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Who will pay for IoT and why? - Atanu Roy Chowdhury, Senior Product Manager at Altiux Innovations

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“WHO WILL PAY FOR IoT AND WHY? " was a thought-provoking session. Here are the Lounge47 key takeaways: 1.IoT is a self-organizing system of Internet connected peripheral systems providing new and improved converged services 2.The value of the digitally charged thing in IoT comes from an extension of the local function with new digital services. Thing(s) + IT=Local function + measurements (historical, instantaneous) leading to new services and supercharged functions 3.The IoT hype is about the opportunity to monetize services from 50b connected devices by 2020 4.IoT devices can be classified by human desires - to know (omniscence), for human connection (telepathy), to protect & be protected (safekeeping), to be healthy & vital ( immortality), to move effortlessly (teleportation), to create, make and play (expression) 5.The IoT difference: Edgeware driving value, the “ecosystem of devices” paradigm and the possibilities for entrepreneurship 6.PC to Mobile industry to IoT is transitioning the traditional “top down” to a more collaborative approach 7.Value to the customer: a.high resolution real-time information b.M2M silos interconnected for greater visibility c.Interoperated and leveraged common infrastructure d.low cost solution solving specific consumer pain points e.improved traceability, resource utilization, health and safety 8.Value to developer: a.can handle multiple business models b.can handle multiple deployment models c.can create new products and services to diversify revenues d. Services in addition to devices can be created by developers 8. The actors in the IoT ecosystem – those that, discover new services, deliver supercharged services, create supercharged services, create Smart Things 9.Technical best practices: a.cost of data acquisition is not homogeneous b.diversity in sensors, devices and vendors is endemic c.business requirements can exceed technology reach d.device failures will happen, plan to handle them e. ensure that products are certified f.security is not an afterthought 10.Business best practices: a.device costs are a function of volumes, functionality and robustness b.there is a creepiness factor to IoT solutions c.new services require training d.market potential is hard to guesstimate e.Know your competition f.understand local regulations and tax regimes g.Process changes will be resisted h.Disgruntled customers seldom return 11. Different Business Models should be considered.
In summary, IoT offers significant opportunities, but the successful players will be those that emphasize and deliver value relative to existing services rather than just offer new functionality with undeterminable value.

Published in: Devices & Hardware
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Who will pay for IoT and why? - Atanu Roy Chowdhury, Senior Product Manager at Altiux Innovations

