The Future of I oT

It’s not just about the data anymore

December 2020
It’s not just about the data anymore
The early days of IIoT focused on connecting everything. Next, it was about collecting
massive amounts of data. Leading IIoT platforms now realize that, while connections
and data are the foundation, robust analytics and AI must deliver operational insights
that lead to action.
If deep insights driving action are not the result, investment in IIoT is a fool’s
errand.

@2020 KPMG Corporate Finance LLC, a Delaware limited liability company. Member FINRA/SIPC. KPMG Corporate Finance is a subsidiary of KPMG LLP, a Delaware limited liability partnership and a member
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I oT in Action IIoT systems
inclusive of
Critical Asset Monitoring in IIoT sensors, tags,
location
Robotic arm vibrates IIoT analytics identify the Robotic arm is promptly
1 outside of its pre-defined 2 issue and notify the 3 repaired, staving off
awareness, data
tolerance range and control room failure of expensive aggregation, and
automatically shuts down equipment and avoiding analytics enable
operational disruption monitoring of
critical assets and
processes across
the manufacturing
facility
1

2 Amassed data
3 delivers true value
A with the
application of
robust analytics,
AI, and machine
learning

Value is
measured by the
ability to assess
deep insights
Location Awareness in IIoT and take action
The IIoT platform is able to confirm, real-time, that the right technician is at the proper station on the
A line, she has selected the correct bolt, inserted that bolt in the proper location of the product, and
tightened the bolt to the specified foot-pounds of torque with an air wrench that was automatically
characterized for that specific model of the product when it arrived at the station
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Prevailing I oT Themes
Fast, secure, and data-driven actions are validating investments in IIoT

Edge computing Edge computing enables data analytics to take place at or near the data source (at the network’s
allows the decision to “edge”), moving intelligence closer to the source of the data from the cloud or on-prem compute
be made at the event center. Edge computing is gaining importance as it allows for a reduction in the amount of data that
must be transported for monitoring purposes.

Private 5G will allow The introduction of private 5G industrial networks is bringing significantly greater network speed
faster decisions and bandwidth to quickly drive more intelligent, real-time analysis and actions.
across an even greater
number of things

AI is empowering AI is enabling robust IIoT systems to model data and take action without the need for human
action without human intervention. Predictive maintenance, critical asset monitoring, real-time environmental awareness,
intervention and machine learning are among the applications that are benefiting from AI tools.

Security is crucial in The sheer number of stakeholders in a connected world represent many different views of the
an increasingly threats posed by vast networks of connected devices. Purpose-built IIoT Cyber Security platforms
connected IoT world are able to secure hundreds, sometimes thousands, of access points and data transport streams,
and detect and respond to emerging threats, ensuring the integrity of IIoT deployments.

@2020 KPMG Corporate Finance LLC, a Delaware limited liability company. Member FINRA/SIPC. KPMG Corporate Finance is a subsidiary of KPMG LLP, a Delaware limited liability partnership and a member
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 Edge Computing Brings a First Level of Data Analytics to the Source
Edge Computing in Manufacturing Edge vs. Cloud Computing
IoT Sensors
Cloud / and Devices
Data Center

Raw Material Personnel

Scheduling
Inputs
Edge Computing Cloud Computing
Gateway
• Decentralized • Centralized
• Low-latency • High-latency
• Saves bandwidth • High-processing and
computing power
Connected • Potential data privacy
Smart Tools required
Equipment and cybersecurity
issues • Cybersecure

Mobile
Intelligent
Devices Smart HVAC Smart edge devices
and Climate Lighting
Controls

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 5G Use Case: Manufacturing
Today Supply chain
5G vision High-bandwidth,
low-latency
Inbound
logistics Raw material Edge computing collects
Planning & inventory data real-time to direct the
scheduling truck into the appropriate
receiving bay

Connected
machines
Machining
setup
Quality
& safety Tooling
management

Manufacturing Setup and

process Work under adjustment
management AI-based
planning
AR guides
workers through
complex tasks
No need
to wait!

