The Impact of the Internet of Things on Enterprises

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1 White paper The Impact of the Internet of Things on Enterprises Forward-looking enterprises are already developing strategies to exploit this game-changing technology.

2 2 Page IoT is already delivering business benefits 3 Challenges to adoption 4 Conclusion 6 The is bringing the physical and digital worlds together. Imagine homes and cars getting to know our preferences and adjusting to us before we re even in the door. Imagine banking and financial services getting more secure through automation that bypasses insecure elements such as passwords. Imagine improved precision and privacy in health monitoring in addition to objects that offer intelligence to personally affect our lives. We can improve energy and water conservation and adapt our very environment to our needs. And big data will give us new and actionable insights, enabling us to harness intelligence for a better-integrated global society. The connected world enabled by IoT will not only change our lives as consumers but will also have a meaningful impact on the way businesses operate. Imagine if a piece of machine equipment on a production line could self-diagnose a problem and automatically call customer support at an equipment manufacturer to order a replacement, which then can be fitted before the existing part fails. Imagine a retailer having an automatic inventory management system that predicts and issues notifications about inventory needs to assure the optimum supply of items across stores and distribution channels. Imagine an automated supply chain system that enables companies to have two-way communications with shipments at each stage of the journey. The opportunities enabled by IoT for enterprises are endless. Driven by devices that collect data and share information over the Internet, IoT promises to redefine user experiences, automate and streamline processes and improve efficiency. Enterprises that begin developing strategies to embrace IoT now stand to benefit both operationally and strategically; those that don t do so risk getting left behind. IoT is about networks of sensors, devices and other things connecting over the Internet to share data with each other and with the organizations that deploy them. By applying analytics and data management to the information collected by these things, IoT is able to generate the insight needed to enable new services, features and functionality that previously were time- and/or labor-intensive. These capabilities can be used to reduce costs, improve productivity and create better user experiences. IoT helps solve challenges as targeted as smoothing out the bumps in a company s supply chain or as broad as helping organizations overcome the barriers to entry in new markets. And by enabling devices to do the routine work of collecting and sharing data without requiring human involvement, enterprises can free their employees to focus on more-strategic efforts. The future is bright for the adoption of IoT. Approximately 3.9 billion connected things were in use in 2014, and this figure is expected to rise to 25 billion by 2020, according to Gartner. 1 Among the companies participating in a recent IDG Enterprise survey, 56 percent already have IoT on their radar or are actively researching it and 32 percent said that IoT will be a top technology investment in the next year. Organizations that truly embrace IoT over the long run stand to benefit significantly; according to Verizon s State of the Market: The Internet of Things 2015 report, by 2025 those companies that extensively use IoT technologies in their products and operations will be as much as 10 percent more profitable than those that do not. 2

