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1 Board Forum 2015 Teollinen Internet 1

2 Internet of Things Ecosystem What is it and why should we care? JP Suortti

3 What is it? 2015 Deloitte & Touche Oy, Group of Companies 3

4 Definitions A variety of terms are being used some dating back 15+ years Machine-to-machine (M2M) Technologies that allow both wireless and wired systems to communicate with other devices of the same type - Siemens Industrial Internet The integration of complex physical machinery with networked sensors and software - General Electric Internet of Things (IoT) Ultra-connected environment of capabilities and services, enabling interaction with and among physical objects and their virtual representations, based on supporting technologies such as sensors, controllers, or low-powered wireless as well as services available from the wider internet - Kevin Procter & Gamble Internet of Everything (IoE) The networked connections of people, process, data, and things - Cisco 2015 Deloitte & Touche Oy, Group of Companies 4 Deloitte Confidential

5 What are we really talking about? Smart, connected products Security Key things - Feedback loop - Actionable insight - Impact to value chain position Source: Adapted from Harvard Business Review (2014) Connectivity Applications Processing, analytics plus storage capability at scale Software Sensor(s) & H/W PHYSICAL OBJECTS External information Other systems 2015 Deloitte & Touche Oy, Group of Companies 5 Deloitte Confidential

6 Case example Aircraft Engine Monitoring 1. Data from jet engines and other parts of the aircraft are aggregated and transmitted via GSM, Wi-Fi, satellite 4. Staff for maintenance, flight scheduling, inventory and asset management operate more effectively Engines generate half a terabyte of data per flight Insight made possible from data across many engines 2. Data is analyzed using advanced algorithms to detect potential failure and information is routed to appropriate staff 3. New processes enable aircraft to be serviced on an as needed basis rather than as scheduled Key Benefits Prevent expensive failures and fines Right worker or part at the right place at the right time New business models Extend asset life by avoiding failure Reduce safety incidents Knowledge ahead of turnarounds 1. Engine 2. Service Can be applied to Any rotating machinery e.g. locomotives 3. Air miles Any burning machinery e.g. turbines Equipment with high impact of failure e.g. transformers Source: GE.com, GigaOM, Deloitte analysis 2015 Deloitte & Touche Oy, Group of Companies 6 Deloitte Confidential

7 IoT will have a broad impact across industries Range of use cases are being applied Manufacturing Healthcare Remote machine control, Predicting equipment failures, Minimizing downtime, Effective supply chain Monitoring patients at home, improving drug compliance Insurance Banking & Securities Retail & Wholesale Computing Services Government Transportation Utilities Real Estate & Business Services Automatic damage reports, Smart vehicle insurances Cash free transactions, Smart sensors, Remote surveillance Wearable technology, automatic grocery shopping Wireless connectivity, ad hoc data collection, Information security services, Server technologies Remote services, Information sharing, Tax control Collaborative parking slot finder, Smart tolls, Collaborative eco-friendly navigator, Driverless vehicle Smart grid, Smart metering, Power efficiency Energy consumption metering, Sensors for damage controlling, Smart Home Systems 2015 Deloitte & Touche Oy, Group of Companies Deloitte Confidential Source: Gartner

8 Current uses Majority of IoT use cases are based on cost reduction and risk management. Focus on revenue and innovation would offer considerably larger potential Cost Reduction Risk Management Revenue & Innovation 65% 22% 13% (Transaction, facility / asset lifecycle) (Transaction, facility / asset lifecycle) (Relationship, product / customer lifecycle) Source: Deloitte research (2014) Sample 89 IoT implementations 2015 Deloitte & Touche Oy, Group of Companies Deloitte Confidential 8

9 Why should we be interested now? 2015 Deloitte & Touche Oy, Group of Companies 9

10 Driver #1: Miniaturization and high-performance computing enable more from less Driver #2: Cost reduction and economics will increase adoption and availability of connected devices Driver #3: Ubiquitous connectivity and means to make sense of large volumes of fast flowing data 2015 Deloitte & Touche Oy, Group of Companies Deloitte Confidential 10

