Decomposing the Internet of things: A $14.4 Trillion Opportunity

Cognizant DECOMPOSING THE INTERNET OF THINGS: A $14.4 TRILLION OPPORTUNITY Internet of Things (loT) is driven by the exponential growth in smart connected devices, inexpensive and ubiquitous connectivity, and declining data storage costs and bandwidth. Collectively, these technologies are expected to unlock $14.4 trillion in value through improved asset utilization, process efficiency, productivity, cost savings and revenues, according to Cisco.' 11:15 loT Drivers Exponential growth of smart devices and sensors Mobile 12 Connected Devices? billion 24 All Connected Devices3 billion Wirelessly Connected Devices4 30 Estimates of Connected Devices in billion 2020 (in Billions) 30.1 Connected Autonomous Things5 billion 50 Connected Devices6 billion The loT is being unleashed by exponential growth in connected devices and low-cost sensors, a dramatic increase in processing power and storage, and low-cost, near ubiquitous bandwidth.7 18 billion Machine-to-Machine connections by 20128 US $1.50/Gb Current cost of connectivity 340 Undecillion 15% IPV6 - the new standard Internet Protocol – uses Annual rate of decline a 128-bit address to offer 340 Undecillion or in cost of cellular 3.4 x 1038 unique IP addresses, enough to support the connectivity needs of the billions of smart devices such as phones, vehicles, household appliances, meters, medical equipment, etc." M2M modules10 How loT Helps Generate Value Estimated cost savings (cumulative) in five industries over 15 years, propelled by a 1% reduction in fuel, capital expenditures and inefficiencies. Commercial Aviation Through better flight planning and operational changes $30 billion Jet fuel Rail Transportation $27 Reduced maintenance costs through real-time diagnostics and predictive analytics, and eliminating waste in fleet scheduling through fleet instrumentation billion System inefficiencies Power $66 Improved gas-generation efficiency through integration of natural gas and power grids billion Gas generation efficiency Oil and Gas $90 By boosting availability of key equipment sets, reduced fuel consumption, enhanced production rates, and reduced costs billion Capital expenditure Healthcare $63 Identify equipment issues and improve resource usage and outcomes to drive down the cost of clinical and billion System inefficiencies back-office operations? Two Ways to Accrue $14.4 trillion in Value 66% $9.5 trillion from industry-specific use cases: » smart grid » connected commercial $4.9 trillion 34% vehicles etc. from cross-industry use cases: » telecommuting, » travel avoidance etc. Value potential represents an increase in aggregate corporate profit of 21% over the next 10 years3 Despite the Opportunities, loT Challenges Remain Steep ... Lack of universal standards and interoperable technologies Inability to route, capture and analyze huge data volumes Steep privacy and security concerns ***** Shortage of human resources and technological expertise to properly manage complex data sets and divergent formats ... but are Surmountable Start by developing a strong understanding of loT's business benefits Build strong analytical capabilities to derive actionable business intelligence Integrate machine and enterprise systems data to optimize business processes Recruit and train loT experts Seek specialist partners to complement in-house loT capabilities Sources: ' http://www.cisco.com/web/about/ac79/docs/innov/loE_Economy.pdf 2 http://www.gsma.com/newsroom/gsma-announces-the-business-impact-of-connected-devices-could-be- worth-us4-5-trillion-in-2020/ 3 Ibid 4 https://www.abiresearch.com/press/more-than-30-billion-devices-will-wirelessly-conne 5 http://www.idc.com/getdoc.jsp?containerld=prUS24366813 6 http://www.cisco.com/web/about/ac79/docs/innov/loT_IBSG_O411FINAL.pdf 7 http://www.mckinsey.com/~/media/McKinsey/dotcom/Insights and pubs/MGI/Research/Technology and Innovation/Disruptive technologies/MGI_Disruptive_technologies_Full_report_May2013.ashx 8 https://machinaresearch.com/news/press-release-machine-to-machine-connections-to-hit-18-billion-in- 2022-generating-usd13-trillion-revenue/ 9 http://www.ericsson.com/res/docs/whitepapers/wp-50-billions.pdf 10 Ibid " http://www.internetsociety.org/what-we-do/internet-technology-matters/ipv6 12 http://www.ge.com/docs/chapters/Industrial_Internet.pdf 13 http://www.cisco.com/web/about/ac79/docs/innov/loE_Economy.pdf C Cognizant To learn more about Decomposing the Internet of Things, read our white paper Preparing to Reap the Benefits of Internet of Things at http://cogniz.at/Reap_loT_Benefits The data in this infographic was collected and analyzed by Cognizant Research Center © Copyright 2014, Cognizant. 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