Internet of Things Outlook for the top 8 vertical markets

Cloud & Infrastructure Internet of Things Outlook for the top 8 vertical markets M13112MRA September 2013 This study includes: - a report - a slideshow

IDATE creates the DigiWorld Institute Founded in 1977, IDATE has gained a reputation as a leader in tracking telecom, Internet and media markets, thanks to the skills of its teams of specialized analysts. Now, with the support of close to 40 member companies which include many of the digital economy s most influential players the newly rebranded DigiWorld Institute has entered into a new stage of its development, structured around three main areas of activity: IDATE Research, an independent observatory whose task is to keep a close and continual watch on digital world industries, collect relevant data and provide benchmark analyses on market developments and innovations in the telecom, Internet and media sectors through its comprehensive collection of market reports and market watch services. IDATE Consulting, time-tested analysis and consultancy solutions: Our multi-disciplinary teams of economists and engineers established their credibility and independence through the hundreds of research and consulting assignments they perform every year on behalf of top industry players and public authorities. DigiWorld Institute, a European forum open on the world: The DigiWorld Institute will take existing IDATE initiatives, such as the DigiWorld Summit, the DigiWorld Yearbook and the monthly clubs in Paris, London and Brussels, to the next level. Members have the opportunity to participate in think tanks on the core issues that will shape the industry s future, drawing on the knowledge of outside experts and our own teams. Contributors > Samuel ROPERT, Senior Consultant Samuel has been an IDATE Consultant since early 2007. His assignments involve specifically technologies expertise for IP technologies, online content distribution and delivery and content delivery networks or technical video compression technologies. Before coming to IDATE, Samuel worked as a consultant for NPA Conseil (a French media consulting company). He focused on the new TV technologies (IPTV, HDTV, VoD and mobile TV). Prior to this, Samuel worked for TV Breizh (TF1 Group) as a technical video assistant where he focused on video transmission (contribution side) by satellite. Samuel graduated from leading French engineering school the Ecole Nationale Supérieure des Télécommunications de Bretagne (Telecom Engineer diploma). He holds also a master degree in Physics of Université de Bretagne-Sud and also in Politics from Sciences-Po Rennes. s.ropert@idate.org > Vincent Bonneau, Director Business Unit Internet > Tiana Ramahandry, Senior Consultant ISBN 978-2-84822-340-7 Copyright IDATE 2013, CS 94167, 34092 Montpellier Cedex 5, France All rights reserved. None of the contents of this publication may be reproduced, stored in a retrieval system or transmitted in any form, including electronically, without the prior written permission of IDATE. IDATE, DigiWorld, DigiWorld Institute and DigiWorld Yearbook are the international registered trademarks of IDATE.

Contents 1. Executive Summary... 8 1.1. Definition and market data... 9 1.2. Building blocks: need for parallel architecture... 10 1.3. M2M and IoO are driven by vertical markets and will therefore be impacted by vertical environments... 10 2. Methodology... 12 3. Concept: from M2M to IoT... 14 3.1. Internet of things concept... 14 3.2. M2M definition and features... 16 3.2.1. Definition... 16 3.2.2. Features... 17 3.3. Internet of objects definition and features... 17 3.3.1. Definition... 17 3.3.2. Features... 17 3.4. Main differences... 18 4. Key building blocks... 19 4.1. Trigger functions... 19 4.1.1. RFID... 19 4.1.2. Near Field Communication (NFC)... 21 4.1.3. 2D barcode... 23 4.1.4. Wireless sensors... 25 4.2. Communication technologies... 25 4.2.1. Addressing technologies... 25 4.2.2. Networking technologies... 27 5. Market structure and player strategies... 32 5.1. M2M... 32 5.1.1. Architecture... 32 5.1.2. Standards... 33 5.1.3. Value chain... 34 5.1.4. Main Market Players... 35 5.2. Internet of Objects... 39 5.2.1. Architecture... 39 5.2.2. Standards... 39 5.2.3. Value chain... 45 5.2.4. Main market players... 47 5.3. Strategic analysis... 54 5.3.1. M2M... 54 5.3.2. Internet of Objects... 58 www.idate.org IDATE 2013 3

