M2MAPPS: Rod: Multi-Tech has an interesting and unusual portfolio: lots of pre-certified products as well as professional and manufacturing services. How do you distill it down into a clear, concise offer?

ROD LANDERS: It’s very simple. Our products are platforms that allow companies to deliver M2M services in very short time frames. We have a comprehensive portfolio of pre-certified end devices and that allows us to match an off-the-shelf product with the functionality of the service that the company is designing. We also have a suite of professional services and this hypothetical company can select the right service or services in order to launch their offer as soon as possible. It’s a simple concept and it works: it’s worked for some of the best-known names in the industry.

M2MAPPS: Is that why you call it “M2M Simplified?”

ROD LANDERS: It is but we may change it later this year. This may sound odd but I’m increasingly finding that the people who really need to have M2M simplified don’t know what M2M is, and trying to explain it is a turn-off for those people. They simply want to employ a platform or device to write a data communications application and partner with a company that can provide a hassle-free deployment service. The iPhone from Apple is a good example of this principle. Their platform consists of a rock solid hardware device that has a UI that is easy to understand, a development environment that allows third parties to make apps for that hardware, and an online store to deploy those apps so that users may select that app for their use. There are a couple of companies in our space that have loosely subscribed to this model, and we will come out with something similar. I could add that our offering will be superior, but this is something else that may sound odd: I’m more interested in innovating than competing. If we get the innovations right then we’ll succeed.

M2MAPPS: Is there a price penalty – a tradeoff between hardware costs and service revenues? Companies pay extra for pre-certified devices but that is offset by revenues that come in shorter time frames.

ROD LANDERS: There is a tradeoff, but what counts is the total cost of ownership. Something like 95% of the market comes from solutions involving deployments of under 20k devices. If a service takes off, or if it is clear that large-scale deployments are involved then we would custom-design a smaller device that was more cost effective. And if the numbers were really high we could design a chip-level device. This isn’t part of that answer but a critical part of simplification and ease-of-use is to recognize the intrinsic value proposition. That’s where the money is. It’s about moving data from the edge of the network to enterprise environments: making it as easy as possible. And if you push it, then the edge should look just like the enterprise from a network management perspective. Later this year we’ll be coming out with a few products that do just that.

M2MAPPS: What is your take on LTE’s ability to deliver cost-effective, low-bit rate services for use in M2M solutions as well as the high-speed, low-latency 4G services that mobile network operators promote?

ROD LANDERS: My take is mixed. Right now MNOs are promoting high-speed services because that was what 4G was designed to deliver and that is where they are going to get increased revenue streams. And the margins will be higher because LTE is spectrally efficient. They don’t need to chase M2M because HSPDA can meet the requirements of the few apps such as surveillance that need high speeds and the great majority are performing well on 2G and 2.5G. That said, LTE employs OFDM technology (orthogonal frequency-division multiplexing) and that can be used to deliver cost-effective low-bit rate services. The technology is there but the delivery mechanism has to be optimized, and right now this end of the market is at the baby steps stage. Various standards bodies are addressing the optimization issue but of course that takes time and meanwhile operators could be overtaken by next-gen wireless technologies that are specifically designed for the low-speed, low-power end of the market. Companies like Semtech, Sigfox, and Neul are companies to watch here. Sigfox allows you to build local and wide area networks using UNB (ultra narrow-band) technology over ISM frequencies, which don’t need a license. Semtech employs spread spectrum technology over the same frequencies, and Neul has been working with the TV white space area of the spectrum.

M2MAPPS: LTE modems are relatively expensive. What timeline do you foresee for a price level that makes employing LTE a given? And when that time comes do you think that LTE will be seen as the global standard for cellular communications.

ROD LANDERS: MNOs are rolling out LTE networks around the world at a faster rate than expected. In the States both AT&T and Verizon have realized nation-wide coverage, so it’s clear that LTE will become the global standard but there are issues. Where would we be without issues? Different countries use different frequency bands, which means that devices can only be made for regions such as Europe and the States. Right now prices for services and devices are high, but service costs always slide down and devices follow. I expect 4G pricing to be in line with 2 and 3G in around two to three years.

 Company: MULTI-TECH SYSTEMS