#IDCDirections#IDCdirectionsTO

Industry Transformation and Automation:Painting a Picture of the Future

Nigel Wallis

IDC Canada

@nigelwallis

#IDCdirectionsTO 2© IDC

1986

Automation has killed jobs

#IDCdirectionsTO

WHEEL WEAR

MINIMAL

LOCATION

57.313, -111.527

LOAD WEIGHT

355t

VEHICLE VELOCITY

12 km/h

DISTANCE TO OBJECT

30m

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1982 1987 1992 1997 2002 2007 2012

Manufacturing

Transportation

Finance

Retail

Wholesale

Services0

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1958 1965 1980 2012

Competing in the Age of Superstar Firms

Source: David Autor, AER 2017; Innosight

Share of market by Top 4 Firms Duration in Fortune 500

50% will be gone by 2026

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What’s the Future of Retail Stores?

#IDCdirectionsTO 6

Aerosoles (2017) Bombay (2015) Jacob (2014) Sam the Record ManAeropostale (2016) Bowring (2015) Jones New York (2015) Smart Set (2014)Arcade 1995 Braemars K-Mart Canada 1997 Sony Canada (2015)Ayre & Sons 1991 Comark (2015) Knob Hill Farms Steinberg’s 1991Bargain Harolds 1992 Costa Blanca 2014 Kresge Tabi 2011Beaver Lumber 2000 Creed’s 1991 Marks & Spencer 1999 Target (2015)Bebe (2017) Danier (2016) Mexx (2014) The Limited (2017) Ben Moss (2016) Eaton’s 1999 Miracle Mart 1996 Towers Bonimart 1990BCBG Max Azria (2017) Esprit 2011 Morgan’s Toy CityBench (2017) Express (2017) Music World Toys R UsBenix (2015) FCUK (2017) Nine West (2015) True Religion (2017) Big V Drug Stores Future Shop (2015) Ogilvy’s 1990 Vitamin World (2017)Bikini Village (2015) Grafton Fraser (2017) Parasuco (2015) White RoseBi-Way 2001 Grand & Toy * Payless Shoes (2017) Woolco 1994Blacks (2015) Gymboree (2017) RadioShack Canada * Woolworth’s 1997Blockbuster HMV (2017) Robinson-Ogilvy 1991 Zellers 2013*

The Canadian Retail Graveyard

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Is this the Future of Retail Stores?

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Retail salesperson is Canada’s single most

common job

626,775 Canadians

When e-commerce eats brick & mortar

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Is this “The Future of Retail”?

