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IDC Analysis Proof Points For The Internet of Things
Vernon Turner Senior Vice President of Enterprise Systems, IDC Fellow for the Internet of Things, IDC October 27, 2015
Agenda
Digital
Transformation
& The Internet
Of Things
IoT Proof Points
Four Key IoT
Predictions
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Leadership Transformation
Omni-Experience Transformation
Information Transformation
Operating Model Transformation
WorkSource Transformation
Digital Transformation is the approach by which enterprises drive changes in their business models and ecosystems by leveraging digital competencies.
Digital Transformation is Multifaceted and Accelerated
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Leadership Transformation
Omni-Experience Transformation
Information Transformation
Operating Model Transformation
WorkSource Transformation
Worldwide, $1.3T Will be Spent on Technology
for Digital Transformation Initiatives in 2015
28% of total DX technology spending In 2015
19% of total DX technology spending in 2015
49% of total DX technology spending in 2015
3% of total DX technology spending in 2015
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1% of total DX technology spending in 2015
2015
Source: IDC, Digital Transformation Spending Guide, 2015
Leadership Transformation
Omni-Experience Transformation
Information Transformation
Operating Model Transformation
WorkSource Transformation
By 2020, We Move From Building the Digital Enterprise
to Building the Information-Based Enterprise
25% of total DX technology spending In 2020
3% of total DX technology spending in 2020
19% of total DX technology spending in 2020
49% of total DX technology spending in 2020
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1% of total DX technology spending in 2020
2020
Source: IDC, Digital Transformation Spending Guide, 2015
33% of total DX technology spending in 2020
38% of total DX technology spending in 2020
How Do You Get There?
8
IDC Defines the Internet of Things (IoT) as…
“A network of networks of uniquely identifiable end points (or things) that communicate without
human interaction using IP connectivity”
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3rd Platform Technologies are Fueling IoT Investments
The 3rd Platform has created the underpinnings for digital transformation and IoT is part of every conversation.
*Source: IDC, 2014 Global Technology and Industry Research Organization IT Survey
Today, 61% of organizations in the U.S. are actively investigating IoT initiatives*
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Devices, connectivity and IT services will make up the majority of the IoT market in 2020 with more than
70% of the total spend.
The worldwide Internet of Things market will grow from $655 billion in
2014 to $1.7 trillion in 2020.
In 2020 there will be more than 30 billion devices connected.
IoT: An Evolving Market
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Source: Worldwide Internet of Things Forecast, 2015–2020 (IDC #256397)
The Next Wave is About Connecting Machines and People
12
The IoT Impact Every Minute
2015
2020
+ 4,800 IoT Sensors Added To Corporate
Networks
$1.25M Spent On IoT Industry
+ 7,900 IoT Sensors Added To Corporate
Networks
$3.4M Spent On IoT Industry
IoT Contributes To A Social Business Model
System of Relationship
System of Decision
System of Transaction
S
E
N
S
E
Respond
Decision
Data Types
Machine and sensors
Geolocation
Transaction data
Mobile apps data
Email and messaging
Social networks and
customer communities
Selected Industry Forecasts (Growth Model)
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2015 2016 2017 2018 2019 2020
$ M
illio
ns
Manufacturing Consumer Transportation Retail
+ 2 X
3 X
+ 2 X
+ 3.5 X
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Knowing Where You Are On The
Journey
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IoT MaturityScape Stage Overview
Almost Completely
Unconnected
Individuals create proof of
concepts for IoT solutions
without the support and
knowledge of business units
and IT. IT lacks IoT budget
or mandate.
Business Outcome
Little to no monetary or
business value achieved.
Unmet Demand for
Outcomes
Lines of business create IoT
projects that are looking for
customer endorsements. IT
infrastructures consume
excessive IT and network
resources.
Business Outcome
LoB leaders pressured
by competitor and
customer needs to
accelerate IoT rollouts
IoT Supports Business
Transformation
Infrastructure maturity
enables IoT solutions to be
deployed at scale and speed
without impact on existing
IT workloads. IoT solutions
are managed by robust IoT
platforms.
Business Outcome
Integrated IoT solutions
roadmaps are shared
with IT suppliers , LoB
and IT
IoT Drives Corporate
Agility
IoT metrics provide LoB and
IT management with critical
data to drive efficiencies
across the supply change.
Enriched outcomes from
hybrid cloud / analytics
speed up product innovation.
Business Outcome
IoT solutions impact the
Capex and Opex metrics
of the company, bringing
early transformation.
IoT Value Engineering
Analytics-driven results
dictate changes to business
supply chain; the blurred line
between IT and LoB enables
the IoT environment to run
seamlessly, automatically,
while IoT is firmly on the
strategic road map.
Business Outcome
IoT functions as major
influence and key driver
of company’s digital
transformation.
