Presentation from www.iot-now.com webinar on the 19th of May 2016. The Internet of Things (IoT) will transform your business by providing business insight, improving business process and connecting you to your customers. But how do you truly measure your IoT connectivity initiatives? During this webinar, you will learn about: Trends and key learnings in evaluating IoT initiatives Understanding the goals, key metrics and ROI of a connected program Quantifying the ROI for IoT initiatives using real-world customer results How choosing the right SIM – built for machines, not people – can help deliver a better ROI

1. ProprietaryandConfidential 1
Michele MacKenzie
Understanding How Optimized
Connectivity Improves IoT ROI

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© Analysys Mason Limited 2016
Analysys Mason has been advising telecoms clients for more
than 30 years
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1000+
CLIENTS THATHAVE
BENEFITEDFROM
OUREXPERTISE
IN THELAST
5 YEARS
200+
EMPLOYEES
WORLDWIDE
110+
COUNTRIES
WE HAVE
WORKED IN
12
OFFICES
Our approach to every
project is customised to
the client’s requirement
Clients see us as trusted
advisers and partners who
deliver honest,independent
advice
Our exclusive focus on
telecoms sets our
company apart
We help clients improve
performance and maximise profit,
even in difficult market conditions
Our advice on mergers and
acquisitions has helped
shape the industry
Our consultancy has
been shaping telecoms
regulation since 1985

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© Analysys Mason Limited 2016 3
IoT and M2M Solutions research programme
Selected reports and forecasts for 2016
§ The business case for LPWA networks
§ CSP strategies and organisational structures
§ Security service revenue opportunities forCSPs
§ EmergingAPAC M2M carrierscorecard
§ M2M in the Middle East and North Africa
§ CSP strategies forthe smart home
§ Connected caropportunities forCSPs
§ The role of regional alliances
§ The role of CSPs insmart cities
§ The impact of the eSIM on M2M
§ End to end solutions forSMEs
§ M2M RoIcase studies
§ Usage based insurance
§ Telehealth strategies:case studies
§ Worldwide M2M device connections and revenue:2016–2026
§ Worldwide LPWA connections and revenue forecast:2016–
2026

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© Analysys Mason Limited 2016
Our expertise in IoT is built on projects performed in multiple regions
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Examples of
recentIoT and
M2M client
projects, by
geography
Assessed the regulatoryimplications and
regulatoryfeasibility for the
implementation of a new M2M servicein
a dozen countries
Conducted a study
on international
opportunities for a
European
operator
Provided an assessmentof
M2M marketopportunity for a
software vendor
For a global operator, provideda
forecastof the marketopportunityfor
IoT, includingallelements of the value
chain
Developedforecasts of M2M device
connections andrevenuefor Brazil, the
Caribbean,Latin Americaand worldwide
Conducted a study to
determine demand for
a satellite M2M
productand end-user
requirements for
hardware andsoftware
Developmentof a cost–benefit
model for operators and
enterprises for Ericsson
Sized quick-win
opportunities in the
internationalM2M
marketand helped to
develop a long-term
M2M strategy for a
leadingmobile
operator
Supported a leadingmobile
operator in developingits
strategy for IoT and M2M
services
For a European operator,
conducted a marketassessment
of a new type of sensor network
Overviewedfleet
managementin fiveSouth-
EastAsian countries
For a Japanese
operator, provided
advice on which sales
channel to use
M2M/IoT services in
Europe (including
assessmentof MVNOs)
For a major regionaloperator,
conducted a workshop to assistwith
IoT and M2M strategy
For an operator client,
developeda listof over
100 potential partners,
with key information for
each [e.g. details of
existingcontracts and
partnerships]
CountriesofIoT andM2Mprojects
Countriesofother
projects
IoT/M2Mclient country

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© Analysys Mason Limited 2016 5
The evolutionof equipment withrespect to time and
intelligence
Smart connected devices will redefine many industry
sectors and transform companies and user experiences
‘Dumb’ physical
equipment
Smart
equipment with
embedded
system
Smart
connected
equipment with
networking
capabilities
Past,present & future
Present &future
Recent past,present & future
ProductIntelligence
Time
5

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© Analysys Mason Limited 2016
Cellular M2M connectivity is set to grow at a CAGR of 19%
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Cellular M2Mconnectionsforecast,2015-2025,worldwide
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Connections(billion)
Automotive and transport Financial services Healthcare Industrial Other Public sector Retail Security Utilities

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© Analysys Mason Limited 2016
A lot depends on IoT connectivity
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Key enablers and drivers for enterprise adoption of internet of things
New providers
The lowering cost
of service
provision has led
to hundreds of
new start ups
New revenue
streamsNew providers
The lowering cost
of service
provision has led
to hundreds of
new start ups
Reduce
operational costsNew providers
The lowering cost
of service
provision has led
to hundreds of
new start ups
Awareness
New providers
The lowering cost of
service provision
has led to hundreds
of new start ups
Cost of IoT
deployment has
decreased
$$
New providers
The lowering cost
of service
provision has led
to hundreds of
new start ups
RegulationNew providers
The lowering cost
of service
provision has led
to hundreds of
new start ups
ROI

