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Moving Up or Down the IoT Value Chain

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International Conference on Electrical, Electronic, Communication and Control Engineering (ICEECC2017)
5-6 December 2017

Moving Up or Down the IoT Value Chain

  1. 1. favoriot Moving Up or Down the IoT Value Chain Dr. Mazlan Abbas CEO favoriot International Conference on Electrical, Electronic, Communication and Control Engineering (ICEECC2017) 5-6 December 2017
  2. 2. favoriot Agenda • Understanding IoT – IoT Maturity & Benefits • Market Potential • The current era of IoT: how is it different from M2M? • The challenges Telcos faced in embracing IoT • IoT Value Chain – Where do Telcos Stand? • Steps in Developing IoT Solutions • IoT Business Challenges
  3. 3. favoriot Business Survival in 21st Century • Every 3 to 7 years, organizations need to reinvent themselves • According to The Boston Consulting Group - S&P 500 Companies from 50 years ago – only 19% are still in existence
  4. 4. favoriot
  5. 5. favoriot Who Will Replace Your Jobs? [Source: https://www.ald.softbankrobotics.com/en/robots/pepper ]
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  7. 7. favoriot The 3 Tsunamis of Internet Fixed Internet Mobile Internet Internet of Things (IOT)
  8. 8. favoriot Understanding IOT What is Exactly Internet of Things?
  9. 9. favoriot Components of Internet Of Things (IoT) Things (Sensors & Actuators) Connectivity Applications/ Analytics
  10. 10. favoriot Why IoT Is At An Inflection Point? Hardware is cheap Connectivity is pervasive Moore’s Law continues Metcalfe’s Law ”Network Effects” Development is easy
  11. 11. favoriot IOT statistics [Source: http://www.informationisbeautiful.net/visualizations/the-internet-of-things-a-primer/ ]
  12. 12. favoriot Understanding IoT Maturity Phases
  13. 13. favoriot Monitoring Autonomous OptimizationControl IOT Maturity
  14. 14. favoriot MONITORINGBoat Tracking
  15. 15. favoriot CONTROL Security Lock Immobilizer
  16. 16. favoriot OPTIMISEBest Route Safe Fuel Optimize Engine
  17. 17. favoriot AUTONOMOUSSelf-Cruising Safe-Sailing
  18. 18. favoriot Disruptive IoT Benefits of IoT
  19. 19. favoriot Re-invent The Customer Experience
  20. 20. favoriot Improved Operational Efficiency
  21. 21. favoriot DevelopNew Business Models
  22. 22. favoriot Market Potential Examples
  23. 23. favoriot Market Potential Transportation Connected cars are a top IoT device. We estimate there will be over 220M connected cars on the road by 2020. [Source: http://www.cbronline.com/news/internet-of-things/m2m/smart-connected-always-on-10-huge-iot-impacts-on-10-huge-sectors-4709736v] Insurance A survey has found that 74% of insurance executives believe the IoT will disrupt insurance within the next five years. 74% also plan to invest in developing and implementing IoT strategies by 2016, according to an SMA Research survey.
  24. 24. favoriot Market Potential Manufacturing 35% of manufacturers already use smart sensors. 10% plan to implement them within a year, and 8% plan to implement them within 3 years, according to PwC Oil, gas, and mining In five years, it is predicted that 5.4 million IoT devices will be used on oil extraction sites. BI Intelligence said that these devices will primarily be internet- connected sensors used to provide environmental metrics about extraction sites. [Source: http://www.cbronline.com/news/internet-of-things/m2m/smart-connected-always-on-10-huge-iot-impacts-on-10-huge-sectors-4709736v]
  25. 25. favoriot Market Potential Agriculture We estimate 75M IoT devices will be shipped for agricultural uses in 2020, at a 20% CAGR. These devices are primary sensors placed in soil to track acidity levels, temperature, and variables that help farmers increase crop yields. [Source: http://www.cbronline.com/news/internet-of-things/m2m/smart-connected-always-on-10-huge-iot-impacts-on-10-huge-sectors-4709736v] Defense We estimate spending on drones will reach $8.7B in 2020. In addition, 126K military robots will be shipped in 2020, according to Frost & Sullivan.
  26. 26. favoriot Market Potential Connected Home Smart meters are already a reality, and from the 313 million installed in homes worldwide in 2013, Navigate Research predicts that number to jump to 1.1 billion by 2022 [Source: http://www.cbronline.com/news/internet-of-things/m2m/smart-connected-always-on-10-huge-iot-impacts-on-10-huge-sectors-4709736v] Food Services With the world population on the rise, IoT will help to keep food production levels at good pace. BI Intelligence estimates 75 million IoT device installations for agricultural uses by 2020, at a 20% CAGR.
