All IDC research is © 2016 by IDC. All rights reserved. All IDC materials are licensed with IDC's permission and in no way does the use or publication of IDC research indicate IDC's endorsement of SAP’s products/or strategies.

An IDC Infographic, Sponsored by SAP

IoT is essential to create innovative experiences and to execute operating model transformation

AN INDUSTRY VIEW

IoT and Digital Transformation

33%of all industry

leaders disrupted by digitally enabled

competitors by 2018

16%of the population will be

millennials by 2018 and will accelerate IoT adoption

(connected life)

58%of companies think

IoT is strategic

24%of all organizations see IoT as transformational

IoT Adoption Varies by Industry

2015–2018 Forecast

Worldwide Internet of ThingsSpending by Vertical Market1

Strategic Asset ManagementFocus on Physical Assets... But What Is an Asset?

✔ Finished goods and components

✔ Electrical/mechanical systems

✔ IT and operational assets, including �eets

✔ Rental goods/equipment

✔ Medical equipment/supplies

✔ Networks of plants, facilities, stores, warehouses

Examples• Preventative and predictive maintenance in the plant and supply chain

• Sensors to track and geo-position promotional displays for auto replenishment

• Dynamic re-routing or optimization of real-time supply and demand trade-o�s

• Ensuring process safety and security objectives are intact

• Combining connected vehicle technology with real-time location system to enable equipment and supplies to “come when called”

Economic Impact• 1% fuel savings in commercial aviation will save $30B over 15 years (GE)

• 1% reduction in system ine�ciency in healthcare systems yields $63B over 15 years (GE)

• Predictive asset management can yield $230 million in savings per plant over 20 years (GE)

• Predictive maintenance approach cut an annual maintenance budget by as much as 50% (Emerson)

• Tracking sensors and geo-fencing can reduce the $3 Billion annual cost of heavy equipment theft from job sites globally (National Insurance Crime Bureau - NICB)

Manufacturing

Consumer Goods

Retail Healthcare

2020

2018

2016

Consumer$120,661M

22.70% CAGR

Healthcare$108,084M

23.30% CAGR

Manufacturing$227,466M

19.80% CAGR

Retail$76,648M

28.60% CAGR

USE CASES

Examples Economic Impact

Consumer/Customer ExperienceFocus on Customers: Consumer, Employee, Patient, Shopper

• Mobile health apps and remote health monitoring devices to evaluate drug and care e�cacy

• Remote health monitoring, wellness trackers

• Controlled access to location, equipment based on operator role

• Consumer insights, interaction and marketing in-store based on location and product proximity

• Dynamic replenishment model based on actual product usage or shelf status

• Self-insured companies with 10,000 employees can save up to 7% in total bene�ts costs using wellness trackers (ROI calculator from Ji�.com)

• Dynamic replenishment can save $2.5 million in out-of-stock, excess inventory, and labor for every $500m in inventory turnover (Retail Industry)2

• Remote monitoring technology to reduce emergency department visits and readmissions can save over $4,000 per patient per year (US News and World Report)

Examples Economic Impact

Product and Service ExperienceFocus on the Product and Service Delivery with Connected Products

• Adaptable product-enabled services (personalized, prepared, and �nished products)

• Remote condition or location monitoring and preventative maintenance

• Automated replenishment of consumables

• Warranty and service contract compliance and delivery

• Tesla managed a 29,000 vehicle product recall with an OTA software update vs. repair shop visits

• Savings of $20,000/hour on manufacturing line by preventing unplanned downtime (Manufacturing Industry Data)3

• 10-route vending operation can save at least $200,000 annually from remote monitoring (Crane Payment Innovations)

Year Expected to Reach Critical Mass

1. Technology and services revenue, which includes hardware, software, connectivity, and support for IoT.2. Modeled from multiple sources, including National Association of Chain Drug Stores, Food Marketing Institute, and Retail Info Systems News.

3. Manufacturing industry data sources: Industry Week, Cisco, Supply Chain.