11 Driver #4: We will not run out of IP addresses anymore 4,3bn (= 10 9 ) 3,4 x Deloitte & Touche Oy, Group of Companies Deloitte Confidential 11

12 All this is expected to enable exponential growth 46% of global GDP can benefit from Industrial Internet 20 Global M2M Connections $19 trillion of value at stake by 2020 $1.9 trillion global economic value creation by billion embedded devices and intelligent systems by 2020 $9 trillion in annual sales by billion connected people 50 trillion GBs of data Global M2M Connections (billion) million apps % of executives exploring/adopting IoT Source: Machina Research (2013), Pyramid Research (2012), Gartner, Nov. 2013, IDC, Oct. 2013, The Economist, Oct. 2013, Deutsche Bank May 2014, GE Deloitte & Touche Oy, Group of Companies Deloitte Confidential 12

13 One should remain pragmatic amidst the hype Deloitte predicts that in bn wireless IoT devices will ship, up 60% from 2014, with an installed base of 2.75bn devices. IoT-specific hardware is likely to be worth $10 billion Associated services enabled by the devices about $70 billion About 60% of all wireless IoT devices will be bought, paid for and used by enterprises and industries. Over 90% of the services revenue generated will be enterprise, not consumer Source: Deloitte Predictions Deloitte & Touche Oy, Group of Companies 13 Deloitte Confidential

14 One thing is certain You do not succeed alone! IoT Ecosystem The IoT ecosystem is in its early stages of evolution and is characterized by a high degree of complexity Startups, incumbents, M&A, alliances, partnerships Industry Groups Hardware Makers Network Service Providers Cloud Service Providers (CSP) The desired outcome is an ecosystem where everyone benefits IT services vendors Regulators / Government Standards Security Interoperability Breakdown of silos Horizontal layers Data common with open access Standards bodies Software vendors Middleware vendors (Device) manufacturers 2015 Deloitte & Touche Oy, Group of Companies Deloitte Confidential 14

15 GLOBAL MEGATRENDS Pekka Lundmark President and CEO Feb 25, 2014

16 1700 s 1800 s 1900 s 1950 s 2000 s 2020 s Konecranes Plc. All rights reserved.

17 STRATEGIC PLANNING ASSUMPTION By 2020, the strongest companies will be those with most industry digital platform control. #GartnerSYM 2013 Konecranes. All rights reserved Gartner, Inc. and/or its affiliates. All rights reserved.

18 EXPLODING NUMBER OF NEW BUSINESS OPPORTUNITIES (The Connectivist, 2013) 2014 Konecranes Plc. All rights reserved.

19 VALUE DELIVERED BY INDUSTRIAL INTERNET IN IS MEASURED IN TRILLIONS Retail Trade 11% INDUSTRIAL Internet of Things $3.8 Trillion Information Services Finance & Insurance 9% 9% 27% Manufacturing Other Industries 44% (Cisco IBSG, 2013) 2014 Konecranes Plc. All rights reserved.

20 Konecranes Plc. All rights reserved.

21 Konecranes Plc. All rights reserved.

22 ENEVO AN EXAMPLE OF A GREAT FINNISH COMPANY Konecranes Plc. All rights reserved.

23 INDUSTRIAL INTERNET REQUIRES A MINDSET CHANGE Competition Customer needs Traditional equipment business Competition from same industry Reactive mindset Industrial internet mindset New startups, new companies and existing partners will become competitors Predictive mindset Products & services Stand alone product and lifecycle services Product updates through more software centric offering Importance of data New business opportunities Data is used for maintenance Leverage existing processes and incremental improvements for products and services Data to knowledge transformation creates new business models and new services Understand the possibilities to find new ecosystem partners that can be interested in our data Konecranes Plc. All rights reserved.

