M2M RFP Best Practices
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1 Machina Research M2M RFP Best Practices Andy Castonguay, Principal Analyst M2M Evolution Miami, FL January 2014
2 About Machina Research The leading research/consulting firm focusing on the emerging opportunity for new connected devices and applications, i.e. M2M/IoT Supporting our clients through o Machina Research Advisory Service our multi-client annual subscription service comprising forecasts, reports and access to the analysts (see below) o Custom Research & Consulting client-specific research We have the most focused research on the M2M field of any analyst firm in the world: we provide the most granular forecasts for the global M2M opportunity, supported by robust analysis of market issues and dynamics Other coverage areas include short-range technologies and Big Data analytics Machina Research 2
3 The Machina Research Forecast Database We recognise that M2M is a very diverse market that requires a granular approach We have developed detailed M2M forecasts based on our thirteen focus sectors (see left) Within each sector there are very different dynamics for each application, so we forecast each of 61 application groups and hundreds of applications separately Machina Research 3
4 Some of our clients Machina Research 4
5 1) Provide a good description of your business and requirements Identify the need that might be met by a connected solution, but allow for partners to be creative It is incumbent on you to clearly identify your fundamental requirements: Do you need a drill? Or do you need a hole in a wall? Vendors need clear description of your business to understand framework and context Machina Research 5
6 2) Provide detail on your envisaged connectivity solution Help vendors to frame their solution by giving them as much relevant technical detail as possible: Monthly and annual connection traffic Identified periodic peaks and troughs Geographical distribution Connectivity specification Data transfer frequencies and requirements Anticipated life cycles of products Machina Research 6
7 3) Explore the coverage and technical capabilities of the vendor solution One key role of the RFP is to determine which vendors meet the necessary technical requirements in three main areas: networks, platforms and devices. With regard to networks, bidders should be asked the following: Which technologies do bidders use and what are their specifications? Which geographies they address and how (e.g. facilities-based vs roaming)? What is the profile of coverage, in urban versus rural locations? Machina Research 7
8 Platform related questions The platform component of the technical solution is core, and whether managed in-house or outsourced, a comprehensive understanding of its capabilities is key. The main differences between many M2M vendors emerge in this area. What network visibility is available? What about out-of-footprint (for cellular)? What are the failover capabilities of the solution? What additional features (such as API capabilities) are there? What sort of billing solutions could be applied? Wholesale, retail, custom? What reporting capabilities could be provided? What end-to-end SLAs are available, e.g. Five 9s, service restoration? Is server infrastructure fully redundant? Outsourced? Machina Research 8
9 Device related questions Finally the RFP process should explore what suggestions the vendor would have with regards to the device solution, and how this hardware component is managed, for example: Is the bidder proposing a module-based solution, or a SIM-based solution or an integrated device solution? What is the process for future activations? How would replacement of modules and SIMs be managed? What types of support and maintenance would be available? Machina Research 9
10 4) Seek information, and guarantees, about technology roadmaps Technology migration result in costly replacements, upgrades, and new product design efforts Exploring the future proofing of any connected device is an extremely prudent and cost effective step. You should seek independent verification where there is any doubt. Machina Research 10
11 LTE migration to challenge partner decisions and product design cycles Faster network speeds and cheaper modules will transform potential applications Country Network Operator 2G Technology Expected decommissioning or similar major event USA AT&T GSM YE 2016 for GSM decommissioning USA Verizon Wireless CDMA 1xRTT YE 2020 for CDMA sunsetting USA Sprint CDMA 1xRTT 2021 likely for CDMA sunsetting USA T-Mobile GSM TBD Machina Research 11
12 5) Request comprehensive commercial models for all fees Push for detail on fees for basic connectivity and additional service features Which tools are included and optional for reporting and monitoring? What testing services are included and optional? Does the vendor include any consulting services or are these optional? What service and support agreements are included or optional to the agreement? Machina Research 12
13 6) Make sure the info you receive is easily comparable between vendors Technical and commercial details should be easy to compare To the best of your ability, attempt to get responses in a similar template to ease comparisons for pricing and technical compliance, capabilities, etc. Be prepared to battle through iterations Machina Research 13
14 7) Be realistic about the timescales Allow the vendor time to produce a well thought out submission RFP preparation RFP writing and review and vendor selection Q&A Submission deadline for vendors Short listing and presentations Decision Full RFP process Phase Duration 1-2 weeks 1-2 weeks 2 weeks after release 3-5 weeks after release 3-4 weeks after submission deadline (or quicker if there is company urgency) 1 week after final presentations Approximately 10 weeks Machina Research 14
15 8) Clearly define your RFP process for Q&A opportunities, presentations and shortlisting Communication is critical in the RFP process. You should provide opportunities for vendors to ask questions and gain additional insights as to your requirements. Allow vendors the freedom to be inventive The feedback process is a two-way street Seek independent third-party advice on vendor bids in order to correctly frame key questions Machina Research 15
16 9) Define and prioritize your assessment criteria clearly Apply a weighting to each of the selection criteria Quality of Service, SLAs of the proposed technical solution Pricing Future-proofing Vendor background, security hurdles Be clear about any gating factors up front Machina Research 16
17 10) Research your potential partners National and international geographical coverage Type of network connections required (from 2G to 4G, ZigBee, WiFi, shortwave, etc.) Module and device ruggedness and capabilities Levels of system integration expertise Device management platform capabilities Application development capabilities Machina Research 17
18 Core elements of the RFP process The four key elements that you should reflect in an RFP are: 1. A good, initial understanding of the M2M technology market to position the right technical questions 2. A good, initial understanding of the main commercial components to explore the most suitable business models for the solution 3. A well-planned and structured management process around the RFP to facilitate further decision-making processes and solicit innovative solutions 4. A well-qualified selection process of potential vendors Machina Research 18
19 Thank you! Contact us Andy Castonguay Principal Analyst Machina Research Mobile: Machina Research 19
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