Caqital Equipment News October 2018

PROFILE

Michele Mackenzie, principal analyst for Analysys Mason’s IoT and M2M Services.

Harnessing the power of the network

When new technologies are invented there is a tendency to overestimate the impact they will make in the short term – but then to underestimate their influence once they have become established. Machine connectivity is the latest technology to excite the industry, but what are the main factors that are driving its adoption? Leading IoT analyst Michele Mackenzie helps us connect the dots.

Q: What are the main drivers of machine-to-machine (M2M) connectivity? Michele Mackenzie [MM]: In the construction equipment sector it is the ability to remotely monitor vehicle diagnostics, helping to reduce failures and downtime, increase productivity and improve customer satisfaction. It is also enabling fleet management services – location, productivity, vehicle performance and operator behaviour. Remote fleet management is now quite well established, with a clearly understood return on investment. Q: Is construction falling behind other M2M sectors? MM: Not necessarily. For some time, companies like Volvo Construction Equipment (Volvo CE) have been using sensor networks that monitor various aspects of machine performance. This Internet of Things (IoT) technology is reducing downtime, as predictive maintenance and remote fault correction becomes commonplace. It is also leading to a positive impact

on environmental factors such as pollution, as well as profitability. Machine connectivity is allowing construction equipment manufacturers to change their business models. In the past they sold or rented a piece of equipment, and that was largely that. Connectivity allows manufacturers to engage with customers on an ongoing basis, providing them with a service as well as a product. Q: How many connected vehicles are there worldwide? MM: We estimate that there are around 224-million vehicles worldwide (including passenger cars and commercial vehicles) with some form of connectivity. This will range from simple tracking solutions to more sophisticated fleet management applications. Q: How fast is it expected to grow? MM: By 2026 we forecast that there will be 929-million connected vehicles, representing an average annual growth rate during that period of 17%.

CAPITAL EQUIPMENT NEWS OCTOBER 2018 32