© 2014 IBM Corporation
BusinessConnect
A New Era of Smart
Intelligenta Maskiner &
Smarter Tjänster
Patrick Couch, IBM

A New Era of Smart
The Elevator Pitch
1. Ni vet hur maskiner & apparater av alla slag blir allt mer instrumenterade?
2. Och ni vet hur dessa maskiner och apparater blir allt mer ihopkopplade med
varandra?
3. Och ni känner säkert alla till att dessa maskiner & apparter blir alltmer
intelligenta?
4. Ni förstår givetvis att detta öppnar upp för en mängd helt nya affärsmöjligheter.
5. Och även att både era konkurrenter och era kunder förstår detta.
6. Den stora frågan är: Vad gör ni av detta? Hur gör ni dessa aspekter till
framgångsfaktorer för just er verksamhet, för just ert företag?
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IBM Corporation

A New Era of Smart
The Internet of Things
“In 2020, Over 30 Billion Connected
Devices Will Be In Use.” – Gartner (link)
“Driven by reducing price per
connection and the consequent rapid
growth in the number of machine-to-machine
(M2M) connections, we
expect the number of connected
objects to reach 50bn by 2020 (2.7% of
things in the world).” – Cisco (link)
“There will be 212 B devices or things
connected to networks by 2020” - IDC
(link)
“There are more than 10 billion wirelessly
connected devices in the market today; with
over 30 billion devices expected by 2020..” –
ABI Research (link)
Business Insider Intelligence:
Global Internet Device Installed Base Forecast
“From vehicles and smart phones to
containers and machines – by 2015
more than six billion things will be
connected to the internet.” – Bosch (link)
Source: Installed base forecast: http://www.businessinsider.com/growth-in-the-internet-of-things-2013-10
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IBM Corporation

A New Era of Smart
Big Data – ones and zeros...
Exabytes
% of machine generated
data
Size of machine generated
data
2005 2010 2015 2020
 The exabyte is a multiple of the unit byte for digital information. The prefix exa indicates
multiplication by the sixth power of. Therefore one exabyte is one quintillion bytes (short
scale).
 1 EB = 1.000.000.000.000.000.000 B = 1.000 Peta Bytes = 1 million TeraBytes = 1 billion
Giga Bytes.
Sources: OECD Broadband Statistics, June 2013; IDC, “ Internet of Things (IoT): Realizing Value Through Intelligent Business Transformation,” March
2014; IBM GTO 2014; Forrester, “Mapping The Connected World,” October 2013; IBM HorizonWatch, “Internet of Things,” January 2013, Wikipedia
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IBM Corporation

A New Era of Smart
Big Data – How big is Big?
 Ford Fusion: 145 actuators*, 4.700 relays and 70 sensors, including radar, sonar,
accelerometer, camera, rain sensors. Collectively, these devices generate more than 25
gigabytes of data per hour, which is processed by more than 70 on-board computers.
* According to the Wikipedia; An actuator is a type of motor that is responsible for moving or controlling a mechanism or system.
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IBM Corporation

A New Era of Smart
The opportunity: Services
“Service Revenues for the IoT will reach $500 Billion
by 2018, dwarfing the $33 Billion in revenue expected
from devices in 2018” - Harbor Research (link)
“IoT product and service suppliers will generate
incremental revenue exceeding $300 billion, mostly in
services, in 2020.” – Gartner (link)
“Sized applications of the Internet of Things could
have direct economic impact of $2.7 trillion to $6.2
trillion per year in 2025.” – McKinsey (link)
Bloomberg Article:
Cisco CEO Pegs Internet of Things as $19 Trillion Market
ZDNet Article: Internet of things: $8.9 trillion market
in 2020, 212 billion connected things
“IoT technology and services spending to generate global revenues of $4.8 trillion in 2012
and $8.9 trillion by 2020, growing at a compound annual rate (CAGR) of 7.9%.” – IDC (link)
“Economic value-add (which represents the aggregate benefits that businesses derive
through the sale and usage of IoT technology) is forecast to be $1.9 trillion across sectors in
2020. The verticals that are leading its adoption are manufacturing (15 percent), healthcare
(15 percent) and insurance (11 percent)..” – Gartner (link)
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IBM Corporation

A New Era of Smart
The Challenge: Customers & Competitors
Individuals are more connected and empowered
 Increased consumer expectations
 Different ways to engage digitally
 Expanded information transparency
Business
Challenges
Competition is coming from new and different areas
 New competitors from different industries
 Changes in value migration; new winners and losers
 New types of collaboration
Business
Challenges
Operations and business models are being transformed
 Redefined consumer value
 Integration across digital with physical
 Concerns around risk, security, compliance and privacy
Business
Challenges
Forces
Social media
explosion
Mobile
revolution
Power of
analytics
Cloud
Enablement
Source: 2011 IBM Digital Transformation Study, IBV Analysis
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IBM Corporation

