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The Internet of Things: Are Organizations Ready For A Multi- 
Trillion Dollar Prize? 
Transform to the power of digital 
TeliaSonera M2M Symposium 
Karl Bjurström, Capgemini Consulting 
Stockholm, 18 November
Copyright © 2011 Capgemini Consulting. All rights reserved. 
The potential of IoT is immense, with a trillion dollar potential 
2 
A staggering potential... ...that companies want to seize 
IoT has the potential to generate 
$19 trillionof value over the 
coming years1 
68% of 
companies are already 
investing 
in IoT2 
96% of companies will be using the IoT in 
some way within the next three years2 
Source: Cisco, PSFK, Capgemini Consulting
Gartner predicts the lion part of the IoT market to come from Apps and Analytics 
Apps, Services, 
Analytics 
Compute, Storage, 
Networking 
Copyright © 2011 Capgemini Consulting. All rights reserved. 
@ 
Things "Hardware" 
80% 
11% 
9% 
Source: Gartner, Capgemini Consulting 
@ @
Players will need to find their positioning and business models in a changing environment 
Vehicles and machines to become software-defined – 
opportunity & potentially disruptive 
• Office 
• Windows 
• HD, processor, 
network 
New entrants 
Apps 
Platform 
Infrastructure 
Current leaders 
Revenue 
growth 
Copyright © 2011 Capgemini Consulting. All rights reserved. 
New players 
New business 
models 
Software 
Hardware 
$ 
Profit 
squeeze 
New 
battlefield 
New business 
processes 
New FS-related services 
e.g. insurance, payments 
With the Internet of Things, business models likely to 
shift towards data, computations, priority 
50 Bn 
500 Bn 
People 
(things) 
Things 
(people) 
Approx. 20 
Bn devices 
Business model: 
• Data 
• Eye balls 
Business model: 
• Data 
• Computations 
• Priority 
2014 2020 Time 
Connections 
2050 
Internet of Things 
Digitization will spur competition – and collaboration – on system and platform level 
Need to decide which ecosystem to take part in and in what capacity/position 
4 
2014 Source: Ericsson, Capgemini Consulting
But for most organizations, these are early days in the adoption of advanced IoT Solutions 
Copyright © 2011 Capgemini Consulting. All rights reserved. 
5 
Control (Remote 
Operability) 
Ability to be 
controlled and 
configured remotely 
Monitoring 
(Basic Information) 
Optimization 
(Performance 
Improvement) 
Delivery of alerts and 
notifications on 
product status 
Predictive maintenance and 
productivity enhancement 
insights based on sensor data 
58% 
27% 
34% 
Autonomy 
Combining monitoring, control, and 
optimization allows: 
• Autonomous product operation 
• Self-coordination of operation with other 
products and systems 
• Autonomous product enhancement and 
personalization 
• Self-diagnosis and service 
<10% 
trials 
Levels of Maturity for IoT Solutions 
Source: Capgemini Consulting
Maturity of IoT Solutions by Industry 
Industry Monitor Control Optimize Autonomy 
Copyright © 2011 Capgemini Consulting. All rights reserved. 
… with significant differences looking at maturity in different industries 
6 
Low Maturity : <40% of firms provide IoT 
solutions that support the feature 
Medium Maturity : 40-60% of firms provide 
IoT solutions that support the feature 
High Maturity : >60% of firms provide IoT 
solutions that support the feature 
Industrial 
manufacturing 
Medical devices 
Utilities 
Automotive 
Insurance 
Home appliances 
Pharmaceuticals 
Source: Capgemini Consulting
But there is a catch, 70% do not generate service revenues from their IoT solutions 
Copyright © 2011 Capgemini Consulting. All rights reserved. 
7 
“Offering the telematics hardware for free with 
the car is not a sustainable option. We need to 
have a clear strategy to generate revenues from 
services.” 
Leading car manufacturer 
Today 
~2 
Trillion 
2020 
10-20 
Trillion 
GAP 
What does it take to address the market and close the gap? 
Source: Capgemini Consulting
Essentially it is about a company’s ability in selling services instead of products … 
Type of offering and position Type of monetization 
Fixed fee 
Transactions based fee 
Revenue share 
Outcome/results-based 
Pay-as-you-go model 
Freemium model 
Copyright © 2011 Capgemini Consulting. All rights reserved. 