3 3 The (IoT) has rapidly become one of the most familiar (and perhaps most hyped) expressions across business and technology. Gartner forecasts tremendous benefits resulting from the IoT, but the ways in which enterprises can actualize any benefits will be diverse and, in some cases, painful, writes Gartner analyst Jim Tully in a recent report. Enterprises will need to make plans and preparations now or risk being left behind by their faster moving competitors. 3 IoT is already delivering business benefits Although IoT is still considered by most to be a new technology, enterprises in a variety of industries are already benefiting from it. In sectors ranging from healthcare to shipping and government, IoT is enabling new products, processes and business models. And it s just beginning; as the technologies involved in IoT mature and companies start building upon the success of their pilot projects, the trend will benefit from the network effect the more devices that communicate and share data over the Internet, the more useful the information and insight they generate becomes. Samsung sees four significant benefits to be reaped by those enterprises that understand and embrace this technology. Operational Efficiency Strategic Decision Making Impact of IoT on Enterprises Customer Service R Intra- Organizational Collaboration Here are some examples: Operational efficiency Industrial companies can use data gathered from sensors and apply advanced analytics to that data to detect the health of equipment and machinery in the field without having to send maintenance crews to the site. Commercial buildings can be equipped with sensors that determine the optimum temperature and automatically adjust heating and cooling to maintain a comfortable work environment while also cutting energy costs. Manufacturers can connect their production-line systems to automatically redirect workloads to take advantage of equipment not in use, therefore reducing downtime and increasing efficiency while boosting plant output in the same period of time. Customer service Manufacturers can use IoT-enabled asset tracking so they can offer their customers superior self-tracking capabilities and anticipated delivery times, helping them stand out among their competitors. Carmakers can create connected vehicles that boost the safety of driving by offering features such as lane-alert sensors; automatic headlights, wipers and calls to emergency services; and the ability to automatically perform vehicle diagnostics. Strategic decision-making Retailers can use analytics to shift through massive amounts of data gathered by IoT sensors to make better decisions often in near real time about how to interact with customers, such as spotting buying trends that may lead to sales opportunities. They can use the information customers offer them (when setting up online profiles, for example) and combine it with purchasing histories to generate additional sales while also catering to customer needs. For instance, if a customer profile shows that a woman has purchased maternity clothing and prenatal vitamins at a store, that retailer can target promotions related to baby gear. Source: Samsung Strategy & Innovation Center Intraorganization collaboration Smart, connected machinery can generate essential data that can be used to inform manufacturers how well the product operates, the ways it is being used and signs that could indicate that maintenance is required.

4 4 This information can be used by many different departments at a manufacturer: Sales and Marketing can use the data to better understand customer usage patterns, R&D can improve product operation and reliability, Service can more accurately predict when maintenance or a replacement is needed and Manufacturing can better track and spot quality issues. Samsung believes that virtually all electronic devices will connect to the Internet and be capable of communicating with each other. By connecting more devices to the Internet, additional new services and functionality can be created to improve productivity and create better user experiences, says Young Sohn, president and chief strategy officer of Samsung Electronics. Challenges to adoption As with any new technology, there are some hurdles ahead for IoT. Among the most pressing: Platform incompatibility IoT will require platforms that are open and interoperable for widespread adoption to occur. Without this openness, isolated islands of proprietary technology will be created, and one of the fundamental tenets of IoT the uninhibited sharing of information by devices will be negated. In the long term, global partnerships will emerge that consolidate options down to a core set of established IoT ecosystems based on interoperability and openness. SAMSUNG S ARTIK PLATFORM: UNLEASHING THE POTENTIAL OF IoT Samsung s ARTIK platform is designed to accelerate development and deployment of IoT. This open platform includes all the essential hardware and software building blocks needed to create IoT devices, along with connectivity and security features to enable faster, simpler development of new enterprise, industrial and consumer IoT applications. ARTIK KEY BENEFITS: Developer-friendly, open, end-to-end platform Small form factor Low power consumption Advanced security features

5 /2011 Smart TV Smart Fridge 2014 Samio.io Simband Smart Things 405M mobile handsets* 2015 Commitment to an Open Ecosystem $100M Developer Investment Smart Lighting Announcement 100% Samsung Digital Appliances Connected 2000 ERA First Smart Watch Cell phones * Strategy Analytics In the meantime, Samsung is working to create an open IoT platform and developer ecosystem called SmartThings, which works with more than 100 devices and has 10,000 developers writing for it. Samsung is also participating in industry-specific initiatives in areas such as manufacturing, transportation, smart cities and consumer applications to help these groups realize what is possible with IoT. For example, Samsung is in partnership with carmaker BMW to connect the company s BMW i3 and BMW i8 auto models with the Samsung Gear S Smart Watch. This connectivity enables users to leverage IoT capabilities such as being able to remotely check battery levels or control the car s cabin temperature. Samsung and Volkswagen are also working together so that the Samsung Galaxy smartphone s display can be mirrored on the head units of Passat models, enabling the car s occupants to have the same user experience inside the car as they do on their phones. Difficulty extracting meaningful insights Data analysis and management will be required to make sense of all the information coming in from these connected devices. Without the right tools, knowledge and experience to analyze and make sense of the data, companies will be left with petabytes of information pouring in but no ability to draw insights from it in a timely manner. Enterprises need the right resources and information management strategies to filter, categorize and analyze this data in near real time. To this end, Samsung is offering a suite of analytics and unified intelligence solutions through partnerships. For example, the company is working with organizations in the healthcare industry to develop the Samsung Digital Health platform, an integrated system that connects sensors, algorithms, devices and partners platforms to manage patients health, from fitness to medical care. The company s mobile monitoring app collects patient data such as weight, blood pressure and

