6 October 2015

What’s the promise of the

Internet of Things?

Tim Ensor

6 October 2015 2

What is the Internet of Things?

6 October 2015 3

What is the Internet of Things?

>> I’m fine… >> Getting quite full now…

>> I need emptying please! >> Help!!

6 October 2015 4

Over the last few year’s the hype around the Internet of Things has been growing

Ericsson, 2010

6 October 2015 5

Over the last few year’s the hype around the Internet of Things has been growing

Gartner, 2014

Exp

ecta

tio

n

Time

Innovation

Trigger

Peak of

Inflated

Expectations

Trough of

Disillusionment

Slope of

Enlightenment

Plateau of

Productivity

IoT

5-10 years

Hype Cycle

6 October 2015 6

The IoT offers the ability to provide new customer services and experiences with a future

market predicted to be worth $6-14Tn…

IoT Market Size Data Growth

$ (by 2025) # devices (by 2020) (2013-2020)

$6.1T

$7.1T

$14.4T

26B

32B

50B

10x

Total Data

4.4ZB to 44ZB

>40x

IoT Data

0.1ZB to 4.4ZB

ZB = zettabyte = 1021 bytes = 1000 billion gigabytes

6 October 2015 7

…but there are those who raise concerns about its viability

Is it private?

Is it secure?

How can I manage this complex eco system?

Who owns the data?

How do I deal with all this data?

What is the business model for this?

Where will the IoT end up, and how can we benefit from it?

6 October 2015 8

The Internet, conceived of in 1980s, can give us some indicators of where IoT may be in

~20 years (or less)

Disconnected research

networks

Protocols start to

standarize (NCP, X25

etc)

1983: ARPANET uses

TCP/IP in US

1980 1990 2000 2010

Emergence of

ISPs

Internet fully

commercialised

in US in 1995

eCommerce a

significant focus

Web 2.0 allows

customisation

Social networks

and content

sharing

On-demand

media streaming

Standardisation 1 Unbundling 2 Service Evolution 3

6 October 2015 9

Looking ahead, the future development of IoT may follow a similar path

IoT Future

Standardisation?

Unbundling?

Service Evolution? IoT OTT?

Closed systems with

concerns over data

Unbundled data

exchange?

Single service offerings

Fragmented

deployments Common protocol?

IoT Today 1

2

3

6 October 2015 10

Today we still see a large number of protocols being used for internet access even

though the core transport protocols have standardised… 1

6 October 2015 11

…similarly, we see a large number of protocols being used for IoT access, this is likely to

remain the same

Focus on the best approach for each use case; don’t wait for standards

1

6 October 2015 12

As with the move to Web 2.0, the ability to create new services based on a “mash-up” of

other services needs access across multiple data sources

[picture of permissions screen from iPhone]

2

6 October 2015 13

As with the move to Web 2.0, the ability to create new services based on a “mash-up” of

other services needs access across multiple data sources 2

6 October 2015 14

As with the move to Web 2.0, the ability to create new services based on a “mash-up” of

other services needs access across multiple data sources 2

6 October 2015 15

As with the emergence of ISPs, do we need an entity

to mediate this data exchange? 2

6 October 2015 16

As with the emergence of ISPs, do we need an entity

to mediate this data exchange? 2

6 October 2015 17

The development of OTT services have come to dominate the underlying assets that

enable the Internet 3

2014 2015 2016 2017 2018 2019

Online gaming

File sharing

Web, email, and data

Internet video

67,000

86,500

111,600

41,300

52,100

33,500

+230%

Monthly Global Internet Data (PB)

Source: Cisco VNI

6 October 2015 18

This is unlikely for IoT in the near future, but bundled “OTT” services

are likely to offer additional revenue for IoT players 3

>> Can I get some more washing powder?

>> Looks like the boiler needs a service >> Do you want me to arrange that for you?

>> Mum’s not turned the

light on for a while >> I’ll message John to let him know…

6 October 2015 19

So, what might be the impact on business?

Source: Newspaper Association of America, Carpe Diem Blog

$20bn

$40bn

$60bn

$80bn

$0bn

1950 1960 1970 1980 1990 2000 2010 2020

$65.8bn

$17.3bn

$23.6bn

Print advertising

Newspaper Ad Revenue (2013 USD)

6 October 2015 20

So, what might be the impact on business?

Source: Newspaper Association of America, Carpe Diem Blog

$20bn

$40bn

$60bn

$80bn

$0bn

1950 1960 1970 1980 1990 2000 2010 2020

$17.3bn

$23.6bn

Print advertising Print, digital and other

Newspaper Ad Revenue (2013 USD)

6 October 2015 21

In some sectors, things may be similarly

dramatic for IoT

6 October 2015 22

The key question to ask is – what are my customers

actually buying?

6 October 2015 23

IoT is both an opportunity and threat for business now and will determine corporate

outcomes over the next 5-10 years

# Products Revenue Valuation Revenue Multiple

2 ~$0.3Bn $3.2Bn

(Jan 2014)

With IoT

10x

300 page catalogue $3.4Bn $3.3Bn

(July 2015)

Without IoT

<1x

6 October 2015 24

What can you do if you’re a mature player new to IoT?

6 October 2015 25

What can you do if you’re a mature player new to IoT?

6 October 2015 26

The Promise of Internet of Things is being realised now

Based on the history of how the internet emerged, we can see that companies most likely

to succeed in IoT will be those that:

Don’t wait for more standards to emerge in access technology, but pick the right

technology for their usecase

Think about emergent user services beyond what their own business might provide

today

Consider how to offer bundled services as well as positioning themselves to

influence a future ecosystem using their infrastructure

3

2

1

Achieving this needs a focus on both User Service and Technology Enablers

6 October 2015 27

Questions

Tim Ensor

Head of Connected Devices

tim.ensor@cambridgeconsultants.com

>> Thank you. >> Any questions?

6 October 2015

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