LONDON: EVENT REPORT, MAY 10-11
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1 LONDON: EVENT REPORT, MAY KEY TAKEAWAYS More than half of global companies, 53%, are not actively engaged in the Internet of Things (IoT); up to 40% of all companies could disappear in the next decade, and this could be one key reason some of them fail. IoT- enabled business and consumer services are expected to surpass telecom services in value by The number of IoT devices in use is expected to surpass 38 billion by Consumer privacy and security is a key IoT topic, but consumers do not spend much time reading what they agree to in online licensing agreements. In 2015, 100% of new cars were connected, and by 2035, 75% of cars on the road are expected to be autonomous. IoT- enabled business and consumer services are expected to surpass telecom services in value by Last week, we attended the Internet of Things Summit in London, which took place on May 10 and 11. We learned from experts how the IoT has caused disruption across industries. Here, we summarize some of our key takeaways from the event. DIGITAL DISRUPTORS: FAST EATING SLOW Erik Staaf: By 2020, the number of things in use in the IoT will be significantly higher than the number of connected PCs, smartphones and tablets in use. 1
2 It is no longer big fish eating small fish, but fast fish eating anyone, said Erik Staaf, former CEO of Digicel. Staaf called the IoT the fourth industrial revolution. According to him, IoT applications can provide: Fifty- three percent of all companies are either not engaged in the IoT or do not understand it. Incremental revenue streams in the form of new business models Cost efficiencies that can reduce costs by up to 30% Better customer experience thanks to technology knowing the user s needs Customer relationship management improvements, as companies are able to move from an annual, static relationship with customers to an ongoing daily relationship Safety, security and compliance improvements in terms of predictability Asset management optimization, via performance metrics Staaf said that 53% of all companies are either not engaged in the IoT or do not understand it. Given that lack of knowledge, and the reality of the digital revolution, he believes that former Cisco Systems CEO John T. Chambers prediction could indeed come true: Chambers said that up to 40% of all existing companies could disappear within 10 years. Some of the companies Staaf cited as digital disrupters were Airbnb, Alibaba, Facebook and Uber, and he noted that some of the most successful disrupters share a customer- centric approach. Sanjay Pradhan, IoT Lead at cloud- software firm Salesforce, spoke about a shift to a world where CX (customer experience) really means IX (individual experience). He said that companies should combine customer history data with real- time events from devices, sensors and apps to deliver an individual experience to the customer. Dan Byles, Head of Corporate Development at Living PlanIT, a provider of IoT solutions for cities and infrastructures, emphasized how rapidly the technology sector is being disrupted. He illustrated this by showing how long it took various devices and companies to reach 100 million users worldwide: it took the telephone 75 years to reach that milestone, but it took WhatsApp just three years and Candy Crush just 15 months. Today s disruptors can change industries more quickly than ever before, he said. Living PlanIT s Dan Byles: It took the telephone 75 years to reach 100 million users; it took WhatsApp just three years. 2
3 The rising level of mobile fraud could be a consequence of users neglecting to read the fine print. Mark Younger, EU General Manager at Samsung SmartThings, noted that IoT- enabled business and consumer services are expected to surpass telecom services in value by Samsung acquired the SmartThings smart home service in 2014, and has since partnered with third- party companies such as Bose (which makes smart speakers) and Osram (which makes smart lighting) to bring smart home devices to life. The IoT market is growing in volume as well as in value. Abdullahi Arabo, from the University of West England, noted that by 2020, the number of Internet- connected devices is expected to surpass 38 billion, more than twice as many as in Discussing cybersecurity risks and privacy issues, he noted that the risk in third- party app collusion is that a user may agree to share data (such as location and contacts) with an app provider, but that provider may, in turn, share that data with a malicious app that could misuse it. The rising level of mobile fraud could be a consequence of users neglecting to read the fine print when they agree to something online. According to Pete Eisenegger, IT Consumer Coordinator at BSI Group, the median time users spend reading license agreements is six seconds. He said that consumers do not want to be anonymous online, and often too easily give third parties control of their data. CONNECTED HOMES Roberto Hortal: Connected homes are not about having control, but about not having to have control. Several speakers talked about how homes can be made smart via IoT technology. Roberto Hortal, Head of Connected Home at EDF Energy Blue Lab, said that the connected- home market has exploded in recent years, with many products and systems now competing for share. Hortal profiled three basic groups of connected- home customers, referring to communications company Ericsson s study on connected homes: Users: year- old single males who are early adopters and live in a suburb of a major metropolitan area 3
