Robin Duke Woolley Beecham Research Brl M2 M Forum 07 04 09

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  • 1. Boston I London l Bonn l Milan M2M in the Downturn April 7, 2009 Robin Duke-Woolley CEO, Beecham Research Ltd. Copyright © 2009 by Beecham Research Ltd. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means -- electronic, mechanical, photocopying, recording, or otherwise -- without the permission of Beecham Research Ltd.
  • 2. Internet of Things & M2M Help Drive Speed/Flexibility into Decision-Making: Adding Value in Downturn throughout Value Chain
  • 3. 1. Connected Products Solution Definition • Networked products connected in an eco-system of: content, technologies, smart devices, infrastructure and services • Smart devices know: who you are, where you are, your content preferences, and best medium to deliver content • Connectivity occurs across: on-board systems, device-to-device, & device-to-web • Innovation is driven by leveraging the eco-system to deliver value to user via new capabilities … driving new business models for both products and services Benefits • Differentiated product to market: Revenue growth via higher market share and/or price premium Increased profits via higher margin value-added extensions
  • 4. MRI scanner as a totally outsourced solution: Hardware-as-a-Service Pay per use Huge Capital Investment for Hospitals, Medical Clinics Replaced by Pay Per Use by product manufacturer Result: Scanning used regularly for medical diagnosis Manufacturer takes over risk Monitors everything remotely Detailed cost and use analysis to maintain business case New business models: Creating Service pull – superseding technology push
  • 5. 2. Supply Chain Solutions: Integrating M2M into the Business Model Definition • Wireless sensors (RFID, Smart Dust) monitor events and conditions • Sensors are in components, inventory, machinery, and locations • Sensors show identity, location tracking, shock, temperature, and tampering • Sensing is conducted across procurement, warehousing, manufacturing, and delivery Benefits • Real-time visibility into part locations, status, quality, and environmental conditions • Improved supply chain reliability and productivity • Security enhanced by constant monitoring
  • 6. Sensor Intensive Supply Chain Example: Cemex Cement Delivery Benefits: Grew customer satisfaction and revenue: –Reduced delivery window by >85% –15% sales growth Cost savings: –Delivery trucks cut by 35% –Projected $100M savings in OpEx • Installed GPS-enabled logistics system to link delivery trucks to central control center • Stage trucks and dispatch/re-route dynamically based on up to the minute customer needs
  • 7. 3. Device Monitoring Solutions Definition • Monitoring devices collect valuable information • Devices are connected to the network and monitored centrally • Diagnostics and preventive and predictive maintenance are conducted remotely • Field technicians are dispatched automatically with the right solution • Engineers learn from actual product and customer behavior Benefits • Lower service operations costs • Value-added service revenue • Shorter time to resolution • Higher services margins • Higher customer satisfaction • Lower warranty costs
  • 8. Example: Air Products KeepCOLD® Services Eliminate damage to the magnet Reduce downtime Reduce loss of revenue Avoid rescheduling patient appointments
  • 9. Three Categories of M2M Applications - Examples After-Market Applications Car Wash • Application led • Low/Medium volume per application • All sectors Vineyard • Add-on networking: retrofit Vending Monitoring • Medium/High cost per unit Regulatory Meter Reading • Regulation led • Medium/High Volume during install • Specific sectors/applications • Embedded networking eCall Toll Collect • Low cost per unit Line Fit/OEM Handheld • Service led Tracking • Medium/High Volume • All sectors OnStar/ • Embedded networking Pumps Telematics • Low cost per unit
  • 10. M2M Application Categories Connections OEM-based Embedded network Across all venues Low Cost High Volume Regulatory Embedded network Specific products Low Cost High Volume After-market Applications Network add-on “Low hanging fruit” High Cost Low Volume Time
  • 11. Impact of Current Economic Climate After-Market Applications • Less affected – installed base Car Wash • eg Commercial Security, 3G • Individual apps affected, eg Fleet/Freight, Containers, Commercial Shipping, Industrial Vineyard (raw material) Vending Monitoring • Opportunities for operational cost savings Meter Reading Regulatory • Govt. initiatives less affected • Regulatory less affected, eg Energy sector eCall Toll Collect Line Fit Handheld • Some products substantially affected by Tracking downturn: • Projects delayed OnStar/ • New house starts down Pumps Telematics • Car sales down 15-50% • BUT, some are investing in downturn for longer term competitive advantage
