“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.

1. INTERNET OF THINGS
WHERE IS THE MONEY?

2. 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

3. 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

4. The internet of things is already here
Inflection
point
6.8 7.2 7.6
50 Billion
“Smart Objects”
Rapid Adoption rate of
digital infrastructure:
5X faster than
electricity and telephony
World
Population
50
2010 2015 2020
40
30
20
10
0
Billions of devices
25
12.5
Timeline
Source: Cisco IBSG, 2011

5. Internet of Things – Why Now?
The perfect Storm!
Internet
of Things
Metcalf’s law
(power of networks
increases with the number
Moore’s Law
(Hardware is getting
cheaper)
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

6. How did we get here and whereto from here?

7. 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

8. 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

9. 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%

10. IoT Verticals
Utilities
Consumer Transportation Retail
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

11. Verticals and growth
Manufacturing and Smart Cities and utilities look like most immediate opportunities in the
Enterprise space Source: Intel

12. 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)

13. Applications
IoT Platform
Devices
Application Platform
Connectivity Platform
Connectivity
Application 1 Application 2 Application 3 Application 4 Application 5
Connectivity
Protocols
Analytics

14. 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

15. 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

16. API for Developers
Data Management and Analytics
Time Series Archival
Device Provisioning, Fulfillment and Management
Message Bus
Applications
Devices
Platform
+ Hardware Ecosystem
Platform + Single Source
Hardware
Connectivity
Module
Connectivity
Module

17. Who is investing in IoT
Corporates Venture Capital
Accelerators Crowd Funding
Source: postscapes, CB insights

18. Whats at play
Investments Acquisitions/IPO’s
Source: CB insights

19. Where is the money going?
Home Automation Wearable/Health Platforms Analytics Security
2014
2013
$ 15M
$ 2M
$ 7M
$ 14.5M
$ 4M
$ 4.9M
$ 5M
$ 1.65M $ 14M
$ 2M
$ 3.75M
$ 100M $
$ 8.5M
$ 112M
$ 3.2B
$ 555 B
~ $ 100M
$ 170M
$ 0.45M
$ 1M
$ 11.9M
$ 30M $ 1.3M
Source: postscapes.org

20. Application 1 Application 2 Application 3 Application 4
Application Platform
Connectivity Platform
Network App 1
Agent 1
App 2
Card 1 Agent 1
Card 2 OS1 OS2
Card 3
Hypervisor
Card 4
Network App 3
Agent
App 4
Card 1 Agent
Card 2 OS1 OS1
Card 3
Hypervisor
Card 4
Applications
Network
Edge
Devices

21. 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