Finished goods
inventory
Outbound
logistics
Distribution
Finished goods and
Distribution integrated logistics

— Highly agile process

— Responsive to customer demand and specifications
— Linear process
— “Always-on” – no breakdowns
— Long lead times
— High efficiency and agility
— Susceptible to breakdowns
— High potential for waste

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 AI is a Key Driver in Transforming IoT Analytics Capabilities
IoT Devices in Manufacturing Analytics and AI

Collect and organize

data
Collecting and
Analyzing

Analyze and model the

data


Predict an outcome

Acting and
Predicting
Make a decision

AI enables sufficient computing and analytics capability at a specific location, allowing systems to
take action and continuously learn. It is the next stage of the IoT continuum where AI enables real-time
decisions by the systems in which it resides to determine immediate actions or to learn from its
operating history.
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Security is Crucial in an Increasingly Connected IoT World

Collaborate with industry and Security strategies must be flexible

regulatory groups to accelerate the and broad enough to address the
standardization of IoT as it becomes a ever growing and rapidly evolving IoT
critical and mainstream solution sector

IoT Ecosystem

Seek opportunities to drive Businesses must invest in

value from security and integrating security, privacy,
package security as a and trust across the entire IoT
differentiator to an IoT solution eco-system of suppliers,
partners, and customers

Security must be built-in from the ground up

with the customer in mind as vulnerabilities
can become large liabilities

@2020 KPMG Corporate Finance LLC, a Delaware limited liability company. Member FINRA/SIPC. KPMG Corporate Finance is a subsidiary of KPMG LLP, a Delaware limited liability partnership and a member
firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 8
 I oT Landscape
IIoT / Industry 4.0
Testing & Measurement IoT Analytics
Bosch Cognizant GE Honeywell
Allied Reliability Cognizant Dynamic Risk C3 AI Greenwave PTC SaS
Nokia PTC Siemens
National Instruments Sight Machine Viavi

Smart Lighting Building Controls

Creston Leviton Hubble Intermatic Osram Legrand ABB Advantech Cisco Honeywell
Johnson Controls Schneider Electric Siemens

Systems Monitoring Access Solutions

Assa Abloy Stanley Security Johnson Controls Siemens
Advantech Schneider Electric Intel Siemens Johnson Controls

KPMG CF is in regular dialog with leading global IIoT providers as well as emerging companies bringing new technologies and introducing
unique business models. For a deeper discussion on these spaces and the companies participating, let’s schedule a call.
@2020 KPMG Corporate Finance LLC, a Delaware limited liability company. Member FINRA/SIPC. KPMG Corporate Finance is a subsidiary of KPMG LLP, a Delaware limited liability partnership and a member
firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 9
Recent I oT Technology Advancements
Rockwell and Microsoft partner Rockwell Automation and Microsoft signed The partnership will focus on digital twin
on digital twins for industrial a five-year deal to combine their expertise solutions and will save on infrastructure
transformation in operational and information technology costs, accelerate time-to-value, and
and deliver new edge-to-cloud IoT increase productivity.
Enterprise IoT Insights: October 7, 2020 solutions, bringing connectivity and
intelligence to industrial transformation.

ABB introduces information and Engineering conglomerate ABB released an
operation technology analytics analytics software and services suite to
bundle to release 80% of trapped combine data from information and
Industry 4.0 data operation technology called Ability Genix to
collect, contextualize, and convert data from
Enterprise IoT Insights: July 29, 2020
across industrial and engineering functions.
ABB estimates most industrial companies
only use 20% of the data they generate
which limits their ability to apply data
analytics meaningfully. ABB’s solution will
work to tap the remaining 80% of data.

Sierra Wireless provides ‘full- Sierra Wireless has been selected by IoT Ekatra has integrated Sierra’s ‘full-stack’
stack’ IoT solution for industrial tracking firm Ekatra to predicate its Octave IoT platform into its new product.
tank monitoring industrial tank monitoring solution and The solution combines hardware,
simplify development and deployment. connectivity, and management software in
Enterprise IoT Insights: September 30, 2020 a single bundle.

