The document discusses the emerging trend of connecting physical objects and infrastructure to computing systems through sensors, networks and analytics (Internet of Things/IoT). This brings opportunities to optimize asset usage, differentiate products/services, and transform customer relationships. However, IT must address issues like security, integration, and data management to enable widespread IoT deployment. The document outlines momentum for IoT across industries, example applications, and considerations for IT leaders preparing for this new connected world, including evaluating big data solutions, strengthening security/authentication, and expanding asset management beyond traditional IT.

1. Making Leaders Successful
Every Day

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Brace Yourselves BecauseThe
Internet of Things Is Coming
Amy DeMartine
Senior Analyst
@AmyDeMartine

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Themes for today’s session
› Increasing software control of the physical world . . .
• Combining sensors, networks, and analytics to connect physical
objects, products, and infrastructure to computing systems
› . . . improves business outcomes…
• Optimize physical asset utilization and capital deployment.
• Differentiate products and services via software control.
• Transform customer engagements from one-time transactions to
ongoing relationships.
› …but has IT implications from Internet of Things
(IoT)/connected world solutions.

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Agenda
› Redefining business in the connected
world
› Emerging connected world solution
momentum
› Addressing IT management and other
issues unleashes deployment
opportunities.

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Imagine a connected world where . . .
. . . farms are wired. . . . hospitals are instrumented.
. . . homes, cars, and people are connected.

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Connected
world/IoT
solutions
occur at the
macro and
the micro level

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Connected world solutions
have an impact on
business
operations
and outcomes
Operations
Opportunities
Outcomes

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M2M technology
connects
many industrial
and
consumer-
focused
devices

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The “four A’s”
of connected
world solutions
M2M technology

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› Source: Business Technographics Global Networks And Telecommunications Survey, 2014
3% 7% 7% 12% 16% 30% 19% 7%Overall
Expanding/upgrading implementation Implementing/implemented
Piloting Planning to implement during the next 12 months
Planning to implement in the next 12 to 24 months Interested but no plans yet
Not interested Don't know
28% are planning to
implement M2M/IoT
solutions
17% are piloting,
implementing, or
expanding M2M/IoT
solutions
Q.MM1: What are your firm’s plans to adopt M2M/Internet of Things solutions or
applications?
Among global telecom decision makers,
adoption of M2M/IoT solutions is 17%
2013:
13% piloting, implementing or expanding
24% planning to implement

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Source: October 23, 2012, “Prepare Your Security Organization For The Internet Of Things” Forrester report
Three stages of IoT implementation
Stage Description Examples
Stage 1:
Personificati
on of objects
Provision identity and basic passive
functionality to selected objects.
Asset ID: The fridge owner scans
cartons of milk with his or her
smartphone as they are placed in the
fridge. As the cartons expire, the
smartphone app triggers a reminder
to the owner to buy replacement milk.
Stage 2:
Partially
autonomous
sensor
networks
The object can sense its surroundings
(e.g., location, status of other devices)
and takes limited action based on that
information.
Water management: Sensors in city
drains detect water capacity has been
reached due to local rainfall. To avoid
local flooding, the system
automatically reroutes water away
from that local area.
Stage 3:
Autonomous
,
independent
devices
Objects or “things” have increased
ability to sense context and
environmental elements and can
autonomously interact with other
“things,” services, and sensors.
Retail: Stores detect items you’re
trying on or carrying and
communicate relevant offers to you in
real time while in the store.
Healthcare: Drug dispensers issue
medication in response to
subcutaneous sensors.

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Challenges to deployment remain
› Significant impacts on process and organization
› Complex vendor ecosystem
› Tech vendors offer customized, intergalactic solutions,
but customers have specific, narrow problems.
› Lack of solution interoperability
› Ethical considerations
› Security issues are a key barrier.

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Agenda
›Redefining business in the connected
world
›Emerging connected world solution
momentum
›Addressing security and other issues
unleashes deployment opportunities.

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Market forces are driving momentum for
connected world/IoT solutions
› Declining prices and broad availability of sensors,
communication technology, and analytic horsepower
› Regulatory compliance requirements in energy,
transportation, and government sectors
› The “app economy” is changing customer expectations
and the pace of innovation.

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Now is the time to prepare for IoT solutions
› Lighthouse use cases in many vertical markets are
readily available.
› Solutions have a significant impact on business
processes and organizational activities.
› Connected devices enable systems of engagement,
which interact with customers using real-time, location,
status, and presence information.
› Network and security issues must be addressed early in
the planning and implementation process.

16. Emerging adoption in specific industries
› Source: Business Technographics Global Networks And Telecommunications Survey, 2014
4%
3%
3%
7%
3%
2%
6%
6%
7%
12%
8%
7%
16%
6%
6%
15%
4%
6%
13%
13%
10%
15%
19%
11%
20%
14%
13%
12%
27%
15%
22%
32%
29%
29%
22%
29%
12%
18%
21%
7%
9%
22%
7%
8%
10%
2%
8%
8%
High-tech manufacturing
(N=250)
Other manufacturing
and pharma (N=456)
Retail and
wholesale
(N=283)
Energy and
mining (N=85)
Water, waste
and telecom
(N=91)
Services
(N=628)
Expanding/upgrading implementation Implementing/implemented
Piloting Planning to implement during the next 12 months
Planning to implement in the next 12 to 24 months Interested but no plans yet
Not interested Don't know
Expanding/
Implementing/
Piloting
15%
15%
34%
16%
15%
26%
Base: Global business and technology decision makers (20+ employees) in 9 countries
Q.MM1 (by industry): What are your firm’s plans to adopt M2M/Internet of
Things solutions or applications?

