Internet of Things as enabler of the 4th industrial revolution

3. Internet of Things and the Ongoing Revolution
Bernardo Campillo Soto
Head of New IOT Business and Innovation
27.10.2016

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Previous Industrial Revolutions
removed force-associated barriers…
Source: “The Second Machine Age”,
E. Brynjolfsson, A. McAfee
…and current Digital Revolution removes
information-associated barriers
As-a-Service
Business Models
Platform Business
Models
Marketplace
Business Models
Data-Driven
Business Models

8. Industry Retail Consumer Electronics
Smart Cities EnergyTransport
$3 Trillion
Revenue Opportunity*
>2 Billion
Terabytes of Data
>25 Billion
IoT Connections
* Yearly revenues by 2024.
Revenue 2016: $1 Trillion
Source: Machina Research

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25. But, what is IOT? So simple as…
Devices
Connectivity
Service Platforms
Analytics
Really that simple?

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WHAT DO
THINGS TALK
ABOUT?

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THINGS TALK ABOUT US

40. CCDO IOT
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Created with Haiku Deck

41. CCDO IOT
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42. CCDO IOT
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43. “We are in charge of creating and making it possible for
people to connect with the things that matter to them,
enabling an infinite world of possibilities”

45. Created with Haiku Deck

46. Home
Vehicles
Retail
Cities
Office
Worksite
Factories
Far Away
OnLifescenarios
Who I love
Where I Live
How I move What I do Where I work
Personal

47. Interactions spheres closer to and around the person…
Personal
What
I do
Who I
love
Where
I live
How I
move
My City My space
My Workplace

48. CCDO IOT
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49. Every IOT vision is leveraged across 4 layers
IOT Analytics
Products
and services
OSS/BSS/IT
Physical
assets
3
2
1
4
IoT

50. Every IOT vision is leveraged across 4 layers
IOT Analytics
Products
and services
OSS/BSS/IT
Physical
assets
3
2
1
4
IoT

52. LPWA, Network evolution meant becoming simpler
Mimicking Nature
3G
LTE
5G
LTE-A
Data traffic
per device
2G
Evolution by increasing Complexity
Cat 1
Data traffic
per device
Battery Life
of devices
Evolution by becoming simpler
Battery Life
of devices
LTE-M
NB-IOT
mMTC (5G)

53. LPWA complement existing cellular networks and short range
solutions for applications requiring limited data throughput
Traditional cellular networks were designed for human communications and
have evolved into massive data transmission.
Machines may have other network needs.
Wide Range (i.e. 10 km)
and low-throughput
Deep indoor coverage
Lower cost connectivity
and devices
Reduced battery
consumption
LPWA Value
Proposition

54. Connectivity technologies ecosystem:
New technologies for new communication paradigms

55. Connectivity technologies ecosystem:
New technologies for new communication paradigms

56. LTE for IoT: Application Segmentation
NB-IOT is focused on massive applications
29/17Kbps
1Mbps
10Mbps
100Mbps
NB-IOT
CAT-M
CAT 1
CAT 4
MASSIVE SENSORS
Gas/Water/Electric Metering, Street lighting,
Parking control, Agriculture monitoring, Smoke
detectors, Assets tracking, Environment
monitoring, Industrial monitoring
WEARABLES
Personal/Pet trackers, Fitness bands, Patient
monitors, Smart Watch, Kids Tracking
DATA DEVICES
Connected healthcare, InCar hotspot, Video surveillance,
Retail Kiosks, Digital signage, Alarm panels
ROUTER
Routers, IoT Gateways, Network bridges
5$
6-9$
15$
40$

64. 64
CONFIDENTIAL

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CONFIDENTIAL

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CONFIDENTIAL

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CONFIDENTIAL

68. 68
CONFIDENTIAL

69. IOT vision is leveraged across 4 layers
IOT Analytics
Products
and services
OSS/BSS/IT
Physical
assets
3
2
1
4
IoT

72. AMAZON WEB SERVICES and IOT
Architecture templates, building blocks and applications

73. AMAZON WEB SERVICES and IOT
One stop shop for application development, deployment and management.
Flexible and scalable. Real-time infrastructure adaptation.
Pay-As-You-Grow models.
FROM CONNECTION TO DATA ROUTING

75. Source: IOT MEGATRENDS 2016 – Vision Mobile
There is a great opportunity and key players are building and leveraging in open
approaches for different sectors and IOT scenarios.
WHY an IoT OPEN ECOSYSTEM?

76. IoT developers evolution
Developers flood
into IoT fast
21%
oriented to
Smart Home
There is a huge developers’ talent market to capture….
Source: IOT MEGATRENDS 2016 – Vision Mobile
1 in 3
developers:
HOBBYISTS or
EXPLORER
10M
5M
2016 2017 2018 2019 20202015
Already 4.5 million individuals
active as IoT developers in 2015
WHY an IoT OPEN ECOSYSTEM?

77. Industrial IoT Open Ecosystems at a glance
Developer Commmunity Business Model
2.350 Active developers
2.760 Apps
PAY PER USE
• Billing by Amazon: 20%
• Billing by Dev: Free
2,5 MM Developers
3.000 Apps
3,8 MM Downloads
MONTHLY FEE
• No billing by Salesforce
2 MM Developers
3.800 Apps
PAY PER USE
• Billing by Azure
WHY an IoT OPEN ECOSYSTEM?

