HfS Blueprint Report. Internet of Things (IoT) Services Excerpt for Cognizant. October PDF Free Download

The Services Research Compay HfS Blueprit Report Iteret of Thigs (IoT) Services Excerpt for Cogizat October 2016 Oliver Marks VP Research Digital & IoT oliver.marks@hfsresearch.com

Table of Cotets TOPIC PAGE Executive Summary 2 Key Market Dyamics 10 Research Methodology 21 Service Provider Aalysis 26 Market Directio ad Recommedatios 33 About the Author ad HfS Research 39 Proprietary Page 1

Executive Summary

Itroductio to the HfS Blueprit Report: Iteret of Thigs (IoT) Services The Iteret of Thigs (IoT) Services HfS Blueprit Report reviews the emergig value chai of services developig from providers that are addressig this potetially huge ad trasformative techology. Ulike other quadrats ad matrices, the HfS Blueprit idetifies relevat differetials betwee service providers across a umber of facets i two mai categories: iovatio ad executio. HfS emphasizes the emergig ature of the IoT, with 55% of the total Blueprit scorig liked to iovatio-based evaluatio criteria. The HfS Blueprit icludes profiles ad assessmets of 17 service providers of IoT Services. We display our assessmets of the 17 service providers o the HfS Blueprit Grid. The HfS Blueprit Grid recogizes providers i the followig categories: High Potetials up-adcomig service providers that scored higher o iovatio criteria tha o executio criteria as they build their practices. Executio Powerhouses established, high-executio service providers that have built effective delivery operatios but eed to iovate their capabilities ad offerigs further. High Performers service providers with strog combied iovatio ad executio performace. Wier s Circle service providers with the highest overall performace. Proprietary Page 3

HfS Defiitio of Iteret of Thigs (IoT) Services HfS Defies IoT Services as: 1. Data streams to ad from coected physical devices 2. Delivery of data from ad to cetralized repositories by these physical devices for additioal iteractios. Note: The devices deliverig the data may or may ot create the data themselves ad may or may ot process the iformatio before deliverig it. The devices ca be itelliget or dumb ragig from a item tagged with a RFID chip that is coded with a uique idetifier to a large sophisticated heavy idustrial machie with sesors that moitor ad cotrol all aspects of operatio, output, ad health. Further, commuicatio of data may be doe via various combiatios of wired ad/or wireless etworks. These etworks ca be either ope or private, ad while this commuicatio is ofte carried out via IP protocol, it is ot a requiremet. As a result, the IoT icludes a broad set of activities, some of which have bee used for decades i idustrial cotrol. HfS defies IoT Services as digital strategy ad tactical executio to solve busiess problems, icrease operatioal efficiecies, ad/or create ew markets by leveragig data to ad from coected physical devices ( thigs ) ad the digital core. The digital core is typically a bled of legacy IT ifrastructure ad moder digital tools ad techologies. IoT Services desig, deploy, ad eable iteroperability with coected thigs as a aspect of a overarchig approach to solvig busiess problems for cliets ad parters, ragig from iovatio, coceptio, ad executio through to operatioal support ad maiteace. Proprietary Page 4

Key Highlights: The State of the IoT Services Market There are two distict IoT developmet areas: Where the Idustrial Iteret usage of IoT has a strog, mature stadards ad iteroperability services culture rooted i IT workflow logic, the IoT will be emergig, mutatig, ad evolvig for the foreseeable future, makig it hard for services compaies of all types to coalesce teams aroud repeatable processes. IoT Services requires multiple skillsets workig together: The IoT bridges multiple competecies curretly housed withi differet service provider practice lies. Busiess/digital strategy, telecom/mobility, cloud, user experiece, egieerig, aalytics, ad security are bleded i agile teams for cliets after strategic itets ad goals are defied. For buyers, executio security ad iteroperability competecies are table stakes for cosideratio. The ability of participats to uderstad the busiess value of executio is critical for success. IoT is a igrediet of broader digital iitiatives: A great deal of curret activity focuses o strategy, iovatio, ad plaig, essetial before focusig o executio. The ability to geerate ad gather data o a ever-broader rage of physical assets ad iteractios will yield value oly if actioable isights yield clear busiess value. Services providers are expected to participate i these strategic stages. IoT opportuities require competitors to collaborate: Digital platforms that itegrate data from multiple sources are sought after to yield the greatest ad broadest cotiguous values. IoT poit solutios are of little use to busiess if they caot iteroperate, uless they solve a very specific pai poit. Proprietary Page 5

Key Highlights: The State of the IoT Services Market (cotiued) The digital ecoomy is forcig chage o legacy busiesses: There is oly so far we ca push legacy IT as a platform for the scale of data ad iformatio flows eabled by the IoT ad other iitiatives. At the same time, there are huge busiess pressures from ewer digital competitors, forcig mature busiesses to look hard at re-platformig to accommodate the IoT ad other digital data flows. The secretive, competitive ature of IoT plaig obscures market perceptios: Although idustrial efficiecies case histories are commoplace, few of the vedors aalyzed i this Blueprit could publicly discuss the more iovative cliet work they were workig o. This teds to skew perceptio of the IoT to idustrial sesor data flows ad heavily marketed services ad tools. Proofs of cocept ad pilot projects are also ofte heavily publicized to gai tractio i the marketplace ad justify budgetig decisios, where actual well-fuded iitiatives ted to be kept uder tight wraps. Security foudatios: Across the rapidly evolvig digital ladscape, ed-to-ed security is critical ad is a key value propositio for all service provider parterships. The IoT s chaotic evolutio cotiues to be full of potetially exploitable piecemeal compoets that could be dagerous platform poits of etry for hackers. This challege slows developmet but is essetial for resposible iovatio ad busiess strategy rollout. Accessible ad actioable data via plug-ad-play digital services: Iovative IoT busiess uses are a excellet example of the bor digital ext-geeratio techologies beig leveraged to drive moder busiess thikig. Proprietary Page 6