  • 12. M2M Landscape – Service Sectors, Applications and Devices Internet of Things IT & Networks Public Safety Retail Healthcare & Buildings Consumer Energy Transportation Industrial & Defense Life Science & Home Care Commercial / In Vivo/Home Stores Hospitality Specialty Industrial Trans Vehicles Non- Research Institutional Systems Vehicular • Super- • Hospital Room • Fuel Stations • Consumer • Hotels • Office • Process Markets • ER • Gaming • Commercial • Tolls • Education • Implants • Restaurants • Drug • Shopping • Mobile POC • Air •Bowling • Retail • Clean Room Discovery Centers • Clinic • Construction • Navigation • Rail • Bars • Cinemas • Hospitality • Home Monitoring • Labs • Single site • Labs • Marine • Discos • Off-Hiway • Traffic Mgmt • Cafes • Healthcare Systems • Campus • Diagnostics • Distribn. • Doctor Office • Special events • Clubs • Airports Centers • Stadiums Devices: HVAC, Transport, Fire & Devices: POS Terminals, Tags, Cash Devices: MRI, PDAs, Implants, Surgical Equip, Devices: Vehicles, Lights, Ships, Planes Safety, Lighting, Security, Access,etc. Registers, Vending M/cs, Signs, etc. Pumps, Monitors, Telemedicine, etc. Signage, Tolls, etc. Infrastructure Resource Supply/ Oil/Gas Awareness Comfort & Fluid/ Converting/ Distribution Alternative Automation Demand & Safety Convenience Processes Discrete • Power Gen • Solar Rigs • Metals Security/Alerts • Pipelines • Petro-Chemical • Mining • Wiring • Trans & Dist • Wind • Derricks • Paper Fire Safety HVAC / Climate • Mat’l Handling • Hydro Carbons • Network Access • Low Voltage • Co-Generation • Well Heads • Rubber/Plastics • Irrigation Environ. Safety Lighting • Conveyance • Energy Mgmt • Power • Electrochemical • Food/Bev • Pipelines • Metalworking Elderly Appliances • Agricultural Quality • Pumps • Electronics Children Entertainment • • Woodland • Energy Mgmt • Assembly/Test Power Protection Devices: TVs, Power Systems, Dishwashers, Lighting, Devices: Pumps, Valves, Vats, Conveyors, Pipelines, Motors, Drives, Devices: Turbines, Windmills, UPS, Batteries, Washer/Dryers, Meters, Lights, Alarms, etc. Converting, Fabrication, Assembly/Packaging, Vessels/Tanks, etc. Generators, Meters, Drills, Fuel Cells, etc. Equipment Surveillance Emergency Public Tracking Enterprise Public Services Infrastructure • Human • Services IT/Data Center • Animal • Weapons • Radar/Satellite • E-Commerce • Equip. & personnel • Equip. & Office • Food/Health • Vehicles • Environmental • Data Centers - Water treatment personnel Private Nets • Packaging • Ships • Military Security • Mobile Carriers - Building environ. - Police, • Baggage • Aircraft • Unmanned • Fixed Carriers - General environ. - Fire • Postal • Gear • Fixed • ISPs - Surveillance - Regulatory Devices: Cars, Ambulances, Fire, Breakdown, Lone Devices: Tanks, Fighter Jets, Devices: Servers, Storage, PCs Worker, Homeland Security, Environment Monitor, etc. Battlefield Comms, Jeeps, etc.. Routers, Switches, PBXs, etc.
  • 13. Energy: Moving to a Smart Grid – Supply side M2M Opportunities in addition to Smart Metering: • Development of Smart Grid - substations • Microgrids • Alternative energy sources: • Wind, Tidal, Solar, Thermal, Fuel Cell
  • 14. Consumer M2M: Approaching a Mass Market – New Report April 2009 Image Source: BRL Issue: January 2009 millions
  • 15. Consumer M2M: Approaching a Mass Market – New Report April 2009 Consumer M2M Product Shipments (millions) 40 35 30 25 20 15 10 5 0 2007 2008 2009 2010 2011 2012 2013 Beecham Research: April 2009
  • 16. 2008 Adopter Survey, SIM-Related: Considering the needs of your M2M-enabled products, how important are the following factors?
  • 17. 2008 Adopter Survey, Network Services: How important are the following network services?
  • 18. M2M Services Revenue Streams for Cellular ($m) Beecham Research: July 2008
  • 19. Comparison of Revenue Streams for Cellular Beecham Research: July 2008
  • 20. Typical Market Players at Each Level Value-Added Services System Applications/ Service Enablement Network Services Hardware Enablement
  • 21. Service Enablement: Key Issues for Research (Q2 2009) 1. Service Enablement purpose: • Reduce Installation and Running Costs (Adopter Survey results) • Reduce time to market for new services: Create Service Pull • Application Providers: Focus on end user, not infrastructure • c/f Windows and Applications • Market Catalyst: bringing order to a fragmented market 2. Value Assessment • Build versus buy for connectivity infrastructure – Cost elements – Establishing an ROI – What connectivity provides lasting value? 3. Key Features – now and future: Which add value from user perspective? 4. Key sectors – early adopters 5. Who does what? • Value chain players – compete or collaborate?
  • 22. About Beecham Research Beecham Research offers focused research, analysis and consulting services to high technology suppliers, service providers and product manufacturers: • Focus on network-connected products and services – M2M and the “Internet of Things”. – Worldwide coverage for all business sectors and all technologies • Founded in 1991. New name Beecham Research Limited (BRL) from early 2008. • Based in London. Operating out of Boston MA, London UK, Bonn Germany, Milan Italy. – Representation in AsiaPac and Latin America regions in progress • Senior staff with many years of M2M experience internationally – well known in the industry • Emphasis on services enabled by M2M technologies and on M2M market development through new service implementations: The services we offer: • Consulting and custom research • Subscription-based research service – Retainer Service • Standard publications include Worldwide M2M Market Forecast Report at hardware and service levels, and individual M2M Service Sector Reports (9 sectors) • Conferences, in conjunction with our partners – Berlin October 2009
  • 23. About Beecham Research – more Some of our recent clients: