The Complete Guide to

the Internet of Things

Industry Overview

Baiyin Zhou & Peter McCall

OpenView Venture Partners

2/8/2015

Defining IOT

Internet of things has its origins in machine-to-

machine (M2M) communication

IoT is made up of a system of connected

nodes and devices

“I could be wrong, but I'm fairly

sure the phrase ‘Internet of

Things’ started life as the title of a

presentation I made

at Procter & Gamble in 1999.”

Kevin Ashton

RFID and sensor technology enable computers to

observe, identify and understand the world –

without the limitations of human-entered data.”

“If we had computers that knew everything there was to know about

things – using data they gathered without any help from us – we would

be able to track and count everything… We need to empower

computers with their own means of gathering information.”

Kevin Ashton

DEFINING IOT

A system where items in the physical world, and sensors

within or attached to these items, are connected to the

Internet via wireless and wired connections.

The network of physical objects that contain embedded

technology to communicate and sense or interact with

their internal states or the external environment.

There are three layers of IoT that interact with each

other to gather, process and deliver.

Sensor Layer Network Layer Application Layer

Objective: collect information Objective: transmit and process information Objective: deliver

information to users

Collection

RFID

Sensors

Actuators

Power

supply

Registration

Provisioning

Asset

mgmt.

Identity

Security

DevicesDevice

Mgmt.

Output

Platforms

Visualization

Automation

Event processing

Monitoring

Diagnostics

Logistics

Vertically-focused apps

Applications

Connectivity

M2M

Input

network

Node

processing

Output

network

Authen-

tication

Identity

mgmt.

Privacy

Networking Security

Processing

Aggregation

Integration

Analytics

App

development

Storage

App

Management

App

Analytics Platform

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Industry Overview

Source: “Gartner's 2014 Hype Cycle for Emerging Technologies,” Gartner

Gartner calls IoT the most overhyped technology of 2014

There is an IoT standards war

Source: “What the Internet of Things (IoT) Needs to Become a Reality”, Freescale Semiconductor and ARM

Major corporations are organizing based on different standards

Growth in IoT is being driven by a number of factors

Decreasing price of sensors and processing due to massive

competition among manufacturers

More devices being

connected

Opportunities for cost savings, automation, greater visibility into industrial processes,

and increased productivity

Adoption of simple consumer devices like fitness trackers

and thermostats

More data being produced

Greater need for solutions

to deal with this data

More people getting used to the idea of internet-connected

devices

Many companies have tried to estimate the 2020 market size

$3.04 trillion

30 billion actual devices

212 billion possible devices

$1.9 trillion

26 billion devices

50 billion devices

50 billion devices $2.7 trillion

Source: Company whitepapers and press releases

$1.9 trillion

28 billion devices

People disagree on exact growth, but most agree the

number of connected devices is going to be very large

Sources: IHS, IDC

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Several areas within IoT are currently trending within the consumer market

Hardware

Wearables

Home Automation / Smart Building

Platforms

Picture by mystuart

Additionally, the IoT has the potential to

help businesses in a number of ways…

1. Cost savings

2. Increased process efficiency by identifying

problem areas

3. Better insight into the physical environment

4. Improved customer experience and service

5. Greater transparency and control over assets

…but also raises a host of new problems to be solved

Privacy and security

Data integration

Standards

Authentication and identity management

Device management

Scalability

Powering devices

Today, enterprises primarily deploy IoT solutions to save money

Revenue growth and innovation

Cost reduction and efficiency

Risk management

Source: “The Internet of Things Ecosystem: Unlocking the Business Value of Connected Devices”, Deloitte

Growth in venture funding has sustained

in IoT over the last four years

Source: CB Insights

~70% of IoT funding rounds from 2011-2013 were

related to wearable technology

Source: CB Insights

Notable IoT companies have received significant venture capital funding

$205M total funding

$93M total funding

$65M total funding

$144M total funding

$3.2B valuation (at acquisition)

Accelerators and incubators are also cropping

up to help start new IoT companies

IoT company exits have grown ~36% YoY since 2010

Source: CB Insights

Notable exits

$200M

$100M

$2B

$3.2B

$555M $175M

$170M $112M

$107M

~$500M IPO

$780M

Strategic interest in IoT ranges from traditional software

companies to hardware companies looking to broaden their

reach, and serves as partnership opportunities for IoT companies

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