6. Vertical markets... 62 6.1. Synthesis... 62 6.2. Automotive Industry... 63 6.2.1. Main challenges... 63 6.2.2. Regulation... 63 6.2.3. Value chain... 65 6.2.4. Supply chain applications... 65 6.2.5. Consumer-facing applications... 68 6.3. Energy: smart metering becoming a reality... 70 6.3.1. Key points... 71 6.3.2. The value chain... 71 6.3.3. Regulation... 76 6.3.4. Business model... 77 6.3.5. Level of deployment... 78 6.4. Food and retail industry... 80 6.4.1. Main challenges... 80 6.4.2. Retail value chain... 80 6.4.3. General challenges for the retail industry... 80 6.4.4. Supply chain applications... 81 6.4.5. Consumer-facing applications... 85 6.5. Consumer electronics... 88 6.5.1. Digital e-readers: the most consumer M2M devices... 88 6.5.2. Personal navigation devices: connectivity to offset the decline?... 90 6.5.3. Handheld game consoles... 91 6.6. Connected Home... 93 6.7. Healthcare & pharmaceuticals... 95 6.7.1. Pharmaceutical industry... 95 6.7.2. Healthcare applications... 101 6.8. Textile industry... 104 6.8.1. Main challenges... 104 6.8.2. Value chain and supply chain... 105 6.8.3. RFID in textile industry... 105 6.8.4. Major deployments... 106 6.8.5. Prospects... 107 6.9. Aeronautics... 108 6.9.1. Main challenges... 108 6.9.2. Supply chain application... 111 6.9.3. Consumer facing applications... 113 7. Forecasts... 115 7.1. Drivers and barriers... 115 7.1.1. Drivers... 115 7.1.2. Barriers... 116 7.2. Main assumptions... 118 7.3. Forecasts... 120 7.3.1. Forecasts 2010-2020... 120 7.3.2. Forecasts by vertical... 120 7.3.3. Forecasts by technology... 122 www.idate.org IDATE 2013 4

Tables Table 1: Properties of passive RFID tags... 20 Table 2: Mobile technologies specifications... 30 Table 3: Level of 4G adoption (in terms of subscriptions)... 31 Table 4: Main module maker positioning... 36 Table 5: OSI network model implementation... 45 Table 6: Overview of technical players' positioning... 48 Table 7: Overview of solutions provided by network operators... 49 Table 8: Bandwidth required by M2M application... 58 Table 9: Interests per vertical... 59 Table 10: Level of implementation in each vertical... 59 Table 11: Main applications in the automotive industry... 68 Table 12: Summary of some current national policies, regulation and targets for smart grids and meters, and main activities of major utilities... 76 Table 13: RFID Gains for retail application... 81 Table 14: Some of the connected objects demonstrated at CES2013... 93 Table 15: Healthcare expenditure per capita in selected countries, 2009... 101 Table 16: Key figures... 110 Table 17: RFID initiatives in the aeronautical industries... 112 Table 18: Global wine production 2009-2011... 119 www.idate.org IDATE 2013 5