24 FINLAND HAS AN UNIQUE OPPORTUNITY TO BECOME INDUSTRIAL INTERNET COMPETENCY HOT SPOT Pack of market leaders in small geographical area High quality Universities with supporting curriculum for both heavy industries and ICT. Dynamic Start-up scene But there is work still needed Konecranes Plc. All rights reserved.

25 FINNISH INDUSTRIAL INTERNET RESEARCH TEKES VTT DIGILE SHOK FIMECC FIIF AALTO ETLA Konecranes Plc. All rights reserved.

26 26 19/01/ Konecranes Plc. All rights reserved.

27 TEOLLINEN INTERNET HALLITUKSEN AGENDALLA Kimmo Rasila Hallituksen puheenjohtaja, Nixu Oyj ,

28 OMA VIITEKEHYKSENI TEOLLISEEN INTERNETIIN Ohjelmistot Digitalisointi Palvelukonseptit ICT Harmillista Todellista Muuttuvat uhkakuvat KYBER IBM Etähuoltoa 80-luvulta ebusiness 90-luvulla Nixu

29 Here is how the Enevo system works! Enevo servers Analytics Ultra low-power wireless fill level sensor Enevo web service and API to fleet management systems Optimized collection schedules and routes

30 What we do Enevo develops and operates Enevo ONe, a wireless sensor network and online service that cuts 40% of waste collection costs for waste management companies and municipalities. We use smart wireless sensors to gather fill level and usage pattern data from waste containers, analyze it using our proprietary algorithms and generate dynamically optimized collection schedules and routes for waste collection fleets.

31 MAHDOLLISUUDET EPÄSUORAT SUORAT RISKIEN HALLINTA

32 ONKO ENEVO MAHDOLLISUUS EPÄSUORA SUORA RISKI Nixu

33 VALUE CHAINS OF YOUR CUSTOMER CHAINS KUVAT POISTETTU TARKOTUKSELLA Nixu

34 IPR R&D:stä yli 50% on ohjelmistoja SUN, MUN, MEIDÄN VAI KOHTA KILPAILIJAN?

35 PONSSE SCORPION Järjestelmässä koodiriviä, jonka omistuksella on väliä Nixu Nixu

36 Joulukuu 2013: Kemppi lanseeraa uuden Kemppi ARC System 3 -ratkaisun ja täydentää osaamistaan hankkimalla norjalaisen Weldindustry AS:n

37 INDUSTRIAL INTERNET JA IPR Yli 50% tuotekehityksestä softaa kenen softaa? Mikä on teille strategisesti oikeasti tärkeää? Kuka omistaa teidän strategisesti tärkeät ipr:t? Missä nämä tiedot sijaitsevat, kuka niitä hallinnoi ja miten? Onko strategisesti tärkeät tiedot oikeasti suojattu? vs Nixu

38 KYBER & INDUSTRIAL INTERNET

39 TIETOTURVASTA KYBERTURVALLISUUTEEN Nixu

40 SAKSASSA MENI VIIME VUONNA MASUUNI Nixu

41 YOUR SUPPLY CHAIN CYBER ROBUST? KUVAT POISTETTU TARKOTUKSELLA Nixu

42 DAILY MAIL > DAILY BLACKMAIL Nixu

43 Nixu

44 INDUSTRIAL INTERNET JA KYBER Valvo toimitusketjua Varaudu Suojaa strategisesti tärkeät tiedot Nixu

45 LUKEMISTA tarjoaa EK, ETLA ja WEF Nixu

46

47 Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ( DTTL ), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as Deloitte Global ) does not provide services to clients. Please see for a more detailed description of DTTL and its member firms. This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the Deloitte Network ) is, by means of this communication, rendering professional advice or services. No entity in the Deloitte network shall be responsible for any loss whatsoever sustained by any person who relies on this communication Deloitte & Touche Oy, Group of Companies 47

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