M2M (machine to machine) communications infers that things — especially everyday objects — are readable, recognizable, locatable, addressable and controllable wirelessly through the Internet (aka: The Internet of Things). The steady rise in M2M solutions coming to market is being driven by projections that we are on the cusp of a massive explosion in the number of internet-connected devices. For example, IMS research claims that there will be more than 326 million cellular M2M connections globally by 2016, up from about 107 million today. Estimates for the number of M2M devices in the foreseeable future range in the tens of billions. In short, the number of 'intelligent’ devices in our future society will far outnumber the total population of users.

Despite this staggering growth and the sizable market opportunity, many questions remain as to how each member of the M2M ecosystem will monetize their particular domain. One thing is for certain, the automated and complex nature of M2M requires an accounts receivable and billing application that is powerful and flexible enough to scale as more connections and devices are added. As we move towards individualized consumption and unique customer needs, it will also be critical for businesses to have tools in place to supports complex pricing scenarios.

According to a presentation given by Informa, there are three possible billing and AR management scenarios for businesses that are delivering M2M services.

  1. A low cost business model:
    • A flexible platform with ongoing low cost of ownership
    • Scalable platform that supports high volume
    • Low ARPU unit value
  2. Massive scale:
    • Reduction of OPEX
    • Supports a mix of recurring and usage-based billing
    • High volume billing and high availability architecture
  3. Multi-party value chain
    • Handles commissions and settlement for complex value chains
    • Supports retail and wholesale pricing models
    • Global support
    • Analytics for greater efficiency.

(I would argue that all three approaches require analytics, but that’s another blog topic.)

As each of the above models progresses in its complexity, so does the requirement for an automated AR and billing solution that scales to support a complicated and massive M2M value chain – one that that not only automates accounting processes, but also helps to streamline service provisioning and billing as the M2M business becomes more complex.

TRACT was designed to support just this type of complex billing environment. For instance, it can be configured to automatically manage the accounts receivable processes associated with invoicing and managing the payments of the multiple parties in an organization’s M2M ecosystem. For B2B service providers, TRACT also enables customers to establish multi-dimensional pricing that includes commissions, settlements, and unlimited pricing scenarios. These capabilities aren’t just essential attributes of a modern billing platform, they also are key enablers of the type of dynamic business we’re increasingly seeing across a number of verticals.

M2M is here, it’s growing, and it’s going to be massive. Don’t get caught trying to figure out how to manage the pricing, billing, and AR complexities after your ecosystem takes off. TRACT is cloud-based, scales easily, and is purpose built to help M2M providers manage super complex financial and billing requirements at each stage of growth.

For a real-world example demonstrating how TRACT supports complex M2M business models, look no further than our profile of remote monitoring service provider Mobile Link.