Bridgera IoT Solution Economics

Enterprise IoT
Tips for justifying an IoT Project
By: Ron Pascuzzi
Ron.Pascuzzi@bridgera.com

You have an IoT Solution idea but you need support.
IoT is complicated and you are not an expert in all fields.

You don’t want to risk political capital or waste time
but are unsure you to proceed with asking for support.

What if you could understand the motivations
and reasons for why your target might support your effort?

This presentation introduces the concepts behind buyer motivations and gives you tools to give your idea
a quick evaluation before you get to deep or let your emotions steer you to far.

If you are not selling, no one is
buying
A brief clip about Bridgera IoT
© 2018. All Rights Reserved

IoT Solutions can be complicated because of the cross functional technology required.
For companies that require unique software solutions but do not have software development
competencies, Bridgera IoT may be the right option.

Full-Stack IoT Software-as-a-
Service• Custom Development to Your Spec
• Operating as a Service

Data
Storage Data
Ingestion
Data
Processin
g
Bridgera IoT consists of a cloud platform
built on a big data technology framework.
This frameworks enables scale and
reliability.
The platform ingests data from devices,
processes data in motion, and stores data
in unstructured and structured formats.

Data
Storage Data
Ingestion
Data
Processin
g
Bridgera IoT Feature Library
+
In addition to the platform, Bridgera offers a
rich IoT feature library to accelerate IoT
application development

Data
Storage Data
Ingestion
Data
Processin
g
Bridgera IoT Feature Library
+
Connect
Iot Devices
Develop Custom
Logic. API’s
Enable Applications.
Web/Mobile UI
Bridgera goes a step further by performing all development needed to satisfy a client’s IoT specification

Monitoring
& Tracking
Integrate IoT Technology with Bridgera IoT
Client
Side
ERP
CR
M
Ingest
Store
Process
App
Server
√
Diverse IoT devices
connected to one common
platform

What is IoT?
Is it really new?

Teetering on the Chasm
It is 2018 and in general, the IoT seems to be teetering on the edge of the Chasm

However, the IoT has required 4-5 decades of innovation to get to where it is today

Moving from Innovators to the Edge of the Chasm is most likely attributed to access to
more computing capacity, in smaller packages, that consume less power, and are
available at lower prices.

We carry the equivalent of the computing in our pockets today
that used to fill entire rooms!

What is Now Needed …
Engineering Skills
Marketable Ideas (that people will buy)

Just because you can …
… does not mean you should
How big is your market?

Who Are You Targeting?
Consumers Businesses

60% to 70% of Spending
Buy on Utility
-Is it useful?
-Is it enjoyable?
-Does it offer security?
Value / Price - Satisfaction
Alternatives

Buy on Utility
-Is it useful?
-Is it enjoyable?
Alternatives
Market Size
Place, People,
Promotion (5P’s)

Buy on Utility
-Is it useful?
-Is it enjoyable?
Alternatives
Exist to Generate Profits
Investment Priorities
1. Enable a Strategy
2. Comply with a Regulation
3. Positive Pay Back (ROI)

1. Enabling a CEO or Board Level Strategy
Increase top line revenue
Sell more product
Sell at price premium
Sell something different
Gain efficiency (cost savings)
Automation / Labor Saving
Energy Savings
Raw Material Savings
Value Drivers Strategy Initiatives
Enabling Investments

1. Enabling a CEO or Board Level Strategy
2. Comply with a Regulation or Mandate
3. Positive Pay Back (ROI)

What is an investment made of?

Unit Mfg Cost
Operational Cost
Establish a Budget / Cost Model
Sales and Distribution Costs
Fixed Development (or acquisition)
Cost

t
+
-
$
Expense / Profits Over Time
How much investment is
required?
When will I start to see a
return?
Are you prepared to answer the
basic questions?

Variable Cost [Operating Expense]
Financial Model
Unit Price VolumeX
Unit Mfg
Cost
Operational
Cost
Sales and
Distribution
Cost
Fixed Development
Cost
[Capital Expense]
+ Volume X
What do these variables need to be for this equation to be greater than 1.

If you build it,
no guarantees they will come
Sell your idea!

