IOT EVOLUTION - Ovum Ltd.€¦ · 0 500 1000 1500 2000 2500 3000 3500 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022) Global M2M and LPWA IoT Connections total M2M total LPWA NEW

IOTEVOLUTIONHow the IoT is driving new opportunities in 2018 and beyond

Alexandra Rehak Practice Head, Internet of Things – Ovum

Charles JuniperPrincipal Analyst, Financial Services Technology - Ovum

John SousanisManaging Director – WardsAuto Intelligence

AGENDA• Key IoT Trends for 2017-2018

• IoT Impact in the Global Insurance Sector

• IoT and Automotive: Necessary Connections

THE IOT IS NOT ONE-SIZE-FITS-ALL

Diverse technologies

Diverse customer

needs

Diverse business models

0

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2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

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Global M2M and LPWA IoT Connections

total M2M total LPWA

NEW TECH OPENS UP NEW USE CASES

LPWA use cases

LPWA = 1986 Mn

M2M = 962 Mn

“We have parking pay and display using GSM, Bluetoothconnectors on the road network, air quality sensors, and traffic signals.

There’s a city council initiative on connected bins – but not using our LoRa network –they’re using GSM. And Ofo are using Sigfox to track their connected bikes.“

- UK Smart City ProgrammeManager

CSP/telco (e.g., BT, Vodafone)10%

Enterprise IT vendor (e.g., Cisco, IBM)

40%

Systems integrator (e.g., Accenture, Tech Mahindra)

19%

Industry vertical or industrial specialist (e.g., Philips,

Bosch, GE)10%

Enterprise applications provider (e.g., salesforce.com , Oracle)

11%

Specialist IoT applications or solutions provider

7%

WHO DO CUSTOMERS GO TO FOR IOT?

Q: “Who is the main provider of your IoT deployment or solution?”. Source: Ovum IoT Enterprise Insight Survey

building datasets for future business insight

better use of environmental/energy resources

shift to as-a-service or usage-based business…

developing new revenue streams

improving employee productivity

growing existing revenue

improving customer experience

increasing competitiveness

improving business processes

reducing costs

WHAT ’S DRIVING IOT DEPLOYMENT?

Q: “What are the main goals of your IoT deployment or plan?” Source: Ovum IoT Enterprise Insight Survey

building datasets for future business insight

better use of environmental/energy resources

shift to as-a-service or usage-based business…

developing new revenue streams

improving employee productivity

growing existing revenue

improving customer experience

increasing competitiveness

improving business processes

reducing costs

WHAT ’S DRIVING IOT DEPLOYMENT?

Q: “What are the main goals of your IoT deployment or plan?” Source: Ovum IoT Enterprise Insight Survey

“The biggest thing for us, to be honest, is customer satisfaction, which is really driving us as a differentiator.

We think deploying this technology can move us up the value chain with customers. “

- US Manufacturer

IOT CHALLENGES VARY BY INDUSTRY

Source: Ovum IoT Enterprise Insight Survey

Data and network security concerns

Integrating with ICT infrastructure

Service reliability concerns

Up-front capital investment requirement

Expected ongoing running costs

Integrating with business processes

Q: What’s your biggest challenge in deploying IoT projects successfully?

IOT ENABLES NEW BUSINESS MODELS

Event- or usage-based

Customer pays only (or mainly) on trigger event

As-a-service

Shift to managed service approach

using IoT

Data-leverage

IoT data as basis for new revenue streams

DISRUPTION IN UNEXPECTED PLACES

Non-data companies can also lead on IoT monetization

• Connect customer’s non-connected devices + processes

• Sell data + insight back to customers

• Sell data to third parties

KEYS TO SUCCESS: SIMPLICITY, FLEXIBILITY, VERTICALIZATION

Diverse technologies

Diverse customer

needs

Diverse business models



• IoT and Automotive: Necessary Connections

IOT IS REDEFINING INSURANCE BUSINESS MODELS

•Reduce risky behaviour

•Pre-emptive intervention

•Dialogue with customer

•Automated & high speed

•Accurate & detailed data

•Process efficiency & fraud

•Connection to individual items

•Pricing reflects risk

•Pricing reflect usage

•New sectors

•New services

•Valued purchaseSelling &

MarketingPricing

Risk

Managing Risk

Managing Claims

IMPACT ON INSURANCE COMPANIES

16% 15%26%

27%45%

41%

41%

28%24%

15% 11% 8%

0%

20%

40%

60%

80%

100%

Within 12 Months Within 24 Months Within 36 Months

% o

f Su

rvey

Res

po

nd

ents

Transform Our Organization Significant Impact on Our Organization Some Impact Limited Impact

‘What do you believe the impact of IoT, telematics or wearable sensors devices will be on the your organization?

