1. Internet of Things in High Tech –
Why you should care… NOW
November 12, 2014
alex.blanter@atkearney.com
@AlexBlanter
2. Let me start at the end and give you the “answer”
Internet of Things will materially change what we do as individuals
and enterprises – and that will happen
whether you do anything or not
High Tech companies –
semiconductor, device, hardware, and systems –
will be key beneficiaries of the Internet of Things
Truly taking advantage of the Internet of Things will require different
strategic thinking and new execution capabilities
1
2
3
Now you can leave to have a drink… or explore Las Vegas…
or stay to see and hear facts, figures, and opinions
3. You are here today because you are interested in the Internet of
Things – and so is everybody else
iot
internet of things
security2020
cloud trends
cisco
2013mean
blog
ioe
check
companies
great
theiot
ibm
need m2m
data mobile
people
time
web
2014
tech
google
smart
big
join
app
world
ITblogs
technologyconnected
business
bluetooth
digital
today
launches
devices
big data start
gigaom
post
potential
On track for nearly
26,000 publications
2X rate increase in
less than 6 months
1
5. Let’s make this a bit more tangible
1
Industries
Things
Value and Impact
Policies&Standards
Identify
Sense
Connect
Collect
Analyze
Act
Enterprise
Consumer
Public Sector
6. IoT will be pervasive… are you ready?
2013 to 2020: From half as many
to twice as many – growth of IoT
devices relative to traditional
connected devices
Over 7.7 billion people
20X+ as many conne-
cted devices/person
Over 3.2M people
Nearly 30 billion
devices
By 2020 in the World…
Over 3.5
per every human on the planet
By 2020 in Silicon Valley…
For a family of four: 250+
For all in Silicon Valley:200M+
Internet of
Things
Traditional
connected
devices
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0
5
10
15
20
25
30
Connected
devices
1
7. IoT will be materially disruptive – there will be
winners and losers
By 2020 IoT will impact close to 6% of the global economy
$3.5T
Revenue
Redistributed
$1.9T
Productivity
Improvement
$177B
Value to End
Customer
$344B
Additional IoT
Revenues
Revenues directly
attributable to sale of
IoT hardware, software,
and services
Direct reduction in
costs driven by IoT and
realized by end
customers
Direct increase in output per unit of cost,
enabled by IoT and reinvested in productive
assets and activities
Revenues realized within the world
economy that will potentially move from one
player to another with no net increase in
total economy
Global
Economy in
2020
$100T
1
8. Additional IoT revenues will be split in a multitude of ways
Enterprise
Consumer
Public Sector
$217B
$97B
$30B
63%
28%
9%
$344B
Additional IoT
Revenues
Survey Results:
Time to Value Rank
1
2
3
1
$196B57%
$41B12% 18%$62B
13%$45B
Source: 2014 A.T. Kearney IoT Survey
9. 2010 2015 2020 2025 2030
IoT journey is starting now
Value
buzz
1
• $1.1B of . VC investment in IoT –
growing at 46% vs. 7% growth for all
VC investment
• US government is investing $100M per
year and UK just announced a £45m
investment
• Cisco is investing $1B over 5 years;
Intel has created IoT BU
• AT&T, Cisco, Intel, GE, IBM forming
Consortium
Survey Results
13% 22%59% 2% 4%
1
Source: 2014 A.T. Kearney IoT Survey
10. zz
In many cases IoT will radically transform our lives –
Smart Clothing example
Mobile apps that
provide the user
interface and
tethered cloud
connectivity
User
Cloud platform &
software stack
for new use cases to
be developed by
multiple providers
Data storage and
analytics platform
Other
users
Smart Clothing &
Braces
with embedded sensors,
medical monitors, and
actuators
Wearables
with Bluetooth
connectivity that
transmit the sensed
information to a
Smartphone… or two
other Wearables
Service
providers
• Healthcare
• Wellness
• Fitness
• Athletics
• Insurance
• Remote care
• Health & wellness
mgmt.
• Emergency services
• Visualization
• Services mgmt.• Direct feedback
• Therapeutic
intervention
Source: Pictures from company websites sensoria, djoglobal, fitbit, nod, gowtrainer
Information flow Services
1
11. Not all industries will adopt IoT at the same time – adoption
forecasts favor High Tech
2.1
2.3
3.5
4.3
4.4
5.7
5.9
Manufacturing
Retail / Consumer Products
Transportation / Logistics
Healthcare
Financial Services
Natural Resources
Education
Rank ordered responses, with 1 – fastest time to value
High Tech semi and
devices opportunity
(revenue sizing, $B)
10
6
4
5
2
6
Faster Slower
12. Opportunities to stake additional ground within and across IoT
solutions will grow and multiply
• Communication
• Control & automation
• Storage & retrieval
• Data analysis & decision
• Transactional
• Monitoring & control
• Content
• Optimization
• Mobility
• Sharing
• Interactive
• Marketplace
• Internet access and connectivity
infrastructure
• Data aggregation and storage
• Computing
• App & service development enablers
& APIs
• Deployment & management solutions
• Sensors & actuators
• Radios
• Embedded processors
• Smart modules
• Wearables
2
13. Across most industries IoT will transform more products into
High Tech products
Traditional
Products
High Tech
ProductsTraditional
products
incorporating
electronics and
software
2
15. IoT will change customer behaviors and will require even
Higher Tech solutions
Delivery
urgency
Dominant
product mode
Connected
devices
Appetite for
new products
Personalization
Hardware
1.8B
Fledgling
7 days
1 to 3 yrs
Software
30B
Mainstream
Same day
2x / year
Experience
500B+
Prevalent
Hours
Monthly
Demanding Fickle Intolerant
2010 2020 2030
2
16. Key players are starting to get serious about IoT – happenings
in just the last two months
Qualcomm Chief Executive Steve
Mollenkopf said automakers are
accelerating efforts to bring mobile
technology into vehicles — outpacing
health care, education and the
connected-home industries
Windows 10 will help Microsoft integrate more
tightly with the Internet of Things… Windows 10
will run on wireless sensors and integrate with
more objects and machines even as the platform
is being designed to support applications across
PCs, tablets and smartphones.
