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August 18, 2005 

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 Q&A: nPhase CEO Steve Pazol on Machine-to-Machine Service Industry 8/17/2005
The mission of Going Global, which appears on ePrairie on most Tuesdays, is to educate and inform Midwest technology companies on what local technology companies are doing internationally so other firms can learn from the successes of like-minded peers.


CHICAGO Ė Steve Pazol is CEO of nPhase. Based in Chicago, nPhase provides enterprise-class machine-to-machine (M2M) services to manage, monitor and control global assets.

Along with Sandeep Mehta, Pazol co-founded Professional Consulting Services, Inc. (PCS) in 1990. In 1993, they founded Mehta & Pazol Consulting Services (MPCS) in Pune, India. In 1998, they started ManageTheWorld, a subsidiary of PCS, which became nPhase in 2003.

Pazol has a degree in electrical and computer engineering from the University of Michigan. He has spent the last 17 years providing consulting and systems implementation services in the IT field. He worked for Burroughs Corp. and Unisys Corp. in Detroit and Chicago until 1988 when he began consulting independently.

He has spent the last four years working to develop the M2M market and has helped nPhase grow into one of the top M2M technology firms. He is the moderator of the first and only M2M web log, which is called M2Mblog.

Pazol has authored dozens of articles on a variety of topics in various technology journals and speaks frequently at conferences. He was the technical editor of Unicenter Advisor magazine for more than seven years and guest editor of Internet Security Advisor. He is also the technical editor and co-author of ďUnicenter TNG for DummiesĒ.

In part one of a three-part Q&A, Pazol sat down with international expert Michael Muth to discuss M2M services.


Michael Muth: Does M2M differ around the world?
Steve Pazol: A lot of people donít know what M2M is at all. We look at it as connecting machines, people and IT infrastructure. Some people view it as asset management, telematics or freight tracking.

In Europe, wireless coverage is much better than in the U.S. and itís easier to implement. Still, itís more difficult to deploy commercially. Vodaphone has separate companies in London, Italy and Holland. Itís almost like a franchise. Youíre roaming. In the U.S., we have a few big carriers.

Once you have a communications agreement, thereís basically no roaming in the U.S. There are different complexities. The international wireless carriers are a little ahead of the U.S. carriers. Sprint and Cingular are our two partners. Cingular is GSM, which is the international standard. Sprint is CDMA, which primarily is U.S. oriented. They donít roam.

One reason Sprint is interested in us is because global customers might want us to combine GSM and CDMA on a single bill. While Cingular has roaming agreements all over the world, itís expensive when you roam for data. You get charged for every byte of data. On the Cingular network, you can get a lot of data for a good price.

If youíre roaming in Italy, while a couple pennies per kilobyte might not sound like much, it adds up as you go to megabyte plans.

For an enterprise to deploy a wireless solution, itís still very complex both commercially and technically. Thatís where we come in as a mobile virtual network enabler (MVNE) or mobile virtual network operator (MVNO). We act as the carrier, yes, but with significant value add. We deal with the communications and technological complexity.

Itís less of a compatibility issue. Carrier networks built primarily for voice and data are still a tiny portion of revenues. The applications are different, too. Mobile-originated BlackBerry handsets will let you get your e-mail. An M2M application might tell you the status of a truck or tank. Networks donít let you do that easily. GPRS and SMS all function differently.

We make it all look the same. We have a middleware technology solution for these problems that basically make the wireless networks look like an extension of an enterprise network.


MM commentary: He just spoke to some of the technological differences. M2M does differ around the world in that who communicates what with what differs by industry and country.


MM: How long does it take for M2M data to traverse the globe?
SP: M2M absolutely does traverse the globe. Different companies play in different sections of the market. We focus on large numbers of geographically dispersed assets and points. The more dispersed they are, the more value we add. Weíve monitored cars in Turkey and medical devices in the Netherlands.

Due to our direct connections into the carrier networks, the latency was insignificant. Even with text messaging, it can be less than 5 seconds. We can track cars via GPS through our NOC to their application.

MM: Iíve read that Europe is ahead of the U.S. in terms of M2M implementations. Is that true?
SP: Itís not that Europe is necessarily more progressive. Itís that a lot of the largest current implementations are the result of regulations. Theyíve implemented more regulations for automated meter reading especially in the Nordic regions. In one country, a consumer needs the ability to see how much energy he or she has consumed.

Since the utilities are required to do provide this, they have to network their meters. Large deployments happen quickly due to the regulations. Electronic cars in Europe will monitor cars and trucks.

In many countries other than the U.S., the landline telephone infrastructure wasnít nearly as built up. In countries like India, getting a phone line used to take more than a year and be exorbitantly expensive. So many consumers and companies have gone right to wireless.


MM commentary: Nevertheless, others are further ahead in implementing some M2M solutions.


MM: Any idea how many international bloggers hit M2Mblog.com?
SP: We started M2Mblog (which is separate from M2M Magazine) as a place to have discussions. Weíre opening it up to more contributors over the next couple months. Weíve gotten great feedback. The hits are going up 30 percent a month. We can see where theyíre coming from: the U.S., Europe and the Philippines.


MM commentary: While M2Mblog.com isnít the most frequented blog on the Web and while it is still small, itís certainly growing.


MM: What should we know about M2M internationally?
SP: We can deploy internationally without having relationships with major carriers in other countries. Still, you need a certain volume to have a local connection make sense. Thatís one of the biggest challenges.

For example, if youíre trying to put a service like OnStar on the market and thereís a device thatís embedded in a car or truck, you have to get that device certified on carriers in different countries to get that radio on different networks. Itís a big cost to get that radio on different networks. Also, different countries operate on different frequencies.


MM commentary: OnStar apparently wasnít able to overcome these obstacles. This is from Telematics Newsletter in January 2005: ďAs part of GM Europeís drastic cost-cutting efforts, it was decided in November that OnStar Europe would be closed at the end of 2004. All services except for [emergency callinig] will cease to function. OnStar says in its communications that it will guarantee the emergency call service until further notice.Ē


MM: Why did you change the name of ManageTheWorld to nPhase?
SP: I started Professional Consulting Services, Inc. as an IT consulting firm. ManageTheWorld was a division and was kind of a working name that got away from us.

We got a mixed reaction to the name and George W. Bush really wanted it. We did several focus groups that got very strong feelings. People either really liked it or disliked it. nPhase comes from a scientific bent. The ďnĒ stands for infinite (like one to ďnĒ) and ďphaseĒ comes from the term ďphase changeĒ. We really like it.


Michael Muth is managing director of GATA, an international business development consultancy that helps technology companies build international partnerships. He can be reached at mike@intlalliances.com.
Click here for Muthís full biography.

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