The Complete Guide to the Internet of Things

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The Complete Guide to the Internet of Things Industry Overview Baiyin Zhou & Peter McCall OpenView Venture Partners 2/8/2015

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Defining IOT

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Internet of things has its origins in machine-to-machine (M2M) communication

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IoT is made up of a system of connected nodes and devices

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“I could be wrong, but I'm fairly sure the phrase ‘Internet of Things’ started life as the title of a presentation I made at Procter & Gamble in 1999.” Kevin Ashton

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RFID and sensor technology enable computers to observe, identify and understand the world – without the limitations of human-entered data.” “If we had computers that knew everything there was to know about things – using data they gathered without any help from us – we would be able to track and count everything… We need to empower computers with their own means of gathering information.” Kevin Ashton

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DEFINING IOT A system where items in the physical world, and sensors within or attached to these items, are connected to the Internet via wireless and wired connections. The network of physical objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment.

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There are three layers of IoT that interact with each other to gather, process and deliver. Sensor Layer Network Layer Application Layer Objective: collect information Objective: transmit and process information Objective: deliver information to users Collection RFID Sensors Actuators Power supply Registration Provisioning Asset mgmt. Identity Security Devices Device Mgmt. Output Platforms Visualization Automation Event processing Monitoring Diagnostics Logistics Vertically-focused apps Applications Connectivity M2M Input network Node processing Output network Authen-tication Identity mgmt. Privacy Networking Security Processing Aggregation Integration Analytics App development Storage App Management App Analytics Platform

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Industry Overview

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Source: “Gartner's 2014 Hype Cycle for Emerging Technologies,” Gartner Gartner calls IoT the most overhyped technology of 2014

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There is an IoT standards war Source: “What the Internet of Things (IoT) Needs to Become a Reality”, Freescale Semiconductor and ARM

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Major corporations are organizing based on different standards

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Growth in IoT is being driven by a number of factors Decreasing price of sensors and processing due to massive competition among manufacturers More devices being connected Opportunities for cost savings, automation, greater visibility into industrial processes, and increased productivity Adoption of simple consumer devices like fitness trackers and thermostats More data being produced Greater need for solutions to deal with this data More people getting used to the idea of internet-connected devices

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Many companies have tried to estimate the 2020 market size $3.04 trillion 30 billion actual devices 212 billion possible devices $1.9 trillion 26 billion devices 50 billion devices 50 billion devices $2.7 trillion Source: Company whitepapers and press releases $1.9 trillion 28 billion devices

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People disagree on exact growth, but most agree the number of connected devices is going to be very large Sources: IHS, IDC

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Several areas within IoT are currently trending within the consumer market Hardware Wearables Home Automation / Smart Building Platforms Picture by mystuart

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Additionally, the IoT has the potential to help businesses in a number of ways… Cost savings Increased process efficiency by identifying problem areas Better insight into the physical environment Improved customer experience and service Greater transparency and control over assets

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…but also raises a host of new problems to be solved Privacy and security Data integration Standards Authentication and identity management Device management Scalability Powering devices

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Today, enterprises primarily deploy IoT solutions to save money Source: “The Internet of Things Ecosystem: Unlocking the Business Value of Connected Devices”, Deloitte

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Growth in venture funding has sustained in IoT over the last four years Source: CB Insights

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~70% of IoT funding rounds from 2011-2013 were related to wearable technology Source: CB Insights

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Notable IoT companies have received significant venture capital funding $205M total funding $93M total funding $65M total funding $144M total funding $3.2B valuation (at acquisition)

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Accelerators and incubators are also cropping up to help start new IoT companies

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IoT company exits have grown ~36% YoY since 2010 Source: CB Insights

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Notable exits $200M $100M $2B $3.2B $555M $175M $170M $112M $107M ~$500M IPO $780M

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Strategic interest in IoT ranges from traditional software companies to hardware companies looking to broaden their reach, and serves as partnership opportunities for IoT companies

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