8 
Low Medium High 
Customer 
relationship 
Collaborative 
Relational 
Transactional 
Hardware 
premium 
Service 
revenue 
Data 
revenue 
Ecosystem 
building 
Convert traditional product into a 
service incl. monetization model 
Generate revenue by selling packaged data 
gathered from sensors 
In this model, organizations create a platform 
where they ideally make money from both 
other product vendors and end consumers 
Simplest model where organizations 
charge a price-premium for the 
product’s connected features 
Subscription model 
One time charge 
Often part of 
ecosystem offering 
Complexity 
Source: Capgemini Consulting
Capabilities needed Methods of capability build-up 
Copyright © 2011 Capgemini Consulting. All rights reserved. 
New capabilities are needed to take position in IoT 
9 
MAKE 10% have developed open 
platforms or APIs 
PARTNER 
57% of organizations are using 
partnerships as a viable 
approach to develop IoT 
solutions 
BUY 10% have made acquisitions 
Product mgmt 
Augment Product Management Capabilities 
with Services Expertise and Emphasize Ease-of- 
Use in Product Design 
Marketing Sales Service 
Data Analytics 
Develop Customer Support 
Capabilities to Drive Real-Time 
Quality mgmt and Issue 
Resolution 
Today’s Product- 
Focused Sales Force 
is not Equipped to 
Sell IoT Services 
Traditional Product- 
Centric 
Organizations Lack 
Capabilities for 
Marketing Internet 
of Things Services 
Organizations Lack ability to Effectively 
Interpret Sensor Data. Put the Right IT 
Infrastructure in Place and Acquire Data 
Analytics Capabilities 
Source: Capgemini Consulting
Leaders are now investing in becoming data driven enterprises – IoT bring enablers across an 
organization 
Internal 
Collaboration 
Copyright © 2011 Capgemini Consulting. All rights reserved. 
Investment characteristics of digital leaders 
Social Media 
Customer 
Experience 
Mobile Channel 
How to engage 
customers 
How to work 
and operate 
How to generate 
revenues 
BUSINESS MODEL 
Process 
Digitalization 
Analytics 
Data Integration 
Sensors 
CUSTOMER-FACING PROCESSES OPERATIONAL PROCESSES 
Companies to use IoT as an enabler for radical improvements in customer experience and 
operational excellence, and new revenues and business models 
Source: Capgemini Consulting, MIT
The Internet of Things: Are Organizations Ready For A Multi-Trillion Dollar Prize?

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The Internet of Things: Are Organizations Ready For A Multi-Trillion Dollar Prize?

  • 1. The Internet of Things: Are Organizations Ready For A Multi- Trillion Dollar Prize? Transform to the power of digital TeliaSonera M2M Symposium Karl Bjurström, Capgemini Consulting Stockholm, 18 November
  • 2. Copyright © 2011 Capgemini Consulting. All rights reserved. The potential of IoT is immense, with a trillion dollar potential 2 A staggering potential... ...that companies want to seize IoT has the potential to generate $19 trillionof value over the coming years1 68% of companies are already investing in IoT2 96% of companies will be using the IoT in some way within the next three years2 Source: Cisco, PSFK, Capgemini Consulting
  • 3. Gartner predicts the lion part of the IoT market to come from Apps and Analytics Apps, Services, Analytics Compute, Storage, Networking Copyright © 2011 Capgemini Consulting. All rights reserved. @ Things "Hardware" 80% 11% 9% Source: Gartner, Capgemini Consulting @ @
  • 4. Players will need to find their positioning and business models in a changing environment Vehicles and machines to become software-defined – opportunity & potentially disruptive • Office • Windows • HD, processor, network New entrants Apps Platform Infrastructure Current leaders Revenue growth Copyright © 2011 Capgemini Consulting. All rights reserved. New players New business models Software Hardware $ Profit squeeze New battlefield New business processes New FS-related services e.g. insurance, payments With the Internet of Things, business models likely to shift towards data, computations, priority 50 Bn 500 Bn People (things) Things (people) Approx. 20 Bn devices Business model: • Data • Eye balls Business model: • Data • Computations • Priority 2014 2020 Time Connections 2050 Internet of Things Digitization will spur competition – and collaboration – on system and platform level Need to decide which ecosystem to take part in and in what capacity/position 4 2014 Source: Ericsson, Capgemini Consulting