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BLE BEACON

01 234567 890123 4IMEI IDENTIFIED

AMAZON GO APP

IDENTIFIEDPRIME MEMBER

FACIAL RECOGNITION

IDENTIFIED

DIGITAL SCALE

75 grams

HD CAMERA

STATUSAI/ML PATTERN RECOGNITION

MATCH

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#IDCdirectionsTO

Retail DX Use Case Taxonomy

12

Contextualized marketingAugmented promotion

optimizationOmni-channel marketing

optimization

Augmented social marketing

Augmented content optimization

Augmented editorial composition

Next-gen customer care

Hyper-Personalized Engagement

360o connected customer management

ClientelingGlobal product

compliance mgmt

B2B networks / marketplaces

Digital Product Lifecycle Mgmt

Global product compliance mgmt

Assortment optimization Sentiment analysisDynamic Merchandise

Optimization

Intelligent product design

Curated product assortment & positioning

Product Innovation

3D product design & review

Crowd-sourced ideation & innovation

TraceabilitySmart financial supply

chainAugmented risk

management

Predictive network inventory orchestration

Advanced tech augmented work

Autonomic operations

Autonomic supply network optimization

Supply Chain Accountability

Dynamic supply network mgmt

Augmented forecasting & planning

Next-gen paymentsNext-gen digital

securityNext-gen loss prevention

Digital workforce management

Empowered workerAugmented knowledge

worker

Mobile enterprise

Connected workforce

Safe & secure omni-channel ops

Mobile inventory information management

Mobile task managementMobile customer

engagement

Curated merchandise life-

cycle management

Omni-experience customer

engagement

Digital supply chain optimization

Efficient & innovation-ready

operations

Priorities ProgramsUse Cases

Augmented product search

Omni-channel order orchestration & fulfillment

JIT production

Real-time inventory management

Intelligent fulfillment

Virtual & augmented engagement

Connected digital experiences

Augmented & virtual product search

Seamless & frictionless commerce

Augmented & virtual experience

Omni-Channel Commerce

Omni-channel commerce system

Frictionless contentConnected buy-and-pay

points

#IDCdirectionsTO

REPEAT VISITS

523

STORE PASSERBYS

8600

PATH ANALYSISTIME TO BE SERVED

2:49

CUSTOMER WAIT TIME

6:24

HEAT MAP

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MOISTURE

21%PH BALANCE

6.0

SHIPMENT DATE

4.25

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TEMPERATURE

38.9°c

ACTIVITY

LOW

COW ID

MABEL

IN HEAT?

OR

INFECTION?

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FRIDGE CONTROL

CORRECTTEMPERATURE +3°C

SPEED MONITORING

72 km/h

VEHICLE 001a STATUS

IN MOTION5.5 HOURS OF SERVICE

SHIPMENT 0895-011

ONROUTEETA 1:20 PM

TOTAL MILEAGE

214,051kmBRAKE MAINTENANCE

FUEL MONITOR

LOW GAS

#IDCdirectionsTO

FRIDGE #5TEMPERATURE 2°C

BUTCHERY SHIPMENT

DELAYEDSCHEDULED DOCK 1

PRODUCE TIME ON SHELF

26 HRSINSPECT

HVAC

20°C

#IDCdirectionsTO

TIME TO GAME START

00:45

WEATHER CONDITIONS

18°

TICKETS SOLD

16,000

SEASON TICKET HOLDER

PURCHASEMOBILE OFFER

#IDCdirectionsTOHow do you sell air?

#IDCdirectionsTO

What’s the Future of Resources?

#IDCdirectionsTO

Resources Powered Canada’s Income Growth

21© IDC

#IDCdirectionsTO

COMPRESSOR

600 PSI

GEOPHYSICS

2,900m

FLARE STACK

350°

PRODUCTION TANKS

7.5M

CHEMICAL TANKS

5.2M

WELLBORE PRESSURE

3,000 PSI

SEPARATORS

12 M3/S

#IDCdirectionsTO

Mining DX Use Case Taxonomy

23

Mine process insight Augmented maintenance Predictive analytics

Smart assets Self-healing assets Asset instrumentation

Predictive ore optimization Digital blending

Operational ecosystem Autonomous operations Digital twin

Resilient Operations

Integrated collaborative operations

Smart Processing

Ore grade optimization Resource management

Process condition monitoring

Process self-inspection

Augmented trainingEnhanced personal safety Connected safety wear Virtual presence

Agile Mining Operations

Connected Assets

Next Generation Safety

ProgramsUse Cases

Virtual geophysics Ore intelligenceDrone-based explorationOre search optimization

Drilling Optimization

Digital Exploration

Drilling optimizationGeological digitization

platform

Strategic asset management

Asset safety

Greenfield mine viability

Operational decision support

Digital inspection

Digital supply chain

Integrated mine planning

Smart processing insights

Autonomous stockpile Pit-to-port optimization Supply chain optimization Global trade automation

Priorities

#IDCdirectionsTO

AIR QUALITY

180 PPM

EMPLOYEE DEPTH

1,200m

BLAST READINESS

NEGATIVE

TIME SINCE SERVICE

21 DAYS

EMPLOYEE GPS

SHAFT #4

TOOL POWER

LOW

#IDCdirectionsTO

PEAK DECIBEL LEVEL

118 dB

FREQUENCY

18,000 Hz

DECIBEL LEVEL

82 dB

#IDCdirectionsTO 26

DX is Different than “Code & Computers”

SENSOR

DISABLED

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IT Edge

OT Edge

Core

DX will force change on your infrastructure

27© IDC

Cloud Traditional

Includes embedded technologies

that do not directly generate data

for enterprise use, and are

outside the direct purview of IT

IT activities performed

outside the datacenter,

but within purview of IT.

