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Commitment to communications

By Brenda Bouw | June 21, 2013
Commitment to communications
Dave McLennan

For Sierra Wireless Inc.’s Chief Financial Officer, Dave McLennan, the coolest thing about his company’s connection to George Clooney isn’t the Hollywood star power, but the technology behind it.

Clooney stars in a series of TV advertisements for the Nespresso single-serve coffee maker, a machine powered in part by Sierra Wireless’ machine-to-machine (M2M) cloud platform and hardware solutions.

The Richmond, B.C.-based company’s AirLink® programmable gateways and AirVantage™ Cloud Platform help monitor the performance of professional Nespresso machines, such as those used in offices and restaurants, and track the number and type of single-serve coffee packets used for inventory management.

“People say to me, ‘A wireless coffee machine? Really?’ Yes, really,” says McLennan. “It’s not obvious when you look at the machine, but that’s what our technology can do – just swap out the coffee machines for any asset that needs monitoring.”

McLennan confesses he hasn’t yet seen those compelling Clooney ads playing mostly in Europe and on the Internet. It’s not surprising, given his demanding role recently in helping Sierra Wireless transition entirely into the machine-to-machine communications (M2M) market.

In early April, the company finalized the sale of its longstanding AirCard® division, which produced mobile hotspots for the consumer market, to focus exclusively on the burgeoning M2M market. Sierra Wireless has become a world leader in M2M after a series of mergers and acquisitions over the past six years including AirLink Communications in 2007, Wavecom in 2009 and Sagemcom in 2012.

Today, Sierra Wireless claims nearly 35 per cent of the world’s embedded M2M market share, and has a number of blue-chip customers including such automotive companies such as Denso and Chrysler and computer firms such as Cisco and Lenovo.

Sierra Wireless is also continuously advancing its technology through research and development (R&D). In February, the company introduced what it called the industry’s “most advanced architecture for embedded wireless communications in M2M,” in its next-generation of AirPrime™ modules, which are used across a number of industries.

The $138-million in cash generated from the AirCard® sale will help the company accelerate its growth plans, including plans for strategic acquisitions in the M2M market to strengthen its leadership position and expand its position in the value chain.
For Sierra Wireless, the business-to-business pitch is how the company’s technology can help create solutions. In the automotive sector, which is currently the company’s largest market, Sierra Wireless’ M2M technology helps connect emergency calls within vehicles to monitoring facilities, as well as providing navigation and driver assistance. At restaurants across parts of North America and Europe, Sierra Wireless’ embedded M2M modules are used in the point-of-sale terminals that allow patrons to pay their bills at the table.

The company’s M2M modules are also used in the healthcare industry, including in monitoring equipment used to manage conditions such as diabetes, sleep apnea, hypertension, and cognitive disabilities. In March, Sierra Wireless announced it has teamed up with MedStartr, the first crowdfunding platform created to fund healthcare projects and startups. The deal positions the company as the preferred provider of wireless communications technology for MedStartr companies. Sierra Wireless also has clients across a number of other industries such as transportation, energy, infrastructure, public safety and security.

Within the M2M ecosystem – which includes hardware vendors, operators, and original equipment manufacturers – Sierra Wireless offers its gateways and modules and M2M cloud- platform to move around data. The company often works hand-in-hand with other companies, including systems integrators and mobile network operators, to provide solutions.

Using the Nespresso example, Sierra Wireless integrated a small gateway into the company’s professional coffee machine. It then helped third-party developers write an application that runs on the gateway to monitor the machine’s activity and allow technicians to remotely adjust equipment settings such as water temperature and pressure.

“What we’ve really focused on is to take something that has historically been fragmented and complex and we’ve tried to simplify it and position ourselves so that we are offering more of the solution, moving up the value chain,” McLennan says.

“One of the challenges, which is a mixed blessing, is that this is a high-touch business in that it takes a lot of support to implement. That’s the bad news because it costs money and you have to invest in it. It’s also the good news because it makes a good business model. Not anyone can start an M2M company, which means it’s less susceptible to commoditization.”

Since Sierra Wireless was founded in 1993, McLennan says the company has built up a team of talented engineers and software developers, with increasing capacity to make new and innovative products. “We have that DNA in our company, and that is an important differentiator.”

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