Machine Generated Broadband

One of the more interesting predictions in the latest Cisco annual internet forecast is that there will be more machine-to-machine (M2M) connections on the Internet by 2021 than there are people using smartphones, desktops, laptops and tablets.

Today there are a little over 11 billion human-used machines connected to the Internet. That number is growing steadily and Cisco predicts that by 2021 there will be over 13 billion such devices using the Internet. That prediction also assumes that total users on the internet will grow from a worldwide 44% broadband penetration in 2016 to a 58% worldwide penetration of people that have connectivity to the Internet by 2021.

But the use of M2M devices is expected to grow a lot faster. There are fewer than 6 billion such devices in use today and Cisco is projecting that will grow to nearly 14 billion by 2021.

So what is machine-to-machine communication? Broadly speaking it is any technology that allows networked devices to exchange information and perform actions without assistance from humans. This encompasses a huge range of different devices including:

  • Cloud data center. When something is stored in the cloud, most cloud services create duplicate copies of data at multiple data centers to protect against a failure at any given data center. While this does not represent a huge number of devices when measured on the scale of billions, the volume of traffic between data centers is gigantic.
  • Telemetry. Telemetry has been around since before the Internet. Telemetry includes devices that monitor and transmit operational data from field locations of businesses, with the most common examples being devices that monitor the performance of electric networks and water systems. But the devices used for telemetry will grow rapidly as our existing utility grids are upgraded to become smart grids and when telemetry is used by farmers to monitor crops and animals, used to monitor wind and solar farms, and used to monitor wildlife and many other things in the environment.
  • Home Internet of Things. Much of the growth of devices will come from an explosion of devices used for the Internet of Things. In the consumer market that will include all of the smart devices we put into homes such as burglar alarms, cameras, smart door locks and smart appliances of many kinds.
  • Business IoT. There is expected to be an even greater proliferation of IoT devices for businesses. For example, modern factories that include robots are expected to have numerous devices that monitor and direct the performance of machines. Hospitals are expected to replace wires with wireless networked devices used to monitor patients. Retail stores are all investigating devices that track customers through the store to assist in shopping and to offer inducements to purchase.
  • Smart Cars and Trucks. By 2021 it’s expected that most new cars and trucks will routinely communicate with the Internet. This does not necessarily imply self-driving vehicles, but rather that all new vehicles will have M2M capabilities.
  • Smart Cities. A number of large cities are looking to improve living conditions using smart city technologies. This is going to require the deployment of huge numbers of sensors that will be used to improve things like traffic flow, monitoring for crimes and improvement everyday things like garbage collection and snow removal.
  • Wearables. Today there are huge numbers of fitness monitors, but it’s expected that it will become routine for people to wear health monitors of various types that keep track of vital statistics and monitor to catch problems at an early stage.
  • Gray Areas. There are also a lot of machine-to-machine communications that come from computers, laptops and smartphones. I see that my phone uses data even at those times when I’m not using it. Our devices now query the cloud to look for updates, to make back-ups of our data or to take care of other tasks that our apps do in the background without our knowledge or active participation.

Of course, having more machine-to-machine devices doesn’t mean that this traffic will grow to dominate web traffic. Cisco predicts that by 2021 that 83% of the traffic on the web will be video of some sort. While most of that video will be used for entertainment, it will also include huge piles of broadband usage for surveillance cameras and other video sources.

If you are interested in M2M developments I recommend M2M: Machine2Machine Magazine. This magazine contains hundreds of articles on the various fields of M2M communications.

Verizon Bringing Fiber to Boston

fios vanEvery once in a while something in the industry comes as a true surprise and that happened last week when Verizon announced that it was going to invest $300 million to build FiOS in Boston. There hasn’t been any new FiOS constructed for many years and the company had announced at the end of 2011 that it was done with FiOS expansion. Then the company went on to sell a lot of customers to Frontier including a big chunk of the FiOS fiber network and it looked like Verizon was inching their way out of the residential landline business.

There was never any doubt that Verizon was interested in fiber to serve large businesses and to serve its own cellular towers. And this desire was emphasized a few months ago when the company announced the intention to buy XO Communications from Carl Icahn. That will provide a vast new fiber network throughout downtowns and business districts around the country.

Verizon says that there are a few reasons it wants to build Boston. Probably first on the list is a shift in the cellular business to add smaller neighborhood cell sites. The whole industry has started the migration from relying mostly on the big cell towers to smaller cell sites dispersed where there is demand. But these mini-cell sites need fiber. And so expanding the FiOS network in Boston will give the company fiber everywhere in the City and give it a competitive advantage over AT&T for providing cellular data.

Verizon also says that it wants to get into the ‘smart city’ business and it views Boston as an attractive market to pursue that goal. Verizon announced a smart city initiative last October and is working on plans to build things like smart traffic grids in cities. Again, this kind of big dollar business requires fiber throughout a city.

