We anticipate a major increase in M2M devices and a concomitant increase in autonomously generated (not requiring action by a user) traffic. We view this rise of M2M as complementary to, and extending beyond, another recently popularized concept, “The Internet of Things” (TIOT). TIOT is based on the assumption that billions of items, large and small will, over time, incorporate digital tags or microprocessors that allow them to be located and identified and allow them to transmit to other devices. TIOT is, in turn, an elaboration of M2M (machine to machine).

Some have actually speculated (with no supporting logic) that, as an article in TechRepublic stated, “The Internet of Things will lead to de-centralization. It could lead to the end of cloud computing.”

While we expect all kinds of items to have tags and to communicate, and M2M or TIOT to be a vast expansionary area in the next five years, we reach a diametrically opposite conclusion regarding its impact on cloud computing. We expect the growth of M2M to spur cloud computing, since this will be a massive source of data flows that will require management, analysis and interpretation, all functions that will largely be performed in the cloud. (See our commentary on “M2M and Mobile Cloud – Technology and Market Overview”)

We believe that, rather than an Internet of Things, a term that we find limiting (as discussed below) and even meaningless, that the embodiment of processing and communications into things, will result in: 1) a vast amount of traffic, that is autonomously generated (meaning that it does not require direct action by the user), as well as 2) a tidal wave of information that will require management.

Furthermore we believe that the concept behind The Internet of Things is actually, in some respects a limiting one. The idea basically is that computing, broadly speaking, goes through cycles of centralization and distribution. Mainframes represented centralization, PCs represented distribution of processing capability.

An assumption behind this view is that cloud represents centralization, with massive processing, storage and other capabilities gathered into vast centralized facilities, typical of IaaS. By contrast, TIOT is viewed as dispersing computing capability to billions of devices and things.

We believe, however, that cloud will have elements of centralization and dispersion. We believe that the future of the mobile cloud is that the cloud will, in effect, fold in on itself, and that billions of devices will become part of the cloud itself. Rather than the devices simply hanging off of a cloud or clouds that are centralized, the computing power of these devices will become incorporated into the capabilities of the cloud.

(See our commentary on “How Users Become Part of the Mobile Cloud”).