 I think we're going to start with this panel discussion here. I have a chair as well, but I'm not going to use it. It wasn't like six people, five chairs. That would have been fun. But what we're going to do here, we have about 25 minutes or so to discuss IoT profitability. Before we get into some of the questions, I can lead off with a question that I'm really much appreciating might be questions from the audience as well as we get into this. But before we do all that, I'd like to have each one of our speakers introduce themselves. A couple of minutes each. We have Chris Dugster from Samsung. Ludovic Colbert from Sony. Jon Soms to be from Ericsson. Molly Preston, AT&T. And Dan Berry and Jim Hunter with Greenway. Also representing Leave So Alliance. OK, so quite a big panel. Let's see what everybody's background and quick bio is all about, and then we'll get into the question. All right, my name is Chris Turcher. I head up the IoT. Do you have a microphone for me, please? Lou? OK. Is this good? Can you hear us? OK. My name's Chris Turcher. I manage the innovation lab for Samsung around IoT in the San Jose area. We're really a shop that is trying to create new products and new platforms, really, that end users love. And we're about product design. We're about technology, architecture, and really simplicity at the end of the day. Our role is to create these new products, build them up, and bring them to Samsung headquarters where they will be productized. So we spend a lot of time on IoT and trying to cut through kind of all the hype and noise and try to make products that people will pay money for at the end of the day. So I'm happy to be on the panel. Thank you. Good morning, everyone. I am Ludovic from Sony. So I'm based also in the neighbor of Samsung in the south area. I used to work in the headquarters in Tokyo and before that in London and New York. So I'm part of the growth and venturing team. So we look at startups for strategic partnership, investment, acquisitions, and also I work on each of the properties, so patent licensing and how to develop our technology differentiation. And people don't associate Sony with IoT so much because of our consumer devices. We have a lot of activities which are much more tightly connected with some of the IoT verticals, like in Japan, banking, and insurance business, solutions business for venues and stadiums and retail, of course, media, music and video, and many others. So on the model, it's really too broadly with my team at how we can inject innovations and infrastructure, and of course IoT, the connectivity, but the software and applications is a key element which I think can be valued to go Sony and all. Good news. Good morning, everyone. Excuse me. My name is John Sonstvy with Ericsson, senior director of innovation and business development. Lovely to be here. And despite my Scandinavian surname, I'm actually US based in Sweden. Our team is an interesting team within Ericsson. We focus on really disruptive innovation from business model standpoint with our large customers like AT&T's of the world, and then in lots of different segments in the IoT domain with transportation and connected cars, smart grid and utilities and digital. Hey, good morning, everyone. Thanks for attending. My name is Mallie Preston with AT&T. AT&T's formed a new group called the Internet of Things Solutions Group recently. We combine the legacy of the M2M Center of Excellence and our emerging device organization, which was consumer focus recently, that formed a supergroup to be focused on IoT and providing both solutions to the commercial marketplace and the consumer in a holistic fashion. And our group's purpose really now these days is to cut through the hype, as we've heard before, and really deliver a solution that is integrated and easy for a customer to hit the body on the commercial enterprise side. Good morning. My name is Jim Hunter. I'm representing two entities today. The first is the Ipso Alliance. Ipso stands for the IP for smart objects. And really our goal is to ensure that as many products as possible recognize the value of being directly on IP and leveraging all of the standards that are out there through IETF, through W3C, through IEEE to make it simple as an on-ramp to IoT straight from the IP world. Secondly, I represent Greenway Systems, where I'm Chief Scientist. Greenway is an ingredient brand company. We build software and services that enable companies like Verizon, who just launched a product of ours jointly this last week, as well as we have products that are empowering, products today that are on store shelves at Home Depot and Lowe's. Finally, just a little bit about me. I've got 22 years in a space called connected home, smart home, home animation, selling products, building products, building startups in the space. So this is really exciting for me. And I'm really glad to be here on the panel this morning. All right. Thank you very much. So I'll just gather and ask, is there a question already, a burning question in the audience that isn't? Of course, I've got one ready. Nobody? Oh, here we go. I'm always pleased to not have to ask the first question. So do we have a microphone? OK, thank you for waiting for the microphone. Thank you. So there's been a lot of discussion about connected devices. There's been a lot of discussion about ecosystems. But it appears to me that everybody is building their own ecosystem. Is there any discussion at all about some way that all of these companies come together in a common ecosystem that provides a greater benefit? Would you like to start that? And then? Certainly. So you actually asked a fantastic question from my point, which is, from a standards position, standards help to make, for example, the World Wide Web something very real, move out of BBSes into something that was interactive, so millions of companies could participate. So the standards work that's going on, both from the IEEE, from the ITF, from what Ipsil is doing, as well as standards going on within service provider companies. For example, the