1) IoT will significantly disrupt current business models and value chains, allowing new competitors to enter markets and demonetize existing ones. 2) Companies must view digitalization and IoT as integral parts of their overall business strategy, not just technical projects, in order to stay competitive. 3) Adopting IoT and digital technologies is necessary just to maintain operations, but true opportunities lie in using them to completely reimagine products, services and value chains.

1. IoT Took My Money:
The business case for IoT
Jaakko Kankaanpää, Mindtrek IoT Event
18.10.2016

2. My dream: From this...

3. The tech is already here
FROM MINORITY REPORT TO BURBERRY

4. http://nordicapis.com/20-emotion-recognition-apis-
that-will-leave-you-impressed-and-concerned/

8. …to this:
Things just happen when or prior to when
I need them and the whole purchasing &
payment process is somewhere in the
background.
I will not even have to make the conscious
decision to buy – things just happen in
one smooth flow.
IoT took my money.

9. Case #2: Flat tire
“Dear driver my tire broke. In 2 km I will steer to the next rest
zone by the road and help will arrive in 15 minutes. I have
also updated your calender, renewed the tickets for the
next show and notified your friends.“

10. We all know the story….

11. By Sonera
Getting the data is not enough
It’s not true IoT before
you act & automate!
Sense &
Connect
Aggregate
& Analyze
Act &
Automate
• Sensors & modern
hardware (pre & retro fit)
• Connectivity & software
management
• Device management
• Data aggregation and
management for
customers (i.e.
dashboards, reporting,
tools)
• Custom analytics
• Data Quality & Privacy
management
• Predictive maintenance
& Asset management
• Convergent charging
• Real-time offer
management
From data collection to business innovation through IoT

12. (The tech is easy)

13. (Best practices and methodology are readily available)

14. And we have Lean to run our development


15. 30.9.2013 www.ambientia.net 15
Even large organizations have undergone their pilots and POCs

16. Customers don’t call them Internet
of Things applications.”
The people that will benefit the
most from these concepts are
the end users. They will be the
people to drive the need and
demand for this technology.
http://www.automationworld.com/its-not-internet-things-its-business-case
Are we ready to stop
tinkering and start being
serious?
What is the true business
effect of IoT /
digitalization?

17. Esittely
The inherit Claim #1: IoT is
not a technical project
Tech is nothing if not combined with business strategy

18. Digitalization is actually not just one thing…it’s
a convergence of trends and developments in
technology
Smart / Connected devices
Advanced integration
Data visualization
Mesh Networks: sensors
Prescriptive algorithms
3D printing Mass Customization
Autonomous vehicles
Cognitive Automation
Content Analytics
Machine to Machine communication
Predictive and content analytics
Internet of Things / internet of everything
Consumer telematics
AI
Crowdsourcing
Location intelligence
Big Data
Open Data
Machine learning

19. The 8 game changers (P. Diamandis)
1. Computation
2. Internet of Things (Sensors & Networks)
3. Robotics/Drones
4. Artificial Intelligence
5. 3D Printing
6. Materials Science
7. Virtual/Augmented Reality
8. Synthetic Biology

20. Information is the key driver
“Information is the oil of the 21st century, and analytics is the
combustion engine”Peter Sondergaard, Gartner
© Cyclecious

21. © McKinsey
21
How will digitalization proceed and what is the scale?

22. Let’s take a look at (the winners of) the internet revolution:

23. Fabrizio Loncini
From CD’s to Ipod

24. http://expandedramblings.com/index.php/airbnb-statistics/
This year 2 million listings in 192 countries and 57.000 cities –
that’s some hotel chain!
500.000 customers / night

25. Wayfair: reaching 1 billion sales by
selling furniture utilizing state of the art algorithms

26. www.ambientia.net 26

27. Where will Apple grow next? Revenue
- Devices
- Software
- App Store (3rd
parties
included)kset)
- Content
- Perfect ecosystem
control
Over 800 million
credit cards

28. © Asymco
2012: 43.62%
2013: 9.55%
2014: 7.24%,
2015: 28.22%
This is the growth rate in Apple’s
revenues over the last four years,
for an annual average of 21.7%.
In 2015, the company racked up
more than $231 billion in sales.
High rates of growth aren’t
typically associated with such a
large revenue base, yet Apple
has defied convention.
Growing revenue by just
10% in 2016 would require
finding a new $23 billion
business.
To put that in perspective,
that’s more than Time Warner
Cable made in all of 2014.
mattcollinsblog.com/

29. Claim #2 In (almost) any business the next phase is to
focus on combining the digital and physical to create new
value chains

30. The big boys lead the way….Sensors, Automation, A.I., Robotics = physical
By Sam Churchill

31. 4 pillars of Amazon
(Bryan Eisenberg)
• Customer Centricity
• Culture of optimization
• Culture of innovation
• Culture of agility
“We are not in the
business of selling
books, but of helping
our customers buy
books.”
Jeff Bezos

32. The home front

33. 33

34. We already have our own trailblazers

35. Example of how to expand strategically: who owns IoT
www.ambientia.net 35

36. Other IoT effects: Smart & evolving products
Could the price of a used car actually rise?

37. Marketing and
other functions
will be affected
as well
Virtual reality + buying shoes + charity + emotion = unforgettable shopping & brand connection

