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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

© IDC Visit us at IDC.com and follow us on Twitter: @IDC 4

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







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





2015

Source: IDC, Digital Transformation Spending Guide, 2015






By 2020, We Move From Building the Digital Enterprise

to Building the Information-Based Enterprise

25% of total DX technology spending In 2020






2020

Source: IDC, Digital Transformation Spending Guide, 2015



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”


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*


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


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

© IDC Visit us at IDC.com and follow us on Twitter: @IDC 14 Source: IDC’s IoT Spending Guide, May 2015

Knowing Where You Are On The

Journey


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.


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



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


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


#1: IoT Is Strategic To Enterprise

Transformative

24%

Strategic

58% Considering

13%

Enterprise decision makers think IoT is…

N=2350


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


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


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


Q. What do you think will hinder the deployment of an "Internet of Things" solution at your organization in the next two years?


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



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 …


Source: IDC FutureScape: Worldwide Internet of Things 2015 Predictions (IDC #252872)

Thank you: How to reach me for questions.


Vernon Turner

Senior Vice President, Enterprise and Research Fellow (Internet Of Things)

@vernonxt

[email protected]

+1 508 524 5076

mailto:[email protected]

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