@2020 KPMG Corporate Finance LLC, a Delaware limited liability company. Member FINRA/SIPC. KPMG Corporate Finance is a subsidiary of KPMG LLP, a Delaware limited liability partnership and a member
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Recent I oT Deployments
Caterpillar IIoT deployment Caterpillar's Advanced Component Through its IIoT deployment, Caterpillar
generates rapid operational Manufacturing Division has deployed an hopes to achieve advanced analytics and
insights and business impact IIoT technology to enable visibility of key process automation on a scale not
process operation data that directly previously achieved.
ROKLive Digital Strategists Conference: June 10, connects to the FactoryTalk InnovationSuite
2020
ThingWorx platform.

Texmark deploys HPE’s IIoT Texmark is creating a ‘Refinery of the The interconnected plant will help mitigate
Solution, transforming the oil and Future’ which is leveraging IIoT equipment failure before it happens,
gas industry technologies that collect data from pumps enhance decision making, and reduce
with sensors and utilize machine learning to employee risks to keep the plant running at
IoT M2M Council (contributed by Hewlett Packard create new insights for multiple job peak efficiency.
Enterprise): August 10, 2020
functions.

ABB deploys Ericsson’s Industry ABB is the first in Sweden to commercially ABB’s factory is connecting essential tools,
Connect solution to increase use the latest version of the Ericsson handheld computers, and other devices as
productivity with 5G-ready Industry Connect 5G-ready network in a part of its digitalization process to improve
connectivity within its factories fully operating factory and manufacturing connectivity quality and efficiency via
site. Ericsson’s Industry Connect solution.
Ericsson Public Press Release: April 23, 2020

@2020 KPMG Corporate Finance LLC, a Delaware limited liability company. Member FINRA/SIPC. KPMG Corporate Finance is a subsidiary of KPMG LLP, a Delaware limited liability partnership and a member
firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 11
I oT M&A Activity Recent IIoT Transactions

Date Target Acquirer

Acquirer Type
Strategic (S) /
Financial (F)

Many companies see M&A as the

fastest way to bring the newest and Nov-20 Camo Analytics Aspen Technology S

best IoT technologies to their

customers, especially as companies Oct-20 Bright Wolf Cognizant S
work quickly to respond to the
impacts triggered by COVID-19. Oct-20 Nanotron Technologies Inpixon S

Companies are frequently buying IIoT Sep-20 SALT Solutions Accenture S

capabilities that will advance their
existing operations, rather than XanTec Steuerungs- und EDV-
Sep-20 Dover S
Technik
spending on research and
development to build these Aug-20 Perpetuum Hitachi S
capabilities.
Jul-20 eSoftThings SAS Lacroix Group S
While the IoT industry remains highly
fragmented, private equity firms are May-20 Trihedral Engineering Delta Electronics S
increasingly looking to IIoT as a
significant opportunity to build market Mar-20 Sentient Energy Koch Engineered Solutions S
leaders and realize significant returns
as the industry continues to grow.
Feb-20 Adesto Technologies Dialog Semiconductor S

Sep-19 CollabNet Version One TPG F

Jul-19 Zenith Technologies Cognizant S

Ubisense’s SmartSpace
Jan-19 Investcorp F
Business Unit

@2020 KPMG Corporate Finance LLC, a Delaware limited liability company. Member FINRA/SIPC. KPMG Corporate Finance is a subsidiary of KPMG LLP, a Delaware limited liability partnership and a member
firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 12
Select I oT Industry Consolidators
Dec 2013 Aug 2014 May 2015 Nov 2015 Jan 2016
Establishes Remote Strengthens AR solutions Enhances
Thingworx IIoT platform Axeda monitoring Coldlight position in IoT Vuforia Kepware technology
solutions market
PTC
Deal Value: $118M
Deal Value: $130M Deal Value: $166M Deal Value: $104M Deal Value: $60M
EV / Rev: 5.9x