Status Quo Do Nothing Premium
Protect
Share
Unit Price $20 $19 $29 $20
Volume 1,000,000 900,000 900,000 1,250,000
Fixed
Cost $0 $0 $300,000 $300,000
Op Cost $0 $0 $2 $2
Unit cost $6 $6 $10 $10
sales cost $4 $4 $6 $6
Revenue $20,000,000 $17,100,000
$26,100,00
0 $25,000,000
Profits $10,000,000 $8,280,000 $9,780,000 $2,200,000
Margin 50% 48% 37% 9%
How will you pay for it?
Your in the toaster business.

Protect
Share
Unit Price $20 $19 $29 $20
Volume 1,000,000 900,000 900,000 1,250,000
Fixed
Cost $0 $0 $300,000 $300,000
Op Cost $0 $0 $2 $2
Unit cost $6 $6 $10 $10
Revenue $20,000,000 $17,100,000
$26,100,00
0 $25,000,000
Profits $10,000,000 $8,280,000 $9,780,000 $2,200,000
Margin 50% 48% 37% 9%
Because business has been
good, you now have competition

Protect
Share
Unit Price $20 $19 $29 $20
Volume 1,000,000 900,000 900,000 1,250,000
Fixed
Cost $0 $0 $300,000 $300,000
Op Cost $0 $0 $2 $2
Unit cost $6 $6 $10 $10
Revenue $20,000,000 $17,100,000
$26,100,00
0 $25,000,000
Profits $10,000,000 $8,280,000 $9,780,000 $2,200,000
Margin 50% 48% 37% 9%
You adjust but trend downward

Protect
Share
Unit Price $20 $19 $29 $20
Volume 1,000,000 900,000 900,000 1,250,000
Fixed
Cost $0 $0 $300,000 $300,000
Op Cost $0 $0 $2 $2
Unit cost $6 $6 $10 $10
Revenue $20,000,000 $17,100,000
$26,100,00
0 $25,000,000
Profits $10,000,000 $8,280,000 $9,780,000 $2,200,000
Margin 50% 48% 37% 9%
You explore an IoT Toaster as a
way to compete.

Protect
Share
Unit Price $20 $19 $29 $20
Volume 1,000,000 900,000 900,000 1,250,000
Fixed
Cost $0 $0 $300,000 $300,000
Op Cost $0 $0 $2 $2
Unit cost $6 $6 $10 $10
Revenue $20,000,000 $17,100,000
$26,100,00
0 $25,000,000
Profits $10,000,000 $8,280,000 $9,780,000 $2,200,000
Margin 50% 48% 37% 9%
Premium Offering
Protect Market
Share
What is your pricing strategy?

Protect
Share
Unit Price $20 $19 $29 $20
Volume 1,000,000 900,000 900,000 1,250,000
Fixed
Cost $0 $0 $300,000 $300,000
Op Cost $0 $0 $2 $2
Unit cost $6 $6 $10 $10
Revenue $20,000,000 $17,100,000
$26,100,00
0 $25,000,000
Profits $10,000,000 $8,280,000 $9,780,000 $2,200,000
Margin 50% 48% 37% 9%

Business to Business Example
Value Drivers: Strategy (Initiative)
• Increase revenue by selling something
different (remote monitoring and control
service)
• Cost Savings / Improve efficiency by
reducing labor costs during warranty
(remote troubleshooting and updates)
• Change business model by selling
processed liquid rather than capital
equipment. (subscription business)

Business to Business Example
Security and Location Tracking Solution (Bridgera Rescue).
Value Drivers: Strategy (Initiative)
• Increase revenue by selling
something different
(An insurance add-on security /
emergency service)
• Improve quality of service by
tracking service providers in
route

Proposal Justification
OEM engineers would be able to monitor
performance of installations to improve the
product.
Aligned to a C-Level funded initiative to
improve the product
The OEM could offer a fix-the-first-time
service program with remote monitoring
and diagnostics and perhaps even get
proactive with maintenance services.
overcome product quality issues
Produce an alternative revenue stream
(charge the Producer a premium) that
exceeds the investment cost
The OEM would like to offer the equipment
as a service by monitoring and charging for
output rather than a one time capital
expense.
grow a predictable re-occurring revenue
model
The OEM is liable in the event their
installed equipment fails in a regulatory
audit and therefore wants to protect
themselves by remotely monitoring usage.
Providing a means for complying with a
regulation. In this case, the investment and
operational costs cannot exceed the
penalty and bad press received in the event
of a compliance failure

500 West Peace
St.
Raleigh, NC
27603
info@bridgera.co
m
www.bridgera.com
Bridgera.com/IoT

Bridgera IoT Solution Economics

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