brace yourselves because the internet of things is coming

Making Leaders Successful Every Day

© 2013 Forrester Research, Inc. Reproduction Prohibited

Brace Yourselves BecauseThe Internet of Things Is ComingAmy DeMartineSenior Analyst

@AmyDeMartine

© 2013 Forrester Research, Inc. Reproduction Prohibited 3

Themes for today’s session

› Increasing software control of the physical world . . .• Combining sensors, networks, and analytics to connect physical

objects, products, and infrastructure to computing systems

› . . . improves business outcomes…• Optimize physical asset utilization and capital deployment.

• Differentiate products and services via software control.

• Transform customer engagements from one-time transactions to ongoing relationships.

› …but has IT implications from Internet of Things (IoT)/connected world solutions.


Agenda

›Redefining business in the connected world

›Emerging connected world solution momentum

›Addressing IT management and other issues unleashes deployment opportunities.


Imagine a connected world where . . .

. . . farms are wired. . . . hospitals are instrumented.

. . . homes, cars, and people are connected.


Connected world/IoT solutions occur at the macro and the micro level


Connected world solutions have an impact on business operations and outcomes

Operations

Opportunities

Outcomes


M2M technology connects many industrial and consumer-focused devices


The “four A’s” of connected world solutions

M2M technology

© 2013 Forrester Research, Inc. Reproduction Prohibited 10› Source: Business Technographics Global Networks And Telecommunications Survey, 2014

Overall 3% 7% 7% 12% 16% 30% 19% 7%

Expanding/upgrading implementation Implementing/implemented

Piloting Planning to implement during the next 12 months

Planning to implement in the next 12 to 24 months Interested but no plans yet

Not interested Don't know

28% are planning to implement M2M/IoT

solutions

17% are piloting, implementing, or

expanding M2M/IoT solutions

Q.MM1: What are your firm’s plans to adopt M2M/Internet of Things solutions or applications?

Among global telecom decision makers, adoption of M2M/IoT solutions is 17%

2013:

13% piloting, implementing or expanding

24% planning to implement


Source: October 23, 2012, “Prepare Your Security Organization For The Internet Of Things” Forrester report

Three stages of IoT implementationStage Description Examples

Stage 1: Personification of objects

Provision identity and basic passive functionality to selected objects.

Asset ID: The fridge owner scans cartons of milk with his or her smartphone as they are placed in the fridge. As the cartons expire, the smartphone app triggers a reminder to the owner to buy replacement milk.

Stage 2: Partially autonomous sensor networks

The object can sense its surroundings (e.g., location, status of other devices) and takes limited action based on that information.

Water management: Sensors in city drains detect water capacity has been reached due to local rainfall. To avoid local flooding, the system automatically reroutes water away from that local area.

Stage 3: Autonomous, independent devices

Objects or “things” have increased ability to sense context and environmental elements and can autonomously interact with other “things,” services, and sensors.

Retail: Stores detect items you’re trying on or carrying and communicate relevant offers to you in real time while in the store.

Healthcare: Drug dispensers issue medication in response to subcutaneous sensors.


Challenges to deployment remain

› Significant impacts on process and organization

› Complex vendor ecosystem

› Tech vendors offer customized, intergalactic solutions, but customers have specific, narrow problems.

› Lack of solution interoperability

› Ethical considerations

› Security issues are a key barrier.


Agenda



›Addressing security and other issues unleashes deployment opportunities.


Market forces are driving momentum for connected world/IoT solutions

› Declining prices and broad availability of sensors, communication technology, and analytic horsepower

› Regulatory compliance requirements in energy, transportation, and government sectors

› The “app economy” is changing customer expectations and the pace of innovation.


Now is the time to prepare for IoT solutions

› Lighthouse use cases in many vertical markets are readily available.

› Solutions have a significant impact on business processes and organizational activities.

› Connected devices enable systems of engagement, which interact with customers using real-time, location, status, and presence information.

› Network and security issues must be addressed early in the planning and implementation process.

Emerging adoption in specific industries

› Source: Business Technographics Global Networks And Telecommunications Survey, 2014

High-tech manufacturing(N=250)

Other manufacturing and pharma (N=456)

Retail andwholesale

(N=283)

Energy andmining (N=85)

Water, wasteand telecom

(N=91)

Services(N=628)

4%

3%

3%

7%

3%

2%

6%

6%

7%

12%

8%

7%

16%

6%

6%

15%

4%

6%

13%

13%

10%

15%

19%

11%

20%

14%

13%

12%

27%

15%

22%

32%

29%

29%

22%

29%

12%

18%

21%

7%

9%

22%

7%

8%

10%

2%

8%

8%





Expanding/Implementing/

Piloting

15%

15%

34%

16%

15%

26%

Base: Global business and technology decision makers (20+ employees) in 9 countries

Q.MM1 (by industry): What are your firm’s plans to adopt M2M/Internet of Things solutions or applications?

Emerging adoption in specific industries (cont.)