IoT Services Value Chai IoT Services are those that desig, create, ad maage a pathway for the physical world to eter the As-a-Service Ecoomy by creatig a bridge betwee hard goods (ad services) ad digital ifrastructure. IoT CONSULTING IoT ENABLEMENT IoT CONNECTIVITY IoT INTEGRATION IoT MANAGEMENT Strategic plaig ad busiess case developmet Goverace strategy IoT techology roadmap (referece architecture) Security strategy Data trasport ad telecom cost cosultig Product egieerig Sesor developmet Software egieerig Embedded tech Device security Custom App Dev (dashboards, visualizatio, etc.) Physical prototypig of thigs Network egieerig Network implemetatio Network security Telecom Database desig ad build Aalytics Implemetatio System itegratio Applicatio moderizatio Security Device maagemet Cloud hostig Network maagemet Data security IoT Services, however, do ot iclude the followig activities whe coducted as a stadaloe service: deployig or operatig aalytics, implemetig or ruig a data repository, developig or deliverig a etwork, ad creatig or maitaiig a physical device with the capacity to create ad/or commuicate data. Those stadaloe activities would be classified as Aalytics, Big Data, Network Implemetatio, ad Product Egieerig Services, respectively. Proprietary Page 7

IoT Service Value Chai by Overall Curret Supplier Maturity IoT CONSULTING IoT ENABLEMENT IoT CONNECTIVITY IoT INTEGRATION IoT MANAGEMENT Strategic Plaig ad Busiess Case Developmet Product Egieerig Network Egieerig Database Desig ad Build Device Maagemet Goverace Strategy Sesor Developmet Network Implemetatio Aalytics Implemetatio Cloud Hostig IoT Techology Roadmap (Referece Architecture) Software Egieerig Network Security System Itegratio Network Maagemet Custom Developmet Embedded Techology Applicatio Moderizatio Data Security Desig Thikig Device Security Mature Nascet Competitive market with examples of service offerigs ad customer case studies from a large umber of service providers Market i developmet with limited examples of service offerigs ad evidece of activities Proprietary Page 8

State of the Market: Service Providers As-a-Service Wiers are service providers that are beig etrepreeurial alogside cliets ad iovatig i both Idustrial Iteret ad IoT activities, buildig ew markets, paradigms, digital systems, ad data flows aroud a breadth of differet types of coected devices. Acceture, Atos, Cogizat, EPAM, Harma, IBM, HCL, TCS, Tech Mahidra The High Performers all execute well aroud older Idustrial M2M models, ad are explorig ad ivestig i ewer IoT. Evolvig demostratio of more tractio with cliets i defiig ad deliverig at scale agaist busiess outcomes ad co-iovatio. Dell, Ifosys, NTT DATA, NIIT Techologies, Sytel, Tieto Executio Powerhouses This category has deep pedigrees ad competecies i Idustrial Iteret work at a global scale, with tremedous resources but is lackig i moder IoT iovatio ad etrepreeurship. Gepact, Luxoft VirtusaPolaris has High Potetial with post-merger growth showig promise through rapid maturatio as a moder IoT player. AS-A-SERVICE ECONOMY Use of operatig models, eablig techologies, ad talet to drive busiess outcomes through outsourcig. The focus is o what matters to the ed cosumer. HfS uses the word ecoomy to describe the ext phase of outsourcig as a ew way of egagig ad maagig resources to deliver services. The 8 Ideals of the As-a-Service Ecoomy: 1. Write Off Legacy 2. Desig Thikig 3. Collaborative Egagemet 4. Brokers of Capability 5. Itelliget Automatio 6. Accessible ad Actioable Data 7. Holistic Security 8. Plug-ad-Play Digital Services Source: Beware of the Smoke: Your Platform Is Burig by HfS Research, 2015 Proprietary Page 9

Key Market Dyamics

The Rapidly Chagig Face of Busiess Strategy, Associated Techologies ad the Services that Are Sought After I our curret high-stakes busiess era, whe digital is chagig all aspects of daily lives ad busiess models, the Iteret of Thigs (IoT) still largely has two dimesios. The Idustrial Iteret origiated i the early days of coectivity ad has evolved to what Europeas amed Idustry 4.0 a robust set of stadards, techologies, ad goverace models for sesor feedback from equipmet ad buildigs to moitor operatioal efficiecies ad health. Where the Idustrial Iteret s roots i the last cetury largely associate it with that era s eterprise IT logic ad workflows, the IoT has exploded oto the world stage i a tsuami of hyperbole ad red herrigs, as is typical with emerget treds ad techologies. The IoT is fudametally a attribute of the digital toolkit (mobility, cloud, bots, data flows, ad aalytics, huma collaboratio ad experieces, security, paymets, goverace), ad as a igrediet i digital busiess plas has varyig levels of importace depedig o busiess goals ad eeds. Where the Idustrial Iteret is ow part of the fabric of our lives ad the bedrock for ewer icremetal developmets, such as smart cities ad cars, IoT busiess models are evolvig very fast for commercial value applicatios, both as products ad as coutless tuck-is to existig iformatio flows ad processes. A tagible example is the speed with which droes emerged ad became a huge cosumer market, a ivaluable visual ispectio tool, ad a origiator of gigabytes of data that eed to be processed ad stored. Proprietary Page 11

