The Internet of Things: Trends Westcon Comstor CONNECT. November 2015

The Internet of Things: Trends Westcon Comstor CONNECT November 2015

The Internet of Things Is Coming.. Are You READY?? 2

Agenda Introduction Definitions and Observations Market Trends/Sizing Recommendations/Discussion 3

Today s Speakers Brian Partridge Vice President, Mobility Team bpartridge@451research.com 4

451 Research is an information technology research & advisory company Founded in 2000 Research & Data Advisory Services Events 210+ employees, including over 100 analysts 1,000+ clients: Technology & Service providers, corporate advisory, finance, professional services, and IT decision makers 15,000+ senior IT professionals in our research community Over 52 million data points each quarter 4,500+ reports published each year covering 2,000+ innovative technology & service providers 451 Research and its sister company Uptime Institute comprise the two divisions of The 451 Group Headquartered in New York City with offices in London, Boston, San Francisco, Washington D.C., Mexico, Costa Rica, Brazil, Spain, U.A.E., Russia, Taiwan, Singapore, and Malaysia

A combination of research & data is delivered across fourteen channels aligned to the prevailing topics and technologies of digital infrastructure from the datacenter core to the mobile edge. 6

Agenda Introduction Definitions and Observations Market Trends/Sizing Recommendations/Discussion 7

451 s Definition of IoT The Internet of Things is the interconnected set of intelligent devices and objects that enable the virtualization of the physical world. Nearly every type of business that exists today can employ IoT systems to create cost savings, efficiencies or support new business models. Today potential has NOT been realized 8

Market Observations IoT Market Hype/ Investment Stage Landscape Is Complex Deal Activity Business models for IoT still TBD Not aligned with current revenue performance Mobile Network Operators Only MVNOs are making profits MNOs struggling Big IT, MNOs, system integrators, infrastructure, device OS Many actors shooting for the same value chain positioning Standards in flux Enterprises want less suppliers to deal with Continued growth Strategic position-taking No one can afford to be left out More consolidation expected at every layer Things/Internet/Data 9

Internet of Things Taxonomy 10

Agenda Introduction Definitions and Observations Market Trends/Sizing Recommendations/Discussion 11

IoT Market Drivers Falling Costs Edge computing Bandwidth Improving Tools Cloud Middleware Analytics Market Forces Market education Competition Government 12

Market Evolution Value Flows to Data Savants 1990s - 2020 M2M Phase Typical applications: Remote asset monitoring, fleet management System characteristic: Singlepurpose industrial applications connecting via proprietary networks to datacenter Service providers focus on: End-to-end proprietary designs 2010-2025 IoT Silo Phase Typical applications: Connected home monitoring, wearable computing, connected cars System characteristic: Singlepurpose applications connecting to Internet/cloud Suppliers focus on: Speed to market/features 2016-2025 IoT Systems Typical applications: Connecting IoT data silos to create new value/ insights System characteristics: Multiple applications working in concert, connected and integrated in the cloud and at the network edge. Suppliers focus on: Integration/ scale/security/data analytics 13

Tech M&A Activity: IoT Annual deal flow, Internet of Things Source: 451 Research s M&A KnowledgeBase 80 70 60 50 40 30 20 10 0 72 61 18 15 21 9 7 12 2008 2009 2010 2011 2012 2013 2014 YTD 2015 Number of IoT transactions 14

IoT M&A Valuations 2013-2015 80 70 60 50 40 30 20 10 0 Value of Deals ($bn) Number of Deals Median Price ($m) Median Multiple (EV/TTM Rev) 2013 2014 2015* Source: 451 Research's M&A KnowledgeBase 15

Deal Activity Outlook Systems integrators will acquire a combination of software platforms and/or specialized vertical players. Consumer device makers will continue wearable technology and connected home push. MVNOs will continue to consolidate regional or vertical specialists. Mobile operators will selectively add vertical e2e specialists in broad or deep solution categories. Buyers IBM, Fujitsu, NEC, Tech Mahindra, ATOS, Capgemini Google, Apple, Xiaomi KORE Telematics, Aeris Communications, Numerex Verizon, AT&T, Vodafone, Sprint Targets Carriots, Aricent, Exosite, Arrayent Fitbit, OMsignal, August, icontrol Wyless, M2M DataSmart, Aeris Alarm.com, icontrol, Airbiquity 16