4 Interested: year- old males and females who live in a city in a major metropolitan area Needs: year- old females with several children, as well as those with dependent elders Hortal said the average user of connected- home services is a young man, whereas families with young children would benefit the most from having a connected home. He expects that connected homes will become less phone- centric as phones become just one of many interfaces. He also noted that, at home, consumers want connectivity to be invisible. Renaud Di Francesco, Director of Europe Technology Standards at Sony, noted that, as monitoring and tracking technology improves, connected homes could allow aging populations to live at home longer. Sony s IoT services and products include video surveillance solutions, location and positioning applications and sensors. Every industry that services consumers in their home will be impacted by the IoT. Every industry that services consumers in their home will be impacted by the IoT, according to Jon Carter, UK Head of Connected Home at Deutsche Telekom. Carter cited Amazon s Dash as a case study. The service allows customers to order products directly from manufacturers (through Amazon) by pressing a button, or to set up one of their devices, such as a printer, to allow it to automatically reorder supplies. DIGITALIZING TRANSPORTATION Transportation is another field that can be transformed by IoT technology, said Christos Voudouris, Head of Digital Business Systems at UK railways owner Network Rail. Voudouris said that more than 1 billion extra passenger journeys are expected on UK rail networks in the coming years. Implementing changes such as digitalized signaling can be a long process, he said some changes might take 25 to 50 years to fully implement, due to safety regulations and the need to minimize disruption to passengers and find funding for new projects. He noted a few examples of how IoT has already been used in transportation: Since digital signaling was implemented along the Victoria line on London s Underground, the line has been able to carry 12,500 extra passengers per hour, and the trains are 50% more reliable. Digital air traffic management has given Heathrow Airport a 60% capacity boost. A smart motorway pilot in the UK resulted in a 50% reduction in accidents. Applying changes to railways might take many years, but their infrastructure lifecycle is long, as well 30 to 100 years, according to Catherine Mulligan, Associate Director at Imperial College London. She noted that the average infrastructure lifecycle of office buildings is 73 years, versus 40 years for roads and only 15 years for retail buildings. 4
5 Oliver van Bilsen: one hundred percent of new cars in 2015 were connected, and by 2035, 75% of cars on the road will be autonomous The IoT s potential in transportation goes beyond the transport networks themselves. Oliver van Bilsen, Global Head of Digital at Shell, detailed how his company has invested in the IoT globally. Shell customers can now use mobile payments, called Fill Up & Go, to pay at the pump. While filling their tanks, customers are entertained with connected screens that offer a news feed and information on the price of the fuel they are buying. Also, Shell s tanks are equipped with sensors that notify staff when fuel levels are low and the tanks need to be filled up. According to van Bilsen, 100% of new cars in 2015 were connected, and by 2035, 75% of cars on the road will be autonomous. He believes that in the near future, connected cars with connected screens will be able to advise drivers on the location of the nearest service stations, and to provide information on prices and facilities. IOT INNOVATORS At the Internet of Things Summit, we came across a number of other companies that are creating or adopting IoT technology in their various industries, including: DunavNET is an IoT solutions provider whose smart agriculture initiatives can help improve farmers yields by 30% and reduce costs by up to 20%. Elekta creates smart and connected applications for the treatment of cancer and brain disorders. General Electric is making connected jet engines to allow for preventative maintenance and aircraft fleet optimization. Michelin has created tires with sensors and RFID tags that can track tire pressure. Smoove is a bike- sharing/leasing company that uses IoT technology to guide drivers to bike- station docks; the company collects data and can share information with city councils and advertisers. Trenitalia is an Italian train operator that has deployed IoT applications for predictive train maintenance, resulting in an 8% reduction in maintenance costs and higher efficiency and on- time rates. 5
6 Deborah Weinswig, CPA Managing Director Fung Global Retail & Technology New York: Hong Kong: China: Janne Eho Research Assistant HONG KONG: 10th Floor, LiFung Tower 888 Cheung Sha Wan Road, Kowloon Hong Kong Tel: LONDON: Marylebone Road London, NW1 6JQ United Kingdom Tel: 44 (0) NEW YORK: 1359 Broadway, 9 th Floor New York, NY Tel: FBICGROUP.COM 6
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