17. Emerging adoption in specific industries (cont.)
› Source: Business Technographics Global Networks And Telecommunications Survey, 2014
1%
2%
2%
1%
4%
5%
9%
7%
4%
4%
7%
8%
9%
5%
2%
9%
16%
13%
6%
6%
16%
20%
17%
13%
12%
33%
27%
28%
37%
39%
19%
14%
23%
27%
29%
10%
4%
2%
7%
4%
Media and
entertainment
(N=148)
Financial Services
(N=343)
Healthcare
(N=120)
Govt and
education (N=347)
Other industry
(N=49)
Expanding/upgrading implementation Implementing/implemented
Piloting Planning to implement during the next 12 months
Planning to implement in the next 12 to 24 months Interested but no plans yet
Not interested Don't know
Q.MM1 (by industry): What are your firm’s plans to adopt M2M/Internet of
Things solutions or applications?
Expanding/
Implementing/
Piloting
10%
10%
18%
19%
13%
Base: Global business and technology decision makers (20+ employees) in 9 countries

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An endless array of applications are
evident in each industry

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Forrester identified 10 applications that
address opportunities in multiple
industries

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Analysis of industry asset intensity and
IT investment identifies “hot” areas

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Facility management in the utilities and
telecom industry
› Automated service call from the
windmill gets service rep into the
field.
› Tablet app confirms which windmill
called . . . before the rep climbs the
350 steps.
› Full content integration includes
maintenance history, video repair
instructions, diagnostic tools
needed, etc.
› A video links back to experts for
tough problems.

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From industrial to consumer markets
The ripest opportunities are decidedly “uncool” . . .
in transportation, facilities, and inventory tracking.
Let’s look at the “cool” consumer-focused areas:
connected homes, connected cars, and connected
individuals.

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Source: December 23, 2013, “The Internet Of Things Comes Home, Bit By Bit” Forrester report
Connected home services deliver peace
of mind, convenience, and efficiency

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Base: 358 US online adults who have remote access and control for at least one of the six specified aspects of their home.
Source: North American Technographics® Devices And Telecom Online Benchmark Recontact Survey, 2013
“How interested would you be in being able to remotely access and control the
following, even if you don’t do it today?”
(Percent answering “I already do this?”)
One
72%
Two
12%
Three
8%
Four
3% Five
1%
Six
4%
Mean: 1.6
Median: 1
Most of these early
adopters are
solving only one
problem.
Adoption of home automation remains
extremely nascent

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Most consumers don’t want a “smart home.”
They want to address specific issues.
› Consumers want a solution to their very specific need.
• Who’s at the door?
• Is my baby asleep?
• Is my door locked?
• Has my elderly parent taken her meds?
• Are my plants too dry?
• Am I wasting energy?
› The “smart home” evolves via solving discrete needs and then
federating the systems together.

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Source: July 22, 2013, “The Connected Car” Forrester report
Connected car:
In-vehicle
computing
takes multiple
forms

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Emerging consumer interest in wearables
Percentage of US online adults that are interested in using a sensor to:
Unlock your car or house
so you don’t have to carry
keys: 44%
Get media
recommendations based
on your mood: 30%
Track your child’s
activity: 29%
Base: 4,657 US online adults
Source: North American Technographics® Consumer Technology Survey, 2013

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Agenda
›Redefining business in the connected
world
›Emerging connected world solution
momentum
›Addressing security and other issues
unleashes deployment opportunities.

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IT executives must proactively prepare
for connected world opportunities
› Collaborate with cross-functional organizational team to
identify your connected world strategy.
› Incorporate business intelligence into the value chain to
improve processes.
› Address employee and customer privacy concerns.
› Implement processes to monitor connected devices.
› Support new apps enabled by 4G/LTE network and
device availability.

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Base: 1,863 North American and European network and telecommunications decision-makers (20+ employees)
Source: Forrsights Networks And Telecommunications Survey, Q1 2013
“What are your firm’s concerns, if any, with deploying M2M/‘Internet of things’ technologies?”
(Select all that apply)
7%
16%
18%
20%
21%
24%
24%
25%
32%
37%
We can’t find the right supplier(s)
Lack of executive support
Regulatory issues or concerns
We don’t think we have a process that will be enhanced by M2M
Difficulty and risk of migration or installation
Pricing is unclear or complicated
Integration challenges
Lack of technology maturity
Total cost concerns (total cost of ownership)
Security concerns
A range of issues must be addressed to
facilitate solution deployment

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Many IT issues must be considered
Issue I&O consideration
Input validation Management and maintenance of devices requires flawless authentication.
System tampering Detected tampering must drive immediate reaction; tampering detection is
critical.
Output integrity Systems can be misled, causing operational inefficiencies and loss.
Privacy Storage of and access to large data repositories will be a challenge.
Scale of failure Failed technology updates will impact millions of devices and lives.
Liability System interactions and dependencies are difficult to map and understand.
Fail-safe Failure scenarios or conflicting outcomes must be identified prior to deployment.
Government and
legislation
Tracking data ownership and managing access to physical data among
interested parties.

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What to Prepare for IoT?
› Keep an eye on big data solutions
• Flood of sensors = flood of data to be processed
• Need large databases to store and protect data
• Evaluate big data solutions to process data to determine sensor failure
or thing being measured failure along with business data
• Consider integration with event management systems
› Beef up security and authentication systems
• Protect data from malicious attacks
› Consider growing asset management to beyond IT assets
• Determine design requirements which will be needed to keep track of
these new assets and asset related data
› New devices will come from home to the workplace
• Define policies including privacy and security early for devices like
Google Glasses
• Decide early what you will manage and what you won’t
› Do NOT let your imagination fail you!

33. Thank you
Amy DeMartine
+1 617.613.8906
ademartine@forrester.com
@AmyDeMartine