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IoT Reference Architecture
Sensors
IoT
Device
IoT
Device
IoT
Device
Data Management
Process Automation
Resource Mgmt
Communication
Data Management
Process Automation
Resource Mgmt
Communication Communication
IoT Gateway
Data Management
Process Automation
Resource Mgmt
Communication
IoT Platform
Data Management
Process Automation
Resource Mgmt
Communication The
Edge
The
Enterprise
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IoT Reference Architecture
18
IoT
Sensor Hardware
IoT
Sensor Software
IoT
Sensor Mgmt
IoT Devices
Network Connectivity
Big Data
Databases IoT
Sensor Mgmt
Analytics
Engines G
RC
, S
ec
uri
ty.
Ide
nti
ty M
an
ag
em
en
t
Exte
rnal
Data
So
urc
es:
Data
Ble
nd
ing
Enterprise
Managemet Tools
Application Dev &
Production Environment
Device Management
IoT Reference Architecture
19
IoT Purpose Built Platform
IoT
Sensor Hardware
IoT
Sensor Software
IoT
Sensor Mgmt
IoT Devices
Network Connectivity
GR
C,
Se
cu
rity
. Id
en
tity
Ma
na
ge
me
nt
Exte
rnal
Data
So
urc
es:
Data
Ble
nd
ing
Bu
sin
ess V
alu
e
Sensors
IoT Gateways
IoT Platforms (City, Automotive, Home, Industrial, Medical, etc.)
Sense & Respond Analytics ( Business Solutions)
Business Innovation & Disruption
“The Value of the IoT Solution is proportional to the speed and the
number of times the original IoT data is analysed” 1
“Smart Data Is Only Smart If It Is In The Right Hands” Source: IDC 2013
$
Time
1. Turner’s Law of IoT
Increasing The Value Of IoT Outcomes
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#1: IoT Is Strategic To Enterprise
Transformative
24%
Strategic
58% Considering
13%
Enterprise decision makers think IoT is…
N=2350
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Source: IDC’s Global IoT Decision Maker Survey, August 2015
Industry view of IoT strategic benefits differ
22
Transformational Strategic To consider Not important
OVERALL 23.7% 57.5% 12.7% 4.1%
Healthcare 17.6% 72.4% 6.8% 2.8%
Transportation 18.4% 66.6% 9.9% 2.6%
Manufacturing 24.8% 66.1% 6.9% 1.0%
Retail 28.4% 59.6% 7.9% 3.7%
Finance 20.0% 58.4% 15.2% 5.6%
IT 27.7% 50.4% 11.0% 6.2%
Professional Services 29.6% 45.8% 15.7% 7.4%
Government 24.4% 41.5% 25.2% 7.7%
Other 22.7% 45.1% 21.9% 4.4%
Source: IDC’s Global IoT Decision Maker Survey, August 2015 N=2350
#2: After The Hype, B2B Takes Over From Consumer
Business-to-
Business (B2B) 46%
Consumer 47%
[CATEGORY NAME]
[PERCENTAGE]
Business-to-
Business (B2B) 53%
Consumer 41%
Federal, State, Local
government
6%
2014
2015
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Increase Productivity Time To Market Process Automation
14.2% 11.8% 10.1%
#3: Top 3 Factors That Influence Your Organization Decision To Create An IoT Strategy
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Source: IDC Enterprise Internet of Things Survey, IDC, July, 2015
N=1971
Challenges As Viewed By Enterprises
Security
Finance
India
Medium-size Companies
Upfront Costs
IT
All of Latin America
Medium-size Companies
Ongoing Costs
Manufacturing
China
Large-size Companies
Top Respondents
N=2350
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Q. What do you think will hinder the deployment of an "Internet of Things" solution at your organization in the next two years?
Source: IDC’s Global IoT Decision Maker Survey, August 2015
IoT Applications Deployed Or Planned (Multiple Choices).
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 26 0 -15 (Cool) 16 -30 (Warm) +30 (Hot)
Source: IDC Enterprise Internet of Things Survey, IDC, July, 2015
#4: Changing Views On “The Edge”
0 10 20 30 40 50 60
Don't know
Collect and tranfer to data center
Collect and process at "the edge"
2014 2015
Edge
Enterprise
Edge
Enterprise 54%
43%
40%
54%
Q. How will your organization manage data generated by the IoT sensors?
Retail
Manufacturing N=2350
Sensors
IoT
Device
IoT
Device
IoT
Device
IoT Gateway
Data
Manag
ement
Proces
s
Autom
ation
Resour
ce
Mgmt Comm
unicati
on
IoT Platform
Data
Manag
ement
Proces
s
Autom
ation
Resour
ce
Mgmt Comm
unicati
on
The Edge
The
Enterprise
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Source: IDC’s Global IoT Decision Maker Survey, August 2015
By 2020, 90% of IT networks will have had an IoT-based security
breach.
By 2018, 60% of global 1000 companies, will integrate IT and OT at
the technology, process, security, and
organizational levels to fully realize the value of their IoT investments.
By 2020, 50% of IT networks will transition
from having excess capacity to handle the
additional IoT devices to being network constrained.
2020, over 90% of all IoT data will be hosted on
service provider platforms.
By …
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Source: IDC FutureScape: Worldwide Internet of Things 2015 Predictions (IDC #252872)
Thank you: How to reach me for questions.
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Vernon Turner
Senior Vice President, Enterprise and Research Fellow (Internet Of Things)
@vernonxt
+1 508 524 5076