M2M communications helps companies reduce operating costs: KORE

KORE Telematics, a Virginia-based firm with network operations in Winnipeg and close ties to the Canadian telecommunications sector, is touting its machine-to-machine (M2M) service offering as a way for companies to reduce operating costs during these difficult economic times. "It resonates tremendously," president and COO Alex Bribourne tells Report on Wireless. "Certainly six months ago when we had fuel prices up at $4, we also had people extremely excited about things like fuel management and route optimization." Perhaps one of the most talked-about M2M applications a few years ago was the wirelessly enabled vending machine that could communicate back to its supplier when particular products are low or sold-out. The idea was that the vending machine's supplier would only have to bring the products each machine needed rather than having to fill a truck with every product only to find out certain ones are selling while others aren't. This would be more efficient and would save on fuel costs for multiple visits to the same vending machine during a delivery cycle. M2M combines low-cost wireless communications devices and applications designed for specific purposes such as tracking or inventory management. "If you can use these things and you can do it with devices that cost maybe $100 or not much more than that for a basic box and maybe a few dollars a month to have real time connectivity, that's a small price to pay for that commercial advantage," Brisbourne says. Telematics has been around for some time. The taxi industry was an early adopter for telematics services with companies such as Ottawa-based Mobile Knowledge and Vancouver-based DDS Wireless (formerly Digital Dispatch) offering service. International shipping has also put telematics to good use by tagging large transportation containers. But putting wireless modems in vehicles, for example, is only half the equation. The telematics provider then has to negotiate access to a wireless network, and as Brisbourne explains, this is not always easy as carriers aren't necessarily set up to handle the telematics business. In addition, the amount of data used by a tracking application, for example, is measured in kilobytes, not megabytes as it is for consumer wireless data applications. KORE solves the network access conundrum For the M2M economic model to be successful, it requires the network to be inexpensive, yet highly reliable, managed 24/7, with self-help tools and specialized plumbing for VPNs and security, Brisbourne says. And this is where KORE strives to make things simpler for a telematics provider - it has already secured wireless network access agreements in both Canada (Rogers Wireless) and the US (Verizon and AT&T). It operates as a mobile virtual network operator (MVNO) focused exclusively on selling access to telematics providers. Getting a carrier interested in telematics can be humbling, explains Brisbourne. A company pitches a wireless service provider on 1,000 new subscribers in the next year each generating $5 per month. "You've just about used up your useful time on the carpet at one of the carriers," he says, adding a carrier will likely do that kind of business in one retail location in one hour. KORE doesn't just sell airtime to telematics providers, it gives application service providers a high level of control over the network. "We designed with our carrier partners a commercial model where the network is treated a smart utility. So instead of buying a rate plan and in effect paying for capacity you don't use, we meter it out on a usage basis. The customer is encouraged to design his application intelligently and meet his own commercial business model," Brisbourne says. In addition, the company has formed an international coalition of like-minded companies, m2mGlobal Alliance, that allow domestic firms to use the networks of other alliance members in other countries. "We have partners that like KORE - well-funded companies with long term agreements with the top carriers focused on M2M - which allows us to sell services in Australia, New Zealand, Europe and other markets as our customers want to expand their reach," explains Brisbourne, noting that it's similar to an airline alliance. To date, the company has shipped 450,000 end point devices and stakes the claim to being the largest all digital provider of capacity to the M2M market in North America. KORE, operating since November 2003, services more than 550 discreet application service providers in a variety of markets including vehicle tracking, vending machines, bracelets for offenders being tracked by police to logistic and asset management services. While the company is headquartered in Reston VA, its technical service and network operations centre of North America is in Winnipeg. In addition, KORE's founders are Canadian and have considerable ties to the Canadian marketplace. Brisbourne was, at one time, a VP and GM at Microcell Telecommunication's wholesale services company, Microcell Connexions where he was responsible for Project Rainbow, an initiative aimed at spurring wireless data service adoption by Canadian businesses. No left turns Global delivery services company UPS has adopted telematics services and installed smart devices on their trucks. Over the past 12 months, UPS has been progressively redefining their route management software to eliminate left turns. Left turns result in a significant amount of idling time while trucks wait to turn across on across oncoming traffic. In addition, there is a greater relative incidence of accidents when making left turns. "They were able to do hard calculations which demonstrated substantial cost savings accrued to UPS in both vehicle off road because of accidents and because fuel savings by eliminating left turns as far as possible," says Brisbourne. This gives new meaning to the phrase going around in circles. For UPS it means substantial cost savings.

M2M communications helps companies reduce operating costs: KORE

News | January 20, 2009

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