iot-where is the money? - chandrashekar raman, engagement manager, iot strategy, cisco,11th oct....
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“Internet of Things (IoT) – Where is the Money?” - This talk highlighted the need for innovative business and technical models. Top 5 key takeaways from the session: 1) Analyze business models from the perspective of targeting “control points” (allows disproportionate share of value e.g. platform), “network externalities” (users generate more users e.g. facebook) and “virtuous cycle” (self-propogating value system e.g. Twitter: tweets generating more, value, tweeters and users) 2) Fog computing (solutions at the edge of the network) should be considered for "time sensitive" or "mission critical" solutions 3) IoT Stats 2013: $1.7B funding, 186 deals, 30% up YOY, 75% up on exits, largely in platforms; Cisco estimates 50B connected devices by 2020, economic value of 19 trillion added in next decade 4) Manufacturing and Smart Cities most immediate opportunities in Enterprise space 5) Key Challenges are security and time-sensitive networking. In summary, IoT Startups focused in a hot space need to pick clever business models relative to the competition.TRANSCRIPT
INTERNET OF THINGS WHERE IS THE MONEY?
Quick Intro ¨ http://www.linkedin.com/pub/chandrashekhar-raman/4/ab4/644 ¨ IoT Strategy at Cisco ¨ Current Focus: Innovation Ecosystem development, IoT Innovation
Centers, Hackathons ¨ Before this: Product Management, Application Development,
Consulting, Smart Cities ¨ Interests :
¤ Making IoT work – Raspberry pi, simple home automation ¤ Open Data and Analytics, in the context of Indian democracy
n democracydatablog.blogspot.in
Topics for Today ¨ Drivers for the Internet of Things ¨ Size of the opportunity ¨ Key Verticals and Markets ¨ Technology stack and control points ¨ Platforms and Network Externalities ¨ Who is investing and where ¨ IoT opportunities for startups
The internet of things is already here
7.2 6.8 7.6
World Population
Rapid Adoption rate of digital infrastructure:
5X faster than electricity and telephony
50 Billion “Smart Objects”
50
2010 2015 2020
0
40
30
20
10
Bill
ions
of d
evic
es
25
12.5
Inflection point
Timeline
Source: Cisco IBSG, 2011
Internet of Things – Why Now? The perfect Storm!
Internet of Things
Moore’s Law (Hardware is getting
cheaper)
Metcalf’s law (power of networks
increases with the number of nodes)
Big Data Analytics and Cloud
(Affordable tools to make sense of Data deluge)
API Economy (service models and loosely
coupled software)
IP V6
Data Anemic à Data Bulimic Insight à Foresight Reactive à Proactive
How did we get here and whereto from here?
How Big is it?
“Trying to determine the market size for the Internet of Things is like trying to calculate the market for plastics, circa 1940. At that time, it was difficult to imagine that plastics could be in everything.”
Prof. Michael Nelson, Georgetown University
Big Numbers: whichever way you look at it.