Figures Figure 1: Evolution of the different components of the Internet of Things... 8 Figure 2: Concept of the Internet of Things... 15 Figure 3: NEC s Smart City Solutions for 4 Layers... 16 Figure 4: 2D barcode principles... 18 Figure 5: The different concepts of the Internet of Things... 18 Figure 6: RFID solution composition... 19 Figure 7: Passive RFID architecture... 20 Figure 8: The use of a NFC-enabled phone for a mobile transaction... 22 Figure 9: NFC operation in read/write mode... 22 Figure 10: NFC credit cards... 23 Figure 11: QR-code scanning... 24 Figure 12: Role of QR-code as part of marketers' upcoming strategies... 24 Figure 13: Communication flow in the EPCglobal Network... 26 Figure 14: ONS 2.0 architecture... 27 Figure 15: Overview of a Personal Area Network ecosystem... 28 Figure 16: Main technologies in use according to bandwidth and reach... 28 Figure 17: Low cost LTE standardization roadmap... 31 Figure 18: Architecture of a M2M solution... 32 Figure 19: M2M value chain... 34 Figure 20: Description of the Orange M2M offering... 36 Figure 21: Mobile carrier positioning... 37 Figure 22: Breakdown of the total cellular M2M market, per M2M segment, 2012... 38 Figure 23: EPCglobal Network architecture framework... 40 Figure 24: EPCglobal Network implementation... 41 Figure 25: Ubiquitous ID implementation... 43 Figure 26: Layered IP architecture... 44 Figure 27: Value chain of RFID technology... 46 Figure 28: Orange offering in logistics... 50 Figure 29: GS1 system... 53 Figure 30: QoS strategy at Telenor... 55 Figure 31: M2M development by vertical industry... 57 Figure 32: Automotive supply chain... 65 Figure 33: RFID embedment at Volkswagen... 66 Figure 34: RFID Tags in Truck Tires... 69 Figure 35: The value chain of M2M... 71 Figure 36: Example of smart meter: Tokyo Electric Power Company... 73 Figure 37: Example of in-home energy display device... 74 Figure 38: Data management products from emeter... 75 Figure 39: Examples of clean energies and other applications connected to smart home... 76 Figure 40: Smart meter deployment in the USA... 78 Figure 41: Expected Smart Meter Deployments by State by 2015... 79 Figure 42: Estimated smart meters rollout by 2020... 79 Figure 43: Food Supply Chain... 80 Figure 44: RFID for Food Logistics... 81 Figure 45: RFID tag embedded on crates... 82 Figure 46: RFID reader embedded on gates, in IKEA supplier warehouse... 83 Figure 47: RFID readings using RFID readers attached to yellow gates... 84 Figure 48: Proportion of Americans owning e-book reader and tablet... 89 Figure 49: Ads opt out option on Kindle... 90 www.idate.org IDATE 2013 6

Figure 50: Weather forecasts (up to 5 days) on a Garmin nülink! 1695... 91 Figure 51: Gas prices comparison on a Garmin nülink! 1695... 91 Figure 52: Home by SFR solution... 94 Figure 53: Pharmaceutical Supply Chain... 96 Figure 54: Potential Applications of RFID in Life Sciences... 96 Figure 55: Conceptual illustration of the capability to support several applications... 99 Figure 56: Smart scale... 103 Figure 57: Supply chain of the textile industry... 105 Figure 58: Aeronautics value chain... 109 Figure 59: Airbus transport fleet... 109 Figure 60: Boeing 787 Dreamliner assembly map... 110 Figure 61: Aircraft parts assembly breakdown (by name, origin and company)... 110 Figure 62: Airbus value chain... 111 Figure 63: RFID implementation onboard the aircraft... 112 Figure 64: Air transport, passengers carried... 113 Figure 65: Growth forecast for cumulative volume of embedded telematics by region... 118 Figure 66: Forecasts for the different components of the Internet of Things... 120 Figure 67: Breakdown of IoO and M2M connected objects by vertical in 2012... 121 Figure 68: Breakdown of IoO and M2M connected objects by vertical in 2020... 121 Figure 69: Breakdown of the technology used for IoO and M2M... 122 Figure 70: Breakdown of M2M technologies, in 2012... 122 Figure 71: Breakdown of M2M technologies, in 2020... 123 www.idate.org IDATE 2013 7

