DIGITAL INTERNET TRENDS

1. Internet of Things 2020:
A Glimpse into the Future
Silicon Valley Thought Leaders Series
Alex Blanter
Partner
+1 510 710 4365
Alex.Blanter@atkearney.com
Follow me: LinkedIn | Twitter
Mark Holman
Partner
+1 650 400 0264
Mark.Holman@atkearney.com
Follow me: LinkedIn | Twitter

2. We came here today to discuss the Internet of
Things…
3% 5%
27%
48%
17%
Never Heard of
It
Novice and
Learning
Casually
Informed
Generally
Familiar
Expert
#IoT2020
In the Know: 65%
Up and Comers: 35%
…ahead of this meeting we asked for your forecasts on
time to IoT value, speed of adoption across sectors and
industries, and barriers to overcome
Source: A.T. Kearney IoT2020 Survey

3. Everybody seems to be talking about IoT
iot
internet of things
security
2020
cloud trends
cisco
2013
mean
blog
ioe
check
companies
great
theiot
ibm
need m2m
data mobile
people
time
web
2014
tech
google
smart
big
join
app
world
IT
blogs
technology
connected
business
bluetooth
digital
today
launches
devices
big data start
gigaom
post
potential
#IoT2020
On track for nearly
22,000 publications
Source: Twitter, Google, Factiva, A.T. Kearney

4. Twenty unique definitions provided in the survey – key words:
Devices, System, Connected, Internet, Data
Source: Sysomos, A.T. Kearney
#IoT2020

5. We define the Internet of Things as a…
seamless combination of
embedded intelligence,
ubiquitous connectivity, and
deep analytical insights
that creates unique and disruptive value
for companies, individuals, and societies
#IoT2020
Source: A.T. Kearney

6. Industries
Things
Value and Impact
Policies
&
Standards
Identify
Sense
Connect
Collect
Analyze
Act
Taking that definition to the next, more detailed,
level…
#IoT2020
Enterprise
Consumer
Public Sector
Source: A.T. Kearney

7. 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 connected
devices per 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…
#IoT2020
For a family of four: 250+
For us in this room: 7,000+
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
Source: BI Intelligence, US Census Bureau, Silicon Valley Index, A.T. Kearney

8. 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
#IoT2020
Source: A.T. Kearney

9. Additional IoT revenues will be split in
a multitude of ways
Enterprise
Consumer
Public Sector
$217B
$97B
$30B
63%
28%
9%
#IoT2020
$344B
Additional IoT
Revenues
Survey Results:
Time to Value Rank
1
2
3
$196B
57%
$41B
12% 18%
$62B
13%
$45B
Source: A.T. Kearney

10. 2010 2015 2020 2025 2030
It will take years for IoT potential to be realized
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
#IoT2020
Survey Results
13% 22%
59% 2% 4%
Source: A.T. Kearney

11. Challenges to IoT deployment and value span 6 areas
#IoT2020
Industries
Things
Value and Impact
Policies
&
Standards
Identify
Sense
Connect
Collect
Analyze
Act
Enterprise
Consumer
Public Sector • Lack of standards for critical
layers of IoT solutions
• Multitude of alliances and
partnerships
• Policies not keeping up with
technological advancement
• Lack of scale needed to
achieve acceptable cost
points
• Limited near term business cases
• Concerns about design and
implementation complexity
• Complex
interoperability
• Complex interoperability
• Legacy environments
• Exponentially growing data volumes
• Lack of integrated end-
to-end solutions that
deliver value
Source: A.T. Kearney

12. Overcoming these challenges will require all and
everyone – top 10 success factors
1. Standardized platforms and
interfaces
2. Updated policies and regulations
3. Defined cross-industry collaboration
models and alliances
4. Strategically eliminated systemic
bottlenecks
5. Relentlessly lowered costs
Overall Ecosystem Individual Company
1. Clarity of business value
2. Strategic and operational flexibility
3. Focus on superior innovation
4. Collaborative and co-creative culture
5. Teams capable of ecosystem
collaboration
#IoT2020
Source: A.T. Kearney

13. What will the future world look like?
Objects communicate with each other without humans and act independently
Distributed intelligence enables self sufficiency
Experiences are personalized
Autonomous
Analog and digital world merge, with seamless experiences across both
Everything can access everything else remotely
Sharing becomes predominant mode of use
Unified
Digital identity for every human, creature, and object… and a home page
Everybody and everything is traceable and trackable
Technology is pervasive but invisible
Transparent
Most everything is direct – intermediaries are gone
Most everything is real time – information, decisions, actions
Predictive, with an ecosystem that anticipates and responds to its environment
Dynamic
#IoT2020
Progress
by 2020
Source: A.T. Kearney

14. Appendix: Survey Results

15. Question 1: How familiar are you with IoT? –
70+ responses received
3% 5%
27%
48%
17%
Never Heard of
It
Novice and
Learning
Casually
Informed
Generally
Familiar
Expert
1. These responses omitted from the rest of the survey
Source: A.T. Kearney
1

16. 3%
Never
3%
Beyond
2025
2025
22%
2020
62%
2015
10%
2.6
2.0
1.4
Consumer
Public sector
Enterprise
5.9
5.7
4.4
4.3
3.5
2.3
2.1
Natural resources
Education
Financial Services
Healthcare
Transportation/
Logistics
Retail /
Consumer Products
Manufacturing
4.2
4.1
3.9
3.3
3.2
2.5
Standards
User concerns
Regulation
Investment
Insufficient value
Technical
Survey results
Q2: When will delivered IoT value live up
to expectations?
Q3: Which sectors of the economy will
develop the fastest?
Q4: Which industries will be furthest
along the adoption curve by 2020?
Q5: Which factors need to be overcome
for IoT to reach its potential?
Source: A.T. Kearney

17. Disclaimer
This document is exclusively intended for select clients of A.T. Kearney. Distribution,
quotations, duplication, and excerpts are not permitted without A.T. Kearney’s prior
written consent. The content compiled in this report is for presentation only and does
not represent the complete findings or total documentation on the topic represented.