The Rapidly Chagig Face of Busiess Strategy, Associated Techologies ad the Services that Are Sought After, cotiued Droes are oe example of the speed at which data creatio thigs ad tools emerge ad become part of daily life ad a $127 billio market by 2020 accordig to PwC data. LIDAR (a radar-like detectio system that sees usig light from lasers) will guide the ext geeratios of droes away from power lies ad other objects, allowig for may more automatic use models. The commercial uses for these tools ad the data they capture are widespread, part of coutless busiess models ad leveraged i efforts to create autoomous vehicles. Curretly, the IoT is a evolvig mass of competig stadards, security cocers, ad iteroperability issues, with trasportatio via mobile spectrum/g5, low-power wide area etworks, ad sesor techologies also at varyig emerget stages of evolutio. Noe of the legacy players i busiess, IT, marketig, ad legal cosultig have strog broad skill sets i digital strategic ad tactical thikig, ad there is a vacuum for credible parters to busiess. A broad market shift focused o digital iovatio ad executio is creatig a ew geeratio of trusted parters, while some of the legacy thikig players will lose relevace or be pushed to commodity provider status. This report focuses o iovatio ad executio competecies aroud the IoT withi the broader cotext of digital demads, strategies, ad techical executio sophisticatio. Proprietary Page 12

Jourey to the As-a-Service Ecoomy Movig ito the As-a-Service Ecoomy meas chagig the ature ad focus of egagemet amog eterprise buyers, service providers, ad advisors. As-a-Service uleashes people talet to drive ew value through smarter combiatios of talet ad techology focused o busiess results beyod cost reductio. Fixed Assets Leveraged Assets LEGACY ECONOMY CHANGE MGMT Ideals 1 Write Off Legacy 3 Brokers of Capability 2 Desig Thikig 4 Collaborative Egagemet 7 Holistic Security 5 Itelliget Automatio 6 Accessible ad Actioable Data 8 Plug-ad- Play Digital Services SOLUTION Ideals AS-A-SERVICE ECONOMY Proprietary Page 13

IoT As-a-Service Ecoomy: Ideal Provider Attributes HfS uses the word ecoomy to emphasize that the emergig ext phase of outsourcig is a more flexible, outcome-focused way of egagig ad maagig resources to deliver services. Operatig i the As-a-Service Ecoomy meas architectig use of icreasigly mature operatig models, eablig techologies ad talet to drive targeted busiess outcomes. The focus is o value to the cosumer. I. THE OPTIMUM OPERATING MODEL Outsourcig Shared Services GBS BPaaS/SaaS/IaaS Crowdsourcig TOOLS/INFRASTRUCTURE IV. TECHNOLOGY TO AUGMENT KNOWLEDGE LABOR Digitizatio ad Robotic Automatio Aalytics Mobility Social Media Cogitive Computig AS-A-SERVICE ECONOMY Agility Collaboratio Oe-to-May Outcome Focus Plug-ad-Play Services II. EMPOWERING TALENT TO MAKE IT ALL POSSIBLE Capabilities over Skills Defiig Outcomes Creativity Data Sciece GOVERNANCE III. A BURNING PLATFORM FOR CHANGE Globalizatio of Labor High-Growth Emergig Markets Disruptive Busiess Models Cosumerizatio

Iovatio IoT Service Provider Iovatio ad Executio Jourey Buyers should be aware service providers have very differet iovatio ad executio stregths ad weakesses across IoT ad Idustry 4.0 strategic, tactical, ad techical skillsets, ad differet techology platform parter allegiaces. LEGACY ECONOMY Iovatio outside Idustrial Iteret models coectig data to the rest of the busiess ad parter ecosphere Examples: Real-time data from flow to ad from maufacturig, services i coected oe coected devices office eviromet - Cosumer maufacturig of smart products - Smart vehicles, equipmet with strog support, self-healig attributes 15-year-old Idustrial Iteret Local sesor data from devices Examples: Legacy serial port era idustrial cotrol mechaisms Limited coectivity ad data flows - Oil & Gas - Maufacturig - Older heavier techologies Fully coected eterprise with IoT attributes feedig data to ad from a digital core Examples: Fully itegrated digital busiess etity with global coectivity, processes, ad customer relatioships - Amazo - Apple Computer May CPG firms - Fitech firms Evolutio of the Idustrial Iteret to Idustry 4.0 AS-A-SERVICE ECONOMY Examples: Smart factories ad heavy equipmet with local oly data flows. Multiple IoT poit solutios. Much greater coectivity, more moder robotic equipmet - Oil & Gas - Maufacturig - Moder heavy techologies Executio Proprietary Page 15

IoT Iovatio ad Executio Data Flow Ideals The IoT flows to Core Digital Data flows from smart objects ito their cotrollig orgaizatio s digital backboe core, where it is aalyzed, distributed, ad routed to relevat systems ad people Security AS-A-SERVICE ECONOMY Data Lake Desired busiess Outcomes, value to customer Real-time itelligece, Aalytics Iovatio Legacy IT Digital Core Other digital attributes Iteret of Thigs LEGACY ECONOMY Idustrial Iteret Executio Proprietary Page 16

The Eight Ideals of the Broader As-a-Service Ecoomy LEGACY OUTSOURCING Itelliget Simplificatio AS-A-SERVICE ECONOMY Legacy techology ivestmets that limit agility ad create masses of exceptios addressed through addig iteral ad exteral FTEs Resolvig problems by lookig first at the process as the source of the solutio Focusig goverace staff o maagig to the letter of the cotract ad the decimal poits of service levels Evaluatig relatioships o baselies of cost, effort, ad labor Operatig fragmeted processes across multiple techologies with sigificat maual itervetios Performig ad-hoc aalysis o ustructured data with little itegratio or busiess cotext Respodig with post-evet fixes; little focus o ed-to-ed process value chais Udertakig complex, paiful techology trasitios to reach steady state 1. Write Off Legacy 2. Desig Thikig 3. Brokers of Capability 4. Collaborative Egagemet 5. Itelliget Automatio 6. Actioable ad Accessible Data 7. Holistic Security 8. Plug-ad-Play Digital Busiess Services Usig platform-based solutios, DevOps, ad API ecosystems for more agile, less exceptioorieted systems Uderstadig the busiess cotext to reimagie processes aliged with meetig cliet eeds Orietig goverace to source expertise from all available sources, both iterally ad exterally, to address capability gaps Esurig relatioships are cotracted to drive sustaied expertise ad defied outcomes Usig of automatio ad cogitive computig to bled aalytics, talet, ad techology Applyig aalytics models, techiques, ad isights from big data i real time Proactively maagig digital data across the service chai of people, systems, ad processes Pluggig ito ready to go busiess outcome focused, people, process, ad techology solutios with security measures Proprietary Page 17

