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Internet of Things 2020: A Glimpse into the Future
Silicon Valley Thought Leaders Series
Alex Blanter Partner +1 510 710 4365 [email protected] Follow me: LinkedIn | Twitter
Mark Holman Partner +1 650 400 0264 [email protected] Follow me: LinkedIn | Twitter
We came here today to discuss the Internet of Things…
3% 5%
27%
48%
17%
Never Heard ofIt
Novice andLearning
CasuallyInformed
GenerallyFamiliar
Expert
#IoT2020
In the Know: 65% Up and Comers: 35%
…ahead of this meeting we asked for your forecasts on time to IoT value, speed of adoption across sectors and industries, and barriers to overcome
Source: A.T. Kearney IoT2020 Survey
Everybody seems to be talking about IoT
iot internet of things
security 2020
cloud trends cisco 2013 m
ean
blo
g
ioe
check
companies
gre
at
the
iot
ibm
need m2m data mobile
people time web
20
14
tech
google smart b
ig
join
app
world
IT b
log
s
technology connected
business bluetooth
digital
today
launches
de
vic
es
big data start gigaom
post
potential
#IoT2020
On track for nearly 22,000 publications
Source: Twitter, Google, Factiva, A.T. Kearney
Twenty unique definitions provided in the survey – key words: Devices, System, Connected, Internet, Data
Source: Sysomos, A.T. Kearney
#IoT2020
We define the Internet of Things as a…
seamless combination of embedded intelligence,
ubiquitous connectivity, and deep analytical insights
that creates unique and disruptive value for companies, individuals, and societies
#IoT2020
Source: A.T. Kearney
Ind
ustr
ies
Things
Value and Impact
Po
licie
s &
Sta
nd
ard
s
Identify
Sense
Connect
Collect
Analyze
Act
Taking that definition to the next, more detailed, level…
#IoT2020
Enterprise
Consumer
Public Sector
Source: A.T. Kearney
IoT will be pervasive… are you ready?
2013 to 2020: From half as many to twice as many – growth of IoT devices relative to traditional connected devices
Over 7.7 billion people 20X+ as many connected
devices per person Over 3.2M people Nearly 30 billion devices
By 2020 in the World…
Over 3.5
per every human on the planet
By 2020 in Silicon Valley…
#IoT2020
For a family of four: 250+
For us in this room: 7,000+
For all in Silicon Valley: 200M+
Internet of Things
Traditional connected devices
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 0
5
10
15
20
25
30
Co
nn
ec
ted
d
evic
es
Source: BI Intelligence, US Census Bureau, Silicon Valley Index, A.T. Kearney
IoT will be materially disruptive – there will be winners and losers
By 2020 IoT will impact close to 6% of the global economy
$3.5T Revenue Redistributed
$1.9T Productivity Improvement
$177B Value to End Customer
$344B Additional IoT Revenues
Revenues directly attributable to sale of IoT hardware, software, and services
Direct reduction in costs driven by IoT and realized by end customers
Direct increase in output per unit of cost, enabled by IoT
and reinvested in productive assets and activities
Revenues realized within the world economy that will potentially move from one player to another with no net increase in total economy
Global Economy in
2020
$100T
#IoT2020
Source: A.T. Kearney
Additional IoT revenues will be split in a multitude of ways
Enterprise
Consumer
Public Sector
$217B
$97B
$30B
63%
28%
9%
#IoT2020
$344B Additional IoT Revenues
Survey Results: Time to Value Rank
1
2
3
$196B 57%
$41B 12% 18% $62B
13% $45B
Source: A.T. Kearney
2010 2015 2020 2025 2030
It will take years for IoT potential to be realized
1.0
Value buzz
1
• $1.1B of VC investment in IoT –
growing at 46% vs. 7% growth for all VC investment
• US government is investing
$100M per year and UK just
announced a £45m investment
• Cisco is investing $1B over 5 years; Intel has created IoT BU
• AT&T, Cisco, Intel, GE, IBM
forming Consortium
#IoT2020
Survey Results
13% 22% 59% 2% 4%
Source: A.T. Kearney
Challenges to IoT deployment and value span 6 areas
#IoT2020
Ind
us
trie
s
Things
Value and Impact
Po
licie
s &
Sta
nd
ard
s
Identify
Sense
Connect
Collect
Analyze
Act
Enterprise
Consumer
Public Sector • Lack of standards for critical layers of IoT solutions
• Multitude of alliances and partnerships
• Policies not keeping up with technological advancement
• Lack of scale needed to achieve acceptable cost points
• Limited near term business cases
• Concerns about design and implementation complexity
• Complex interoperability
• Complex interoperability
• Legacy environments
• Exponentially growing data volumes
• Lack of integrated end-to-end solutions that deliver value
Source: A.T. Kearney
Overcoming these challenges will require all and everyone – top 10 success factors
1. Standardized platforms and interfaces
2. Updated policies and regulations
3. Defined cross-industry collaboration models and alliances
4. Strategically eliminated systemic bottlenecks
5. Relentlessly lowered costs
Overall Ecosystem Individual Company
1. Clarity of business value
2. Strategic and operational flexibility
3. Focus on superior innovation
4. Collaborative and co-creative culture
5. Teams capable of ecosystem collaboration
#IoT2020
Source: A.T. Kearney
What will the future world look like?
Objects communicate with each other without humans and act independently
Distributed intelligence enables self sufficiency
Experiences are personalized
Autonomous
Analog and digital world merge, with seamless experiences across both
Everything can access everything else remotely
Sharing becomes predominant mode of use
Unified
Digital identity for every human, creature, and object… and a home page
Everybody and everything is traceable and trackable
Technology is pervasive but invisible
Transparent
Most everything is direct – intermediaries are gone
Most everything is real time – information, decisions, actions
Predictive, with an ecosystem that anticipates and responds to its environment
Dynamic
#IoT2020
Progress by 2020
Source: A.T. Kearney
Appendix: Survey Results
Question 1: How familiar are you with IoT? – 70+ responses received
3% 5%
27%
48%
17%
Never Heard ofIt
Novice andLearning
CasuallyInformed
GenerallyFamiliar
Expert
1. These responses omitted from the rest of the survey Source: A.T. Kearney
1
3%
Never
3%
Beyond 2025
2025
22%
2020
62%
2015
10%
2.6
2.0
1.4
Consumer
Public sector
Enterprise
5.9
5.7
4.4
4.3
3.5
2.3
2.1
Natural resources
Education
Financial Services
Healthcare
Transportation/ Logistics
Retail / Consumer Products
Manufacturing
4.2
4.1
3.9
3.3
3.2
2.5Standards
User concerns
Regulation
Investment
Insufficient value
Technical
Survey results
Q2: When will delivered IoT value live up to expectations?
Q3: Which sectors of the economy will develop the fastest?
Q4: Which industries will be furthest along the adoption curve by 2020?
Q5: Which factors need to be overcome for IoT to reach its potential?
Source: A.T. Kearney
Disclaimer
This document is exclusively intended for select clients of A.T. Kearney. Distribution, quotations, duplication, and excerpts are not permitted without A.T. Kearney’s prior written consent. The content compiled in this report is for presentation only and does not represent the complete findings or total documentation on the topic represented.