The first wave of the Internet connected users to information found on websites. The second wave went further by connecting users to each other through social media. The third wave will go beyond interactions with personal computers to include digital wireless technology, connecting machines and systems in a vast network to benefit users. Simply stated, devices will talk to each other to optimize our daily living. According to a new report from IHS Electronics & Media, the expansion of machine-to-machine (M2M) functions found in a growing number of electronic devices will cause the market for value-added services (VAS) to also expand. The prediction is that the VAS market will rise from $1.5 billion in 2012 to $10 billion by 2017. "The next Internet wave will be the M2M revolution, where almost anything—from an automobile to a shipping container to a home electricity meter—can become a part of a vast network," Sam Lucero, Senior Principal Analyst for M2M & Internet of Things at IHS, said in a company news release. "Cellular communications will play a key role in in this new era of the 'Internet of Things,' serving as the glue that connects hundreds of millions of nodes together. However, the cost and complexity of developing, deploying, and operating cellular M2M applications is daunting, leading increasing numbers of companies to outsource cellular M2M application development, deployment, and—in many cases—operation, to VAS providers." VAS Growth and M2M Growth Go Hand-in-Hand The VAS market encompasses a variety of non-essential services that complement cellular connectivity and application platforms. These services allow developers, service providers, and others to create new M2M applications. It creates a loop where improved M2M apps provide the opportunity for greater services in wireless devices, which in turn inspires the creation of better M2M apps. For instance, some two-way radios offer emergency radio and weather alerts from NOAA. This automated M2M functionality could benefit people using radios during large outdoor events where staying a few steps ahead of the weather can be invaluable. The added value creates a higher demand for more M2M functionality, such as devices with an integrated GPS modem that enables event workers to locate one another. The IHS report appears to indicate that the M2M VAS revolution is still in its infancy, especially as prices continue to drop for M2M hardware. The burgeoning market inspires further innovation. Digital wireless companies will need to design products with connectivity in mind—wireless solutions catered to the various industries they serve. Security Concerns are Familiar Right now, the biggest concern for the M2M VAS products will be security. Manufacturers need to be mindful of "device impersonation" and eavesdropping. However, this issue is not a new one. Companies should anticipate the risks, then work on security solutions. The VAS provider landscape is fragmented, with opportunities for cooperation between companies based on the specific resources of each. The projected growth of M2M VAS market is sure to offer collaborations that are mutually beneficial for both businesses and their customers.