1) The document discusses the emerging field of the Internet of Things (IoT) and opportunities in IoT venture investment. 2) It notes that while hype currently exceeds reality, the connectivity of billions of new devices will transform industries like transportation, healthcare, and utilities and create opportunities for software platforms, end-to-end solutions, and data analytics companies. 3) New challenges around security, scale, and battery life must be addressed as more devices come online, many without adequate protection initially.

1. Asheem Chandna
SANS – Internet of Things
October 2013

2. Agenda
• Greylock
• Hype vs. reality
• Challenges and opportunities
• Venture investment
• Summary
Page 2

3. Greylock Partners
• Founded in 1965
• Menlo Park (primary) and Cambridge
• Currently investing out of Greylock 14 ($1B fund)
• Two primary areas of investment focus
• Consumer Internet
• Enterprise IT
• Invest across stages, with strong focus on early-stage
• Investors with industry operating backgrounds
Page 3

4. Asheem Chandna
• 15+ years product management, marketing, business development
•
•
•
BSEE, MS Computer Engineering – Case Western Reserve University
AT&T Bell Labs, SynOptics / Bay Networks, CoroNet / Compuware
Check Point Software ($10M -> $550M+)
• 10+ years venture capital (investing and company building)
•
•
CipherTrust (INTC), PortAuthority (WBSN), Securent (CSCO), Aruba (ARUN), Sourcefire
(CSCO), Zenprise (CTXS), Imperva (IMPV), Xsigo (ORCL)
Palo Alto Networks (PANW), Sumo Logic, AppDynamics, Delphix, Aquantia, SkyHigh, Avi
Networks, Instart Logic, Tech Process
Page 4

5. Greylock enterprise companies
Cloud Infrastructure
Cloud Services
Applications
Data and
Analytics
*
Management
Security
Storage
Networking
*

6. Greylock consumer companies
Commerce
Media
Ads
Social
Mobile

7. Internet of Things – a definition
“Imagine if all the objects in the world had
all the information that they needed to
function optimally.” – The Economist, 2010
• Sea change in # of sensors + actuators that
can communicate
• Massive new data sources
• Increasing automation (M2M)
Page 7

8. Reality vs. hype: 50 billion connected objects?
Page 8

9. $1 Trillion in new revenue?
Biggest categories:
Security, Education, Industrial Automation?
Page 9

10. Another view on future revenue?
Connection Revenues from Application
Connected Car
Clinical Remote Monitoring
Assisted Living
Home and Building Security
Pay-As-You-Drive Car Insurance
New Business Models for Car Usage
Smart Meters
Traffic Management
Electric Vehicle Charging
Building Automation
2020 ($ billions)
600
350
270
250
245
225
105
100
75
40
(GSM Association of Mobile Operators)
Biggest categories: Cars, Healthcare, Security?
Page 10

11. 6 devices per human?
Page 11

12. Not a new idea…
“When wireless is perfectly applied the
whole earth will be converted into a huge
brain...and the instruments through which
we shall be able to do this will be amazingly
simple compared with our present
telephone. A man will be able to carry one
in his vest pocket.”
- Nikola Tesla, 1926
Page 12

13. But increasing recent interest
2005
2013
Page 13

14. Especially in Asia…
Page 14

15. And increasing public awareness
Page 15

16. Big companies focusing too…
Page 16

17. Big companies focusing too…
Page 17

18. Hype may be ahead of reality, but future growth
could surprise on upside….
IoT?
Page 18

19. New challenges
Connectivity
Footprint
Security
Scale
Battery Life
Page 19

20. Scale
Increasing
devices
(sensors)
data from
each
sensor
big data
problem
Simple example:
If every car in the US records location data every 30s while driven…
16 trillion data points / year
Google Self-Driving Car…
750 MB / sec sensor ingest
Page 20

21. Security
• Exponential expansion in attack surfaces
• Changing threat landscape
• Privacy concerns
• Hardware refresh cycle
• Increased stakes
•
•
Critical infrastructure
Kinetic cyber attacks (e.g. Stuxnet)
Page 21

22. Shodan
Search engine for servers, routers, load balancers,
computers…
Search by location, hostname, OS, IP range, port,
etc.
Page 22

23. Vehicle control
Page 23

24. Scada control
Dan Tentler find
Page 24

25. 10K+ geolocatable scada systems
Eireann Leverett
Page 25

26. Traffic control
Page 26

27. Cams and controls in your home
Page 27

28. Cheney’s heart device…
Page 28

29. Transitions create opportunities
Page 29

30. Transforming industries
• Transportation
•
•
•
Self-driving cars reduce accident rates
Free up productive time
Increase fuel economy, reduce congestion,
increase infrastructure load, optimize routes
• Healthcare
•
•
•
•
Wearables encourage weight loss
Ingestable sensors
Internal monitors feed data to doctors to reduce
hospital visits, algorithms to look for anomalies /
increase preventive care
Mass tracking benchmarks effectiveness of
treatments
• Many others…
Page 30

32. Opportunities and business models
• Software platforms
• End-to-end
•
•
•
•
•
Home automation
Wearables
Healthcare
Industrial
Transportation
• Data and analytics
Page 32

33. Some examples – platform
Page 33

34. Some examples – end-to-end
Page 34

35. Some examples – end-to-end
Page 35

36. Smart marketing but…
Page 36

37. Some examples – data & analytics
Page 37

38. Growing VC investment in IoT
$752M across 100+ deals in last year
(Q2 2012 – Q1 2013)
Page 38

39. Significant businesses starting to be built…
$370M
(market
cap)
$800M
(last
venture
valuation)
$1.5B
(last venture
valuation)
$2B
(acquisition by
Blackstone)
Page 39

40. Opportunity areas
• Software platforms
• End-to-end
•
Home automation, wearables, healthcare,
industrial, transportation
• Data and analytics
•
Transportation (self-driving, optimization)
•
Healthcare (monitoring, tele-health)
•
Utilities (climate controls, smart grid)
Page 40

41. Summary
• Billions of devices are expected to come online
rapidly, many without adequate security
• Hype ahead of reality, but industry
transforming changes are ahead
• Platform transitions will create opportunities for
many new large companies to be built
Page 41