Cellular IoT on Pace To Reach 1B Connections by 2020 1,000,000,000 800,000,000 600,000,000 400,000,000 200,000,000 0 2015 2016 2017 2018 2019 Source: 451 Research s Global Mobile Forecast PAYDI Digital Signage mhealth Security Connected Energy ATM, POS Industrial Process Cars 17

Products Services Machine Data Predictive Maintenance Sell Tractors Revenue at sale Product-centric Weather Soil Analysis Yield Forecast Deliver Services Ongoing revenue Service-centric 18

IoT Challenges for the C-Suite Business Process Change Cultural Changes Security/Privacy Risk Lack of Skills Costs 19

IoT Adoption Snapshot 30% 8% 2%6% 25% Which of the following best describes your company s plans for the use of Internet of Things (IoT) technology? Source: 451 Research ChangeWave Already Using Plan to Begin to Use in the Next 6 months Plan to Evaluate/Test in Next Six Months No Plans Currently, but Considering for Future 29% No Plans Currently, not Considering for Future Don't Know 20

IoT Adoption Snapshot 21

IoT Adoption Snapshot cont. 22

Key IoT Trends We re Tracking Things Connectivity Infrastructure/ Platforms Applications Wearable computing in the enterprise OT/IT convergence ARM vs. Intel Edge processing and intelligence Edge security LPWAN vs. LTE-M New communication protocols Transport security Addressing Application platforms and SDKs and DevOps Public cloud services for IoT Big/fast data and analytics Middleware API management Predictive maintenance Smart buildings and cities Fleet management Connected driving experiences Fitness and health 23

IoT Technology Challenges

IoT Technology Challenges Small devices Limited compute Physical security Device Gateway Mobile network availability and coverage Cost Privacy Regulatory compliance Data Management Real-time analytics Ecosystem Fragmented and complex Hypercompetitive Noisy 25

Different IoT Actors See Stack Differently 26

Industry IoT App Requirements Home Manufacturing Building Healthcare Cities Transportation Lighting Security Pets Appliances Factory automation Supply chain HVAC Security Datacenter m-health Home care Wearable monitors Parking Surveillance Energy Fleet mgmt Rail Traffic routing Self driving Vehicle telematics Privacy Multi-protocol connectivity Role-based access ERP and supply chain integration RFID support On-premises Asset management integration Video storage Energy star/epa requirements HIPAA, FDA compliance Data sharing EMR/PHR integration Big data storage Demand response support Real-time data processing Geo-location intelligence 27

Agenda Introduction Definitions and Observations Market Trends/Sizing Recommendations/Discussion 28

What's Your Role? Horizontal vs. Vertical Market Vectors

Go-To-Market Evolution - ~40% of Market Could Be Served Like This

Market Map 451 Research also tracks horizontal enabler suppliers of IoT technology. 451 Research Market Maps are designed to provide a view of the vendor landscape by major segment. The Map highlights companies competing in multiple segments by connecting them through a circuit line. IoT supplier market leaders are called out. 31

Things Thing-centric Edge Computing Operating Systems Modules Wearable Technologies Aggregation 32

Internet Internet-Centric IoT Bandwidth IoT Middleware/Application Platforms/API Mgmt IoT Cloud/Big Data Platforms IoT Professional Services 33

What are the best IOT markets to attack? Careful consideration required! Capability Fit + Market Readiness Buildings and/or Retail and/or Healthcare and/or X

Stakeholder Recommendations Enterprises Start NOW: Brainstorm what is possible with IoT Cross-functional team Security from the start Don t re-invent the wheel - consider an IoT platform Service Providers/Vendors Reduce buying complexity for customers Business model innovation Align with industry-specific change agents Clear on security 35

The Internet of Things Is Coming.. Are You READY?? 36

Thank you! 37