![IBM Analytics © 2015 IBM Corporation3
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Business value Drivers for IoT Solutions
- 1. © 2015 IBM Corporation IBM Analytics The Business Drivers of IoT April 30, 2015 Steve Shoaf, Business Unit Executive, WW Sales – Analytics Platforms
- 2. IBM Analytics © 2015 IBM Corporation2 Welcome – Today’s Agenda Agenda 9:30 - 10:00 Arrival and Coffee 10:00 - 10:45 Business value drivers for IoT solutions - IBM 10:45 - 11:15 Implementing IoT for business value - Hildebrand 11:15 - 11:30 Break 11:30 - 12:15 Internet of Things supporting architectures / capabilities - IBM 12:15 - 12:30 Lunch 12:30 - 1:00 End-to-end solution demonstration: From concept to delivery-Intel/IBM 1:00 - 1:30 Panel discussion – Q&A
- 3. IBM Analytics © 2015 IBM Corporation3 Legal Disclaimer • © IBM Corporation 2014. All Rights Reserved. • The information contained in this publication is provided for informational purposes only. While efforts were made to verify the completeness and accuracy of the information contained in this publication, it is provided AS IS without warranty of any kind, express or implied. In addition, this information is based on IBM’s current product plans and strategy, which are subject to change by IBM without notice. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, this publication or any other materials. Nothing contained in this publication is intended to, nor shall have the effect of, creating any warranties or representations from IBM or its suppliers or licensors, or altering the terms and conditions of the applicable license agreement governing the use of IBM software. • References in this presentation to IBM products, programs, or services do not imply that they will be available in all countries in which IBM operates. Product release dates and/or capabilities referenced in this presentation may change at any time at IBM’s sole discretion based on market opportunities or other factors, and are not intended to be a commitment to future product or feature availability in any way. Nothing contained in these materials is intended to, nor shall have the effect of, stating or implying that any activities undertaken by you will result in any specific sales, revenue growth or other results. • If the text contains performance statistics or references to benchmarks, insert the following language; otherwise delete: Performance is based on measurements and projections using standard IBM benchmarks in a controlled environment. The actual throughput or performance that any user will experience will vary depending upon many factors, including considerations such as the amount of multiprogramming in the user's job stream, the I/O configuration, the storage configuration, and the workload processed. Therefore, no assurance can be given that an individual user will achieve results similar to those stated here. • If the text includes any customer examples, please confirm we have prior written approval from such customer and insert the following language; otherwise delete: All customer examples described are presented as illustrations of how those customers have used IBM products and the results they may have achieved. Actual environmental costs and performance characteristics may vary by customer. • Please review text for proper trademark attribution of IBM products. At first use, each product name must be the full name and include appropriate trademark symbols (e.g., IBM Lotus® Sametime® Unyte™). Subsequent references can drop “IBM” but should include the proper branding (e.g., Lotus Sametime Gateway, or WebSphere Application Server). Please refer to http://www.ibm.com/legal/copytrade.shtml for guidance on which trademarks require the ® or ™ symbol. Do not use abbreviations for IBM product names in your presentation. All product names must be used as adjectives rather than nouns. Please list all of the trademarks that you use in your presentation as follows; delete any not included in your presentation. IBM, the IBM logo, Lotus, Lotus Notes, Notes, Domino, Quickr, Sametime, WebSphere, UC2, PartnerWorld and Lotusphere are trademarks of International Business Machines Corporation in the United States, other countries, or both. Unyte is a trademark of WebDialogs, Inc., in the United States, other countries, or both. • If you reference Adobe® in the text, please mark the first use and include the following; otherwise delete: Adobe, the Adobe logo, PostScript, and the PostScript logo are either registered trademarks or trademarks of Adobe Systems Incorporated in the United States, and/or other countries. • If you reference Java™ in the text, please mark the first use and include the following; otherwise delete: Java and all Java-based trademarks are trademarks of Sun Microsystems, Inc. in the United States, other countries, or both. • If you reference Microsoft® and/or Windows® in the text, please mark the first use and include the following, as applicable; otherwise delete: Microsoft and Windows are trademarks of Microsoft Corporation in the United States, other countries, or both. • If you reference Intel® and/or any of the following Intel products in the text, please mark the first use and include those that you use as follows; otherwise delete: Intel, Intel Centrino, Celeron, Intel Xeon, Intel SpeedStep, Itanium, and Pentium are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries. • If you reference UNIX® in the text, please mark the first use and include the following; otherwise delete: UNIX is a registered trademark of The Open Group in the United States and other countries. • If you reference Linux® in your presentation, please mark the first use and include the following; otherwise delete: Linux is a registered trademark of Linus Torvalds in the United States, other countries, or both. Other company, product, or service names may be trademarks or service marks of others. • If the text/graphics include screenshots, no actual IBM employee names may be used (even your own), if your screenshots include fictitious company names (e.g., Renovations, Zeta Bank, Acme) please update and insert the following; otherwise delete: All references to [insert fictitious company name] refer to a fictitious company and are used for illustration purposes only.