How IoT Services Play i the As-a-Service Ecoomy IDEAL Write Off Legacy AS-A-SERVICE IDEAL DEFINITION Usig platform-based solutios, DevOps, ad API ecosystems for more agile, less exceptioorieted systems EXAMPLE Pullig relevat data flows from rig-feced legacy systems to cotribute to the digital core i order to drive moder busiess models Desig Thikig Brokers of Capability Uderstadig the busiess cotext to reimagie processes aliged with meetig cliet eeds Orietig goverace to source expertise from all available sources, both iterally ad exterally, to address capability gaps Idetifyig busiess models that leverage IoT attributes to drive ew markets ad cost savigs Assemblig fit for purpose As-a-Service digital platform frameworks to eable moder busiess data flows to ad from IoT compoets Collaborative Egagemet Esurig relatioships are cotracted to drive sustaied expertise ad defied outcomes The IoT cotributes structured data to ustructured collaborative frameworks across broad ecospheres aroud busiess outcomes Accessible ad Actioable Data Applyig aalytics models, techiques, ad isights from big data i real time The IoT provides a ew level ad depth of data flows that require a sophisticated As-a-Service cloud ifrastructure that eables real-time actioable itelligece Holistic Security Proactively maagig digital data across the service chai of people, systems, ad processes For the IoT, securig data withi sophisticated etworks is critical to success Plug-ad-Play Digital Busiess Services Pluggig ito ready to go busiess outcome focused, people, process, ad solutios with security measures Ecosphere that rus o a agile digital core that allows ad accommodates rapid techology chages ad eables data flow icreases ad reroutig Proprietary Page 18

IoT Solutio Examples Across Verticals INDUSTRY VERTICALS Aerospace Automotive & Trasportatio Maufacturig Buildigs Agriculture Cosumer Electroics Urba Ifrastructure Healthcare & Life Scieces Oil & Gas Utilities Miig & Resources BFSI Coected Aerospace, Coected Repair Solutios EXAMPLES Coected Car, Isurace Telematics, Fleet Maagemet, Coected Ship, Iteractive Geospatial Solutio, Coected EV Statios, Predictive Aalytics to Reduce Maiteace ad Warraty Costs Coected Asset Maagemet, Coected Workers, Remote Diagostic ad Predictive Maiteace for Idustrial Machies, Stole Asset Retrieval, Trasparet Supply Chai, Coected Shopfloor Coected Home, Smart Eergy, Coected Buildig, Coected Security Precisio Farmig, Farm to Fork Smart Wearables, Subscriptio Eablemet Platform, Autheticatio Applicatios for Wearables Smart Parkig, Smart Light, Smart Bi, Smart Waste, Digital Udergroud Mappig, Ifrastructure Moitorig, Bridge Moitorig Coected Healthcare, Health Facility Way Fidig, Virtual Care Platform, Patiet Egagemet Platform, Coected Patiet, Emergecy Maagemet Digital Oil Field, Smart Drillig, Smart Oil Trasportatio, Solar ad Wid Power Moitorig Smart Grid, Smart Meterig, Coected Power Plat, Coected Solar Farm, Coected Wid Farm Coected Mies, Coected Supply Chai Cryptocurrecy, Block Chai Asset Maagemet, Beacos for Commerce Proprietary Page 19

IoT Solutio Examples by Verticals: Iovatio/Etrepreeurial vs. Executio Iovative/Etrepreeurial Usig Desig Thikig, broader busiess strategy to drive ew ideas ad markets Executio Icreased focus o Idustry 4.0 cotrol systems, sesor, ad data flow techical evolutio INDUSTRY VERTICALS Aerospace Automotive & Trasportatio Maufacturig Buildigs Agriculture Cosumer Electroics Urba Ifrastructure Healthcare & Life Scieces Oil & Gas Utilities Miig & Resources Bakig, Fiacial Services, Isurace Coected Aerospace, Coected Repair Solutios EXAMPLES Coected Car, Isurace Telematics, Fleet Maagemet, Coected Ship, Iteractive Geospatial Solutio, Coected EV Statios, Predictive Aalytics to Reduce Maiteace ad Warraty Costs Coected Asset Maagemet, Coected Workers, Remote Diagostic ad Predictive Maiteace for Idustrial Machies, Stole Asset Retrieval, Trasparet Supply Chai, Coected Shopfloor Coected Home, Smart Eergy, Coected Buildig, Coected Security Precisio Farmig, Farm to Fork Smart Wearables, Subscriptio Eablemet Platform, Autheticatio Applicatios for Wearables Smart Parkig, Smart Light, Smart Bi, Smart Waste, Digital Udergroud Mappig, Ifrastructure Moitorig, Bridge Moitorig Coected Healthcare, Health Facility Way Fidig, Virtual Care Platform, Patiet Egagemet Platform, Coected Patiet, Emergecy Maagemet Digital Oil Field, Smart Drillig, Smart Oil Trasportatio, Solar ad Wid Power Moitorig Smart Grid, Smart Meterig, Coected Power Plat, Coected Solar Farm, Coected Wid Farm Coected Mies, Coected Supply Chai Cryptocurrecy, Block Chai Asset Maagemet, Beacos for Commerce Proprietary Page 20