1.1. Definition and market data The Internet of things is a concept whereby any item can connect to the Internet to retrieve information to enhance its intrinsic value. The scope of the Internet of Things (IoT) is therefore very broad. It includes communicating devices and M2M but it aims to go beyond M2M, by enabling any object to connect and leverage the Internet (the Internet of Objects), even if it does not contain the electronics required to connect directly to the Internet (use of an intermediate device). M2M refers to automated communications (both programmed and/or triggered by a maninduced event) that involve at least one remote device that is not a common information device such as a computer, telephone or TV. This, therefore, involves exchanges between several machines without any human intervention in the chain of communication. Internet of Objects (IoO) here refers to inert and passive objects that do not generate any data by themselves. The intrinsic value of the object (and related margin) usually makes module integration irrelevant. However, some kind of technology could make them smarter by communicating the identity and other related information of the product itself. Although the concepts may seem very similar, they contain some marked differences. M2M refers to machines (embedded electronics, working autonomously without any connection) whereas IoO refers to inert and passive material. In addition, M2M application is often seen in terms of connectivity (a central issue most of the time) whereas the Internet of objects relates more to data management. Indeed, in the Internet of Objects, no data is generated by the things themselves, but by readers only. Finally, in some way, the M2M application is often controlled solely by a specific user. Conversely, the principle of the Internet of Objects (and obviously even more so for the Internet of Things) suggests access to the data by several (types of) players. To sum up, the M2M application is often seen as a closed application for internal use whereas IoO would be based on open (or at least shared) access to the data generated by the thing/object. From this perspective, the Internet of Things uses all the data and applications generated or run across all things (objects, machines, and all communicating devices). In this context, 15.7 billion things (machines, communicating devices and objects) were connected to the Internet in 2012. By 2020, 80 billion things will be connected. However, the number of connected objects (IoO) is far greater than the number of connected machines (M2M). When compared to communicating devices, the number of connected objects still leads. In 2020, the IoO will represent 85% of the total IoT, ahead of communicating devices (11%) and M2M (4%). In terms of growth, IoO still leads with 41% CAGR between 2010 and 2020, followed by communicating devices with 22% CAGR and M2M with 16% CAGR. On a vertical basis, the industries dealing with the highest volume of objects have already implemented deployments at item-level. Indeed, the pharmaceutical industry leads by far as it is driven by a huge installed base (billions of medication packages are sold each year, especially in the developed countries) and regulations aimed at fighting against counterfeiting, which already concern virtually all medication packages. The packages are tagged with 2D barcodes while some industries are implementing at RTI level (reusable transport items, like pallets, etc.). The textile industry is also a strong driver for the Internet of Things, involving 20 billion garments throughout the world. Indeed, it is also using RFID technology for supply chain and inventory optimization. In terms of technology, as key enablers of the IoO, ID technologies (RFID and 2D barcodes mainly) will lead in volume. For the M2M communication technologies, cellular modules will represent 16% while wireless modules will lead mainly for cost reasons. Still, the percentage remains a real opportunity for Telcos and hubs are not taken into account here (mainly equipped with cellular connectivity). www.idate.org IDATE 2013 9

2. Methodology The methods employed by IDATE s teams of analysts and consultants are based on an approach that combines: research and validation of data collected in the field; the application of classic industry and market analysis tools: segmentation, competition analysis, strategic strengths, modelling, assessment and forecasts ; the expertise of specialists who contribute their own analytical capabilities and those of their network of market analysts. More specifically, the tools employed by IDATE s teams are as follows: 1/ A multi-disciplinary team of full-time consultants, specialised by sector of activity IDATE s analyses are performed primarily by our in-house consultants, and very occasionally by freelance market analysts. This approach allows us to capitalise on our pool of expertise through teamwork, sharing knowledge, ideas, contacts, viewpoints and key data. Each report is drafted by a team of specialists, overseen by senior consultants with a proven track record in their field. 2/ Primary and secondary research IDATE reports and databases are compiled based on primary data obtained from one-onone interviews with the sector s decision-makers, and on secondary data which is established by cross-referencing public sources and external databases. 3/ An integrated information centre sustained by a number of tools and proprietary databases Over the past 30 years, IDATE has established working and data organization methods and proprietary databases that trace the central chapters in the history of our sectors of expertise. Companies: IDATE s in-house data service tracks the latest news and events to come out of the top telecom, Internet and media industry companies around the globe. Innovative firms and start-ups are monitored by the market experts in the different Practices. Markets: IDATE s databases are derived from rigorous processing of fundamental economic variables (GDP, investments, exchange rates, demographics, etc.) and their relation to decisive sector-specific and national elements (capex, national market dynamics, etc.). Technologies: IDATE s organization by Practice provides us with an efficient means of tracking innovation. IDATE s engineers ensure in-depth understanding of the changing shape of products and services and of the latest innovations in the marketplace. 4/ Contents of the published reports Each IDATE market report details the structures and issues at play in the market being examined, the decisive forces (technologies, regulation, consumption) and the players involved. Particular emphasis is given to market assessments and forecasts, as part of the central premise. All market reports are laid out in a clear and concise manner, and illustrated with tables and graphs of key market data and trends. www.idate.org IDATE 2013 12