  27. 27. favoriot Market Potential Utilities Energy companies throughout the world are trying to meet the rising demand in energy. To do this, they will be installing nearly 1 B smart meters by 2020. [Source: http://www.cbronline.com/news/internet-of-things/m2m/smart-connected-always-on-10-huge-iot-impacts-on-10-huge-sectors-4709736v] Hospitality 31% of hotels use next-generation door locks, 33% have room control devices, 16% have connected TVs, and 15% use beacons throughout the hotel, according to Hospitality Technology’s 2015 Lodging Technology survey.
  28. 28. favoriot Market Potential Infrastructure We estimate municipalities worldwide will increase their spending on IoT systems at a 30% CAGR, from $36B in 2014 to $133B in 2019. This investment will generate $421B in economic value for cities worldwide in 2019. Retail Beacons, paired with mobile apps, are being used in stores to monitor customer behavior and push advertisements to customers. In the US, we estimate $44.4B will be generated from beacon triggered messages. [Source: http://www.cbronline.com/news/internet-of-things/m2m/smart-connected-always-on-10-huge-iot-impacts-on-10-huge-sectors-4709736v]
  29. 29. favoriot Market Potential Logistics Tracking sensors placed on parcels and shipping containers will help reduce costs associated to lost or damaged goods. In addition, robots such as Amazon Kiva robot, help reduce labor costs in warehouses. Banks There are nearly 3M ATMs installed globally in 2015, according the World Bank. Some teller-assist ATMs provide live-stream video of a teller for added customer support. [Source: http://www.cbronline.com/news/internet-of-things/m2m/smart-connected-always-on-10-huge-iot-impacts-on-10-huge-sectors-4709736v]
  30. 30. favoriot Market Potential Healthcare We estimate 646M IoT devices will be used for healthcare by 2020. Connected healthcare devices can collect data, automate processes, and more. Smart Buildings 43% of building managers in the US believe the IoT will affect how they run their building within the next 2 to 3 years, according to a survey from Daintree Networks. [Source: http://www.cbronline.com/news/internet-of-things/m2m/smart-connected-always-on-10-huge-iot-impacts-on-10-huge-sectors-4709736v]
  31. 31. favoriot How Is It Different From M2M? THE CURRENT ERA OF IOT
  32. 32. favoriot 10/90 rule The Last 100 meter connectivity The “last 100 meters” represent > 90% potential number of connections Today, the devices used in the “last 100 meters” are typically not connected. The wide-area network is to a larger extent connected e.g. through smartphones, home routers (e.g. ADSL routers) and GSM / 3G / 4G Routers. Still DisconnectedConnected World
  33. 33. favoriot Why Telcos Have Difficulty To Embrace IoT 4 REASONS
  34. 34. favoriot Legacy Business Is Still Connectivity Old habits die hard Sim-Card based Low ARPUM2M high volume game Less complex
  35. 35. favoriot Lack of Domain Expertise Think beyond connectivity Solutions and selling managed services Need go-to-market partner
  36. 36. favoriot Mindset Block Slow business cycle Low single digit growth contribution Full of skeptics
  37. 37. favoriot Stable Business Vs. Risky Ventures Telco business culture Stakeholders expectation IOT business is fluid Need to work like startup
  38. 38. favoriot Understanding IoT Value Chain BUILDING AN IOT ECOSYSTEM – WIN-WIN GAME
  39. 39. favoriot IoT Value Chain – Where Is The Money? Device Provider Network Provider Platform Provider Application Provider • No. of devices • Edge devices/sens ors • Gateways • System Integration • …. • SIM-Cards • Fixed Line • Data Bundled packages • Data Speed • SMS/MMS • Dedicated APN • Fixed IP • Voice/Data • … • No. of connected devices • Data streams • Storage • API Keys • Email/SMS APIs • Support Type • …. • No. of dashboards • No. of users • No. of data sources • Consulting • Types of Analytics (Basic/Adva nced) • ….
