Industrial IoT Market Evolution and Value Creation

Juxtology Proprietary

Lee HouseManaging Director, JuxtologyJuxtology.com

Juxtology Industrial IoT Webinar AgendaThe IIoT market, how to create value, and how to create value for customers

Juxtology Proprietary

Cisco Prediction: Industrial IoT (IIoT) will create $14.4T by 2020

The Industrial IoT Value Creation will be Realized in Stages: First Connect and Manage, then Analyze, Predict and Optimize:

IIoT is Ramping, but the Ecosystem is Fragmented and Immature§ What does it take to to Deliver IIoT Value Now?§ What Makes a Good IIoT Strategy for Suppliers and Customers?§ What should Suppliers do to Accelerate the IIoT Market?

Preview: Solution providers that Simplify IIoT Value Creation will Win Big

2

The Industrial Internet of Things has Transformed Asset Management

Juxtology Proprietary3

Internet of Things

Microelectronics and Sensors

Big Data and Enterprise Analytics

Open-sourceSoftware and

Hardware revolution

Ubiquitous Connectivity

Cloud Computing

IoT is a new “brand” for doing what we have done for a long time, but now can do Much Better

Source: Juxtology Consulting

“The Old Way”

“The New Way” with IoT

Multiple “mega-trends” are fueling the IoT industry and enabling a revolution in new value creation

The Industrial IoT “Stack” is a Technology Roadmap for Value Creation

Juxtology Proprietary4

Source: Juxtology Consulting

“The Old Way”

“The New Way” with IoT

The IIoT industry is now moving from “early adopter” to “mainstream”. Early high-value projects are paving the way and paying for for industry maturity

The IIoT Architecture is gaining maturity

IoT Market Growth Outlook – Cisco Predicts $14.4T of Value CreatedMcKinsey spotlights the markets likely to see the most IoT impact

Juxtology Proprietary5

1

2

3

?

Cisco’s prediction is on the value created that is directly related to IoT deployment:

McKinsey states that IoT users (businesses, organizations, and consumers) will capture 90 percent of the value IoT applications generate.

Source: Cisco Systems

Industrial IoT’s Biggest Hurdles to Deployment

Juxtology Proprietary6

1. IIoT “Time to Value” is Unclear / Ambiguous2. A Fragmented Ecosystem is too Hard for Customers3. Customers need Help Capturing IIoT Value

It will take Time to Deliver the Full Industrial IoT Value Proposition –But this value chain begins with relatively simple connectivity and grows from there

Juxtology Proprietary7

Source: Intel IoT Platform

Connect to high value assets to monitor and controlRemote management to reduce operational costs

Analyze performance to predict failures

Edge intelligence to create autonomous systems

New services with end to end intelligence

Innovate customer “value for life”

Incr

easi

ng V

alue

Increasing Solution Complexity and Integration

“Thin” Industrial IoT Solutions Can Provide Immediate Business ValueImmediate / low risk value creation can be realized incrementally

Juxtology Proprietary8

Source: Juxtology Consulting

Basic IoT connectivity enables asset visibility, monitoring and control, providing:§ Immediate visibility to asset fault conditions§ Automation of metering and billing activities§ Improved utilization of capital assets§ System level visibility of asset performance § Remote asset control and configuration§ Elimination of “truck rolls” for unnecessary

scheduled maintenance activities

Even “simple” deployments can create significant new enterprise value creation

“Thin” Industrial IoT Solutions Can Provide Immediate Business ValueImmediate / low risk value creation can be realized incrementally

Juxtology Proprietary9

Basic IoT connectivity enables asset visibility, monitoring and control, providing:§ Elimination of “truck rolls” for unnecessary

scheduled maintenance activities§ Immediate visibility to asset fault conditions§ Automation of metering and billing activities§ Improved utilization of capital assets§ System level visibility of asset performance § Remote asset control

Even “simple” deployments can create significant new enterprise value creation

50%?Source: Cisco Systems

”Full Stack” IIoT Solutions Significantly Extend Business Value RealizedIncremental IIoT investments add to value creation opportunity

Juxtology Proprietary10

Evolving to a “Full Stack” Deployment Enables Incremental / Compounding Value Creation:§ Asset data analysis enables predictive

maintenance and new levels of reliability§ Total end to end system optimization

improves asset utilization and profits§ Real-time data monitoring and control

enables advanced system automation§ Edge intelligence for low latency controls§ ”Smart” IIoT products drive customer loyalty

“Full Stack” deployments extend early investments with new value creation

”Full Stack” IIoT Solutions Significantly Extend Business Value RealizedIncremental IIoT investments add to value creation opportunity

Juxtology Proprietary11

Evolving to a “Full Stack” Deployment Allows Addition of New Layers of Value Creation:§ Asset data analysis enables predictive

maintenance and new levels of resilience§ Real-time data monitoring and controls

enable advanced automation systems§ Integration of IIoT into back-end systems

enables new levels of asset utilization§ Edge intelligence for low latency controls§ ”Smart” IIoT products drive customer loyalty

“Full Stack” deployments extend early investments with new value creation

100%Source: Cisco Systems

Industrial IoT’s Biggest Hurdles to Deployment

Juxtology Proprietary12

1. IIoT “Time to Value” is Unclear / Ambiguous2. A Fragmented Ecosystem is too Hard for Customers3. Customers need Help Capturing IIoT Value