The process of drafting of a market report includes the following stages: analysis of the information available in the in-house databases, and review of analyses performed in the recent past; based on a preliminary segmentation and assessment of the market, and as part of an validated interview guide, analysts conduct interviews that enable them to validate working hypotheses; a market model is then established, making it possible to test the hypotheses that have an impact on the market s development, and validated by a new round of interviews; and, finally, the report s conclusions are debated with the team responsible for the project and with expert consultants from the various fields involved; a final proofreading and editing/revision process, prior to the production of the final version of the report which is delivered to the client. 5/ Market assessment and forecasts Primary data gathering worldwide. Market models that isolate key service consumption parameters and service pricing assumption. www.idate.org IDATE 2013 13

3. Concept: from M2M to IoT 3.1. Internet of things concept The Internet of things, in which any item can connect to the Internet to retrieve information to enhance its intrinsic value, is still years away. Obviously, the scope of the Internet of Things (IoT) is very broad. It includes communicating devices and M2M but it aims to go beyond M2M, by enabling any object to connect and leverage the Internet (the Internet of Objects), even if it does not contain the electronics required to connect directly to the Internet (use of an intermediate device). Hence, the Internet of Things encompasses several concepts: Communicating devices referring to devices connected to the Internet or other types of network, by definition. Connectivity is the primary feature, meaning that without connectivity, the device is useless. These devices are smartphones, tablets or connected TVs. This segment will be excluded from the study scope (except for market data estimates and forecasts). Machine-to-machine (M2M) communications refers to machines which are objects that can work autonomously without any connectivity. A machine is often seen as an object with electronics inside (at least an IC). A connected machine is a machine to which a communication module has been added. Most of the time, M2M communication is automated communication between machines or between machine and servers. Internet of Objects (IoO) here refers to inert and passive objects that do not generate any data by themselves. The intrinsic value of the object (and related margin) usually make module integration irrelevant. However, some kind of technology could make them smarter by communicating the identity and other related information of the product itself. Nevertheless, all items, here, need to be retrievable thanks to a unique identity. This means that items with barcodes embedding information referring to several products (typically for the same product range, rather than a single product) are excluded from the scope of this report. www.idate.org IDATE 2013 14

4. Key building blocks 4.1. Trigger functions 4.1.1. RFID RFID Description RFID which stands for Radio Frequency IDentification is an automatic data capture method, based on the transmission of the identity, of an object or a person, over radio frequencies. RFIDs are one of several automatic identification (Auto-ID) technologies available such as the popular barcodes. RFID which is initially related to an ID access solution is now increasingly used to provide advanced applications like supply chain management. For the Internet of Thing, using RFID to tag an object with a virtual label remains the best option for easy-to-use solutions combined with NFC devices. The RFID ecosystem uses 3 mains technologies: tags, leaders and System Software. Figure 6: Tag RFID solution composition Reader + types handheld, + box, portique System Software (Host) Inlay Substrate Antenna IC Tag Handheld reader Reader box Gate reader Source: IDATE There are two main categories for RFID tags: Active tags are powered by an internal battery (or an outside energy source such as solar power), and the data they contain can be modified over time. Active tags currently have a memory of up to 1 Mb, and can therefore contain the desired data, without having to use a remote database to interpret them. The drawbacks of this kind of tag are principally their bulkiness, high cost and relatively short lifespan (optimally a maximum 10 years, but generally five years). And, secondly passive tags which do not require an outside energy source (they are in fact powered by the energy of the reader whose waves they reflect), and the data stored on them is generally limited to an ID number. The main advantage of passive tags is that they are lightweight, small and have a potentially unlimited, maintenance-free lifespan. On the flipside, passive tags require the use of more powerful readers than active tags, and have a much shorter range. Passive tags are in fact the barcodes of the future, but contain far more information (roughly 2 kb). www.idate.org IDATE 2013 19