78. Telco Open Ecosystems at a glance
Developer
Commmunity
Marketplace
Pricing &
Business Model
Comments
10.000 developers
(through Eclipse IDE
and Eclipse
SmartHome Project)
Deutsche Telekom.
Partner channels
Oriented to partners
and cross-vendor
ecosystem.
Focus on SmartHome.
Qivicon brand in Germany and licensed to other operators
(e.g. KPN, eww Austria).
Partner network of compliant devices providers.
AT&T Developer
Program
AT&T own channels
(mainly online)
Free: Max 10 devices
Pro: 99$ p/year plus a
fee per device/month
depending on volume
and data point usage
M2X (development) and Flow (deployment) tools.
Telco capabilities: SMS, PoC, call mngmt, webRTC,
landline messaging, identity, etc.
IoT Starterkit including m2m SIM and hardware.
Seamless integration with MS Azure and IBM
Bluemix. Partnership with OpenShift (RedHat PaaS).
Orange Partner
APIs for IoT
Orange App Shop
Free.
Paid modes coming
soon.
M2M France (managed connectivity), LiveObjects API (MQTT-
based) and connection with telco capabilities (SMS, Identity
management).
HW starter kits (incl. LoRa offer).
http://www.pcworld.es/aplicaciones/orange-app-shop-nueva-tienda-de-aplicaciones-moviles
https://m2x.att.com/pricing
WHY an IoT OPEN ECOSYSTEM?

79. Understand developers by looking at their goals and motivations
Knowing the developers…
IoT Developer `s Segments
Source: IOT MEGATRENDS 2016 – Vision Mobile
Hobbyists
Moonlighters building their
own IoT solutions to learn
and have fun.
Explorers
Independent developers
gaining experience as a side
Project to seize on future
opportunities.
Hunters
Experienced developers
building an IoT business.
Focused on making money
from device sales, apps or
services.
Gun for Hire
Seasoned professionals
developing IoT solutions on
commission.
Product Extenders
Companies using IoT
technology to promote or
extended non-IoT products.
Optimizers
Engineers and system
integrators using IoT to
increase organizational
efficiency and reduce cost.
Data Brokers
Companies that monetize
digital content or data.
Gold Seekers
IoT startups aiming to hit VC
gold.
HOW to build an IoT OPEN ECOSYSTEM?

80. Knowing the developers…
Stages of ecosystem evolution and key developers segments
Source: “How to kick-star an ecosystem” – Vision Mobile
Seeding
“give hope to early adopters”
Growth
“give money to pros”
Maturity
“reach brands, verticals & media”
Hobbyist
Explorers
Guns for Hire
Hunters
Gold Seekers
Product Extenders
Content Publishers
Corporate IT
Hobbyist
Explorers
Guns for Hire
Hunters
Gold Seekers
Product Extenders
Content Publishers
Corporate IT
Hobbyist
Explorers
Guns for Hire
Hunters
Gold Seekers
Product Extenders
Content Publishers
Corporate IT
HOW to build an IoT OPEN ECOSYSTEM?

81. Knowing the developers and the market:
Developer segment mix is an indicator of market maturity
Source: IOT MEGATRENDS 2016 – Vision Mobile
Professional and SME approach.
Closer to B2B proposal.
Recreational and exploration approach.
Closer to B2C proposal approach.
Increased
maturity
HOW to build an IoT OPEN ECOSYSTEM?

103. IOT vision is leveraged across 4 layers
IOT Analytics
Products
and services
OSS/BSS/IT
Physical
assets
3
2
1
4
IoT

104. IOT
Analytics
Value
added
servicesConnectivity
All IOT P&S feed a powerful IoT Analytics layer
Hardware

114. How to build a Big Data / IOT Analytics strategy
2. Big Data usages
3. Focus on your own and
customers’ needs
4. Our Big Data strategy
formulation
1. Understanding our Data:
The 4 V’s

115. 1.- Understanding our Data: The 4 V’s
VarietyVolume VelocityVariability

116. BI Dashboards - Reporting
Data Analysis
(trends, patterns, alerts)
Predictive Analysis
Predictive Engines + Machine Learning
Prescriptive Analysis
Prescriptive Engines + Business
Knowledge + Cognitive Computing
Descriptive Analysis
B
A
C
2.- Big Data usages
Value
Difficulty
What
happened?
Why did it
happen?
What will
happen?
How to make
it happen?
Descriptive
Diagnostic
Prescriptive
PredictiveA
B
C

117. 3.- Focus on your own and customers’ needs
Can we monetize all
available data?
How could we use data to enhance our
processes?
How are we going to generate value
from data for our proposal to
customers?
1
2 3
Starting point: 3 fundamental questions to focus on the Big Data
opportunity

118. 4.- Our Big Data strategy formulation
Category Description Monetization Target Customer
Big Data as
Business Insight
Offers insights from our own
business analyzing data from
devices, connectivity and other
sources.
Operational efficiency
enhancements that enables you
to offer new services to our
customers.
Internal consumption
(Operation, Business Units)
Big Data as
Added Value
Adds value to our existing services,
proving specific benefits for
customers on functionality, ROI, etc.
Widen and enhances our P&S’s
value proposal with the
integration of data analysis.
External customers and
Business Units
Big Data as a
New Service
Offer access to data sets that can be
correlated among them and with
other external data sources.
Access to and usage of data sets
can be commercialized.
External customers and
Partners
1
2
3

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175. Bernardo Campillo Soto
Head of New IOT Business and Innovation
bernardo.campillosoto@telefonica.com
bernardone@twitter