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developing new growthopportunities and businesses at the interaction of smart systems,services and the internet of things

2015 - 2020Market analysis on how networks of companies, customers, people and intelligent devices are driving the convergence of The Internet of Things and The Internet of People.

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For quite a few years now, Harbor Research has focused most of its research and consulting on what we call “Smart Systems”—the convergence of pervasive or embedded computing with the packet-switching “network of networks” called the Internet.

These days, many people refer to this phenomenon as “the Internet of Things.” We prefer “Smart Systems” over other terms in common use—notably “M2M,” which usually stands for “machine-to-machine”—because it captures the profound enormity of the phenomenon, something much greater in scope than just machine connectivity.

Whatever we choose to call it— “Smart Systems” or “Pervasive Computing” or “The Internet of Things”—we are referring to digital microprocessors and sensors embedded in everyday objects relaying information over networks. But even this makes too many assumptions about what the smart systems phenomenon will be. Encoded information in physical objects is also smart—even without intrinsic computing ability. Seen in this way, a printed bar code, a house key, or even the pages of a technical manual can have the status of an “information device” on a network. What’s more, all of these characterizations do not even begin to address the human-machine dimension of collaboration.

Smart Systems is a concept in which inputs from machines, people, video streams, maps, newsfeeds, sensors, and more is digitized and placed onto networks. We believe these systems that connect people, devices, business processes, and content to enable collective awareness will drive a multi-year wave of growth based on the convergence of the virtual and physical worlds.

REPORT OVERVIEWThe total Smart Systems market value forecast for 2015 is approximately $250 billion. By 2020, the market is expected to grow to $927 billion, representing a 5-year compound annual growth rate (CAGR) of 30.2%. Cumulative networked devices in use are expected to grow to 33 billion by 2020. Revenues derived from Smart Systems can be broken down into four macro categories:

» Enablement: the wireline or wireless module attached to or embedded in each machine to be connected.

» Network Services: the communication medium used to receive/send machine data including configuration and provisioning, network service charges, and support services.

» System Applications: software platforms and services for provisioning, certification and integration of devices as well as device and data management functions.

» Value Added Applications: systems-level applications for monitoring, analytics, energy management, security management and related.

KEY QUESTIONS ADDRESSED Our analysis and research is focused on understanding the strategic market development implications within the emerging Smart Systems. Harbor is particularly interested in answering the following fundamental questions:

» How will traditional computing meet the real world?

» What progress has really been made in driving organic Smart Services opportunities?

» What’s at risk for manufacturers who continue to iterate existing products, systems and development protocols?

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Smart Systems Forecast: 2015-2020

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The Smart Systems Venue Map is our organizing schema for the Internet of Things opportunity. This approach to segmentation provides coverage and, with few exceptions, represent all potential applications for the Internet of

Smart Systems Forecast Venue Map

RESEARCH STRUCTURE

Things. As technology advances and adoption matures, the amount of interactions between and amongst people, machines and systems will dramatically increase.

Harbor’s market model segments the Internet of Things into five sectors that encompass ten venues. Within the ten venues, there are 29 market segments with over 350 distinct connected product (i.e. device) segments that Harbor Research analyzes and monitors.

Harbor’s forecast provides comprehensive coverage of the intelligent device [smart device] networking and related smart services market.

» Who will be the first to deploy machine data analytics applications that can leverage tools across interrelated devices and diverse domains?

» How well prepared are manufacturers for the advent of Smart Systems and Services?

» Which Smart Systems applications are experiencing the highest rates of adoption?

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Smart Systems Forecast: 2015-2020

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Table of Contents

Chapter I: Executive Summary » Executive Summary

Chapter II: Introduction & Methodology » Report Overview » Research Structure » Revenue Streams » Systems Classification » Methodology » Critical Questions

Chapter III: Trends & Forces » Technology Forces » New Forces at Work » Technology Evolution » Competitive Forces » Customer Forces » Socioeconomic Forces

Chapter IV: Market Forecast: 2015 - 2020 » Organizing Schema » Venue Segmentation » Applications & Technologies » Enablement » Network Services » System Applications » Value Added Applications » Network Technologies » Venue Snapshots

Chapter V: Challenges & Opportunities » Challenges for Technology Providers » Challenges for Network Service Providers » Challenges for Technology Adopters » Required Smart Systems Tools » Required Smart System Strategies » Conclusions

Chapter VI: Appendix » Glossary » Frequently Asked Questions » Venue Coverage » Overview of Research

Chapter II: Introduction & Methodology » Smart Systems Application Taxonomy » Venue Organizing Schema » Smart Systems Forecast Network

Evolution » Forecast Methodology » Methodology Elements » Aligning Network Technology and

Applications

Chapter IV: Market Forecast: 2015 - 2020 » Underlying Segmentation » Installed Devices by Geography » Devices Shipped by Venue » Enablement Revenue by Venue » Enablement Revenue by Network Type » Network Services Revenue by Venue » Network Services Revenue by Network

Type » System Applications Revenue Streams » System Applications Revenue by Venue » Value Added Applications Revenue

Streams » Value Added Applications Revenue by

Venue » Smart Systems Revenue by Network Type » Devices Shipped by Network Type » Buildings Venue Snapshot » Security Venue Snapshot » Healthcare Venue Snapshot » Retail & Commercial Services Venue

Snapshot » Resources Venue Snapshot » Industrial Venue Snapshot » Energy Venue Snapshot » Transportation Venue Snapshot » Consumer Venue Snapshot » Professional IT Venue Snapshot

Chapter V: Challenges & Opportunities » Smart Systems Business Model Discovery

Framework

EXHIBITS and FIGURESSTRUCTURE and CONTENT SUMMARY

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Smart Systems Forecast: 2015-2020

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Research & Retainer ServicesIn addition to our research reports, we provide research and retainer services aimed at supporting client market and business development goals. Our program consists of research services, creative interactions and on-going support. Clients are given the ability to tailor their own package to suit the goals of their organization.

Consulting EngagementsHarbor also offers strategy, business development and technology research consulting engagements. We emphasize interactive analyses, the incorporation of outside perspectives, time-efficient workshops, and action-oriented decisions. Our multifaceted approach, ranging from the research we publish to fully custom consulting engagements benefits from our on-going domain knowledge and market relationships. Our clients benefit from our ability and willingness to take an informed position that combines in-depth knowledge of the marketplace with rigorous strategic and development processes.

ABOUT HARBOR RESEARCH

Founded in 1984, Harbor Research Inc. has thirty years of experience in providing

strategic consulting and research services that enable our clients to understand and capitalize

on emergent and disruptive opportunities driven by information and communications

technology. The firm has established a unique competence in developing business models

and strategy for the convergence of pervasive computing, global networking and Smart

systems.

For inquiries please contact:Alex Glaser

+01 303 876 9000 x25aglaser@harborresearch.com

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Smart Systems Forecast: 2015-2020

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