Understand The Difference Between IoT and M2M

What you want to accomplish determines which approach is better to use.

By Chantal Polsonetti, Vice President, ARC Advisory Group

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Industry discussions on the industrial Internet of Things (IoT) and its potential benefits have raised numerous questions regarding distinctions between the IoT and its forerunner, machine-to-machine (M2M) communications. Remote device access is a core common deliverable for both solutions, so questions concerning how to distinguish between the two are understandable.

Commonality between the two solution types largely ends there; they differ in how they achieve remote device access.  For example, traditional M2M solutions typically rely on point-to-point communications using embedded hardware modules and either cellular or wireline networks.  In contrast, IoT solutions rely on IP-based networks to interface device data to a cloud or middleware platform.

The M2M market's sustained inability to realize its forecast growth potential — and the reasons for that failure — provide telling indicators of the true differences between the IoT vs. M2M. While M2M solutions offer remote access to machine data, these data are traditionally targeted at point solutions in service management applications. Rarely, if ever, are the data integrated with enterprise applications to help improve overall business performance.  Integration of device and sensor data with Big Data, analytics and other enterprise applications is a core concept behind the emerging IoT. This integration is key to achieving numerous benefits throughout the manufacturing enterprise and, ultimately, growth in the marketplace.


Remote Device Access
Access to remote devices, machines, assets and other entities provides a primary value proposition for both M2M and IoT solutions.  M2M applications are typically composed of hardware modules embedded in a machine at a customer site that communicate via proprietary cellular or wireline networks to a dedicated software application, often at the supplier's service operation. This capability allows the device/asset/machine supplier to reduce its service management costs through remote diagnostics, troubleshooting, updates, and other remote capabilities that decrease the need to deploy field service personnel.

In industrial IoT solutions, the "what, how and why" of remote device access involves much broader brushstrokes.  The IoT accommodates not only the same devices/assets/machines as M2M applications, but also low-power and passive sensors as well as inexpensive devices that may not be able to justify a dedicated M2M hardware module.  IoT devices communicate via standards-based IP networks and their data are incorporated into enterprise applications to enable not only improved service, but also operational improvement and new business models such as product-as-a-service.  

The ability for applications throughout the enterprise to access device data to enable performance improvements, business innovation or other possibilities clearly distinguishes the potential of IoT versus that of M2M. This IoT-based data delivery is usually to a cloud, allowing access by any sanctioned enterprise application. In contrast, M2M typically employs direct point-to-point communication. The cloud-based architecture also makes IoT inherently more scalable, eliminating the need for incremental hard-wired connections and SIM card installations.  This is one reason why M2M is often referred to as "plumbing," while the IoT is seen as a universal enabler.

Integrated IoT Solutions Enable Higher-Order Benefits
Enterprise integration, higher-order-benefits potential, and the ability to accommodate more and a wider variety of devices underscore why the IoT market bears much greater potential than traditional M2M.  Customers of M2M and IoT applications alike aim to reduce unplanned downtime, and both types of solutions potentially can improve service management, a higher order benefit. The IoT excels here as well, providing the ability to assess these issues from a system level as well as at the device or machine level and applying analytics and processing Big Data to tweak out incremental benefits.

Reliance on the software versus hardware aspects of the architecture makes IoT solutions more accessible to a broader variety of both internal and external customers. Universal visualization capabilities allow data to be presented anywhere, including on mobile devices, to any sanctioned users.  The combination of these attributes further raises the visibility of IoT solutions and generates attention at the corporate level, rather than just at the departmental level.

Differences in Supplier Landscape
Suppliers of M2M and IoT applications typically have different competencies.  This directly affects users' ability to generate the desired benefits from their remote device access solutions.

M2M supplier competencies tend to focus on the "plumbing" aspects mentioned earlier, particularly embedded hardware and cellular telecommunications networks. Many are starting to add cloud capability through internal development, acquisition or partnering. But for most M2M suppliers, this represents new terrain.  IoT solution suppliers, on the other hand, tend to emphasize software capabilities and particularly enterprise integration.  These are important distinctions.


Specify the Right Solution
The terms M2M and IoT have become synonymous in many quarters, but it is important to make sure you specify a solution that meets your current and anticipated needs.  This involves recognizing up-front whether you seek a point solution for simple remote machine access, like in a service-management application, or look to drive incremental business benefits across the enterprise through use of analytics, Big Data and other software-oriented performance-improvement tools.  Enterprise integration capabilities, scalability, software vs. hardware emphasis, and use of standard vs. proprietary device connections are key criteria that impact whether you have an IoT or M2M solution.
ARC recently launched a dedicated Industrial Internet of Things (IoT) Advisory Service designed to help manufacturers and other industrial organizations make sense of, evaluate, plan for and potentially implement emerging IoT technology and solutions.   


CPolsonetti 300Chantal Polsonetti is vice president, ARC Advisory Group. You can e-mail her at cpolsonetti@arcweb.com.

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