5. Market structure and player strategies 5.1. M2M 5.1.1. Architecture The figure below illustrates the overall architecture of an M2M solution. This may vary depending on the configuration used (such as on-site wired), which could make certain components optional. Additionally, some elements could be positioned at different levels in the M2M data transmission process, notably integration, machine-gateway and middleware downstream from the Internet. Figure 18: Architecture of a M2M solution Presentation Sensor Machine Module Middleware Sensor IC Gateway Interface Modem Network (Local or wide area) Internet ERP Integration Data base Source: IDATE As shown by the illustration, M2M solution architecture is based on the deployment of all or some of the following components: The machine to be monitored or controlled, gathering information in different ways. The machine can be the module itself, particularly in the case of terminals that scan barcodes or RFID tags. M2M is not always used for monitoring a machine, but possibly an object, a person or an indicator (such as temperature). It does, though, always involve data captured by a machine (data capture and/or read-out device). The gateway, or interface, whose main role is to convert the information to be transmitted to the transport protocol format. It is located at the entrance to the operated network (cellular, satellite, Internet). It can thus be located in the network for local network use, as with WiFi, or be integrated further up the network in the modules at the interface level with other networks, often referred to as firmware or agent software. It can generally be reconfigured remotely, for changing certain parameters (such as to alert trigger thresholds). This means that several levels of sophistication can be reached at the gateway by combining it with the module s interface and/or the machine s API: basic protocol conversion (where information becomes IP or SMS data packets), advanced conversion (XML data formatting), compression (reducing the size of data streams), filtering (transmission reduced to required messages), optimisation (local automated regulation). www.idate.org IDATE 2013 32

6. Vertical markets 6.1. Synthesis For supply-chain applications, these will develop at a different pace for each vertical market. This has already been observed in the eight main vertical markets: Automotive Energy with smart metering/smart grid applications Food and retail industry Consumer electronics Home automation Healthcare and pharmaceuticals Textile Aeronautics Key criteria are related to: Technical maturity: RFID has to fit in well with current technical processes. Industries will develop faster if they rely less on products or intermediate transportable items that contain water (a challenge for food) or metal (challenges for existing postal supply chain). Current processes can also be modified to improve technical performances (as in the textile industry) with workarounds. The technical environment can only be modified to a certain extent. Business maturity: RFID has to be adapted to the business model of the industry to deliver ROI, while also competing with existing infrastructures. Some industries are already highly automated (with non RFID solutions) with conveyors and sorters. Tag cost is still a key metric, which means it remains incompatible with low value items, which includes most retail goods. In terms of volume, food retailing clearly represents the major opportunity. However it is not likely to become a significant market for at least 10 years, due to technical shortcomings and uncertain ROI. A few industries offer better opportunities in the short-term, such as textiles and cultural goods, as well as food logistics. For after-sale applications, mainly based on M2M, automotive, consumer electronics should offer the biggest opportunities for regulatory and mass-market reasons. www.idate.org IDATE 2013 62