Europe’s largest telecommunications
providers are gearing up for a battle in the
lucrative race to connect cars, homes, utilities and
other everyday devices to smartphones and other
wireless devices.
Intel Corp is using sensors to
predict tool failure, a company
Internet of Things expert told
attendees at a San Francisco
event Tuesday.
Deutsche Telekom and China Mobile
on Friday formed a joint venture that
will see them provide connected car
services to China's growing automotive
sector.
Dell Inc. has opened a Silicon Valley laboratory
where customers can develop software to
improve business operations. The facility, dubbed
the Dell Internet of Things Lab, opened in the Dell
Silicon Valley Solution Center in Santa Clara
With the rise of the Internet and its data-rich
applications, America's railroad system has entered
a new age -- one that is focused on improving the
commuter experience, enhancing safety and
minimizing costs… Cisco's Connected Rail…
Best Buy will add more than
100 new smart-home
products online and at 400
stores before Thanksgiving.
Microsoft and LG Electronics agreed to
cooperate on the Internet of Things (IoT)
yesterday when Microsoft’s Chief Executive
Officer Satya Nadella was in Korea to attend the
TechDays 2014 forum
3
GE forges Internet of Things alliances with
Verizon, Cisco, Intel… will also open up
its Predix software platform to developers
and users in 2015 as it aims to add
intelligence to industrial gear
AT&T certifies tiny 3G module for IoT
applications …world's smallest 3G chip
module for use on the carrier's cell networks.
The 16-by-26-millimeter module is intended
for applications in the Internet of Things,
transmitting data between devices
17. Competition is also heating up in specific industry segments –
semiconductor industry example
• Bought SmartThings,
developing own
wearable devices &
software
• Investing $18bn in new
manufacturing facility
anticipating demand
from IoT growth
• Intel and Qualcomm leading
consortiums to define
competing IoT standards
• Renesas collaborates with
IS2T and Micrium to
develop Microcontrollers for
IoT applications
• ARM acquired Sensinode
Oy a provider of S/W
technology for IoT
• Maxim teams with Logic
PD to develop wearable
devices
• TI launches its own IoT
cloud ecosystem
• Silicon Labs offers suite of
products targeting IoT
applications including
Zigbee SoCs
• Marvell introduces a new
platform targeting the
internet of things
• STM MEMS Sensor products
target Wearables and
applications beyond the
smartphone
• Bosch partners with Institute
for Technology Management
(ITEM) at the University of
St. Gallen
3
Logic
Radio, Analog and
Power Management
Sensors & ActuatorsMemory
18. Success in IoT requires… high level of business value clarity
Are you
moving fast
enough?
What
industries
will be the
main focus?
Where your
company fits into
IoT ecosystem?
3
19. Success in IoT requires… explicit strategic choices
1
2
3
4
Semiconductor example
Continue in
the core
Expand to adjacent
upstream
Evolve into a
platform player
Transition from products to solutions and services
E.g., manufacture
Individual components
that go into sensors &
devices
Integrate devices,
memory, computing
into SoC edge
modules
Provide components,
modules, software to
enable edge modules and
customer applications
Go into specific industry
verticals with customer
ready offerings
3
20. Success in IoT requires… alignment of innovation focus with
selected strategic choices
Continue in the Core
• Tune product characteristics to IoT-specific needs – e.g., low power,
low cost, increased variability
Expand to adjacent
upstream
• Focus on system and sub-system design and strengthen integration
capabilities, including software
Evolve into platform
player
• Drive standardization and interoperability
Transition from products
to solutions/services
• Deepen vertical industry expertise and corresponding ecosystem
relationships
3
Strategic Choice Innovation Focus
21. Success in IoT requires… operational capabilities built for
flexibility and experimentation
3
Focus on superior
innovation
Proactively
manage
complexity
Implement agile
product
development
Enable distributed
collaboration
Social Ideation & Creative Design
Sharable 3D virtual prototyping to infuse innovation from customers, designers and engineers
alike…3D virtual prototypes can be displayed on any browser, any time, anywhere in the world
http://www.3ds.com/industries/high-tech/ht-body/social-ideation-creative-design
Ideation & Concept Design
Combines automated social market listening, streamlined 3D-drawing to 3D-design integration,
project-oriented social media, and one-source-of-truth product lifecycle management for
extensive development capability. Available on-cloud and on premise.
http://www.3ds.com/industries/high-tech/ideation-concept-design/
Requirement, Traceability & Test
Automate capture of customer needs and associated product specifications... “voice of the
customer” translation it into user requirements for new product definition. Single repository…
http://www.3ds.com/industries/high-tech/smarter-faster-lighter/requirements-traceability-test/
Concurrent Hardware & Software Design
Improves coordination between ME, EE and SW eng teams. Provides a single repository for all
PD data including spec, 3D models, code, analysis results, and mfg requirements.
http://www.3ds.com/industries/high-tech/smarter-faster-lighter/concurrent-hardware-software-
design/
Semiconductor Collaborative Design
Faster design integration through advanced element modularization. Efficiently manages
design data for an entire design organization. Design data contributed by individual teams
seamlessly integrated into higher level designs.
http://www.3ds.com/industries/high-tech/silicon-thinking/semiconductor-collaborative-design/
Company-specific