38. © The Digital Enterprise
Why this (digitalization driven) disruption is different?
by james mcquivey

39. The world of unexpected convergent consequenses
• The combined disruptive effect creating and transforming
business & value chains
• Very difficult to predict based on current experiences and
models

40. And it’s faster and do or die:
The Accenture Shark Fin model:
The age of binary success
Digital
disruption is
speeding up
innovation and
changing
traditional
industry models
from years to
weeks
• Volatile
• Complex
• Fast
http://zafin.com/our-articles/infographic-shark-
fin-model-digital-disruption/

41. Lack of speed: From eagle to pigeon – missing
free-to-play

42. Global Institute research supports that belief, estimating that the impact of the Internet of
Things on the global economy might be as high as $6.2 trillion by 2025.
$6.2 trillion
The ballpark?

43. Even the
modest
estimates are
in the 100’s of
billions for EU
alone

44. No field of
business will
escape

45. The hype!

46. The view of the World Economic Forum
By Blesblov &
Pascal Charest

47. Could this
really
happen
(again)?

48. Claim #3: This 4th revolution will demonetize and
deconstruct the current value chains significantly
• It is not enough to utilize IoT in one function or process or value
chain element – the whole chain has to be retooled
• The “old” laws of entering the field don’t apply
• New competitors and completely retooled old competitors have
the edge
• Still “old” players who cover an industry/value chain end to end
have an advantage at least if reacting first
“Demonetizing & dematerializing are the key
activities of disrupting business in the age of
zero marginal cost” @PeterDiamandis

49. Not just us -> ATKerney: recommendations
• Develop IoT objects and use cases in close cooperation with the
customer and a firm understanding of the value chain
• Bring IoT solutions to market in a way that maximizes their chance
for adoption
• Extend the customer relationship throughout the life cycle
• Navigate the regulatory environment and public perceptions to avoid
IoT being viewed as an intruder of privacy
• Contribute to powerful industry relationships to ensure openness.
https://www.atkearney.com.tr/strategic-it/ideas-insights/article/-/asset_publisher/LCcgOeS4t85g/content/the-internet-of-things-a-new-path-to-european-prosperity/10192?inheritRedirect=false&redirect=https%3A%2F%2Fwww.atkearney.com.tr%2Fstrategic-it%2Fideas-
insights%2Farticle%3Fp_p_id%3D101_INSTANCE_LCcgOeS4t85g%26p_p_lifecycle%3D0%26p_p_state%3Dnormal%26p_p_mode%3Dview%26p_p_col_id%3Dcolumn-4%26p_p_col_count%3D1

50. Gartner’s example: The digital edge – implementing digital (The Digital Edge / © Gartner)
From context and outcomes to digital From tech to outcomes
There are loads of great tools for the job

51. 30.9.2013 51
A model to map and plan implementig the digital dimension
(The Digital Edge / © Gartner)

52. Examining the cooperation of digital and physical
(The Digital Edge / © Gartner)

53. How it should be viewed : (Mark P. McDonald) –
Let’s not develop an electric patient treatment card but the whole smart
hospital
http://blogs.gartner.com/mark_mcdonald/2013/01/23/digital-strategy-or-digital-tragedy/

54. Digitalization conjures forth completely new networks and
value chains
Claim #4 Developing a single process or plain optimization
is not enough – the whole strategy must be viewed through
the new paradigm
© linh.ngân

55. 55
Why everyone is forced to act or die:
A comparison to eCommerce
0
100000
200000
300000
400000
500000
600000
Amazon Walmart Safeway
Turnover/ employee (dollars)
Amazon
Walmart
Safeway
Comparison (from Finland): Trad. vs. omnichannel cost structure -> 40 % VS 13 %

56. 56
GE: Evolution Series-veturi
Jaksaa vetää 170:tä Boeing 747 -jumboa vastaavan painon
Leikanneet polttoaineen kulutusta
-6,3%
Nostaneet nopeutta
10-20%
GE Trip Optimizer

57. By Andrew Morrell
A 1 percent change in fuel burn for an airline is worth hundreds
of millions of dollars.” – Jeff Immelt
We will experience the two of the most amazing events in human history: the
creation of true machine intelligence and the connection of all humans via a
common digital network, transforming the planet’s economy
The Second Machine Age, Erik Brynjolfsson and Andrew McAfee
2 timelines for the benefits…

58. What about the deep end:
The moonshots (10 X instead of +10%):
• Should we tinker in the world where these companies already
operate?
• All these companies already have significant funding

59. Furthering our lifespan: the 72 is the new 30
Between 1910 and 2010 improvements in medicine and sanitation increased the human
lifespan by 50 percent from 50 to 75 years. Today with the emergence of exponential
technologies such as those being pioneered and advanced by HLI we have the potential to
meaningfully extend the lifespan even further.

60. Mining asteroids

62. Even if we tone it down a notch…

63. And it’s working

64. To recap:
IoT is not a tech project
&
The relationship between business strategy and digitalization
• They should not be separate things but digitalization should be an
integral part of the actual strategy

65. © LuAnn Snawder
Strategic agility is the most crucial
competitive advantage today.