Broadband Forum is working on something called CSDA. It's basically, it stands for control signaling and device abstraction. And it's a way to actually manage the assets that are actually behind the CPE equivalent, behind the edge in the home. So I think standards are a great step towards getting to where there's a common language, that all these devices, a common bus, all these things can communicate on. It's your question from an AT&T perspective. We founded the Industrial Internet Consortium with about 70 other companies, IBM, GE, are on it, and it's really to develop a standards-based approach. You know, it was talked about yesterday, if you were in the room with George Telecom, was that there was not enough adoption of this within the commercial enterprise space, mainly because it's just the complexities are difficult, as complexities are really born out of the lack of standards. So from a carrier perspective, when we go build a solution for a large commercial customer and there's no standards, and then we want to go kind of do it to a similar thing, a similar vertical industry, we kind of have to reinvent the wheel and the customer gets to kind of dictate some of these things. It's gonna be a lot easier for us to duplicate and scale a business to these billions of connections that we're all talking about if we apply that standard. So that's, we're also working on other forums within the vertical industries, right? Heavy Quip and has their own vertical engine standards of reading the data off of that. And then allowing each manufacturer to also adopt that. So we're leading the forefront of those things to try to help along, along with the ecosystem partners that we work with. Yeah, I think it's an excellent question. I'll echo what you both say about standards. And I think that's very important. And what I think this is important is, I think really this is where the business value lies and the real opportunity is not just in specific verticals, but really cross ecosystem coming up with new models there that some of which we can think of today and I'm sure many, many of which will be thought of in the future. So we know we'll do that with standards, securely exposing and managing APIs in a very horizontal way in exchange between these ecosystems is key. I think the, as we said, the good thing about standards is you have so many of them to choose from, right? And nevertheless, I think a tremendous momentum in Etsy, in surveillance, ITU, all these recognized regional and worldwide bodies which are trying to drive some, even bottom up or terrible approach to civilization. For example, Sony, one of several companies here, a member of the One and Two M initiative, for instance. They also empower a lot of not really standardization body, more like industry groups. For example, the Qualcomm Lab, also the Alliance, there is also, I think one on Samsung is this, pair handing and many others in specific verticals in fact, which I mentioned others. Now my, I meet startups every day and then on the consumer side, you see, oh, nice connected, toothbrush or connected, scale connected whatever they say recently, lighter for some people to smoke if that's nice and everybody's doing its own API, which makes sense, it's a lower cost. So how do you move through the consumer world from individual APIs, which are nice by themselves for more global and, you know, horizontal set of devices that can communicate with each other. I still think there's a lot of work to be done by everybody in the value chain. And I'll just add a little bit to that from the perspective of Samsung, I hope. So I think that, you know, as we mentioned earlier, the great thing about standards there's so many to choose from. What really matters is which ones get implemented and across all the devices and how they actually gain adoption. So as some of the other folks have mentioned, Samsung's involved in Thread, a QB6 basically on top of ZigBee, also involved in the Open Interconnect Consortium, I believe is the name of the consortium which is working with smart things on standardization. So I think that for Samsung, the challenge is really deciding which one of these approaches and technologies to implement in our products and our dishwashers and our TVs and our fridges and all these other devices. And making that consistent across the devices that we ship is an extremely powerful thing. And that's where we're trying to add it up. And again, to echo the point around consumer value product, these, you know, in our looks at this, your garage or opener has an app, your TV has an app, you know, all these things have apps, there's about three or four before you just throw the phone down on the ground and stop using. And so this platform needs to exist. And how it gets done is a very complex process and we'll all be working against that. But we need to do it to achieve the vision and the value we want. Thank you. Okay, so we have standards in place. We've got an interoperability working. We've got legacy systems connected. So apparently we have these trillions of dollars to be made for the next few years. And I like these numbers because they're very exciting, not necessarily reflecting a very realistic amount of money that each one of you is making though. Where does the load hanging fruit lie? Is there any load hanging fruit right now? What is it that each one of the entities we have here enabling right now or in the short to midterm? I'm sorry. You guys want to go the other direction? Yeah. Okay, so, you know, I think the load hanging fruit are really these simple devices that are connected that we control via our smart phones and are signed well and work together with other devices in a simple way. Beyond that, you know, some other companies are more about preparing monthly revenue and subscription and those types of things. And you'll see a lot of investment in those spaces as well. That those are kind of the easy things. I think the things that get harder are around data and be able to make things automatic across systems without having