Oct 2016 Dec 2017 Feb 2018 Jul 2019

Asset Cloud-based Apex Asset AI and machine
Mtell optimization RtTech IIoT software optimization Mnubo learning solutions
solutions Software and edge Optimisation solutions
Aspentech connectivity

Deal Value: $37M Deal Value: $12M Deal Value: $23M Deal Value: $78M

Apr 2018 May 2018 May 2018 Jun 2018

Real-time Digital
locating
J2 Building
sensory Building Smart
building
Agilion automation Enlighted
solutions Innovations solutions systems Robotics solutions
Siemens
Value Not Disclosed Value Not Disclosed Value Not Disclosed Value Not Disclosed

Feb 2016 Mar 2016 Jul 2016 Jun 2017 Dec 2019
Critical Security and Scanning, Industrial Process
infrastructure RSI Video intrusion mobile cyber Rebellion automation and
Xtralis protection Intelligrated Nextnine
Technologies detection computer and security Photonics gas detection
Honeywell solutions solutions voice solutions solutions solutions

Deal Value: $480M Deal Value: $123M Deal Value: $1.5B Deal Value: $42M Value Not Disclosed

@2020 KPMG Corporate Finance LLC, a Delaware limited liability company. Member FINRA/SIPC. KPMG Corporate Finance is a subsidiary of KPMG LLP, a Delaware limited liability partnership and a member
firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 13
We Are One of the Most Active M&A Advisors in IoT (1)
The IoT sector team at KPMG Corporate Finance has become one of the most prolific M&A advisors in IoT,
having closed more than 18 M&A transactions. Through deep IoT domain experience and global reach, our
team has become a preferred advisor to industry leaders, financial sponsors, and emerging innovators alike.

Representative
Transactions* Project Project
Array Clover in partnership with

Sell-Side Sell-Side has been acquired by Has sold its

has acquired SmartSpace division
to
has acquired

IoT / Fleet Management IoT / Fleet Management IoT / Smart Building Industrial IoT
Connected Vehicle Industrial IoT

has acquired divested its Smart

has been acquired by has been acquired by has been acquired by Traffic and Tolling has acquired the M2M
Technologies business of
business to

IoT / Telematics
Industrial IoT Smart Building IoT/Automated Retail IoT / Smart Traffic IoT
Solutions

has sold has been acquired by a subsidiary of

Strategic Advisory FreeWave has been
related to Connected has been acquired
acquired by its founder
Vehicle by
a portfolio company of has acquired
to

IoT Platform Connected Vehicle Industrial IoT IoT / Connected Car Industrial IoT
IoT/M2M

*Represents the global Corporate Finance practices of KPMG International’s network of independent member firms.
(1) Ranked as one of the leading M&A advisors in 2019 for number of deals closed based on Refinitiv rankings; Each set of figures is taken from the league
table press releases issued for that year. Middle market is defined as deals less than US$500 million
@2020 KPMG Corporate Finance LLC, a Delaware limited liability company. Member FINRA/SIPC. KPMG Corporate Finance is a subsidiary of KPMG LLP, a Delaware limited liability partnership and a member
firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 14
Contact Us
KPMG Corporate Finance LLC
Joseph Radecki Joe Boleski Patrick Reedy
Co-Head, Director, Associate,
TMT Investment Banking TMT Investment Banking TMT Investment Banking
Corporate Finance Corporate Finance Corporate Finance

jradecki@kpmg.com josephboleski@kpmg.com preedy@kpmg.com

+1 312 665 4401 +1 312 665 4043 +1 312 665 1240

KPMG Strategy
Greg Corlis
National IoT and
Private Network
Leader

gcorlis@kpmg.com
+1 404 398 4422

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@2020 KPMG Corporate Finance LLC, a Delaware limited liability company. Member FINRA/SIPC. KPMG Corporate Finance is a subsidiary
of KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
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