6.2. Automotive Industry 6.2.1. Main challenges The automotive industry faces different types of challenges. General challenges These relate more to the client/consumer rather than the industry itself. Safety: road traffic injuries represent the leading cause of injury-related deaths worldwide. This has led to much R&D by major car manufacturers. Environment: the impacts of automotive vehicles. Time: the saving of time spent on the road, or a changed experience through other activities, such as entertainment. Process challenges Other challenges related to process optimization are: Just-in-time (JIT) strategies The main supply chain processes in the automotive industry rely on just-in-time (JIT) strategies. There has been widespread JIT rollout in many production industries, and this inventory strategy is designed to improve the return on investment of a business by reducing in-process inventory and its associated carrying costs. In automotive manufacturers plants, large warehouses can store up to 250 000 different parts. Today for a typical manufacturer, 30% of all parts are delivered just-in-time. Better traceability can significantly improve the just-in-time process (limited storage). For instance, General Motors claims that the barcode (and associated standards) implementation allowed it to make 100 million USD savings per year in logistical costs, over the 1999-2001 period. Codification (standardization of component parameters, i.e. technical features, brand, model ) the process has just begun. Codification was first used by Peugeot and PSA, in 2005 and other heavyweights from various industries (EDF, Arcelor Mittal, Lafarge ) joined in later. Codification is usually expected for original equipment manufacturers (OEM), which produce cars for different brands and manufacturers. It could also help manufacturers to differentiate models. Counterfeiting of spare parts is big business and endemic in the automotive industry. Lots of players allocate some budgetary resources to curb these practices. Several initiatives have already been undertaken (badges ) but remain insufficient. According to the OECD, the proliferation of counterfeit parts is a 12 billion USD per year worldwide problem in the automotive industry. According to DaimlerChrysler, around 10% of total spare parts are counterfeited. Part recall (a maintenance issue) is, and will remain, an important source of costs. For instance, Ford estimated the Firestone tire recall cost 2.6 billion USD in 2000, which led to controversy. Manufacturers try to reduce this kind of wasteful expenditure. 6.2.2. Regulation Regulation runs deeply through the automotive market. In the USA, the Transportation, Recall, Enhancement, Accountability and Documentation (TREAD) Act mandated the automotive industry to develop a mechanism to trace tyre recalls for the USA, after the Ford- Firestone scandal, described below. Obviously, regulation also relates specifically to environmental issues dealing with recycling (11 million vehicles are recycled every year) and CO2 emissions, as with bonus/malus ticket management implementation in France. Finally, regulation also relates to road safety (speed camera installation, ecall EU directive). www.idate.org IDATE 2013 63

Future Networks Cloud & Infrastructure How will the Internet and network infrastructure evolve and be monetized? new Internet services require new networking approaches for telcos. The volume of traffic calls for appropriate optimization. But traffic growth is more than just a threat. There are indeed plenty of opportunities by offering QoS, SLAs, security, handling new connections from objects and things or leveraging sleeping data like personal data through Big Data solutions. Cloud and virtualization represent disruptions for telcos, which should prepare relevant. Vincent Bonneau, Internet Services & Technologies Business Unit Director Our Cloud & Infrastructure programme is specifically designed to provide telecom operators, vendors, government bodies, regulators and local authorities with a comprehensive analysis of the issues affecting this changing ecosystem. Key issues For a typical 12-month subscription, our clients obtain: Strategic & technological analysis: Expert analysis delivered via insights and analysts' comments on key network infrastructure and cloud market issues: analysis of key topics, player benchmarks (operators, OTT players, vendors), highlights from major conferences As a complement to this service, we propose a dedicated programme & including a database on the World Internet Services Markets (fiveyear forecasts for main OTT markets such as Search, e- Commerce, Social networks, Online video and Online advertising, for both fixed & mobile) and a special report on Net Neutrality with benchmarking of 15 countries. Traffic growth is very significant, especially for video services, cloud and mobile. What are the optimization and new delivery solutions to handle it? Funding the Internet infrastructure is a challenge as the traffic structure evolves. What revenue transfers in the value chain can ensure a fair balance? How can telcos benefit from new growth activities like monetization of personal data or new vertical markets? Cloud and virtualization have become central for telcos, both as revenue opportunities and as the major building blocks and enablers of future networks (as with SDN). How are telcos positioning themselves in regard to cloud, data centers and new infrastructures? 2013 Programme Exclusive monitoring of the cloud & infrastructure industry Reports 1st Q 2nd Q 3rd Q 4th Q Traffic Management In-depth market report In-depth reports and market Insights on key industry topics OTT Video Distribution In-depth market report OTT market: Cloud Market Insight Future Network Architecture In-depth market report Internet of Things In-depth market report Datacenters Market Insight Big Data for Telcos In-depth market report Complementary service " Telecom & OTT " including: - World Internet Services Markets (Database and Status report) - Net Neutrality (In-depth report) Find the latest information on this programme's publications at www.idate.org/research