to actually set up rules as users and these types of things. So those would be the things we'll get to. But for now it's products and services at the very basic level. I think the golden rules of three years of dollars is still a little bit far away. But one thing, for example, that Sony does and just announced it a couple of weeks ago, we have, as I mentioned, car insurance and financial technology in Japan. And we have been launching this OBG-2 type of device to basically a peripheral you put in your car. And it's like pay as you drive. So if you drive well, then you get discount insurance if you drive very poorly. Then you pay more in a very seamless fashion. So it's not a very sexy thing, maybe. It's not a flattering, but it's a concrete implementation of something from an industry which is very long lasting and with very limited innovation from the idea or perspective coming to something new. At the same time, I think whatever can exist here in Silicon Valley, and we are all geeks here in a good way, earlier doctors at least, may not travel easily to mass markets if I ask my grandmother in France to use a quite a scale or connect to, you know, to brush again. I don't really think it's this, it's a big gap. So how as an individual company, as an industry group, as a bundle with operators, with cool services, we can make it something which doesn't require a PhD to use. Yeah, I think the low hanging fruit is stuff that actually solves people and businesses problems today. Right? There's a lot of stuff out there that just does stuff for the sake of doing stuff and that really doesn't resonate with consumers, right? With businesses, you know, the connected fork that I saw at CES, right? I mean, it really cares about it. I mean, building on that OBD2, right? So that's a, for those of you who don't know, it's a port in your car under your steering wheel that if you have any kind of car it's been around for, I don't know, 10 or 15 years or something. It has that, right? But I'm a member of AAA, which if you're not familiar is the American Automobile Association. If the car breaks down, they come and tow you away after four hours or something. But the point, yeah. But a year ago, they started introducing this OBD2 dongle they call it where you could buy for $70 a year, you could buy this OBD2 dongle, plug it in your car, and then use their app and then you can see how much gas you had in your car, right? Or you could see where you are in your car. And there were niche markets, right? For, you know, hey, where my kid's in the car, right? See if you can go in and do that. But I was kind of struck by, I got a promotion recently from them as, hey, instead of $7 a year, we're giving this for free. And for free for the first years, the adoption room hasn't taken up. So, you know, people aren't doing it just for the sake of doing it, but usage-based insurance is a great model, except for me and the way I drive, but it's a good model. It's a trench. Yeah. So I think the way you put yourself in your customer, your consumer shoes and business shoes and solve real problems that I think Val can actually mention something along those lines this morning too. Yeah, so I'll answer this question from an industrial IoT perspective. So I have the good fortune of meeting with companies, typically Global 2000 across the globe. And the low-hanging fruit in the commercial side is there. The number one problem preventing companies from doing that typically is that IoT has a transformative effect on the business processes. They work so hard, six sigma and everything to standardize on. And so even though it's the, literally the technologies, what the carriers have with the hardware manufacturers and software and open API capabilities, you literally can connect machines today, get the data up in the cloud, orchestrate it, remotely manage the device for an asset that may cost a million dollars proactively. And you can do that really within three to four months. It's amazing what we can do today. You would think that most companies would jump on that, right? But they don't. And so that's the low-hanging fruit, really, from a commercial perspective, but it's getting companies to adopt what the change will affect their business, which is significant. That's not the way we do it. That data, private to me, is it being anonymized? How's it being worked through the system? There's a lot of complexities for these corporations to understand what the impacts are. So it's all about risk mitigation that they work through and they'll spend a year working through some of those things. And that reduces the rate of adoption in the low-hanging fruit. The apples, in my opinion, are rotting on the tree, literally as corporations stall and try to work their way through it, is from a business process perspective and organizational change perspective. So I think that the most important factor about low-hanging fruit is you gotta make sure it's something people wanna eat. And I think that there's some studies that are being done that kind of indicate there's a little bit of a backlash that's going on in the world of IoT. Maybe it's a little bit of exhaustion. So for example, BI recently released a research report that said that over 50% of consumers that are out there, actually only one of the most desired functionality is to control it with their smartphone. One of the lower desires on their list is something that's like automation. That's like 21% of people actually want an automated system, translate that to a full system. So we're looking at, as you guys have said, point solution, solve problems. What's also interesting is that over 50% of these same responders think that the current family of IoT products are gimmicky. And about 43% said they won't change the products they have today unless there's a very real value. And a lot of people are seeing real value as something that saves them money. So low-hanging fruit, in my opinion, and based on this information, is something that will save the consumer's money. We're gonna have to revisit that