Research Methodology

Research Methodology Data Summary More tha 1,080 data poits were collected from more tha 56 IoT Services cotracts, coverig 18 major service providers. There were others (such as HP ad Capgemii) whose IoT service offerigs are still evolvig ad were ot yet i a positio to be icluded but o which we will report later. Data was collected i Q2-Q3 2016, coverig buyers, providers, ad advisors/ifluecers of IoT Services. Participatig Service Providers This Report Is Based O: Tales from the Treches: Iterviews with buyers who have evaluated service providers ad experieced their services. Some cotacts were provided by service providers, ad others were iterviews coducted with HfS Executive Coucil members ad participats i our extesive market research. Sell-Side Executive Briefigs: Structured discussios with service providers regardig their visio, strategy, capability, ad examples of iovatio ad executio. Publicly Available Iformatio: Thought leadership, ivestor aalyst materials, website iformatio, presetatios give by seior executives, idustry evets, etc. Proprietary Page 22

HfS Blueprit Scorig: IoT Services Scorig Percetage Breakdow EXECUTION 45% Quality of Customer Relatioships 15% Quality of Accout Maagemet Team 5% How Service Providers Icorporate Customer Feedback 10% Real-World Delivery Solutios 20% Proprietary Delivery Models 15% Stadard Delivery Methods 5% Flexible Pricig Models to Meet Customer Needs 10% INNOVATION 55% Future Aligmet with Chagig Market 25% Acquisitio ad Ivestmet Strategy 5% Partership Ecosystem 10% Collaboratio ad Developmet Techiques 10% Stregth of Visio for IoT Services 15% Ability to Go Beyod Stage 1 (Digitizatio) with the IoT 15% Creatio of Proprietary Frameworks for Aalyzig Needs 5% Idustry Experiece 10% TOTAL 100% Proprietary Page 23

Blueprit Scorig Defiitios: Iovatio INNOVATION Iovatio is the combiatio of improvig services ad busiess outcomes. Future Aligmet with Chagig Market Acquisitio ad Capability Developmet Partership Ecosystem Collaboratio Techiques Stregth of Visio for IoT Services Ability to Go Beyod Stage 1 with the IoT Creatio of Proprietary Frameworks for Aalyzig Needs Idustry Expertise How future lookig is the service provider i terms of aligig itself i skills ad offerigs with the evolvig market demad? Is it keepig pace, is it a fast follower, or is it leadig the way? How does the service provider icorporate capability developmet ivestmets, icludig acquisitios, ito its strategy, ad what has bee accomplished already? What is the role of parterships i the developmet of the service provider s solutio ecosystem? How extesive is the curret partership ecosystem? How well does the service provider collaborate with cliets ad parters to develop PoCs ito full-scale busiess solutios ad IoT offerigs? Does the service provider have a strog visio for services across the IoT value chai? How well has the service provider itegrated iovative approaches ad emergig skills ad techologies ito services? Does it also brig the core techology platform to assist a eterprise i deployig the ext level of IoT solutios? What, if ay, proprietary frameworks does the service provider utilize to aalyze the uderlyig busiess eed? Does the service provider have ay idustry IoT-specific offerigs? If so, what are the ature of these, ad how far advaced is it i buildig this area out? Proprietary Page 24

Blueprit Scorig Defiitios: Executio EXECUTION How well does the service provider execute o its cotractual agreemet, ad how well does the service provider maage the cliet provider relatioship? Quality of Customer Relatioships Quality of Accout Maagemet Team How Service Providers Icorporate Customer Feedback Real-World Delivery Solutios Proprietary Delivery Models Stadard Delivery Methods Flexible Pricig Models to Meet Customer Needs How egaged are service providers i maagig the cliet relatioship based o the followig metrics: quality of accout maagemet, service provider/cliet egagemet, ad icorporatio of feedback? What is the quality level of professioal skills i the accout maagemet team? How have service providers take feedback ad icorporated that feedback ito offerigs? Does the solutio provided compare favorably to peers regardig value creatio through curret offerigs, parterships, subject matter expertise, ad delivery models? What, if ay, proprietary software platforms ad process structures has the service provider created to deliver these services? What, if ay, stadard software tools ad busiess platforms does the service provider utilize to deliver these services? How flexible are the service providers whe determiig pricig of cotracts? Have the service providers aliged these terms with the uique demads of IoT projects? Proprietary Page 25

Service Provider Aalysis

Guide to the Blueprit Grid To distiguish service providers that show competitive differetiatio i a particular lie of delivery with progress i realizig the As-a-Service Ecoomy of busiess outcome-orieted, o-demad talet ad techology services, HfS awards these providers the As-a-Service Wier s Circle desigatio. As-a-Service Wier s Circle show excellece recogized by cliets i the 8 Ideals i executio ad iovatio EXECUTION Collaborative relatioships with cliets, services executed with a combiatio of talet ad techology as appropriate, ad flexible arragemets. INNOVATION Articulate visio ad a ew way of thikig, have recogizable ivestmets i future capabilities, strog cliet feedback, ad are drivig ew isights ad models. High Performers demostrate strog capabilities but lack a iovative visio or mometum i executio of the visio High Potetials demostrate visio ad strategy but have yet to gai mometum i executio of it Executio Powerhouses demostrate solid, reliable executio but have yet to show sigificat iovatio or visio Execute some of the followig areas with excellece: worthwhile relatioships with cliets, services executed with gree lights, ad flexibility whe meetig cliets eeds. Early results ad proof poits from examples i ew service areas or iovative service models, but lack scale, broad impact, ad mometum i the capability uder review. Evidece of operatioal excellece; however, still more of a directive egagemet betwee a service provider ad its cliets. Typically, describe a visio ad plas to ivest i future capabilities ad parterships for As-a-Service, ad illustrate a ability to leverage digital techologies ad/or develop ew isights with cliets. Well-plotted strategy ad thought leadership, showcased use of ewer techologies ad/or roadmap, ad talet developmet plas. Less evidet visio ad ivestmet i future-orieted capability, such as skills developmet, itelliget operatios, or digital techologies. Proprietary Page 27