  40. 40. favoriot End-to-End IoT Service Provider THE END GAME
  41. 41. favoriot s m a r t c i t y sm a rt tra nsp o rt s m a r t a u t o m o t i v e End-to-End IoT Service Provider Device Provider Network Provider Platform Provider Application Provider Customer Network Platform
  42. 42. favoriot Connectivity Player PHASE-1
  43. 43. favoriot s m a r t c i t y s m a r t lo g is tic s s m a r t a u t o m o t i v e Business Model Device Provider Network Provider Platform Provider Application Provider Customer Network Platform Platform 1
  44. 44. favoriot IoT Enabler Player PHASE-2
  45. 45. favoriot s m a r t c i t y s m a r t lo g is tic s s m a r t a u t o m o t i v e Business Model Device Provider Network Provider Platform Provider Application Provider Customer Network Platform 2
  46. 46. favoriot s m a r t c i t y s m a r t lo g is tic s s m a r t a u t o m o t i v e Business Model Device Provider Network Provider Platform Provider Application Provider Customer Network Platform IOT Subsidiary 3
  47. 47. favoriot IoT Solutions Player PHASE-3
  48. 48. favoriot s m a r t c i t y s m a r t lo g is tic s s m a r t a u t o m o t i v e Business Model Device Provider Network Provider Platform Provider Application Provider Customer Network Platform 4
  49. 49. favoriot IoT Service Provider PHASE-4
  50. 50. favoriot s m a r t c i t y s m a r t lo g is tic s s m a r t a u t o m o t i v e Business Model Device Provider Network Provider Platform Provider Application Provider Customer Network Platform 5
  51. 51. favoriot s m a r t c i t y sm art logistics t s m a r t a u t o m o t i v e Business Model - Hybrid Device Provider Network Provider Platform Provider Application Provider Customer Network Platform 6
  52. 52. favoriot 1 2 3 4 5 HowtoEvolvetoaEnd- to-EndIOTService Provider 6
  53. 53. favoriot Encourage Adoption And Innovation Of IoT HOW-TO
  54. 54. favoriot “Makers, startups and crowdsourcing efforts result in high numbers of low-revenue niche IoT applications.”
  55. 55. favoriot Opportunity To Differentiate • This means you can focus on a specific customer other businesses may have missed. • Separating your business from the pack - Add purchase value • Find niche within fragmented industry • Increase vertical integration to gain more control over its production process • Corner the market with scarce resources
  56. 56. favoriot Steps in Developing IoT Solutions HOW TO START YOUR IOT JOURNEY
  57. 57. favoriot Home Health Transport OfficeWaste IOT Platforms - From Vertical To Horizontal Blending Data - Creating New Compound Applications
  58. 58. favoriot Gateway 3G/Ethernet/Wi-Fi IOT Devices IOT Devices 3G/Ethernet/Wi-Fi HTTPS Push/Pull Service Social Media Integration DEVICE CONNECTIVITY (REST, MQTT, CoAP) APPLICATION INTEGRATION DATA MANAGEMENT DATASTORE BUSINESS LOGIC NOTIFICATION ENGINE REST API Custom Reporting SECURITY BIGDATATOOLS Application Development AUTHENTICATIO N Data Analytics
  59. 59. favoriot Define Your Data… But What Data? How to Start Building Your First IoT Solution
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  62. 62. favoriot Data Ownerships Personal/Household Private Public CommercialSensorDataProvider
  63. 63. favoriot Wisdom Knowledge Information Data More Important Less Important Benefitto Hum anity Evaluated understanding Appreciation of Answers to questions. Symbols Understanding Answers to questions WHO WHY HOW WHAT WHERE WHEN Value is Created by Making Sense of Data
  64. 64. favoriot Wisdom Knowledge Information Data More Important Less Important Benefitto Hum anity Understanding Example: SMART PARKING N/A Empty (0), Full (1) Who park at this lot? What kind of vehicle? Where is the empty parking lot? When is the peak period? How to implement a tiered charging? How to find “overstayed” vehicles? Why my parking utilization is low?
  65. 65. favoriot Smart Parking Smart Parking With Sensors Location of Parking Availability Parking Utilization Tiered Pricing Parking
  66. 66. favoriot
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  68. 68. favoriot favorwatch Health Profile Stability of HeartActive
  69. 69. favoriot favorwatch ECG Location of FallDoctors Wandering Management
  70. 70. favoriot Constant Touch
  71. 71. favoriot • Wearable device to monitor the elderly people vital signs such as heart rate, steps, Blood Pressure*, ECG, location*, fall cases and others • Offered with Favorwatch mobile application to monitor the elderly • Based on annual subscription • Optional features* will include but not limited to: • Health professionals* • Pharmacy* • Care givers* • Elderly care centers* • Hospitals* favorwatch *Coming Soon
  72. 72. favoriot Diffusion of Innovation
  73. 73. favoriot
  74. 74. favoriot Smart Modules Smart Objects Connectivity Platform S/W Customization/ System Integrator Application s /Analytics Resellers / Channels Malaysia IoT Ecosystem As of Nov. 30, 2017 @ 10.31 am R&D/ Universities ©IoTDiscussion Group
  75. 75. favoriot Security and Privacy of data Managing vast amounts of data Fragmented industry Finding the right business model What Are The Business Challenges
  76. 76. favoriot • Which Business Model Will You Choose? • Will it B2C or B2B focus? • What are your IoT specialization? Which industry to focus?
  77. 77. favoriot www.favoriot.com favoriot favoriotfavoriot favoriot info@favoriot.com favoriot
  78. 78. favoriot Dr. Mazlan’s IOT WORLD BLOG http://iotworld.co

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