Core is the "IT datacenter”, an

information aggregation facility that is

located on the firm's own physical

premises, off-premises in a collocation

facility, or off-premises at a virtual

location such as a public cloud.

Intelligent

Edge

#IDCdirectionsTO

DX is Driving Net New Spending at the Edge

Source: Worldwide Internet of Things Infrastructure Forecast, 2017–2021

Core: ComputeCore: StorageCore: Network

Edge: Compute

Edge: Storage

Edge: Network

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Worldwide 2018 Spend US$ Billions

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Growth From Tech That Didn’t Exist a Decade Ago

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Conventional Tight Shale

Canadian Oil Production

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What’s the Future of Cities?

#IDCdirectionsTO

Smart city example - BarcelonaAIR QUALITY

11 PM2.5

NOISE LEVELS

72 dB

GARBAGE BIN LEVEL

80%

LED STREET LIGHT

ON

MOISTURE SENSOR

40%

AUTO TRAFFIC

546/HR

PEDESTRIAN TRAFFIC

1,546/HR

STREET PARKING

OCCUPIED

BUS ARRIVAL TIME

17:40

#IDCdirectionsTO

Smart Cities DX Use Case Taxonomy

32

Connected field workers Data-driven social services

Early warning systems IoT-enabled firefighters Next-gen emergency mgmt

Data-driven policing

Proactive social services

Real-time crime centres Officer wearablesData sharing/

interoperability

Connected neighbourhoods

Reliability as a Service

Data-driven planning Digital permits & licenses Digital twin

Digital Administration

Sustainable land use

Community Resiliency

Smart City platform Connected back office

Smart indoor lighting Smart HVAC Smart elevators

Environmental monitoring Smart outdoor lighting Smart trash collection

Smart water

Sustainable infrastructure

Non-revenue water mgmt Water quality monitoring

Intelligent traffic mgmt Ride-hailing/sharing

Smart parking Smart journey plans Multi-modal transit hubs

Connected & autonomous vehicles

Smart infrastructure

Autonomous vehicles V2X Advanced public transit

Sustainable Planning &

Administration

Data-Driven Public Safety

Resilient Energy & Infrastructure

Intelligent Transportation

Priorities ProgramsUse Cases

Interactive experiences

Open data Next-gen 311 servicesOmni-channel portalsCivic Engagement

Smart concessions Smart parking

Augmented Culture & Tourism

Smart Stadiums

Economic Development &

Civic Engagement

Smart kiosks Intelligent event mgmt Connected museums

Smart emergency mgmt

Smart buildings

Digital Equity

Digital legislating

Visual surveillance & analysis

#IDCdirectionsTO

Smart city example – snow plows

BRINE DEPLOYED

21 L/km

BLADE LOWERED

46.2146, -74.5859

#IDCdirectionsTO

Minneapolis I-35 Bridge: 2007

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VIBRATION

2-3 cm CURRENT LOAD

31 t

YAW

0 cm

CORROSION

1 mm

#IDCdirectionsTO

Enjoy your commute

#IDCdirectionsTO

The Nation’s Capital…

#IDCdirectionsTO 38

WATER MAIN

BROKEN

GAS MAIN

DAMAGE

MAINTENANCE HOLE

BROKEN

LAT & LONG

43.760, -79.504

WATER LEVEL

RECEDING

#IDCdirectionsTO

#IDCdirectionsTO

Sidewalk TO Vision

#IDCdirectionsTO

Sidewalk TO’s Vision of the Future is IoT

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“Technology is neither good nor bad; nor is it neutral.”Melvin Kranzberg

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Black Mirror “Nosedive”

#IDCdirectionsTOhttp://foreignpolicy.com/2018/04/03/life-inside-chinas-social-credit-laboratoryhttp://www.wired.co.uk/article/chinese-government-social-credit-score-privacy-invasion

China’s “Social Credit” system

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How Far From Orwell?

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What’s Your Next Step?

