The explosive impact of machine-to-machine technology

This article originally appeared in print with the headline, "The next very big thing."

At a time when seemingly every person on the planet with access to discretionary income has at least one mobile device—a smartphone, tablet or something else—it is only logical to question whether the high-growth-era in the wireless market finally has run its course. After all, once everyone has a device—or several devices, as is commonplace today—doesn’t that create a saturated market that will struggle to maintain its existing status, much less grow?

Not quite, according to industry leaders. But the largest growth in the commercial wireless arena during the next several years is not expected to be the result of still more iterations of personal devices and applications. Instead, the next projected boom in the wireless industry will be to connect machines to each other—for example, sensors to systems that can process data from the sensor to create an alert notification for action to be taken—or what is known as machine-to-machine (M2M) communications.

The case for M2M communications is so compelling that even one of the largest consumer-facing brands in the world is altering its business strategy to compete in this new arena, according to David Douthit, utility practice principal for AT&T.

“I can tell you that the focus of our company now has really shifted into the realm of machine-to-machine data communications,” Douthit said during a session earlier this year at the International Wireless Communications Expo (IWCE).

There is a reason for such a shift: the market potential for M2M communications—dubbed by Cisco Systems as “the Internet of things”—is enormous, with some projecting that there will be 50 billion connections between devices by 2020, according to Barry Einsig, global transportation executive at Cisco.

“It’s going to monumental,” Einsig said. “The opportunity for all of the wireless community to build standards, build a global platform and deliver new connections for the 99% of things that aren’t connected in this world today will unleash unlimited economic value. Cisco’s estimation is that could be as much as $14.4 trillion in global GDP [gross domestic product].

“And this is not something that’s going to happen in the future; this is something that’s happening right now.”