  • 5. But for most organizations, these are early days in the adoption of advanced IoT Solutions Copyright © 2011 Capgemini Consulting. All rights reserved. 5 Control (Remote Operability) Ability to be controlled and configured remotely Monitoring (Basic Information) Optimization (Performance Improvement) Delivery of alerts and notifications on product status Predictive maintenance and productivity enhancement insights based on sensor data 58% 27% 34% Autonomy Combining monitoring, control, and optimization allows: • Autonomous product operation • Self-coordination of operation with other products and systems • Autonomous product enhancement and personalization • Self-diagnosis and service <10% trials Levels of Maturity for IoT Solutions Source: Capgemini Consulting
  • 6. Maturity of IoT Solutions by Industry Industry Monitor Control Optimize Autonomy Copyright © 2011 Capgemini Consulting. All rights reserved. … with significant differences looking at maturity in different industries 6 Low Maturity : <40% of firms provide IoT solutions that support the feature Medium Maturity : 40-60% of firms provide IoT solutions that support the feature High Maturity : >60% of firms provide IoT solutions that support the feature Industrial manufacturing Medical devices Utilities Automotive Insurance Home appliances Pharmaceuticals Source: Capgemini Consulting
  • 7. But there is a catch, 70% do not generate service revenues from their IoT solutions Copyright © 2011 Capgemini Consulting. All rights reserved. 7 “Offering the telematics hardware for free with the car is not a sustainable option. We need to have a clear strategy to generate revenues from services.” Leading car manufacturer Today ~2 Trillion 2020 10-20 Trillion GAP What does it take to address the market and close the gap? Source: Capgemini Consulting
  • 8. Essentially it is about a company’s ability in selling services instead of products … Type of offering and position Type of monetization Fixed fee Transactions based fee Revenue share Outcome/results-based Pay-as-you-go model Freemium model Copyright © 2011 Capgemini Consulting. All rights reserved. 8 Low Medium High Customer relationship Collaborative Relational Transactional Hardware premium Service revenue Data revenue Ecosystem building Convert traditional product into a service incl. monetization model Generate revenue by selling packaged data gathered from sensors In this model, organizations create a platform where they ideally make money from both other product vendors and end consumers Simplest model where organizations charge a price-premium for the product’s connected features Subscription model One time charge Often part of ecosystem offering Complexity Source: Capgemini Consulting
  • 9. Capabilities needed Methods of capability build-up Copyright © 2011 Capgemini Consulting. All rights reserved. New capabilities are needed to take position in IoT 9 MAKE 10% have developed open platforms or APIs PARTNER 57% of organizations are using partnerships as a viable approach to develop IoT solutions BUY 10% have made acquisitions Product mgmt Augment Product Management Capabilities with Services Expertise and Emphasize Ease-of- Use in Product Design Marketing Sales Service Data Analytics Develop Customer Support Capabilities to Drive Real-Time Quality mgmt and Issue Resolution Today’s Product- Focused Sales Force is not Equipped to Sell IoT Services Traditional Product- Centric Organizations Lack Capabilities for Marketing Internet of Things Services Organizations Lack ability to Effectively Interpret Sensor Data. Put the Right IT Infrastructure in Place and Acquire Data Analytics Capabilities Source: Capgemini Consulting
  • 10. Leaders are now investing in becoming data driven enterprises – IoT bring enablers across an organization Internal Collaboration Copyright © 2011 Capgemini Consulting. All rights reserved. Investment characteristics of digital leaders Social Media Customer Experience Mobile Channel How to engage customers How to work and operate How to generate revenues BUSINESS MODEL Process Digitalization Analytics Data Integration Sensors CUSTOMER-FACING PROCESSES OPERATIONAL PROCESSES Companies to use IoT as an enabler for radical improvements in customer experience and operational excellence, and new revenues and business models Source: Capgemini Consulting, MIT