› Source: Business Technographics Global Networks And Telecommunications Survey, 2014

Media and entertainment

(N=148)

Financial Services(N=343)

Healthcare(N=120)

Govt and education (N=347)

Other industry(N=49)

1%

2%

2%

1%

4%

5%

9%

7%

4%

4%

7%

8%

9%

5%

2%

9%

16%

13%

6%

6%

16%

20%

17%

13%

12%

33%

27%

28%

37%

39%

19%

14%

23%

27%

29%

10%

4%

2%

7%

4%





Q.MM1 (by industry): What are your firm’s plans to adopt M2M/Internet of Things solutions or applications?

Expanding/Implementing/

Piloting

10%

10%

18%

19%

13%

Base: Global business and technology decision makers (20+ employees) in 9 countries


An endless array of applications areevident in each industry


Forrester identified 10 applications that address opportunities in multiple industries


Analysis of industry asset intensity and IT investment identifies “hot” areas


Facility management in the utilities and telecom industry

› Automated service call from the windmill gets service rep into the field.

› Tablet app confirms which windmill called . . . before the rep climbs the 350 steps.

› Full content integration includes maintenance history, video repair instructions, diagnostic tools needed, etc.

› A video links back to experts for tough problems.


From industrial to consumer markets

The ripest opportunities are decidedly “uncool” . . . in transportation, facilities, and inventory tracking.

Let’s look at the “cool” consumer-focused areas: connected homes, connected cars, and connected individuals.

© 2013 Forrester Research, Inc. Reproduction Prohibited 23Source: December 23, 2013, “The Internet Of Things Comes Home, Bit By Bit” Forrester report

Connected home services deliver peace of mind, convenience, and efficiency


Base: 358 US online adults who have remote access and control for at least one of the six specified aspects of their home.Source: North American Technographics® Devices And Telecom Online Benchmark Recontact Survey, 2013

“How interested would you be in being able to remotely access and control the following, even if you don’t do it today?”

(Percent answering “I already do this?”)

One72%

Two12%

Three7%

Four3%

Five1%

Six4%

Mean: 1.6Median: 1

Most of these early adopters are solving only one problem.

Adoption of home automation remains extremely nascent


Most consumers don’t want a “smart home.” They want to address specific issues.

› Consumers want a solution to their very specific need.• Who’s at the door?

• Is my baby asleep?

• Is my door locked?

• Has my elderly parent taken her meds?

• Are my plants too dry?

• Am I wasting energy?

› The “smart home” evolves via solving discrete needs and then federating the systems together.


Source: July 22, 2013, “The Connected Car” Forrester report

Connected car: In-vehicle computing takes multiple forms


Emerging consumer interest in wearables

Percentage of US online adults that are interested in using a sensor to:

Unlock your car or house so you don’t have to carry

keys: 44%

Get media recommendations based

on your mood: 30%

Track your child’s activity: 29%

Base: 4,657 US online adultsSource: North American Technographics® Consumer Technology Survey, 2013


Agenda



›Addressing security and other issues unleashes deployment opportunities.


IT executives must proactively prepare for connected world opportunities

› Collaborate with cross-functional organizational team to identify your connected world strategy.

› Incorporate business intelligence into the value chain to improve processes.

› Address employee and customer privacy concerns.

› Implement processes to monitor connected devices.

› Support new apps enabled by 4G/LTE network and device availability.


Base: 1,863 North American and European network and telecommunications decision-makers (20+ employees)Source: Forrsights Networks And Telecommunications Survey, Q1 2013

“What are your firm’s concerns, if any, with deploying M2M/‘Internet of things’ technologies?”(Select all that apply)

We can’t find the right supplier(s)

Lack of executive support

Regulatory issues or concerns

We don’t think we have a process that will be enhanced by M2M

Difficulty and risk of migration or installation

Pricing is unclear or complicated

Integration challenges

Lack of technology maturity

Total cost concerns (total cost of ownership)

Security concerns

7%

16%

18%

20%

21%

24%

24%

25%

32%

37%

A range of issues must be addressed to facilitate solution deployment


Many IT issues must be considered

Issue I&O consideration

Input validation Management and maintenance of devices requires flawless authentication.

System tampering Detected tampering must drive immediate reaction; tampering detection is critical.

Output integrity Systems can be misled, causing operational inefficiencies and loss.

Privacy Storage of and access to large data repositories will be a challenge.

Scale of failure Failed technology updates will impact millions of devices and lives.

Liability System interactions and dependencies are difficult to map and understand.

Fail-safe Failure scenarios or conflicting outcomes must be identified prior to deployment.

Government and legislation

Tracking data ownership and managing access to physical data among interested parties.


What to Prepare for IoT?› Keep an eye on big data solutions

• Flood of sensors = flood of data to be processed

• Need large databases to store and protect data

• Evaluate big data solutions to process data to determine sensor failure or thing being measured failure along with business data

• Consider integration with event management systems

› Beef up security and authentication systems• Protect data from malicious attacks

› Consider growing asset management to beyond IT assets• Determine design requirements which will be needed to keep track of

these new assets and asset related data

› New devices will come from home to the workplace• Define policies including privacy and security early for devices like

Google Glasses

• Decide early what you will manage and what you won’t

› Do NOT let your imagination fail you!

Thank youAmy DeMartine

+1 617.613.8906

[email protected]

@AmyDeMartine