  1. 1. Atanu Roy Chowdhury Senior Product Manager, Altiux Innovations Private Limited atanu.roychowchury@altiux.com atanurc@post.harvard.edu January 10, 2015 Who Will Buy IoT Products And Why? 1
  2. 2. Practical Business Models for IOT The IoT ecosystem Demystifying IoT 2
  3. 3. The Internet of Things What is the hype about? 3
  4. 4. Gartner's 2014 Hype Cycle for Emerging Technologies 4
  5. 5. Thing(s) + IT = Local Function + Measurements Instantaneous Historical Supercharged Function $$$New Services$$$ The value of the digitally charged thing in IoT comes from an extension of the local function with new digital services Why the IoT hype? 5
  6. 6. ©The Connectivist , May 05, 2014 6
  7. 7. The Hype is about the opportunity to monetize services from a very large number of connected devices. 7
  8. 8. The Internet of Things What really is it? 8
  9. 9. Defining the Internet of Things “IoT is just M2M reincarnated with connectivity” –a manufacturing client “IoT is a hyper-connected graph with a disproportionate ratio of leaf nodes” -a security researcher “IoT is the interconnection of uniquely identifiable embedded computing devices within the existing Internet infrastructure”-Wikipedia “IoT is a self organizing system of Internet connected peripheral systems providing new and improved converged services” –our architect9
  10. 10. Things in IoT NOT 10
  11. 11. 11 OMNISCENCE TELEPATHY SAFEKEEPING IMMORTALITY TELEPORTATION EXPRESSION
  12. 12. Characteristics of IoT systems All nodes have computation and communication capabilities of varying degrees. There are several intermediaries between communication end points who may use different protocols across all layers of the OSI stack. Any node is uniquely addressable from any other system. Any node can offer a service. Additionally it can discover and consume any service offered by another node. Nodes and services do not exist in isolation. Any node can align itself with a logical network. 12
  13. 13. The Internet of Things What’s different about it? Edgeware, Ecosystem and Entrepreneurship 13
  14. 14. Device Mgmt Access Mgmt Compute Mgmt Protocol Mgmt Data Mgmt Connectivity Mgmt Edgeware Peripheral Devices Edge Gateways Field Area Gateway Enterprise Gateways Storage Systems Data Processing Systems Applications Workflows Operational Technologies Information Technologies Event based actions on real time high velocity data Query based action on non real time high volume data IoT Edgeware* 14
  15. 15. Ecosystem Wireless photo printing Scan to mail Predictive maintenance Content delivery Remote printing Social Integration 15
  16. 16. Entrepreneurship © Claro Partners16
  17. 17. Can provide high resolution real-time information. Can interconnect M2M silos for greater visibility. Can interoperate and leverage common infrastructure. Can provide low cost solution for solving a specific consumer pain point. Can improve traceability, resource utilization, health and safety. The Value Proposition for Customers 17
  18. 18. Can handle multiple business models. Can handle multiple deployment models. Can create new products and services to diversify revenues. Services and devices can be created by developers. The Value Proposition for Developers 18
  19. 19. The Internet of Things Some Examples 19
  20. 20. Thing tracking Home surveillance Connected homes Smart wearables Infotainment Multimodal interaction Digital assistants Smart lighting Smart parking Smart buildings Smart cities Smart apparel Energy savings Connected cars Connected calendars Connected healthcare Consumersareinterestedin… 20
  21. 21. Predictive maintenance Loss prevention Asset utilization Inventory tracking Disaster planning and recovery Downtime minimization Energy usage optimization Device performance effectiveness Network performance management Capacity utilization Capacity planning Demand forecasting Pricing optimization Yield management Loading balancing optimization Worker safety Enterprisesareinterestedin… 21
  22. 22. Practical Business Models for IOT The IoT ecosystem 22
  23. 23. Not all IoT products are Things CE product Line card Application server Design Software stacks Solution acceleration Integrated solution 23
  24. 24. Market discovery Product design Concept validation Product architecture Product engineering Contract manufacturing Application Hosting Content provider Data connectivity SLA definition Prototyping Ecosystem validation Implementation Integration Alpha testing Production Distribution channel creation Installation and commissioning Market outreach Revenue Realization After sales support Product maintenance CreatinganIOTproduct Ideation Ecosystem Establishment Implementation Go To Market Sustenance 24
  25. 25. Discovering new services Delivering Supercharged Services Creating supercharged services Creating Smart Things IoT company Silicon providers ODM/OEM CMS PES SI Connectivity providers Content providers Application hosting service providers Marketers Thought leaders Customers Service providers Distributors and retailers Installation and commissioning After sales Actors in the IoT ecosystem 25
  26. 26. IoTcomponentvendors 26
  27. 27. The Internet of Things What are the pitfalls? 27
  28. 28. The cost of data acquisition is not homogeneous. There will be diversity in sensors, devices and vendors. Business requirements can exceed technology reach. Plan for device failures and handle them. Ensure that products are certified. Security is not an afterthought. Technical best practices for IoT Solutions 28
  29. 29. Device costs are a function of volumes, functionality and robustness. There is a creepiness factor with IoT solutions. New services require training. Market potential is hard to guesstimate. Know your competition. Understand local regulations and tax regimes. Process changes will be resisted. Disgruntled customers seldom return. BusinessbestpracticesforIoTSolutions 29
  30. 30. Practical Business Models for IOT 30
  31. 31. Delivering an IoT product IoT Product Company Consumer System Integrator Enterprise Service Provider Innovation Partners Support Partners Content Providers Implementation Partners B2C B2B B2B2B B2B2B B2C B2B B2B2C 31
  32. 32. The Internet of Business Models Case Studies 32
  33. 33. Grants and Capex Leased Opex Mixed IP transfers Revenue sharing Simple Models 33
  34. 34. Freemium Models Source: http://2lemetry.com/pricing/ 34 Source: http://www.tataindicom.com/mobile-internet.aspx Whitelabelling
  35. 35. Usage Based Models 35
  36. 36. Activity Based Models 36 Time Based Models Presence Based Models Location Based Models
  37. 37. Interaction Based Models 37 Outcome Based Models Priority Based Models Ecosystem Based Models
  38. 38. Alternate Revenue Models 38 E-Commerce Models Gamification Based Models Data Based Models Source:http://www.thingworx.com/marketplace/ Source: http://www.microsoft.com/en- us/server-cloud/internet-of- things.aspx
  39. 39. Application mashup models 39
  40. 40. Summary This is an introductory discussion on IoT and its ecosystems, both of which are in its nascent stages. There is significant scope for entrepreneurs to create new IoT devices and services. Both end consumer and enterprises are willing to pay for IoT solutions BUT There must be a demonstrable value addition over existing services, at an acceptable price point, that can result in resource optimization, improved traceability or better health and safety or even enhanced social presence. 40
  41. 41. Thank You 41

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