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© Analysys Mason Limited 2016
Reducing costs has been a key driver for IoT connectivity in
many verticals and ROI is significant
8
Cellular M2M connections, 2025,worldwide, selectedverticals
Smart transportation
Aftermarket
Connections
PoS
Connections
Fleet management
Connections
145m
116m
35m
“ROI depends on the major
fleet issues in each market.
It could be oil theft, driver
behaviour, route optimisation,
vehicle recovery and cold
storage monitoring. However,
on average, an ROI in the 15–
20% range can be expected.”
Head of M2M, Middle East
telco

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© Analysys Mason Limited 2016
And the role of connectivity is often under-stated
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Internet ofThings:genericvalue chain
§ Offer the
network for
data
transmission
of the IoT
services
§ Connectivity
providers
Systems
integration
§ Offer the end
user module,
with the
embedded
M2M chipset
§ Device
OEMs
§ Provide the
actual
applications
thatmanage
the data
collected by
the device
§ Application
developers
§ Manage the
distribution,
supply chain
and fulfilment
§ Billing and
support
§ Provide
system
integration
services
§ System
design/
development
§ Solutions
provider
§ 5-30%
100%
DescriptionSpend
Service
provision
ApplicationDeviceConnectivity
§ 5-20% § 30-60% § 20-30% § <20%

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© Analysys Mason Limited 2016
The cost of connectivity failure can be measured in more
than just financial terms
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© Analysys Mason Limited 2016
As IoT matures enterprises need to be aware of the following
pitfalls..
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SIM Connectivity
Monitoring/
Management
Scale

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© Analysys Mason Limited 2016 12
But an unmanaged approach risks undermining the IoT
business case
Objective Impact of connectivity failure
Reduce costs
• Higher operational and maintenance costs to identify and replace SIMs
• Downtime costs if connection fails
New revenue streams • Downtime impacts on customer contracts
• Inability to correctly bill customer
Scale business • Additional costs to build new IoT solution to be able to scale
Trust and brand
• Failure undermines customer trust in your organisation
• May result in customer churn
Source: Analysys Mason

13. ProprietaryandConfidential 13
Understanding How Optimized
Connectivity Improves IoT ROI
Dan Martensson
VP Cloud & Connectivity Business Line

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SIERRA WIRELESS: Building the Internet of Things
2015 revenue: $608 million
1,100 employees worldwide
Customers in 130+ countries
2015 revenue: $608 million

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35.0%
20.7%
20.4%
23.9%
Sierra Wireless is building the IoT
Building the IoT with intelligent
wireless solutions
120 Million Devices Shipped
#1 in cellular devices
for the IoT
(1)
Source: ABI Research– June2015
Cellular Embedded Module
Revenue Market Share in 2014 (1)
Sierra
Wireless
Innovative open-
source embedded
platforms
Technology
leadership
Industry’s broadest
portfolio
20+ years of wireless
M2M experience
IoT specific
Connectivity
Complete device to
cloud offering

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Our complete device-to-cloud solution
Your
applications
& enterprise
software
Your
devices
Cellular Devices
Embedded
Solutions
Gateways
Solutions
IoT Cloud Services
Connectivity
Management
Application
Enablement
360
Operations
SIM & Connectivity
End-to-End Security & Differentiation

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Well positioned in key IoT segments
Automotive &
Transport
Energy &
Industrial
Enterprise
Residential &
Healthcare
• Automotive
• Fleet Mgt.
• Toll Collect
• User-based
Insurance
• Smart Meters
• Smart Grid
• Industrial
• Public
Infrastructure
• Sales &
Payment
• Distributed
Enterprise
• Mobile
Computing
• Home
Security
• Residential
Automation
• Patient
Monitoring
Strong global base of blue-chip customers

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Our IoT Learnings
Global operator independent IoT Services
delivered by the worldwide leader in cellular modules
1000+Customers
>2MSubscribers
180+Countries
Small & Medium Enterprises Large Enterprises & OEMS

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Our Customers IoT Goals
Mission Critical
Fixed location
EU-Wide
Difficult to service
Urban & Rural
Latin America
Access Control
Deep Indoors
EU-Wide
Maximizes potential
customers & minimizes
deployment costs
Maximizes market
potential & simplifies
management
Enables an SLA &
minimizes downtime
service costs

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Our Customers IoT Challenges
ROI, Complexity, Time-to-market, Scalability
Securing expected ROI from IoT projects
Transforming into a service driven business
Lack of focus on business value of data, customer experience
Underestimating technical complexity and risk

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Need to Focus on Measurable Objectives in ROI
Reducing:
• Service Costs
• Customer Down Time
• Mean time to Repair (MTTR)
Increasing:
• Service Revenue (MRR)
• New Customers
• Service Efficiency Gains (fewer truck rolls)
• Customer Satisfaction