HfS Blueprit Grid: Iteret of Thigs (IoT) 2016 Ivestig i Iovatio to Chage Excellet at Iovatio ad Executio HIGH POTENTIALS HIGH PERFORMERS AS-A-SERVICE WINNER S CIRCLE INNOVATION VirtusaPolaris NIIT Techologies NTT Data Sytel Tieto HCL Ifosys Dell Services IBM Harma Cogizat EPAM Tech Mahidra TCS Luxoft Gepact Acceture Atos EXECUTION POWERHOUSES Buildig All Capabilities EXECUTION Executio Is Ahead of Iovatio Proprietary Page 28

Major Service Provider Dyamics: Highlights INNOVATION Because the IoT is typically a subset of a broader busiess strategy, may suppliers have purchased desig ad ideatio firms (Tech Mahidra purchased Piifaria, Cogizat Desigit as examples) to move up the strategy ad iovatio value chai aroud broader digital costructs. How well these add-is to large IT orgaizatios work i the cotext of cliet strategic eeds requires close scrutiy. Acceture curretly have a tactical advatage sice they are already trusted strategic advisors. Iovatio i the Idustrial Iteret evolutio i heavy machiery is very differet from the more itercoected digital world. Harma, Atos, ad Luxoft are well established i the smart car stadards ecosphere, for example, but others may have greater agility i etrepreeurial coected product efforts, depedig o busiess goals, eeds, ad scale. Where the Oil & Gas, Utilities, ad Miig & Resources verticals are focused o modest iovatio withi complex legacy idustrial frameworks, iovatio i coected smart thigs are o a very differet trajectory where proof-of-value experimetatio is commo. It is ufair to call out specific suppliers here give their differet dimesios of iovatio. EXECUTION Buyig decisios are ofte iflueced by comparig pricig flexibility ad co-ivestmet optios with shared risks ad rewards. Buyers cited IBM, Harma, TCS, ad Tieto for flexibility, while Acceture, Atos, NTT DATA, ad Tech Mahidra As-a-Service pricig for IoT is cosidered forward-thikig for subscriptio-based promised outcomes over time. Decisio makig about proprietary ad/or ope source stadards is critical for the IoT, particularly for iteroperability with legacy systems. Vedors that collaborate with parters ad cliets are importat, with Cogizat, EPAM, Gepact, ad NIIT receivig kudos for workig closely with cliets. Tie-is to larger systems of itelligece where IoT data flows to ad from larger core digital eterprise systems as part of broader digital strategies require sophisticated strategy ad suppliers. Acceture, Atos, IBM, ad Ifosys were cosidered particularly capable at this level of executio. Proprietary Page 29

The Curret Maturity of Service Provider IoT Service Offerigs ad Capabilities Acceture Atos Cogizat Dell EPAM Gepact Harma HCL IBM Ifosys Luxoft NIIT Techologies NTT DATA Sytel TCS Tech Mahidra Tieto VirtusaPolaris CONSULTING ENABLEMENT CONNECTIVITY INTEGRATION MANAGEMENT Key to Services Maturity o the Service Provider Profile Pages Relies o Parters Less Mature Services More Mature Services Key to Four Stregths/Weakesses o the Service Provider Profile Pages: Iovatio, Executio, Idustrial, ad Etrepreeurial Not Mature Less Mature More Mature Proprietary Page 31

Cogizat Wier s Circle Blueprit Leadig Highlights Accout Maagemet Strategic Visio Stadard Delivery Methods Partership Ecosystem Collaboratio Techiques Stregth of Visio for the IoT IoT Services Offerig Maturity: IoT Cosultig IoT Eablemet IoT Coectivity IoT Itegratio IoT Maagemet IoT services fit ito broader digital visio ad ext-ge IT eterprise follow-through with strog etrepreeurial drive Stregths Strog Executio Reputatio Drive by Strog Strategic Visio: Cogizat is highly aware of the importace of digital to the services sector ad the erosio of IT s domiace i its market. Cogizat is see as havig a strog visio globally, ad Global CEO Fracisco D Souza has good digital DNA to evolve the busiess. Flexible Approach: Cogizat has acquired strategy compaies ad has collaboratory real estate to drive iovatio ad the art of the possible with cliets. Realizig IoT cocepts ito completed solutios to cliet busiess problems via flexible fiacial ad parterig approaches to the cliet aims help projects see the light of day. Digital Structure Fosters Rapid Cotextual IoT Developmet: Cotiuig to operate IoT as a hub amid spokes of other emergig techology practices (Social ad Mobile, Security, Cloud, Aalytics, Egieerig, ad Maufacturig Services) draws expertise from each practice area withi project cotext ad adjacecies. Accout Maagemet Reputatio: Cogizat has a strog accout maagemet culture ad is disciplied about bledig the ew digital with old IT ifrastructure, a commo challege, ad workig closely with cliets at all project stages. This agility is a valuable attribute i the very dyamic ad evolvig IoT space. Fudig of Start-up Cocepts: Cogizat is attued to the start-up ecosphere ad is fudig iteral ad exteral projects. Challeges Divisio betwee Digital ad Next-Ge IT: Betrayig Cogizat s system itegrator IT origis, the compay s ligua fraca/ative laguage is still IT, despite excellet digital ad strategic IoT capabilities. Lack of Messagig Clarity: Cogizat eeds to be clearer i coveyig IoT ad digital adjacecies sophisticatio ad capabilities. Locatio of Executio Resources: Although Cogizat is takig big steps to igite IoT projects, ofte tied ito broader digital iitiatives, the reality that most resources are i Idia makes accout maagemet ad commuicatio doubly importat. Physical thigs caot be worked o via the Iteret; Cogizat eeds to be i the geography where they will operate. As the practice grows, this may be more of a challege. Service Delivery Operatios Cliet Profile Acquisitios / Parterships Proprietary Techologies / Platforms Iovatio Executio Idustrial Etrepreeurial Headcout: IoT Strategy about 200, IoT Delivery about 2700; about 2000 additioal distributed resources, e.g., Iformatio Maagemet team Aalytics ad data scietists, mobile developers, IoT Testig. Org Structure: The IoT practice combies Product Egieerig, IoT Cosultig, Idustry Solutios, ad IoT Platforms is part of Cogizat Digital Works. Delivery Network: 20% US, UK, Netherlads; 65% Idia; 15% rest of the world Go-to-Market Approach: Cogizat s IoT practice operates i a hub-adspoke model coectig other emergig techology practices as part of its Digital Works Techology group, a multi-discipliary team comprised of strategic cosultats, idustry experts, desig thikers, ad techologists who work together to trasform a eterprise usig a structured, yet agile, methodology. The IoT practice was officially formed i 2013. Target Idustries: Targets eterprises with more tha $1 billio i reveue Core: Maufacturig ad Logistics, Bakig, Isurace, Retail, Healthcare, Life Sciece Additioal: Travel, Hospitality Acquisitios: ReD (2016) KBACE (2016) QuickLedt (2016) Storebrad Baltic (2015) Odecee (2014) Cadiet Group (2014) TriZetto Corp (2014) Parterships: Platform Vedors: Xively, PTC/Axeda, Microsoft ad Azure IoT, Zebra Techologies, AWS, Cisco, Itel, ad GE Predix Iovative Solutios: icotrols, Vuzix, Google Glass, WIFARER Applied Research: Caregie Mello Uiversity Highly aware ad egaged with the start-up ecosphere APEx: Asset maagemet as-a-service Foresight: Coects devices ad trasmits, aggregates, visualizes, ad aalyzes data to accelerate the deploymet of IoT projects. HealthActivate: Targeted at Life Scieces compaies ad healthcare providers, for cloudbased patiet egagemet. Iteractive Exposure Map: geospatial solutio targeted to isurers MedVatage: Cloud-based sales, service, ad complait maagemet system S3P: Subscriptio Eablemet Platform. Uprotect Failure predictio services Proprietary Page 32