Source Number of Objects (2020) Market Size
Cisco 50 Billion Economic Value of $19 Trillion added in the next decade
McKinsey - As high as $6.2 T Economic value in 2025, upto $2.5T in healthcare alone, followed by manufacturing
Goldman Sachs 28 Billion ~ $2 Trillion opportunity just in Industrials
Gartner 26 Billion Addressable market of $300B, $1.9B economic value added by 2020 Manufacturing, Healthcare and Insurance top verticals
Internet of Things market predictions ¨ Nearly 2 Billion connected devices will be shipped in 2014 – increasing to
~8 Billion in 2020 ¨ ~ 1-3 Billion utility meters in 2020, ~0.5-1.5 Billion autonomous vehicles ¨ Driverless cars can generate ~$1.3T of savings just in the US ¨ 500M parking lots in US ¨ $14B in potable water is lost every year to leakage, theft and unbilled
useage ¨ 280 Million streetlights globally ¨ Wearables market to reach $20B by 2017 at a CAGR of ~60%
IoT Verticals Utilities
Transportation Retail Consumer
Quantified Self, Wearable tech , Smart Home, connected appliances
Disc. Manufacturing
Automation, Preventive Maintenance, Asset Management, energy efficiency
Proc. Manufacturing
Automation, Preventive Maintenance, Scheduling, energy efficiency
Smartgrid. Automatic Metering Infrastructure, Asset Management
Healthcare
Remote monitoring, Early intervention, preventive care, post operative
Smart City
Safety and Security, Parking, Waste Management, Lighting, services kiosks
Telematics, Autonomous cars, Positive train control, preventive maintenance
Inventory Control, Smart checkout, vending machines, multi channel
Verticals and growth
Manufacturing and Smart Cities and utilities look like most immediate opportunities in the Enterprise space Source: Intel
IoT in Manufacturing ¨ Converged Plant networks ¨ Plant Wifi ¨ Factory Visibility ¨ Automation – Industry 4.0 ¨ Energy Management ¨ Preventive maintenance ¨ Remote monitoring ¨ Connected Supply chain
Key Challenges 1. Security 2. Determinism, time
sensitive networking)
Devices
Application Platform Connectivity Platform
Connectivity
IoT Platform
Applications Application 1 Application 2 Application 3 Application 4 Application 5
Connectivity Protocols
Analytics
Architectural Control Point ¨ Architectural Control Point is a system component, the control over
which confers control over other components (i.e. enable or constrain design of other components)
¨ Component is an architectural control point if • Causes Technological Dependence – interfaces, standards
• Adds Value to dependents
• Absence of close substitutes/ high switching costs/ Intellectual Proporty
Control points capture a disproportionate share of value generated by the system and are key to sustaining relevance
Platforms as Control Points Network Externalities and the Virtuous Cycle
1 Sided NE – ex Social Networks 2 Sided NE
More Users
More Value/Incentives for new users
$$$
Ex. Telephone, Whatsapp, Facebook
More Developers on Platform
More Users/Customers/ Installed base
More monetization opportunities for
developers
More Applications – more value for users
Development Platforms, Ad Networks, Ecommerce Aggregators
Message Bus
Device Provisioning, Fulfillment and Management
Time Series Archival
API for Developers
Data Management and Analytics
Applications
Devices
Platform + Hardware Ecosystem
Platform + Single Source Hardware
Connectivity Module
Connectivity Module
Who is investing in IoT Corporates Venture Capital
Accelerators Crowd Funding
Source: postscapes, CB insights
Whats at play Investments Acquisitions/IPO’s
Source: CB insights
Where is the money going? Home Automation Platforms Analytics Security Wearable/Health
2014
2013
$ 15M
$ 2M
$ 7M
$ 14.5M
$ 4M
$ 4.9M
$ 5M
$ 14M $ 1.65M
$ 2M
$ 3.75M
$ 100M $
$ 8.5M
$ 112M
$ 3.2B
$ 555 B
~ $ 100M
$ 170M
$ 0.45M $ 1M
$ 11.9M
$ 1.3M $ 30M
Source: postscapes.org
Application 1 Application 2 Application 3 Application 4
Application Platform
Connectivity Platform
Network App 1 Agent 1
App 2 Agent 1 Card 1
Card 2 OS1 OS2
Card 3 Hypervisor
Card 4
Network App 3 Agent
App 4 Agent Card 1
Card 2 OS1 OS1
Card 3 Hypervisor
Card 4
Network Edge
Devices
Applications
Summary ¨ Next Big Opportunity that will change the way we work live and play ¨ Smart home and wearables are more visible but significant opportunity in
Manufacturing and Smart Cities ¨ Understand the customer and his universe – technology comes next ¨ Holy grail – ‘uber’ platform that will connect everything and become the
‘facebook’ of things ¨ Opportunities in new ‘edgeware’ marketplaces ¨ Opportunities in designing customer use cases using off the shelf hardware
and software platforms ¨ Design thinking for the internet of things