Sample: 474 insurance senior decision makers

CHANGING COMPETITIVE DYNAMICS

13%

10%

10%

8%

13%

14%

17%

18%

22%

25%

27%

33%

31%

37%

35%

39%

34%

31%

39%

39%

35%

32%

32%

31%

31%

34%

23%

20%

22%

17%

16%

13%

Vehicle Manf.

Utility Co's

Telco's

InsurTech's

Security Co's

FS excl. insurers

GAFA*

Other Insurers

% of Survey Respondents

Major Competitive Threat Competitive Threat Minor Competitive Threat No threat

‘What level of competitive threat do the following types of organization present to your company when it comes to

offering IoT, telematics or wearables-based insurance products?’

Sample: 474 insurance senior decision makers*GAFA = Google, Amazon, Facebook & Apple

THE NEW INSURANCE PROPOSITION

Today

‘Bucket’ & Opaque Pricing

Multiple Policies

Annual Renewal

Disconnected From Insured Items

Infrequent Communication

Inefficient Claims

‘Pay to clear up the mess !!’

IoT-Based Insurance

Insurance as a Utility

Pre-emptive Risk Management

Value-Added Dialogue

Automated Claims

‘Avoid the mess in the first place’



• IoT & Automotive: Necessary Connections

IOT & AUTOMOTIVE NECESSARY CONNECTIONS

• Keeping up with the smart phone• Mobile, personalized connectivity• Navigation, concierge services

• Smart home on wheels• Personalized environment• Heating, cooling, lighting, acoustics

• Usage/user data

CONNECTED IN OUR CARS


IMPACT OF IOT ON AUTOS• Creating new business models for automakers• Attracting new players to the market• Changing every aspect of the vehicle and industry

• Safety and driving (not driving?)• Maintenance – OTA monitoring and updates• Insurance – usage and user pricing • Fleet Management – connecting vehicles• Cybersecurity


IMPACT OF AUTOS ON IOT

• Arguably most important extension of IOT• 50% of today’s new cars are connected to

the Internet • 100% (~100 million vehicles/year) by 2025• Creates new classes of user/usage data• Completes the picture• Furthers the cause with public, government,

businesses


THE PROBLEM WITH CARS

CARS CONSUME

• >50% oil goes toward gasoline

CARS CONGEST

• Land-use: parking, streets

• City gridlock, commuter traffic

• Record demand – 90 million

• 1.4 billion vehicles on the road

CARS POLLUTE

• #1 global warming contributor (NASA)

• >50% CO and NOx emissions

CARS KILL

• 1.2 million deaths/year

• More than WAR + MURDER

• #1 cause of death 15-29 yr olds


• Connected fuel-economy improvement driven by select systems, such as Smart Cruise Control, whose estimated impact is shown to the right

• Connected autonomous vehicles could reduce passenger car fuel consumption 44% by 2026

• Connected driving-cycle management alone can improve fleet efficiency 5%

Estimates from Autonomie Vehicle Performance Analysis Software

CONNECTED CARS – EMISSIONS & FUEL ECONOMY


• Connected-vehicle traffic management on freeways • Reduce the number of crash-related incidents• Increase the level of throughput on roads• Reduce traffic delays in already congested areas

• Increased stages of ADAS and autonomy increase safety• Reduce need for parking in city centers

• Safety solutions require redundant levels of connectivity

CONNECTED CARS – CONGESTION AND SAFETY


A Matrix of Connections• Onboard Wireless LAN• System-to-system connections• Connection(s) to the Internet• Vehicle to Infrastructure sensors,

servers• Vehicular Ad hoc networks (V2V)• Systems-to-Service connections• Vehicle-to-Devices• Vehicle-to-Grid

THE CONNECTED VEHICLE


BUILDING THE NETWORK: THE AUTO IMPERATIVES

• V2C Vehicle to Cloud;

• Full coverage, requires investment in cellular, Wi-Fi

• V2V Vehicle-to-Vehicle

• Requires international standardization, regulation

• V2I Vehicle to Infrastructure:

• Pillar of Autonomy; Traffic management; Safety

• Requires government regulation, investment in IoT


• IoT/connected vehicles will be the key driver of change in the auto industry for the at least a decade

• Government regulations and investment, consumer demand and commercial interest will be activated by societal needs for safer, cleaner more efficient mobility

• Complexity and urgency of automotive IoT needs will act as a catalyst on overall IoT development and adoption

SYMBIOTIC DEVELOPMENT

Thank you. Questions?

Alexandra RehakPractice Lead, IoTOvum+44 (0) 7770 785 [email protected] @RehakResearch

Charles JuniperPrincipal AnalystFinancial TechnologyOvum+44 (0) 7876 791 [email protected]

John SousanisManaging Director

WardsAutomotive [email protected]

Documents

IOT EVOLUTION - Ovum Ltd.€¦ · 0 500 1000 1500 2000 2500 3000 3500 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022) Global M2M and LPWA IoT Connections total M2M total LPWA NEW