has driven the adoption of M2M services, as companies looked to reduce the cost to service and
control assets. As more companies connect more assets and business processes, security will become the No. 1
consideration in the acquisition process. This scrutiny will cascade into reviews of underlying SDPs, applications and
management platforms. For example, Gartner expects there will be significant investments in the management of
private APNs and VPNs relating to M2M services.
M2M Services Key to Enabling IoT, OT and Digital Business Solutions
Although M2M solutions have existed for more than a decade, the increase in market messaging relating to IoT, OT
and digital business forces companies that are bringing managed M2M services to the market to compete for mind
share. That is not to say that managed M2M services are the functional equivalent of these solutions areas; however,
managed M2M services are often an important component and enabler to IoT, OT and digital business solutions.
Gartner expects that during the next 18 months, more companies will abandon "M2M" as a service category and
instead rebrand and relabel managed M2M services as "managed IoT" solutions.
Regional Drivers for Managed M2M Communications Service Adoption
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Government initiatives in countries such as Singapore, China, South Korea and Japan, where there are multiyear
master plans for national development, are helping to drive forward M2M service adoption. These countries have
close cooperation between government agencies, private enterprises and academia.
In Japan, South Korea and Australia, the existing base of homegrown MNCs and large domestic enterprises is
adopting new technologies, such as M2M, for operational efficiencies and competitiveness. Examples are companies
in the mining, energy, automotive and financial services sectors.
Growing awareness of environmental sustainability and energy conservation, particularly in developed markets, is
driving the adoption of M2M services in the energy and utilities sectors.
Energy, automotive and transportation are the leading M2M verticals in Europe, based on our analysis of M2M
connections from the leading suppliers. These are the early-adopter verticals that have a solid business case for M2M
services. Because of regulatory pressures, these sectors are further ahead in adopting advanced managed M2M
service solutions.
The key European drivers are:
Energy regulations: The European Union (EU) mandates smart metering and estimates that by 2020, 72% of the EU
nations will be served by a smart meter.
Increasing funding for smart cities and smart transportation initiatives: The EU Cohesion Policy states that a
minimum €16 billion, or 5%, of national European Regional Development Fund (ERDF) allocations during the 2014
through 2020 period must be used in sustainable urban development. The EU Horizon 2020 program has earmarked
€6.5 billion for efficient energy and €7.7 billion for smart transportation in the same time frame.
The European eCall initiative from the European Commission requires that new cars from 2015 on must have a
device that automatically connects to an emergency number in a serious accident, as well as sends air bag sensor
and GPS information. In addition, manufacturers are working toward better standardization (for example, through
organizations such as the Car 2 Car Communication Consortium).
In the Americas, as with all markets around the world, the adoption of managed M2M services has been centered on
"things with wheels" and high-value asset-intensive industries. The sectors witnessing the highest levels of adoption
have been manufacturing — particularly automotive — energy and utilities (particularly, meter-reading solutions). As
with Europe's eCall initiative, legislation associated with the U.S. Affordable Care Act (ACA) promises to create
requirements, which will lead to investments in managed M2M services. Furthermore, Brazil has been the beneficiary
of multiple pieces of legislation that have led to improved M2M service adoption, including reduced taxation liability.
In Brazil, Argentina and Mexico, notable growth has been seen in security solutions related to automobiles.
Additionally, the agricultural sectors in the U.S., Argentina and Chile have made investments related to irrigation and
produce tracking.
In the U.S., beyond the automotive, energy and utilities, and retail vending sectors, usage-based insurance best
illustrates the promise of applying M2M technologies and services to a well-defined market. These technologies are
radically changing how a service, such as automotive insurance, is offered and monetized.
Regional Inhibitors for the Adoption of Managed M2M Services
There is still insufficient awareness of the value and benefits of M2M technology among enterprises. More market
education from service providers is needed. Security concerns and the perception of immaturity also can hamper the
adoption of M2M services.
Furthermore, several enterprises still see the M2M market as fragmented, and standards are still evolving. CSPs are
generally not seen as credible providers of end-to-end services (for example, connectivity, application development,
system integration and analytics). Many CSPs still lack expertise in engaging line of business (LOB) buyers of M2M
services (the LOB buyer differs from the purchasing or IT department that acquires connectivity/access services).
Unproven business models and lack of consumer propensity to pay for devices and services (particularly in
developing markets) are further factors constraining growth.
In developing markets (for example, India), the lack of regulatory clarity as to what is permitted creates
hesitancy/reluctance among CSPs to invest in M2M services. In developing markets as well, there is generally a lack
of concerted/coordinated government initiatives to spur the market forward.
Common Observations on Buying Centers and Sponsors of Managed M2M Services
Traditional purchasers of IT and communications (such as CIO and purchasing), but additional stakeholders (such as
the CEO, the CFO, the board of directors, product managers, customer experience managers and supply chain
managers) will likely be involved in the approval of business cases, the specification of requirements and the
selection process. Consequently, the sponsors and buying centers will vary, depending on industry, company size,
and so forth. Therefore, service providers may be challenged to gain access to new buying centers beyond their
existing relationships.
ACRONYM KEY AND GLOSSARY TERMS
ACA
Affordable Care Act
APN
Access Point Name
B2B2C
business-to-business-to-consumer
B2C
business-to-consumer
ERDF
European Regional Development Fund
FTE
full-time equivalent
GSMA
GSM Association
HLR
home location register
HSS
Home Subscriber Server
IMEI
International Mobile Equipment Identity
IoT
Internet of Things
ISV
independent software vendors
LTE
Long Term Evolution
M2M
machine-to-machine
MRC
monthly recurring charge
MVNE
mobile virtual network enabler
MVNO
mobile virtual network operator
OT
operational technology
PCRF
Policy and Charging Rules Function
R&D
research and development
RAN
radio access network
SDP
service delivery platform
SI
system integrator
SIM
Subscriber Identity Module
TOD/DOW
time of day/day of week
VPN
virtual private network
EVIDENCE
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Gartner client inquiries in 2013 and 2014.
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Customer references from the service providers in 2013 and 2014.
Service provider interviews and vendor presentations and demonstrations of software platforms in 2013 and 2014.
For the inaugural Magic Quadrant, Gartner issued a survey in 2014 to more than 40 CSPs, M2M service providers and M2M service
aggregators. Completion of the survey was mandatory for inclusion in this Magic Quadrant.
Public information from sources such as U.S. Securities and Exchange Commission filings, press releases, vendor websites and community
support forums.
EVALUATION CRITERIA DEFINITIONS
Ability to Execute
Product/Service: Core goods and services offered by the vendor for the defined market. This includes current product/service
capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the
market definition and detailed in the subcriteria.
Overall Viability: Viability includes an assessment of the overall organization's financial health, the financial and practical success of the
business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product
and will advance the state of the art within the organization's portfolio of products.
Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal
management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.
Market Responsiveness/Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities
develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of
responsiveness.
Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to
influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the
product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional
initiatives, thought leadership, word of mouth and sales activities.
Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated.
Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer
support programs (and the quality thereof), availability of user groups, service-level agreements and so on.
Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational
structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and
efficiently on an ongoing basis.
Completeness of Vision
Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services.
Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance those with
their added vision.
Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized
through the website, advertising, customer programs and positioning statements.
Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and
communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.
Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality,
methodology and feature sets as they map to current and future requirements.
Business Model: The soundness and logic of the vendor's underlying business proposition.
Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual
market segments, including vertical markets.
Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation,
defensive or pre-emptive purposes.
Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside
the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and
market.
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