Internet of Things 2020: A Glimpse into the Future
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Silicon Valley Thought Leaders Series
Internet of Things 2020:
A Glimpse into the Future
Alex Blanter Mark Holman
Partner Partner
+1 510 710 4365 +1 650 400 0264
Alex.Blanter@atkearney.com Mark.Holman@atkearney.com
Follow me: LinkedIn | Twitter Follow me: LinkedIn | Twitter
#IoT2020
We came here today to discuss the Internet of
Things…
48%
27%
17%
3% 5%
Never Heard of Novice and Casually Generally Expert
It Learning Informed Familiar
Up and Comers: 35% In the Know: 65%
…ahead of this meeting we asked for your forecasts on
time to IoT value, speed of adoption across sectors and
industries, and barriers to overcome
Source: A.T. Kearney IoT2020 Survey
#IoT2020
Everybody seems to be talking about IoT
internet of things
2020 security
cloud trends
tech
cisco
iot
2013
2014
mean
blog
google
ioe
join
smart
big
app
check
theiot
web
time
m2m people
great
ibm
companies
need
world
IT blogs
big data start data connected technology
mobile
bluetooth
gigaom
post
devices
business today
launches digital
potential
On track for nearly
22,000 publications
Source: Twitter, Google, Factiva, A.T. Kearney
#IoT2020
Twenty unique definitions provided in the survey – key words:
Devices, System, Connected, Internet, Data
Source: Sysomos, A.T. Kearney
#IoT2020
We define the Internet of Things as a…
seamless combination of
embedded intelligence,
ubiquitous connectivity, and
deep analytical insights
that creates unique and disruptive value
for companies, individuals, and societies
Source: A.T. Kearney
#IoT2020
Taking that definition to the next, more detailed,
level…
Things
Identify
Policies & Standards
Act Sense
Industries
Enterprise
Consumer
Public Sector
Analyze Connect
Collect
Value and Impact
Source: A.T. Kearney
#IoT2020
IoT will be pervasive… are you ready?
30
2013 to 2020: From half as
many to twice as many –
25
20 Internet of
15
Things
growth of IoT devices relative
10
to traditional connected
5
Traditional
connected devices
devices
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
By 2020 in the World… By 2020 in Silicon Valley…
20X+ as many connected
Nearly 30 billion devices Over 7.7 billion people Over 3.2M people
devices per person
Connected
devices
For a family of four: 250+
Over 3.5
For us in this room: 7,000+
per every human on the planet
For all in Silicon Valley: 200M+
Source: BI Intelligence, US Census Bureau, Silicon Valley Index, A.T. Kearney
#IoT2020
By 2020 IoT will impact close to 6% of the global
economy
Revenues realized within the world
Revenue economy that will potentially move
$3.5T Redistributed from one player to another with no
net increase in total economy
Revenues directly
attributable to sale of
IoT hardware, software,
and services Global
Additional IoT Economy in Value to End
Revenues
$344B 2020 $177B Customer
$100T
Direct reduction in
costs driven by IoT and
realized by end
customers
Direct increase in output per
unit of cost, enabled by IoT Productivity
and reinvested in productive Improvement
$1.9T
assets and activities
IoT will be materially disruptive – there will be
winners and losers
Source: A.T. Kearney
#IoT2020
Additional IoT revenues will be split in Additional IoT
$344B
Revenues
a multitude of ways
Survey Results:
Time to Value Rank
Enterprise 63% $217B 1
Consumer 28% $97B 2
Public Sector 9% $30B 3
57% $196B $45B 13%
12% $41B $62B 18%
Source: A.T. Kearney
#IoT2020
It will take years for IoT potential to be realized
Value • $1.1B of VC investment in IoT –
buzz
growing at 46% vs. 7%
1 growth for all VC investment
• US government is investing
$100M per year and UK just
announced a £45m investment
• Cisco is investing $1B over 5
years; Intel has created IoT
BU
• AT&T, Cisco, Intel, GE, IBM
forming Consortium
Survey Results
13% 59% 22% 2% 4%
2010 2015 2020 2025 2030
Source: A.T. Kearney#IoT2020
Challenges to IoT deployment and value span 6 areas
Things
• Lack of integrated end- • Lack of scale needed to
to-end solutions that achieve acceptable cost
deliver value points
Identify
Policies & Standards
Act Sense
Industries
Enterprise
Consumer
• Complex Public Sector • Lack of standards for critical
interoperability Analyze Connect layers of IoT solutions
• Multitude of alliances and
Collect partnerships
• Policies not keeping up with
technological advancement
Value and Impact
• Limited near term business cases • Complex interoperability
• Concerns about design and • Legacy environments
implementation complexity • Exponentially growing data volumes
Source: A.T. Kearney#IoT2020
Overcoming these challenges will require all and
everyone – top 10 success factors
Overall Ecosystem Individual Company
1. Standardized platforms and 1. Clarity of business value
interfaces
2. Updated policies and regulations 2. Strategic and operational flexibility
3. Defined cross-industry collaboration 3. Focus on superior innovation
models and alliances
4. Strategically eliminated systemic 4. Collaborative and co-creative culture
bottlenecks
5. Relentlessly lowered costs 5. Teams capable of ecosystem
collaboration
Source: A.T. Kearney#IoT2020
What will the future world look like?
Progress
by 2020
Digital identity for every human, creature, and object… and a home page
Transparent Everybody and everything is traceable and trackable
Technology is pervasive but invisible
Most everything is direct – intermediaries are gone
Dynamic Most everything is real time – information, decisions, actions
Predictive, with an ecosystem that anticipates and responds to its environment
Objects communicate with each other without humans and act independently
Autonomous Distributed intelligence enables self sufficiency
Experiences are personalized
Analog and digital world merge, with seamless experiences across both
Unified Everything can access everything else remotely
Sharing becomes predominant mode of use
Source: A.T. KearneyAppendix: Survey Results
Question 1: How familiar are you with IoT? –
70+ responses received
48%
27%
17%
3% 5%
Never Heard of Novice and Casually Generally Expert
It 1 Learning Informed Familiar
1. These responses omitted from the rest of the survey
Source: A.T. KearneySurvey results
Q2: When will delivered IoT value live up Q3: Which sectors of the economy will
to expectations? develop the fastest?
62%
Enterprise 1.4
22%
10% Consumer 2.0
3% 3%
2015 2020 2025 Beyond Never
Public sector 2.6
2025
Q4: Which industries will be furthest Q5: Which factors need to be overcome
along the adoption curve by 2020? for IoT to reach its potential?
Manufacturing 2.1 Standards 2.5
Retail /
Consumer Products 2.3 User concerns 3.2
Transportation/
Logistics 3.5
Technical 3.3
Healthcare 4.3
Insufficient value 3.9
Financial Services 4.4
Natural resources 5.7 Investment 4.1
Education 5.9 Regulation 4.2
Source: A.T. KearneyDisclaimer This document is exclusively intended for select clients of A.T. Kearney. Distribution, quotations, duplication, and excerpts are not permitted without A.T. Kearney’s prior written consent. The content compiled in this report is for presentation only and does not represent the complete findings or total documentation on the topic represented.
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