See also: Thames Water trials wireless smart meters\nThe costs of fuel, vehicle damages and insurance are escalating and many companies are struggling to contain this.\nThis is where the CIO can step in, says Steve Towe, European MD of mobile resource management specialist Masternaut.\nMasternaut helps companies use machine-to-machine (M2M) technology to manage their mobile workforce costs, which are typically growing at 15 per cent a year.\nAs CIOs and organisations seek increased efficiency and growth, technologies like M2M will enter CIOs\u2019 strategic discussions and plans.\nM2M essentially describes any situation where networked devices communicate with each other to share, deliver and act upon real-time business information.\nTypical applications include utility meters, vending machines and medical equipment.\nOne mobile example is a black box on the dashboard of fleet vehicles which accumulates information about how the driver uses the car.\n\u201cThis can tell you who speeds the most, who has to hit the brakes suddenly and who are the safest drivers,\u201d says Towe.\nSome companies use this information to name and shame the bad drivers while others seek to reward those who obtain the best mileage.\nThis approach helps companies cut fuel consumption and make savings on insurance costs and accident repairs.\n\u201cIt\u2019s all about optimisation of the assets,\u201d explains Towe. \u201cIn one company we they cut speeding tickets by 60 per cent and accidents by 30 per cent.\u201d\nNetworking machines, whether a fleet of vehicles or factory floor robots and giving them some intelligence to make decisions. This should speed up business processes.\nThe impact on the CIO will be massive, says analyst Jeffrey Peel, managing director at Quadriga Consulting, as M2M will feed a whole new generation of smart, sensor-based IT and applications.\n\u201cCIOs will be able to develop much richer, revenue-generating and customer-enhancing solutions off the back of better technology and real-time feeds,\u201d says Peel.\n\nM2M systems will deliver a new generation of mobile cloud mash-ups that take advantage of mixed real-time data sources and pervasive mobile devices to access them.\n\u201cAll types of internal and external apps will become augmented,\u201d says Peel.\nThe market mobilisesM2M adoption will soon spread beyond transport and utilities, creating a market the mobile operators are set to dominate, analysts say.\nUS telcos Sprint, AT&T and Verizon, and European counterparts Vodafone, Telenor, KPN and Everything Everywhere are the leaders, for whom success hinges on two things: creating a differentiated role and market position, and developing a sustainable and cost-effective business model.\nThis is where it gets complicated for the CIO, as the need for differentiation makes the competing service offerings difficult to understand, when often they are much the same.\nOne of your most important guiding principles should be to keep it simple, says Marc Overton, VP of wholesale at Everything Everywhere.\n\u201cMany M2M contracts involve you having boxes with up to 15 SIM cards in them,\u201d he warns. \u201cIt\u2019s much more manageable if you have one SIM, one SLA and one contract.\u201d\nCommunications service providers don\u2019t manufacture or integrate devices, so they need partners and so must become solution enablers.\nThis casts them in the unfamiliar role of bundling services like billing, end-user care, distribution and even professional and consulting services, which is unfamiliar ground.\nContracts will be another challenge for M2M as operational support requirements for provisioning, charging, billing and post-sales support are significantly different.\nAn M2M contract generates low average revenue per embedded device for the communications provider, so they need to have a high lifetime contract value. Which means CIOs will typically sign off a 10-year commitment.\nIn the last two years M2M applications have evolved from their simple origins, so it\u2019s no longer simply about one machine updating another on small amounts of information about water levels in a reservoir. A third-generation M2M application will carry out complex analysis of information and act on it.\n\u201cThere are many emerging applications that can be created for companies,\u201d says Maxine Hewitt, director of M2M supplier Alpha Micro Components, which helps companies develop whatever apps they require.\nSome companies have rather scary imaginations, Hewitt says.\nFor example, as someone enters a shopping centre, a camera might capture their image and pass it on to a computer which then makes another M2M interaction with an advertising server.\nAs the shopper walks around the mall, an advert for a retailer will pop up on every plasma screen they look at, its choice based on the initial visual demographic.\nToday\u2019s third-generation platforms automate management and decision-making for business and operational processes.\nThe carriers involved in creating M2M need to be carefully watched by CIOs, analysts say.\nThe cost of maintaining multiple wireless networks while transforming processes to support new services limits their financial performance and investment flexibility.\nAside from creating cost savings and service differentiation, M2M can help the CIO make improvements in corporate governance and customer service, says Towe at Masternaut.\nThe guiding principle you should use to judge M2M is that whatever you can measure can be managed, argues Towe. That means all kinds of cost and governance boxes can be ticked.\nCarbon emissions, be they from the datacentre or a vehicle fleet, can be measured, so any CIO can devise projects to cut CO2 fairly easily to comply with laws or save money.\nContract complexityM2M can present governance problems to CIOs.\nA potential pitfall is that the management of too many partners creates more vendor governance and management issues when it comes to meeting service level agreement commitments.\nThe complexity of M2M contracts can create governance aggravation.\nCIOs should examine the track record of the communications service providers at network management.\nAny communications service provider with a record of internal fractious disagreements, funding and long-term commitment issues, performance issues, management turnover, and a multitude of other technology deployment issues is best avoided.\nAs ever, scale increases the challenge; if there are millions of connected devices and large processing volumes then the mettle of service providers will be tested.\nAsk suppliers how they intend to address anticipated higher volumes of more complex second- and third-generation M2M solutions.\nThese processes will likely need to be re-tooled and re-engineered, and not all communications service providers have a good track record for making timely investments in critical business support systems\/operations support systems.\nWhen an M2M contract is global, there will be a complication arising from the patchwork of mobile broadband coverage.\nAntony Rix, who leads connected devices projects at product development consultancy TTP, says there is a significant concern whether GSM and 3G networks will be switched off or the frequencies reused for other services, something that is already happening in some countries.\n\u201c4G is too expensive for most M2M applications, but the cost is likely to fall rapidly in the next three years,\u201d says Rix.\nCommunications organisation ETSI and others are still working on international M2M standardisation, but teething problems like roaming charges, especially in the transport and distribution industries, could eat into those savings.\nCIOs adopting M2M could discover the age-old problem of a skills shortage with fast growing IT markets.\nThe bad news is that anyone with M2M know-how will come at a very high premium.\nThe good news? That applies to M2M-savvy CIOs too.