- 4. IBM Analytics © 2015 IBM Corporation4 Companies are moving to IoT because it will make them more efficient ….efficiency is a gain in productivity ….productivity creates money Business Insider Intelligence estimates that by 2019 $1.7 Trillion of value will be added to the world wide economy in the form of revenue and cost savings. – this is the business value IoT can create
- 5. IBM Analytics © 2015 IBM Corporation5 The Promise of IoT The fundamental promise of the IoT is to enable new business engagement models driven by remote connected devices, allowing asset owners and operators to obtain up to the minute information about their products’ status and key measures, and related conditions affecting their operation. These devices could also be controlled remotely to adjust operating parameters, update their automation software or even shut down in case of an emergency.
- 6. IBM Analytics © 2015 IBM Corporation6 9 billion devices around the world are currently connected to the Internet, including computers and smartphones The number is expected to increase dramatically within the next decade, with estimates ranging from 50 Billion devices to reaching 1 trillion The Internet of Things has the potential to create economic impact of $2.7 trillion to $6.2 trillion1 annually by 2025 Source: Disruptive Technologies, McKinsey Global Institute, May 2013 Connections Driven growth
- 7. IBM Analytics © 2015 IBM Corporation7 Connected devices by Category 7 “There will be 212 B devices or things connected to networks by 2020” - IDC (link) “we expect the number of connected objects to reach 50 B by 2020 (2.7% of things in the world).” – Cisco (link)
- 8. IBM Analytics © 2015 IBM Corporation8 IoT Market Opportunity – 20.6% CAGR Industry Revenue Opportunity ($B) Market Opportunity by Sector 5 Year IoT Revenue Opportunity Industry Revenue Opportunity ($M) Not only is the market growing, but the forecast of market size is growing
- 9. IBM Analytics © 2015 IBM Corporation9 IoT Business Value Identification This market is developing in a recognizable pattern The Makers of Things are watching their things perform in the field under real customer use • Objective is to improve product quality and retain customer loyalty The Users of Things need to integrate newly available information to deliver business results • Objective is to reduce cost of operations while increasing business growth The business case for IoT technologies at Makers and Users demands immediate operational improvement (productivity increase) and follow-on effective use of refined data toward the business goal of increased profitability Bottom line for the IoT business case is “what gets measured gets managed”
- 10. IBM Analytics © 2015 IBM Corporation10 IoT Opportunity by Industry
- 11. IBM Analytics © 2015 IBM Corporation11 IoT Contributions by Industry Banking Healthcare Automotive Retail Transport E&U Monetize Cash replacement solutions Mobile Banking Paid home care family services Pay-per-drive car rental Cash replacement Sensor enabled Loyalty cards Paid Alerts to travellers Congestion charging Pay-per-use energy Optimize Optimized Cash management ER Bed Resource Mgmt Component predictive replacement Fleet mgmt Delivery and stock replenishment optimization Store layout optimization Smart Cities Traffic mgmt Airport Management Delay non- essential supply during peak loads Extend Banking the un- banked Biometrics Smarter Subsidies Life style monitoring In-car Movies, Music, Games Highly Automated Driving Smart Vending Machines Delivery Lockers Mobility Services Smart home services Control Remote ATM Management Dynamic Authorization Remote Hospital environment Mgmt Remote Drive-train optimization Store energy mgmt Store parking mgmt Dynamic price labels Crowd mgmt Timetable mgmt Asset mgmt Remotely control consumer devices
- 12. IBM Analytics © 2015 IBM Corporation12 IBM Confidential05/04/15 12 4.5 million developers will drive IoT adoption “Just like in mobile, the value will come from an army of IoT entrepreneurs addressing thousands of user needs” - VisionMobile
