IoT: A business perspectiveCarlos Perez, PhD, MSc

July 19th 2017

What’s IoT?

The market landscape

Technologies supporting IoT

Applications: B2B & B2C

Business models

Security, data protection and ethical issues

What does it take to starting an IoT company?

A business case: Johan sports

What’s next?

Outline

What’s internet of things (IoT)

"The transformation of any physical object into a digital data product“

Matt Turck, VC

Expectations:• $4 – 11 trillion in economic value by 2025

• 127 new devices connected every second

• 21B objects connected by 2020 (6.4M in 2016)

Source: Gartner, McKinsey

NEW Actionable

Information

The IoT hype cycle

Drivers:• Data analytics

• IoT services

• Standardization & security

• Cheap HW and development

• Edge computing

• Battery lifetime management

5-10 years to become mainstream

Technologies 1/2

Thing:Sensors + Arduino + raspbperry Pi

Protocols:MQTT

HTTP

Transmission:Zigbee

LPWAN (SigFox, LoRa)

5G

Arduino UNO17€

Raspberry Pi 335€

+

Temperature sensor5€

+ = 57€

Integration cost (€/MM)

SigFox extension board for Arduino54€

Tx costs: 0.7 – 8€/year @140 msgs/day max

= 54€

HW cost = 111€

Technologies 2/2

Data collection & analytics:Cloud based (€/h)

Application:SaaS

Mobile

Data visualization:Existing solutions (€/user)

Development cost (€/MM)

~ 25€/month/user

Applications: Overview

B2C B2B

Sorce: Gartner

Applications: B2C

4M objects sold in 2016 (63% of objects sold)

$546M in value (2016)

Drivers:• Easiness to use

• Perceived usefulness

• Price tag

Trends:Toward the “Quantified Self”

Health care & wellness

Energy consumption mgt

Applications: B2B

Drivers:• ROI

• Security

• Standardization & Integration

Trends:• Deliver new insights leading to better

decision reducing costs, increase revenues and reduce risks

• Expected pay-back time: < 3 years

Sorce: Gartner

Only 1 key success factor: The OS

Those who own the OS, own the ecosystem and own the market

Video link

Applications: Biomass CHP plant

Power: 150MW

Investment: 250M€

Operation lifetime: 20 years

Expected ROI: 5-10%

Yearly revenue: 120M€

Yearly costs: 84M€

IoT gain: 1%

IoT gain: 840k€

IoT ROI improvement: ~3%

1% cost reduction translates into +3% ROI

IoT Business Models

The industry is immature and hasn’t found yet a viable BM

Data is not knowledge anymore, data is money

The data is at the core of revenue streams: B2C, B2B…but not always visible to users

Market startup(2012 – 2015)

Market up take(2015 – 2020)

Market maturity(2020 – 2025)

Sell the device• Higher price tag than not connected objects• Setup is still not simple enough• Compatibility issues with other devices• Major security issues• € from one-shot sales

Sell a new service• Appealing mostly to early adopters• ROI/benefits not proven• IoT services: Try and error• € from recurrent revenues

Sell new offers from current services• Appealing to mass market• A Company owns , operates and manages the device• Devices becomes a comodity• Stardardization of interfaces• Data protection, ownership and management regulated• € from personalized services

€

€€

€€€€

Security: A major feasibility requiremet

A major Go/No Go for IoT services

Security by design:• HW• SW• Tx (no protection: 75% of devices) • Access to devices• Data storage• End to end applications

Sensible personal data are fully exposed

Hacking a car

Video link

Data protection & ethical issues

B2C: Who owns the personal data:

• The person• The device maker• The company operating the device

Today, no legal framework defines who owns the data and the dos & don’ts

A major condition for B2C mass market adoption

1996: HIPAA1998: Safe Harbor2013: FDA

FTC

1995: EU directive 95/45/EC on the right to access and manage the collected data

1978: Loi Informatique et Libertés (Art 34) on personal data protection

What does it tale to start an IoT startup

SW startup IoT startup

MVP develoment approach YES YES

Protoyping budget 100k€ >250k€

Prototyping delay A few weeks >24 weeks

Mechanics NA 10-30k€

Electronics NA 10-20k€

Packaging NA 4.5-15k€

Parts sourcing & materials NA 8-10k€

Other engineering (e.g. security) Variable 10-20k€

Industrialization budget 500k€ >1 000k€ (5 000 units)

Fabrication delay 24 weeks >14 weeks

Certification delay NA 2-4 weeks

What does it tale to start an IoT startup

SW startup IoT startup

Logistics NA Very expensive

Stock management NA Mandatory

Commerciallization SaaS, Apps PoS, online

Revenu sharing with retailers Optional Mostly mandatory

Launch delay and required funding:

SW startup: ~27 weeks, ~600k€ vs. IoT startup: >42 weeks, >1 250k€

Sport data analytics: State of the art

System installed and never moved: A complex system

High positioning accuracy based on GPS with correction: mm

Very expensive: starting at 1M€ each

Sport data analytics: Johan Sports

1. Track your activity 2. Analyze results 3. Improve your game

Sport data analytics: Johan Sports

Johan Sports video

Sensor: A few tenths of € each

Whole system:A few thousands of € each

Open new markets:• professionals• amateurs• Individuals 20 clubs, 484 sensors deployed

What’s next

Technology:• Bespoke processors• Data analytics on a $5 board• Making current objects smart• Energy harvesting

Security & data protection:• Adoption of security by design• Regulation for data protection and

ownership

BMs:• IoT as a service

openMSP430 µcontroller - FPGA

Sorce: SIGREF

The IoT trends:http://www.gartner.com/smarterwithgartner/7-technologies-underpin-the-hype-cycle-for-the-internet-of-things-2016/

Technology:https://store.arduino.cc/arduino-uno-rev3

Johan Sportshttp://www.johan-sports.com/

Catapult sportshttp://www.catapultsports.com/fr/

GPSportshttp://gpsports.com/

RESSOURCES

www:

https://www.carlosperez.biz/

e-mail:

carlos@carlosperez.biz

LinkedIn:

https://www.linkedin.com/in/carlos-perez-msc-phd/

Twitter:

@egma1976

Contact

The most popular HW platforms

Arduino

Raperry Pi™

Intel® Galileo

Intel® Edison

Beaglebone Black

UDOO

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