Reports OTT Video Distribution (2013 Edition) This report analyses how online video markets will develop, and the potential for online delivery services. It explores how: Sustainable ad-funded and pay services are finding their way to the Open Internet Content delivery services play a key role in achieving QoS over the Internet The major players are positioning themselves in the B2C and B2B online video markets Future Network Architecture (2013 Edition) This report analyses the overall context of the networking industry and presents potential answers in the long term. The report presents major evolutionary developments already in progress (CDN, traffic management around DPI and PCRF, etc ) and a deep dive into major disruptions like SDN. It presents the strategies of major network equipment providers and telcos. Lastly, it sizes up the SDN market by 2017. Big Data for Telcos (2013 Edition) This report analyses the impacts and opportunities for telcos in Big Data through concrete case studies. There are indeed many ways of leveraging Big Data, from CRM improvement to data monetization. OTT market: Cloud (2013 Edition) This insight, part of the Telco vs OTT programme, analyzes the strategies of telcos and major OTT regarding professional (SaaS, IaaS, PaaS) and personal cloud services, with market sizing and in-depth benchmarking. It also identifies sweet spots for telco positioning in the cloud market. Main customers Internet of Things (2013 Edition) The extension of the Internet from humans to machines (M2M) and now objects will impact its overall architecture. New building blocks are required from information capture (like RFID) to information sharing and discovery (EPC-like services). This report analyses the key technologies and sizes up the number of connected objects by 2020 with a breakdown per vertical. Datacenters (2013 Edition) This report provides an overview of key developments around datacenters (technologies, strategies, etc ). It looks at the arbitration facing stakeholders when deciding where to locate a new datacenter. Based on this, it expands to regional development and impacts for local authorities. Traffic Management (2013 Edition) This report responds to key questions for traffic management: strategies by telcos, vendors and Internet giants, technology solutions that can be deployed, as well as the regulatory framework around traffic growth. Telco CDN (2012 Edition) In response to the growth in Internet traffic, especially video, the major Telcos now deploy CDNs in their networks. This could potentially disrupt the entire video distribution ecosystem. However, technical deployments are complex and the commercial challenges are daunting in a market that is already very competitive. This study gives the status of this new market and provides information on the positioning of the various players in the value chain Analyst support Analyst support is available for subscribers to our monitoring services according to a system of hours of credit: our team can provide answers upon request to specific questions concerning the topics covered in our programme. Our team offers tailored advice as part of our complementary services: - Analysts' Brief: we organise conference calls and webinars on topics defined with the customer. - On-site Presentations: our customers can choose a theme from among the topics covered within the service. Talk given by our leading analysts. - Custom research: our consultants regularly place their skills at the service of customers seeking confidential analyses and answers to specific questions. Our team Soichi Nakajima Senior Consultant Samuel Ropert Senior Consultant Tiana Ramahandry Senior Consultant Julien Gaudemer Consultant DigiWorld by IDATE Founded in 1977, IDATE has gained a reputation as a leader in tracking telecom, Internet and media markets thanks to the skills of its teams of specialised analysts. Now, with the support of nearly 40 member companies which include many of the digital most influential players the Institute is structured around three main areas of activity: Research, Consulting, DigiWorld Institute. Contact us: For more information about our research services, please contact our sales team and customer service at +33(0)467144404 or research@idate.org