- 13. IBM Analytics © 2015 IBM Corporation13 IT Spending by Industry Source: “IT Key Metrics Data 2014”, Gartner Consulting Group, 2014 O=71% C=29% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% Construction Materials and Resources Energy Chemicals Food & Beverage Processing Retail/Wholesale Industrial Manufacturing Consumer Products Industrial Electronic & Equipment Transportation Utilities Insurance Life Sciences, Pharma, Medical Products Cross Industry Average Telecommunications Professional Services Education Media & Entertainment Banking & Financial Services Software Publishing and Internet Services IT spending as a percent of revenue
- 14. IBM Analytics © 2015 IBM Corporation14 14 Cross Industry IoT Opportunity Survey Adoption of organizations are actively pursuing IoT initiatives. of respondents cite data security concerns as the number one barrier. 14 of the average IT budgets is being allocated to IoT initiatives... Actively Pursuing NotConsidering 61% 1. Lower Operational Costs 2. Better customer service and support 3. Customer acquisition/retention 4. Business process efficiency 5. Product/service improvement and innovation 34% 6.8% Drivers and Barriers Budgets Source: Global Technology and Industry Research Organization, 2014 Top IoT Drivers N=3568 (Weighted) Considerations Common goals of reducing costs couple with downstream use of data for business growth purposes Information Security Cross Industry Avg. IoT Rev USD 500,000,000 IT Budget % 3.2% 6.8% IT Budget $$ 16,000,000 Capital Budget 4,640,000 Est. IoT Allocation 1,088,000 GBP Revenue is an example
- 15. IBM Analytics © 2015 IBM Corporation15 15 IoT Opportunity: Retail Adoption of respondents are actively pursuing IoT initiatives. of respondents cite funding the initial investments at the scale needed as the number one barrier. 15 of the average IT budgets is being allocated to IoT initiatives... Actively Pursuing NotConsidering 60% 40% 10.5% Drivers and Barriers Budgets Source: Global Technology and Industry Research Organization, 2014 Top IoT Drivers N=203 (Weighted) 1. Better customer service and support 2. Lower operational costs 3. Customer acquisition and/or retention 4. Product and/or service improvement and innovation 5. Business process efficiency/operations optimization and control TOC Considerations Thinning margins while competing with Internet competitors Customer targeted marketing Improve Supply Chain Efficiency Rev Source: Wikipedia, 2014 Best Buy Retail USD Rev 40,339,000,000 IoT Allocation IT Budget % 1.5% 10.5% IT Budget GBP 605,085,000 Capital Budget 175,474,650 Est. IoT Allocation 63,533,925
- 16. IBM Analytics © 2015 IBM Corporation16 16 IoT Opportunity: Utilities Adoption of respondents are actively pursuing IoT initiatives. of respondents cite developing a sustainable business model/ proving ROI as the number one barrier. 16 of the average IT budgets is being allocated to IoT initiatives... Actively Pursuing NotConsidering 71% 49% 6.6% Drivers and Barriers Budgets Source: Global Technology and Industry Research Organization, 2014 Top IoT Drivers N=84 (Weighted) 1. Better customer service and support 2. Lower operational costs 3. Business process efficiency/operations optimization and control 4. Product and/or service improvement and innovation 5. Information Technology optimization and/or modernization TOC Considerations Lower data acquisition costs Automate contingent operations Integration of consumer technologies Rev Source: Wikipedia, 2014 SDG&E Utilities GBP Rev 4,329,000,000 IoT Allocation IT Budget % 2.8% 6.6% IT Budget 121,212,000 Capital Budget 35,151,480 Est. IoT Allocation 7,999,992
- 17. IBM Analytics © 2015 IBM Corporation17 17 IoT Opportunity: Insurance Adoption of respondents are actively pursuing IoT initiatives. of respondents cite developing a sustainable business model/ proving ROI as the number one barrier. 17 of the average IT budgets is being allocated to IoT initiatives... Actively Pursuing NotConsidering 63% 1. Better customer service and support 2. Customer acquisition and/or retention 3. Lower operational costs 4. Product and/or service improvement and innovation 5. Competitive differentiation 29% 6.4% Drivers and Barriers Budgets Source: Global Technology and Industry Research Organization, 2014 Top IoT Drivers N=176 (Weighted) TOC Considerations Significant budget invested to reduce risk through more accurate predictions Linkage of premiums to claims payment (improve the loss ratio) Rev Source: Wikipedia, 2014 Prudential Insurance/FS Rev USD 58,527,000,000 IoT allocation IT Budget % 3.2% 6.4% IT Budget 1,872,864,000 Capital Budget 543,130,560 Est IoT Allocation 119,863,296