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Need to Understand Your Real Connectivity Costs
• 30% of IoT OPEX is connectivity
• Hidden costs often underestimated and can double TCO
• Real cost per MB = network communication costs + Support Costs
• Downtime costs significantly impact service levels and revenue

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Network Communication Costs
Re-occurring Cost to Connect Devices
• Monthly access fee
– expensive if your deployment includes periods non-connectivity
• Optimizing Monthly Data plans
– Pay-per use – cost effectivewith low usage or fluctuating usage
– Pay per device for fixed amount of data
• Overage
– Additional charge if your usage fluctuates
• Roaming
– Devices on the move pay roaming when out of primary
coverage area

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IDC – Essential to Minimize Data Usage Costs
üSeamless network switching between high & low speed networks
üHigh usage & low devices usage on same data plan
üNo overage costs because of malfunctioning devices
üMid-cycle rate plan changes

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IOT Support Costs
• Tech Support Call cost
– Diagnose the problem
– Troubleshoot
• Service Visit Cost
– Cost to roll a truck to fix device
– Service Efficiency (truck rolls)

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Cost of IoT Downtime
• Downtime Cost
– Lost Revenue
– Poor Service Level
– SLA Compliance Penalty

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Nube: Transforming LPG supply
NubeChallenge
Sierra Wireless Device-Cloud Solution
devices platformconnectivity
AirPrime
Embedded
Modules
üFully Integrated
• Innovative start-upcompany
based in Mexico
• Focused on delivering bestin
class B-to-B-to-C services
• Start ofoperation in Mexico;
global expansion plan
• Gas levels
• Consumption
• Alerts
• Orders
Consumers
• No knowledge ofgas levels
• Constantly refueling gas tanks manually
Gas Companies
• No knowledge ofcustomer gas levels
• Ad hoc supply,ordering and delivery;
inefficientlogistics
• Payment Status
• History
• Analytics
üReady to deploy üGlobal Solution
Sierra
Wireless
Smart SIM
IoT
Acceleration
Platform
Customer Snapshot

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Coverage
Data quality
Flexibility
Simplicity
Nube’s Connectivity Challenges
IoT deployments require a consistent&
resilient data connection without
human intervention.
UNTIL NOW CONNECTIVITY SERVICES WEREN’T DESIGNED FOR IOT
TECHNICAL CHALLENGES
IoT deployments need the broadest
possible coverage to ensure machines
are always connected.
Customers connecting globalproducts
need a SIM and tools that simplify
logistics and operations.
OPERATIONAL CHALLENGES
IoT deployments have long lifespans.
Customers need the flexibility to update
providers and networks.

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TOO COMPLEX FOR IOT
Nube’s Connectivity Options
OPERATIONALSIMPLICITY EASY TO SCALEDIFFICULT TO MANAGE
TECHNICALCAPABILITY
LOCAL SIMS
• Geographically restricted
• Many MNO’s needed for coverage
• Very complex SIM logistics
• Poor support for OTAupdates (eUICC)
LACK FLEXIBILITY & COVERAGE
ROAMING SIM
• Coverage restricted to alliances
• Costs sky-rocket outside of footprint
• >1 MNO needed for coverage & cost
• Poor support for OTAupdates (eUICC)
Smart Multi-Operator SIM &
Dedicated IoT Core Networks

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Sierra Wireless Solution = Simplicity
Best Coverage
Best Quality
Most Flexibility
Multi-Operator Connectivity
Quality centric and resilient service
Carrier-agnostic subscription management
Simplicity of a Single SIM for Regional or Global IoT Deployments

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End-to-End Connectivity and Platform Services
• Bring your own SIM and/or Sierra.
• Open to any bearer: cellular, fixed,
satellite, LPWA
• All you need to connect your machine:
– Data collection
– Monitoring
– Billing
Connectivity
Management
Application
Enablement
360
Operations
Third party SIM
eUICC
SIM & Connectivity

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Real Cost per SIM
Real monthly project cost
Pricing Options ComparisonTable for PowerPoint
Number of SIMs
Project Timeline
Cost per MB
Number of Issues
Level 1,2 Support Cost
$1.00
4,020
$20 @100%
$1.00
1,327
$10 @100%
Roaming SIM
Sierra Wireless
Smart SIM
Typical Telematics Customer Connectivity ROI
Downtime/Compliance Penalty
Average Cost per Issue
$50 @1%
$30.50
$1.61
$50 @1%
$15.50
$1.10
Data Usage/SIM/Mth
Field service visit cost $200 @5% $200@2.5%
DeploymentSupportCosts
Real LT Project Cost $19,416,600 $13,293,738
TCO
201,000
1 MB
5 Years
$323,610 $221,562
Reduced by 2/3
by Smart SIM
Faster
resolution time
Lower cost per
issue
Lower total cost
of ownership
Visits cut in half

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Improve Your IoT ROI by
üFocusing on Measurable Objectives in ROI
üUnderstanding Your Real IoT Connectivity Costs
= network communication costs + Support Costs
üMinimizing Downtime Costs

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Thank You
Dan Martensson,VP Cloud & Connectivity
Business Line
dmartensson@sierrawireless.com