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Guidance to Vendors

#IDCdirectionsTO

Cross-industries

ConsumerManufacturing

Utilities

Government

Transportation

RetailHealthcare Provider

Telecommunications

Resources

ConstructionInsurance

Banking

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018

AG

R (

%)

2017–2021 CAGR (%)

2018 Canadian IoT Market is $12 Billion

© IDC 48

DX is a Massive Opportunity

IDC Internet of Things Spending Guide 2H 2017

#IDCdirectionsTO © IDC 49

IDC Market Glance: DX Platform

For areas on which IDC publishes market share data, the top 3–5 market share leaders are represented. For areas on which IDC does not publish market share data, vendor selection is up to analyst discretion.

Source: IDC, 1Q18

Multi-Service Platforms

Application Centric Platform Centric Infrastructure Centric

Build, Govern, and Manage ServicesBusiness Logic ServicesData Services

Integration and Orchestration Services

Business Intelligence and Analytics Artificial Intelligence Rich Media AnalyticsData Governance and Management

Intelligent Core

Cloud Native ServicesData ServicesDeveloper Tools

Developer Services

Integration Services Platform Services

ExecutionIdentification

Engagement Services

Personalization Intelligence and Monitoring

Dev Ops

DX requires partners

DX is an ecosystem

#IDCdirectionsTO

Who is Now Funding Technology Initiatives

50© IDC

Business LedIT AwareFunding comes from your functional budget. IT is not involved in implementing or supporting the project, however, IT is aware of the project.

Joint IT & BusinessBusiness Funds Project IT and functional area work together on the project. Project funding comes entirely from functional area budget.

Joint IT & BusinessIT Funds ProjectsIT and functional area work together on the project. Project funding comes entirely from IT budget.

IT only ProjectsIT only works on the project and funds it entirely.

24% 20% 19% 21%

Shadow Spending Represents 16% of All Tech SpendingSource: IDC Worldwide Line of Business Survey, 2017 n=501 Canadian respondents

#IDCdirectionsTO

Assume the worst

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Design for Resiliency

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Implicationsfor Canada

#IDCdirectionsTO

“The number of jobs lost to more efficient machines is only part of the problem. What worries many job experts more is that automation may prevent the economy from creating enough new jobs... Throughout industry, the trend has been to bigger production with a smaller work force... Many of the losses in factory jobs have been countered by an increase in the service industries or in office jobs. But automation is beginning to move in and eliminate office jobs too... In the past, new industries hired far more people than those they put out of business. But this is not true of many of today’s new industries… Today’s new industries have comparatively few jobs for the unskilled or semiskilled, just the class of workers whose jobs are being eliminated by automation.”

What does DX/automation mean for Canada?

#IDCdirectionsTO

“The number of jobs lost to more efficient machines is only part of the problem. What worries many job experts more is that automation may prevent the economy from creating enough new jobs... Throughout industry, the trend has been to bigger production with a smaller work force... Many of the losses in factory jobs have been countered by an increase in the service industries or in office jobs. But automation is beginning to move in and eliminate office jobs too... In the past, new industries hired far more people than those they put out of business. But this is not true of many of today’s new industries… Today’s new industries have comparatively few jobs for the unskilled or semiskilled, just the class of workers whose jobs are being eliminated by automation.”

What does DX/automation mean for Canada?

“The Automation Jobless”TIME Magazine, 1961

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© IDC 56

Robot Density correlates with employment

Industrial Robots per 10,000 employees in manufacturing

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▪ While new jobs will be created, it’s likely that workers displaced from their existing occupations will find it difficult to easily find equivalent wages and stature.

▪ Life-long training has been a theoretical virtue for three decades, but is a current and future societal requirement

▪ The greater the velocity of the change, the greater the magnitude of the needed policy response.

© IDC 58

Automation Requires Policy Response

#IDCdirectionsTO

Guidance to Canadian Businesses

#IDCdirectionsTO

66%

62%

72%

73%

79%

14%

6%

14%

3%

1%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Decrease

No Change

Slow Growth(1-5% agr)

Medium Growth(6-10% agr)

Fast Growth(>10% agr)

Percentage of respondents indicating adoption of one or more IoT solution

Org

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IoT Users (In production) Pilots/PoC

1) Get Started

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Vision People Process Technology Data

2) It’s not about the technology

#IDCdirectionsTO

Thank you!

© IDC62

@nigelwallis