- 18. IBM Analytics © 2015 IBM Corporation18 18 IoT opportunity: Oil and Gas Adoption of respondents are actively pursuing IoT initiatives. of respondents cite data security concerns as the number one barrier. 18 of the average IT budgets is being allocated to IoT initiatives... Actively Pursuing NotConsidering 56% 37% 7.4% Drivers and Barriers Budgets Source: Global Technology and Industry Research Organization, 2014 Top IoT Drivers N=121 (Weighted) 1. Lower operational costs 2. Better customer service and support 3. Business process efficiency/operations optimization and control 4. Competitive differentiation 5. Information Technology optimization and/or modernization TOC Considerations Production, transportation and distribution is a sensor rich environment Information Security Rev Source: Wikipedia, 2014 BP Oil & Gas GBP Rev 378,083,941,112 IoT Allocation IT Budget % 1.1% 7.4% IT Budget GBP 4,158,923,352 Capital Budget 1,206,087,772 Est. IoT Allocation 307,760,328
- 19. IBM Analytics © 2015 IBM Corporation19 We have built the world’s broadest and deepest portfolio in data, analytics, and cloud. 15,000 $24 billion $17 billion invested to date to build IBM’s capabilities in Big Data and analytics, with $7 billion in organic investment of gross spend for Big Data and analytics, including more than 30 acquired companies 500 Analytics consultants and 400 mathematicians Analytics patents generated each year We have significantly increased analytics and cloud revenue through strategic investments, and new skills and capabilities. Analytics Revenue 2013 2010 $16 billion $11 billion 40 total cloud data centers across five continents Cloud Revenue 2013 2012 $4.4 billion $2.6 billion
- 20. IBM Analytics © 2015 IBM Corporation20 Smarter Communications Retail Tracking Smarter Energy Key Partnerships Connected Home Gateway & Systems
- 21. IBM Analytics © 2015 IBM Corporation21 IBM IoT’s Functional Architecture Streams Deep Analytics Zone Device/Sensors Smart Gateways Sensor Analytics Zone
- 22. IBM Analytics © 2015 IBM Corporation22
- 23. IBM Analytics © 2015 IBM Corporation23 Connected Car Real time data from vehicles in the field • Predict demand for replacement parts and service • Monetize telematics data • Provide drivers assistance 23
- 24. IBM Analytics © 2015 IBM Corporation24 Dublin City Centre Improved on-time performance 600 buses on 150 routes 50 bus locations per second Location and stop ETA Automatically generate routes and stop locations Expect increase in riders 24
- 25. IBM Analytics © 2015 IBM Corporation25 IBM Burlington Testing POWER transistors 8.5 trillion per day From Batch to Real Time 4 hours to minutes 25
- 26. IBM Analytics © 2015 IBM Corporation26 Emory University Medical Center gains early insight into heart failure in critical care patients Need • Provide clinic-wide situational awareness to allow prioritization of treatment based on real-time analysis of physiologic data streams Benefits • Early warning system detects subtle signs of Atrial Fibrillation in patients in the Intensive Care Unit • Enables early detection and intervention to mitigate deterioration in the patient’s condition 26
- 27. IBM Analytics © 2015 IBM Corporation27 Hildebrand provides intelligent solutions to clients Benefits • Provide real-time analytics and insights • Retail footfall tracking: • 250 million data points per day • 300,000 data points per second • Location and Time Spent in Mall 90% reduction of Development & Operations cost “The potential for businesses to cut costs and increase revenues is enormous.” – Josh Cooper, CEO, Hildebrand
- 28. IBM Analytics © 2015 IBM Corporation28 Conoco Phillips uses stream data to monitor ice-flow movement in real time Need • Acquire Satellite images • Wind and surface current forces • Ice reflection/refraction for density • Underwater current forces and ice berg size Benefits • Expected saving USD 300 million first year deploying second well • Expected savings of USD 1 billion per platform construction due to iceberg avoidance 28