Market Directio ad Recommedatios

What Is Next for IoT Services We see the followig as the major treds i the maturatio of IoT Services over the ext 2 3 years: The market will remai loosely defied as some service providers rebadge older aalytics, mobile, ad cloud practices as IoT Services while others create stadaloe practices some arrow poit solutios, some broader ad icludig elemets of IoT/Idustrial Iteret. As use cases mature ad market demad for sesor data flows icreases, more ad more service providers will positio themselves as IoT capable ad ready. Stadards ad security will cotiue to be problem areas that impede use cases as the IoT evolves ad becomes more complex. The mature Idustry 4.0 ad iovative, emerget IoT uses will be icreasigly itertwied ad reliat o each other. As the IoT is a attribute of broader digital data flow values eeds for busiess, coheret platform parterships will become icreasigly crucial for success for suppliers ad buyers. Creatig data flows, APIs, ad aalytics are table stakes for services, while idetifyig busiess value from the IoT will be a icreasigly importat differetiator. Proprietary Page 34

IoT Services Market Adoptig As-a-Service Ideals How Ideals Will Progress Betwee Service Buyers ad Service Providers IDEAL AS-A-SERVICE IDEAL DEFINITION NON- EXISTENT INITIAL EXPANSIVE EXTENSIVE ALL PERVASIVE Write Off Legacy Usig platform-based solutios, DevOps, ad API ecosystems for more agile, less exceptioorieted systems ad processes 2016 2020 Desig Thikig Uderstadig the busiess cotext to reimagie processes aliged with meetig cliet eeds 2016 2020 Brokers of Capability Orietig goverace to source expertise from all available sources, both iterally ad exterally, to address capability gaps 2016 2020 Collaborative Egagemet Esurig relatioships are cotracted to drive sustaied expertise ad defied outcomes 2016 2020 Itelliget Automatio Use of automatio ad cogitive computig to bled aalytics, talet, ad techology 2016 2020 Accessible ad Actioable Data Applyig aalytics models, techiques, ad isights from big data i real time 2016 2020 Holistic Security Proactively maagig digital data across the service chai of people, systems, ad processes 2016 2020 Plug-ad-Play Digital Busiess Services Pluggig ito ready to go busiess-outcome focused, people, process, ad techology solutios with security measures 2016 2020 Proprietary Page 35

2016 17 Recommedatios: Eterprise Buyers Be aware of your opportuities ad goals: The mature Idustrial Iteret ad the emerget IoT are two dimesios of the busiess advatages broader digital data flows ca create. It is possible to ulock the value from these oly with a coheret broader strategy. May service providers have techical executio skills but are light o busiess acume i creatig ad stitchig together the data wirig eeded to realize value from smart thigs. Ed-to-ed security is essetial: Breaches of etworks remai a massive cocer as stadards ad use cases mature. The weakest lik will be sought out by attackers, ad the IoT provides dagerous physical opportuities i additio to data theft uless careful thought is give to all stages of coectivity ad operatio. Real IoT actio is happeig i great secrecy: Most publicly discussed IoT iitiatives either are mature with little competitive sesitivity or are projects ad pilots that require publicity. The most iterestig work is, by ature, strategically importat ad uder wraps press vedors to explai their differetiatio beyod geeric projects. Poit solutios are very differet from broader data flows from multiple digital elemets: Addig sesors ad gatherig data ofte cotiue to be the easiest aspects of the IoT. Creatig data repositories that ca capture ew isights is ow straightforward ad ca be leveraged across the firm. The real challege for the IoT is chagig broader ed-user processes to digital platform paradigms. Deep skills i the Idustrial Iteret are ot the same as etrepreeurial iovatio: While the heavy machiery focused Machie to Machie (M2M) Iteret has bee evolvig for more tha a decade, emerget digital busiess models for sesor-eabled mass-produced devices are a very differet world that requires digital strategy approaches to maximize beefit from data creatio. Proprietary Page 36