6 6 exercise patterns and then pushes this information to the cloud for analysis and real-time review by doctors. Not only does this initiative engage patients in their own healthcare but it also enhances their access to medical professionals. Lack of security Currently most connected devices create and transmit data to a corporate network or the cloud without using encryption. Yet many of these devices are used in sensitive, mission-critical settings such as healthcare and financial services. IoT must be secure to be successful; security and privacy should be integrated into IoT products at inception, and mobile security platforms need to be extended to protect IoT devices. Samsung s KNOX mobile security platform is built into the company s newest mobile devices to securely save, manage and transfer data, and the company is actively integrating KNOX into a variety of Samsung IoT platforms, devices and solutions. Samsung has also developed KNOX Workspace, which is tightly integrated with the KNOX platform and enables IT administrators to set up secure containers so that corporate information and applications can reside on a mobile device but remain separate from the user s personal data and applications. Conclusion IoT has the potential to truly change the way information is shared, work gets done and value is generated. There are hurdles to overcome, but IT industry players have already begun working together to build open, flexible platforms for IoT that will create value for enterprises. As more companies craft comprehensive IoT strategies and make significant investments in IoT, the business advantages such as increased productivity, reduced costs and greater innovation will be hard to deny. It s clear that, over the next few years, IoT is poised to become a game-changing technology that has the ability to make or break enterprises. Internet-connected, intelligent objects have the potential to free us from many routine tasks and enable us to focus on what human beings are really good at: generating ideas, says Won Pyo Hong, president and chief marketing officer of Samsung Electronics. In the enterprise sector, this freedom has tremendous implications in terms of cost reduction, increased productivity and enhanced value for end customers. The more devices that communicate and share data over the Internet, the more useful the information and insight they generate becomes. For more information, visit 1 Gartner, The Enables Digital Business, technology/research/internet-of-things/. 2 Verizon, State of the Market: The 2015, com/state-of-the-market-internet-of-things/?_ga= Jim Tully, Gartner, Mass Adoption of the Will Create New Opportunities and Challenges for Enterprises, February 27, 2015.

7 7 Legal and additional information About Samsung Electronics Co., Ltd. Samsung Electronics Co., Ltd. inspires the world and shapes the future with transformative ideas and technologies, redefining the worlds of TVs, smartphones, wearable devices, tablets, cameras, digital appliances, printers, medical equipment, network systems and semiconductors. We are also leading in the space through, among others, our Digital Health and Smart Home initiatives. We employ 307,000 people across 84 countries. To discover more, please visit our official website at com and our official blog at global.samsungtomorrow.com Copyright 2015 Samsung Electronics Co., Ltd. All rights reserved. Samsung, MagicInfo, Samsung GALAXY Tab, Samsung GALAXY Notes, MagicIWB, Samsung KNOX, SmarThru, SecuThru, Cloud Print, and Samsung Business Core Printing Solutions, LYNK REACH and LYNK are either trademarks or registered trademarks of Samsung Electronics Co., Ltd. Specifications and designs are subject to change without notice. Non-metric weights and measurements are approximate. All data were deemed correct at time of creation. Samsung is not liable for errors or omisssions. All brand, product, service names and logos are trademarks and/or registered trademarks of their respective owners and are hereby recognized and acknowledged. For more information For more information about Samsung Enterprise, visit Samsung Electronics Co., Ltd. 416, Maetan 3-dong, Yeongtong-gu Suwon-si Gyeonggi-do Korea

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