IoT WestNavigating the IoT Universe

Before we begin…

• The IoT will never be truly standardized, nor does it need to be.

• The IoT opportunity is worth even more than the hype.

Gartner’s Hype Cycle

Hype vs opportunity

Not insurmountable, but difficult to resolve.

Many different stakeholders with different objectives (companies, governments, end users/networks).

Not only in the technical area changes in mentality and functionality required at all levels within organizations.

There will be winners and losers in the IoT race. Success depends on the agility of the players to adapt to the new business environment.

So what are we waiting for?

HurdlesWho?

Where?Why?

Winners and losers

Disruption in the automotive industry

The shift to “Mobility as a Service”

3500

6700Today

Traditional automotive revenues New automotive revenues, 2030

Recurring revenue

Aftermarket

One-time vehicle sales

What's the catalyst?

Electrification ConnectivityAutonomous driving

Diverse mobility

v

Triggered by

• Regulation/urban design

• Technology/business model

• Consumer preferences

CURRENT AND FUTURE ENABLING FORCES

TREND

(Source Mckinsey Global Institute)

Slicker designs

Enhanced/cheaper batteries

Increase in charging stations

Regulations on emissions

Connected car trend

Regulation on vehicle safety

Advent of 5G

Disruption from tech companies

Cheaper sensors/processors

Regulation across states

Media hype

Interest from tech giants and start-ups

Car sharing trend

Use of smart phone apps

Incentives for corporations and consumers

Urban congestion

High profile of shared mobility providers

Winners and losers in the media industry

• Explosion in number and variety of IoT devices

• Cheaper components (sensors, connectivity)

• Investment in startups developing end-to-end solutions

• Huge growth market, especially in the B2B segment

• Lack of consistency and interoperability

• Lack of demand in the consumer segment

• Concerns about security

• Changes needed at an organizational and regulatory level

Where are we today?

• Mission critical platforms

• Streamlined efficiency

• Cost control

• Improved user experience

• New revenue streams

What does IoT utopia look like?

This requires new mentality to change business models, skill sets, technical infrastructure, processes and operations.

Who is nearing IoT Utopia?

What are the main hurdles to overcome?

Technical Organizational Regulatory

• Hurdle 1Interoperability

•Hurdle 2 Security

• Hurdle 3Business Models

•Hurdle 4 Killer

Applications

• Hurdle 5Government Policy and organizational structure

Interoperability

• Unlocks between 40%and 60% of value

• Degrees of interoperability -technical or semantic

• IPv6 is needed to allow for the huge increase in devices that will

connect to the Internet

• Connectivity protocols such as NB IoT for cellular or LPWAN offer different benefits for different applications

• No value in connecting

everything to everything. The challenge is to identify where value can be created from connecting devices or networks together

HURDLE 1

Interoperability winners and losers

+ +

Security

Spending on IoT security

HURDLE 2

IT security budgets

$547million

in 2018 Spending on IoT security 25%

10%

Security winners and losers

Business Models

• Shift from products to services

• Value added services sold on top of the core product

HURDLE 3

• More difficult for competitors to disrupt

• The IoT market will shift from end-to-end solutions to software platforms and analytics

• Creates an additional recurring revenue stream

• Ties customers in to a long term relationship they value

Business model winners and losers

Killer Apps

• Factories ($3.7 trillion per year) - Operations optimization, predictive maintenance, inventory optimization, health and safety

HURDLE 4

• There is unlikely to be one Killer App since the market is so broad

• Cities ($1.7 trillion per year in 2025) - Public safety and health, traffic control, resource management

(Source Mckinsey Global Institute)

Killer Apps winners and losers

Regulatory

• Public policy: Some apps require more legislation than others (e.g. connected vehicles)

• Who owns the data?

HURDLE 5

• Control: consumer reticence to deploy smart objects in the home also related to reluctance to let machines take over

• Liability: who is liable if the sensors or communications malfunction and transmit incorrect information?

• Cybersecurity/hacking: The more things connected to other things, the greater the security risk

• Privacy: what/how much information can be accessed?

Regulatory winners and losers

•Can all aspects of the IoT ever be standardized?

•How can the issue of interoperability be overcome?

• What can developers of IoT applications do now to ensure their devices can successfully navigate the IoT universe?

How can we move forward?