2016 17 Shared Strategic Challeges: IoT Service Providers Where to ivest? Legacy IT services compaies have sigificat challeges i makig IoT ivestmet commitmets, with their growth ivestmets at risk from edless low-value tire kickig exercises by prospects tetatively explorig ad uderstadig busiess value. As-a-Service approaches this problem with flexible risk-sharig optios that help both sides of the relatioship get to grips with risk ad reward optios. Educatio, strategy, ad desig thikig sessios help qualify ad reivet perceptios of IT providers as beig o top of what is a very ew focus area for most people. Where to parter? Parter ecospheres i the systems of itelligece era revolve aroud data flows, with IoT devices of all sizes iteractig with the core of busiess systems. May of the older eterprise systems were ever iteded for these volumes of sophisticated trasactios ad security. This meas IoT service providers have to choose their parters wisely to be aliged with platforms that are fit for purpose ad make sese for cliets to ivest i as part of their operatios. Where to focus? Pure-play deep bor IoT services are frequetly ot well aliged with broader digital trasformatio efforts of large cliets aroud data value, despite IoT sesor data beig icreasig importat across most verticals. Poit solutio thikig ad lack of idetificatio of data value adjacecies could doom some highly skilled players to beig merely commodity provisioers uless strategic horizos are broadeed. Which stadards to get behid? Cosistet stadards, security, ad descriptors are essetial if shared goals across the service provider spectrum are to be met: To may prospects, IoT is a bewilderig blizzard of buzzwords, coflictig stadards, poor iteroperability, ad scary security opportuities. Proprietary Page 37

2016 17 Recommedatios: Service Providers, cotiued A buyers market for ow: For a still-emergig market, IoT Services are broad ad deep with patchy uptake at what sometime seems almost radom segmet iterest by prospects. Cosistecy is foud via clear paths to busiess value, which are achieved with strategic cosultig ad plaig. Whether suppliers choose to drive this activity themselves or parter with cosultig compaies, this is almost ivariably where scale projects origiate ad where focus must be cocetrated. Ed-to-ed is challegig: The Idustrial Iteret has mature icumbets while the digital etrepreeur space is far more fluid. While they share some similar techological uderpiigs, the busiess dyamics are very differet, ad choosig where ad i what segmets to specialize is icreasigly importat to build out practices. Parterig adjacecies are critically importat to provide broader offerigs that meet prospect ad cliet eeds, while providig scalig optios. Platform or ope source/best of breed? Both? May moder digital compaies are full stack eviromets with a lot of ope source flexibility. The IoT space has may competig proprietary platform approaches from large vedors that services providers ca leverage. Fidig a balace that avoids vedor lock-i is o prospect ad cliet mids just as it is with suppliers. As-a-Service leds itself to platform approaches, but ope source is a essetial elemet of systems itegratio ad digital data flow eablemet. Security security security: Fear of security breaches is a sigificat barrier to may commercial digital iitiatives, ad cocers about the weakest lik are all the more serious whe thigs ca be compromised. Cliets beig able to sleep at ight kowig their ew IoT eviromets are secure are table stakes for participatio. Proprietary Page 38

About the Author

Oliver Marks VP Digital & IoT, HfS Research Sa Fracisco, CA Overview Leads Digital ad Iteret of Thigs research for HfS Research Extesive prior experiece cosultig ad advisig with compaies o effective iteratioal digital trasformatio strategy ad executio Streamliig, simplifyig, ad moderizig ways of workig, fidig the correct recipe of ew tools to combie with legacy systems ad processes, ad idetifyig viable busiess models Previous Experiece Oliver.Marks@HfSResearch.com Built, ra, maaged, ad evolved global game developer collaboratio eviromet at Soy PlayStatio Worldwide Studios Led the Global Digital Eterprise Trasformatio cosultig team at HP Numerous real-world strategic projects uder tight NDA i multiple idustry verticals, icludig CPG, BFSI, Eergy, ad Mergers & Acquisitio digital busiess strategies Oliver is based i the Sa Fracisco Bay area ad grew up i the UK. Proprietary Page 40

About HfS Research HfS Research is The Services Research Compay the leadig aalyst authority ad global commuity for busiess operatios ad IT services. The firm helps eterprises validate their global operatig models with world-class research ad peer etworkig. HfS Research coied the term The As-a-Service Ecoomy to illustrate the challeges ad opportuities facig eterprises that eed to re-architect their operatios to thrive i a age of digital disruptio, while grapplig with a icreasigly complex global busiess eviromet. HfS created the Eight Ideals of Beig As-a-Service as a guidig framework to help service buyers ad providers address these challeges ad seize the iitiative. With specific focus o the digitizatio of busiess processes, itelliget automatio, ad outsourcig, HfS has deep idustry expertise i healthcare, life scieces, retail, maufacturig, eergy, utilities, telecommuicatios, ad fiacial services. HfS uses its groudbreakig Blueprit Methodology to evaluate the ability of service ad techology providers to iovate ad execute the Eight Ideals. HfS facilitates a thrivig ad dyamic global commuity of more tha 100,000 active subscribers, which adds richess to its research. I additio, HfS holds several Service Leaders Summits every year, brigig together seior service buyers, providers, ad techology suppliers i a itimate forum to develop collective recommedatios for the idustry ad to add depth to the firm s research publicatios ad aalyst offerigs. Now i its teth year of publicatio, HfS Research s acclaimed blog Horses for Sources is the most widely read ad trusted destiatio for ufettered collective isight, research, ad ope debate about sourcig idustry issues ad developmets. Horses for Sources ad the HfS etwork of sites receive more tha a millio web visits a year. HfS was amed Aalyst Firm of the Year for 2016, alogside Garter ad Forrester, by leadig aalyst observer IfluecerRelatios. Proprietary Page 41

HfS Blueprint Report. Internet of Things (IoT) Services Excerpt for Cognizant. October 2016