A New Era of Smart
The Solution: Transformation
Organizations transition from intense focus on
operating costs toward growth and transformation1
New business models are impacting
organizations and industries
64% of executives believe new
business models will impact their
industries more profoundly than
ever before2
37% of executives say new
disruptive business models will
be the biggest organizational
impact on their companies3
Anticipated change (%) between
previous 3 years and next 3 years
Sources [1] 2013 CEO Study Q5: “What are the top priorities in your business strategy”; (n=4183);
[2] 2013 Global Digital Reinvention Executive Study Q12: “Please rate the extent to which the following trends will have an impact on your business” (n = 1089);
[3] 2013 Global Digital Reinvention Executive Study Q24: “What is your biggest organizational change likely to be caused by digitization?” (n = 1090);
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IBM Corporation

A New Era of Smart
Transformation: It’s all around
Pervasive
Degree of economic impact
(functions, industries, geographies)
Digital products and
infrastructure
• Digital products (e.g.
Music, Entertainment)
• Infrastructure (e.g.
Telco, Software, IT
Infrastructure)
Digital distribution and
web strategy
• e-commerce (e.g.
Retail, Electronics)
• Efficiency through
web strategy (e.g.
Government)
Digital transformation
of business models
• Mobile revolution
• Social media
• “Hyper digitization”
• Power of analytics
Late 1990s 2000s 2010s
Limited
Time
SSoouurrccee:: BM Institute for Business Value: Digital Transformation Creating new business models where digital meets physical
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IBM Corporation

A New Era of Smart
Transformation: That means business model innovation
Industry
Model Innovation
Changing the way your industry
works or changing your value
chain
 Redefine existing industries
Business
Model Innovation
Enterprise
Model Innovation
Revenue
Model Innovation
Changing what you do and
where you collaborate
 Do as much as possible
within your organization
Changing your value proposition
or the way you price for
products/services
 Pricing innovation
 Move into new industries  Payer innovation  Specialize by focusing on
 Create entirely new industries
differentiating activities
 Intensively collaborate with
external partners
 Package innovation
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IBM Corporation

A New Era of Smart
The Enabler: Analytics
Understanding how to create value from data (…has been the focus of IBM’s analytics studies
for 5 years)
Analytics:
The new path to value
2010 2011 2012 2013
Operationalizing
analytics in
sophisticated
organizations
Analytics:
The widening
divide
Mastering analytic
competencies
Analytics:
The real world use
of big data
Fundamentals
of big data
Analytics:
A blueprint for value
Extracting value
from data and
analytics
The intelligent enterprise
and
Breaking away with BAO
2009
Defining analytics
as a strategic
asset
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IBM Corporation

A New Era of Smart
Analytics: What is it?
How can everyone
be more right…
….more often?
Cognitive
Tell me the best course of action?
Prescriptive
How can we achieve the best outcome?
Predictive
What could happen?
Descriptive
What has happened?
Big Data &
Analytics
Information Layer
How is data managed and stored?
Business
Value
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IBM Corporation

A New Era of Smart
Analytics Success Factors: Characteristics of a Leader
 80% of Leaders measure the impact of analytic
investments.
 66% of Leaders see analytics investment ROI of under 12
months measurement.
 60% of Leaders have predictive analytic capabilities.
 Leaders are 166% more likely to make most decisions
based on data.
 Almost two-thirds of Leaders are confident enough with
the data and analytics available to them to use it in their
day-to-day decision-making processes.
 57% of business executives within Leader organizations
oversee the use of data and analytics within their own
departments, guided by an enterprise-level strategy,
common policies and metrics, and standardized
methodologies.
 Leaders are 221% more likely to have formal career path
for analysts, and 130% more likely to think analytics talent
is very import
Identifying Leaders
Leaders were defined based on their self-reported
performance within their industry and market and who
attribute much of their success to analytics.
Source: Analytics: A blueprint for value – Converting big data and analytics into results, IBM Institute for Business Value
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IBM Corporation

A New Era of Smart
Wrapping up and returning to Ford Fusion
 Mike Tinskey, director of vehicle electrification and infrastructure, describes the data
collected from the vehicles as “small but growing” (Ref: 25GB/Hour). He says “We gather
data every time the customer plugs in. We know where they’re plugging in, how many gas
miles they drove, how many electric miles, how often they plug in and how often they take
trips. It’s helping to shape where we go next with products.” One proposed use of this data is
to work out ‘peak times’ of energy usage, and charge customers a lower rate if they refrain
from plugging in when power demand is high.
Source: http://dataconomy.com/how-big-data-brought-ford-back-from-the-brink/
© 2014 14
IBM Corporation