Our Biggest IIoT Challenge: The Ecosystem Remains too FragmentedCustomers still must work too hard to field working solutionsSolution providers that make IoT easy for customers will have critical competitive advantage

Juxtology Proprietary13

Compute Clusters

Presentation

Infrastructure …aaS Big Data Storage …aaS

Big Data Access and Control

Cloud-basedApplications

IoT Analysis and Insight

Web Interface and Device Control

Operating Systems

IoT and Gateway Hardware

Distributed Intelligence & Control

Connectivity

Protocols & Translations CoAP

Wired ISP

Sensors and I/O ConnectivityClo

ud Io

T So

lutio

n C

ompo

nent

s

Fiel

d Io

T So

lutio

n C

ompo

nent

s

Platform …aaS

Transport:WiredandWirelessPrivateNetworks

Field Assets, Smart Cities, Smart Grid

Users and Customers

Microwave

Bosh

Inte

l -Io

TTe

xas

Inst

rum

ents

ARM

Smar

tWor

xLi

belliu

mM

achF

uM

eshi

fyD

evic

e W

ise

(Tel

it)

AT&T

–M

2XVe

rizon

Voda

fone

Aeris

IBM

–W

atso

n Io

TM

icro

soft

Azur

e Io

TAm

azon

IoT

Goo

gle

IoT

Inte

rDig

ital

Vitri

aG

ener

al E

lect

ricSi

emen

sAB

BSa

lesF

orce

.com

PTC

/ Th

ingW

orx

Presentation / Visualization

IoT Reference Model Coverage – Few Suppliers Provide “Whole Products”Customers must work with multiple IIoT solution providers to deploy solutionsThis graph provides a subjective view of IoT function coverage based on recent Juxtology research

End-User Integration ServicesIoT Solution Designer Software Tools

IoT Cloud-connect / Dev. Mgt.

IoT LTE TransportIoT Gateway / Aggregation

Field Area Networks

Edge Intelligence

IoT Edge Devices

Sensor Integration

Juxtology Proprietary14

Processing / Analytics

Machine Learning

Strong DifferentiationEmerging LeadersStrong Players

IIoT Cloud or Platform Solutions Moving towards IIoT as a Service (IIoTaaS)

Juxtology Proprietary15

Suppliers that deliver mature / easy to deploy tools will win customer loyalty

IoTProviderEdgeDeviceIntegration

DeviceConnectivitySupport

EdgeComputingSolution IoTCloudTools

IoTApplicationCreationTools

VARNetworksorServices

IBMWatsonIoT

MicrosoftAzureIoT

GoogleIoTPlatform

AmazonAWSIoT

AT&TM2X

ThingWorx

Vitria

Aeris

DeviceWise

GEPredix

IIoT Edge Connectivity Solutions – A Problem Still in Flux

Juxtology Proprietary16

Cloud Application

TieredSolution

DirectConnect

FullyIntegrated

Gateways

Edge Nodes

Sensors

Edge Nodes

Sensors Embedded

There are multiple deployment alternatives …

There are multiple connectivity alternatives …

The IIoT Edge Node problem: one size does not fit all!§ Asset IoT solutions can be very simple or very complexo Single sensor monitoring and reportingo Multiple sensor monitoring, reporting and controlo Multiple sensor monitoring, reporting, intelligence and controlo Field based analytics, local intelligence, and fault

management

§ Power / Cost / Range / Bandwidth all influence design decisionso Is the device grid conneced or power scavenging?o How much data needs to be transmitted?o How smart does the device have to be?o What kinds of I/O are needed? o What about critical asset latency, and response time?

Ecosystem starting to provide some solutions:§ DeviceWise – developed targeted solutions for utilities§ MachFu – developed utility HW supporting smart applications§ Libellium – Integrated multiple sensors and I/O for flexibility§ Meshify – developed solutions with high I/O & control options§ Modular wireless options are becoming the norm§ ARM / Raspberry Pi / “Maker” industry knowledge is spreading

However, this remains a problem for IIoT deployment

Industrial IoT’s Biggest Hurdles to Deployment

Juxtology Proprietary17

1. IIoT “Time to Value” is Unclear / Ambiguous2. A Fragmented Ecosystem is too Hard for Customers3. Customers need Help Capturing IIoT Value

Customers are Expert in Their Fields – Not Necessarily in IIoT

Juxtology Proprietary18

IIoT Solutions are Maturing, but Customers Need Help with Practical Deployment Issues Key Challenges for IIoT Growth:

§ One size does not fit all§ Justified confidence in IIoT Security§ Industrial segment “fear of the cloud” § IoT solutions are fragmented / too hard!§ Customer uncertainty of IIoT ROI

How the IIoT Industry Needs to Help§ Delivery of proven / deployable solutions§ Build & Adopt Standards for IIoT § Simplify IIoT tools / provide services and

improvement of IIoTaaS offerings§ Develop flexible Edge Node solutions§ More sophisticated customer engagement

o Clear demonstrations of IIoT valueo Value discovery process with customerso Clear paths to ROI and value creationo IIoT customers need help to discover and

realize new value creation

IIoT is already going mainstream, but will accelerate with a more mature ecosystem

Industrial IoT Market Evolution and Value Creation

Juxtology Proprietary