connected cutlery product offering. I'm not sure if you're based on it. All right, sorry. How can I ask you to carve that turkey? Very, very interesting insight so far. So I'm looking for the question that's gonna make these people not want to answer it. Do we have one that's a challenging one? Thank you. Please give it a go. Wait for the microphone. She's been doing that all week. So. Well, I'm not sure that it's gonna be a challenging enough. So it seems like people talk about low-hanging fruits and what could be the killer out, and they don't want to really try the customer adaptation. But it seems like, as you said, most of the things are more like gimmicky, or more like kind of sharper image, kind of products that at least sound small niche, but none of this is studied like a really broad consumers. So do you think this is going to be the way that IOT is going to be? It's not gonna address like small points. Not a small point that everybody had, but each application is gonna be more like a niche, but it's like a collection of lots of niche applications. Or there's gonna be, some way, some day, somebody finds a holy grail of killer up and then kind of dominate the market. What's your view on that? Like, what's gonna be that application kind of spectrum of being? So is there a single killer app? That's the first question. I think that one of the things that we can do is we can actually look back and learn from our history. Look at the computer industry, and look at what had to happen to the computer industry for computers to become mainstream. There was a lot of, as we said, there was a lot of gimmicky solutions. There was a lot of niche solutions to connect to computers together. There was a lot of niche value propositions for users of computers, you know, play games or use a calculator, right? It was very simple to begin with. And what had to happen was you had to kind of learn by doing. And I think that's what we're in right now, is we're learning by doing. And the challenge is, like the challenge that you have with any technology, there's not a platform that's actually ubiquitous yet. IP might be one of those platforms that would be that way. But all these companies that are signing up and coming into the crowdfunding space is like Kickstarter. They're becoming, more than they think they're becoming, they're becoming end-to-end service providers to the likes of Samsung with much smaller scale and much smaller ability to actually close the deals that they're actually signing up for. So you're gonna have, as you had in the computer industry, as you had with any kind of connectivity between, I guess it's reducing the friction between consumers and technology, you're gonna have that continued challenge where you're gonna have people step up with these ideas and these ideas are gonna be shot down by consumers and we're gonna learn by that and grow to the next level to the next level. I think we're in a natural phase of that growth and early phase of that growth right now. Yeah, no, that's a very good question too. Is there a holy grail or pot of gold out there? Maybe, there's certainly a hard to find and hard to come by. I hope I'm still looking myself on how I can find that pot of gold. You know, I think some of the challenges are too often a lot of these companies and people bringing solutions to market really are focusing on the technology and at the end of the day, this is really not at all about the technology, right? It's about transformation, it's about transforming business. You know, as you mentioned, it's about transforming people's lives and society and so like I said before, it's about solving problems so it's about understanding your consumers. I've started doing a little bit of an unscientific poll and talking with people who I meet not in this industry and ask them if they know about Internet of Things or what that means and I counted about five or six people I did that to this week and two of them had never even heard the term. Three people couldn't explain to me just what it was. There was only one person who sort of knew what it was so I think we probably need to move on from that buzzword as well and I don't know what we call it but again, it's about solving people's problems at the end of the day and I guess the last point to the business transformation side, I think for this, you really need to use the lean startup principles like Chris talked about in his keynote yesterday and I think that's imperative, go test these processes and you can't use the typical KTIs, can't use the typical processes and procedures to bring this IOT to market. Chris, maybe a final comment for me because you discussed that need for an overarching platform brings together apps and services that might initially seem to be completely disjoint or disconnected. Sure, so I think yesterday we talked a little bit about the Gardner Hyde Cycle which is kind of useful tool sometimes, kind of not. The point is we, the people in this room, this community, this industry are at the peak of inflated expectations right now and there is an inevitable trough of disillusionment that we will head into and that's going to happen as we struggle on search and try to get platforms figured out to get to the consumer value and then they call it the peak of the trough of enlightenment or slope of enlightenment. That's us. We're about to go through that and I think the key for us, we can do this quickly with platforms, with the right products and with this iteration quickly, faster than people expect us to. It's folks, the technology, the process, the design patterns are there to enable us to do it. So I think that yeah, we're going to, we will become Web 2.0 a little bit at some point in some of these things and the trick for us is really using the right tools and techniques to find that consumer value and transform these ideas and these technologies and products people love. Okay, I think we've run out of time. I'd like to thank our panelists, please. Thank you so much. Because I'd like you to work with sharing your experience.