GSM, the Global System for Mobile Communications, is an open, non proprietary digital cellular system which has rapidly gain worldwide acceptance and market share. In addition to digital transmission, GSM incorporates many advanced series and features, including ISDN compatibility, and worldwide seamless roaming in other GSM networks. The advanced services and architecture of GSM have made it a model for future 3G cellular systems such as UMTS.
Short Message Service (SMS) is one of the salient features of today’s wireless technology. It has an ability to send and receive text messages to and from mobile phones. The text can comprise of words or numbers or an alphanumeric combination. SMS was created as part of the GSM Phase 1 standard. Short message is approximately up to 160 characters in length when Latin alphabets are used and 70 characters in length when non-Latin alphabets such as Arabic and Chinese are used.GPRS stands for General Packet Radio Service. This is a new bearer service for GSM that greatly improves and simplifies wireless access to packet data networks. It applies a packet radio principle to transfer data packets in an efficient way between mobile stations and external packet data networks. GPRS enabled networks are “always on”, which means there is no time delay in dialing up and establishing a connection to a data network. GPRS introduced a packet based air interface to the originally circuit-switched GSM network. This opened up the mobile user to data services like the internet. By the basic nature of packet-switched networks, multiple users can share a single channel, which saves network resources as compared to circuit-switched networks wherein a single channel is reserved for just a single user.

GSM Based Embedded Applications :
Today many applications which requires mobile connections can take the advantage of the existing GSM network to get the information passed through rather then building own network from scratch.
Consider few Examples :
GSM controlled Factory automation : The automation is very much part of today's industries. A petroleum company has to make a embedded system which is able to send the details of the operations to the controller of the refinery through SMS. Also changing of parameters should take place through GSM. Also, only Authenticated user should only be able to receive information and be able to change it.GSM based SMS Server for remote monitoring: A GSM based SMS server which is attached to the computer, which broadcasts the message to every other entity of the huge system. A application very similar to Paging but can be done with more flexibility and feasibility.
Some more ....
GSM/GPRS based remote mobile banking :
GSM/GPRS based remote logistics tracking systems:
There are more and more IDEAS which can be implemented but one needs to know the intricacies and feasibility involved In implementing it on a GSM platform.
More details about GSM can be found on www.gsmworld.com