Verizon also says that it would like to tear down all of the copper in Boston. Of course, Boston’s copper is not older or in worse shape than the copper in other east coast cities and this justification doesn’t seem like a reasonable reason to invest $300 million in fiber. I’m betting that management took a new look at their existing FiOS business and saw how profitable it is now that broadband penetration rates keep climbing. Broadband is a very high margin business.

It’s also my guess that Verizon might be getting more realistic about the future of its cellular business. That business has thrived for a few decades due to astronomically high prices and margins compared to the cost of providing the service. And those margins are under attack throughout the industry as alternate cellular companies are offering cheaper rates. Even the new discounted rates are high margin, but they have forced Verizon and AT&T to bring their prices down out of the stratosphere. So perhaps the company is quietly going to build up the landline data business as a way to insure future profits.

One has to wonder what this means for other east coast cities. Verizon largely built FiOS in the suburbs and to a large extent ignored the downtowns of the major northeast cities. If there was any downtown fiber built it was spotty and only to neighborhoods where the construction costs were the lowest. There certainly would be a big sigh of relief if other cities could know that they were also going to finally get a fiber network to compete with Comcast.

One thing we’ve always known about big companies is that they can change strategies at will and something they say they will never do one day can end up as a major corporate initiative a few years later. Verizon gave every sign for the last few years that it was walking away from landline networks. One has to go many pages deep into their annual reports to even see that business mentioned.

But this Boston initiative is no small deal and requires a major investment. And the reasons why this benefits Verizon are just as true for many other cities. Verizon says that one reason they are willing to do this now is that city hall in Boston was receptive to making it easier to build fiber – something that has not been true in the past. Just like many cities are bending the old rules for Google, I imagine that there are discussions going on today in many east coast cities about what they might be able to do to get Verizon fiber too.

What Are Smart Cities?

Jetsons cityI’ve been seeing smart cities mentioned a lot over the last few years and so I spent some time lately reading about them to see what all the fuss is about. I found some of what I expected, but I also found a few surprises.

What I expected to find is that the smart city concept means applying computer systems to automate and improve some of the major systems that operate a city. And that is what I found. The first smart city concept was one of using computers to improve traffic flow, and that is something that is getting better all the time. With sensors in the roads and computerized lights, traffic systems are able to react to the actual traffic and work to clear traffic jams. And I read that this is going to work a lot better in the near future.

But smart city means a lot more. It means constructing interconnected webs of smart buildings that use green technology to save energy or to even generate some of the energy they need. It means surveillance systems to help deter and solve crimes. It means making government more responsive to citizen needs in areas like recycling, trash removal, snow removal, and general interfaces with city systems for permits, taxes, and other needs. And it’s going to soon mean integrating the Internet of Things into a city to perfect the many goals of governments doing a better job.

I also found that this is a worldwide phenomenon and there is some global competition between the US, Europe, China, and India to produce the most efficient smart cities. The conventional wisdom is that smart cities will become the foci of global trade and that smart cities will be the big winners in the battle for global economic dominance.

But I also found a few things I didn’t know. It turns out that the whole smart city concept was dreamed up by companies like IBM, Cisco, and Software AG. The whole phenomenon was not so much a case of cities clamoring for solutions, but rather of these large companies selling a vision of where cities ought to be going. And the cynic in me sees red flags and wonders how much of this phenomenon is an attempt to sell large, overpriced hardware and software systems to cities. After all, governments have always been some of the best clients for large corporations because they will often overpay and have fewer performance demands than commercial customers.

I agree that many of the goals for smart cities sound like great ideas. Anybody who has ever sat at a red light for a long time while no traffic was moving on the cross street has wished that a smart computer could change the light as needed. The savings for a community for more efficient traffic is immense in terms of saved time, more efficient businesses, and less pollution. And most cities could certainly be more efficient when dealing with citizens. It would be nice to be able to put a large piece of trash on the curb and have it whisked away quickly, or to be able to process a needed permit or license online without having to stand in line at a government office.

But at some point a lot of what the smart city vendors are pushing starts to sound like a big brother solution. For example, they are pushing surveillance cameras everywhere tied into software systems smart enough to make sense out of the mountains of captured images. But I suspect that most people who live in a city don’t want their city government spying and remembering everything they do in public any more than we want the NSA to spy on our Internet usage at the federal level.

So perhaps cities can be made too smart. I can’t imagine anybody who minds if cities get more efficient at the things they are supposed to provide for citizens. People want their local government to fix the potholes, deliver drinkable water, provide practical mass transit, keep the traffic moving, and make them feel safe when they walk down the street. When cities go too much past those basic needs they either have crossed the line into being too intrusive in our lives, or they are stepping over the line and competing with things that commercial companies ought to be doing. So I guess we want our cities to be smart, but not too smart.