Secrets to
Success in the
Hot IoT Space
Discover How PLM Unlocks the
Imagination of Top IoT Companies
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How the IoT Market Will Change Product Design
The “Internet of Things” (IoT) is a term you’ve probably read in the headlines. Analysts, such as IDC, forecast IoT
revenues will reach $3 trillion in 2020 with 30 billion devices expected to be connected through the Internet.1
IPOs of IoT companies like Fitbit and GoPro, along with
Google’s investment in driverless cars and $3.2 billion
dollar acquisition of Nest’s smart thermostat system
prove the IoT phenomenon is real.
But as the volume of new IoT devices increases,
product launch failure rates have scaled way past 50
percent, according to Gartner. This puts hundreds of
billions of dollars at stake for electronics manufacturers.
With such a high product design failure rate, IoT
companies must now ponder these questions:
• How can we manage our design processes
or products better?
• Can we monetize aspects of the Internet of Things?
• Where can we use the Internet of Things to embed technologies for remote operation and
management of our assets?
• How can we extend our existing products with the Internet of Things?
• What product design and supply chain management tools will best help us succeed?
To help companies become IoT successes, Arena Solutions, the inventor of cloud product lifecycle management
(PLM), has published this definitive IoT whitepaper. With input from Arena customers, partners, and top IoT
analysts, we share their first-hand insights into the following IoT product design topics:
• Why You Should Care About IoT
• Lessons Learned from the Medical Device IoT Market
• How Cloud PLM Accelerates IoT’s Need for Speed
• How to Turn Disruptive Change Into IoT Innovation
• Why IoT Success Depends Upon a Robust PLM Ecosystem
Here’s what you need to know to unlock your imagination, turn design ideas into product realities and make money
in the IoT market.
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Why You Should Care About IoT
The Internet of Things is a product design megatrend
that is impacting how both new and old companies
innovate and turn designs into the next breakthrough.
Yet for many electronic product companies on the
outside looking in at the potential of the IoT market,
one lingering question remains:
What exactly is the “Internet of Things”?
If you’re still confused about what the “Internet of
Things” means and why you should care —you’re hardly
alone. In fact, nearly half (43%) of the manufacturing
executives polled recently by LNS Research said they
don’t know anything about the IoT market. What’s more,
only 10% say they’ve started to invest in IoT technologies.2
The concept of “Internet of Things” dates back almost a century. In 1926, Nikola Tesla said, “When wireless is
perfectly applied, the whole earth will be converted into a huge brain, which in fact it is, all things being particles of
a real and rhythmic whole...and the instruments through which we shall be able to do this will be amazingly simple
compared with our present telephone. A man will be able to carry one in his vest pocket.”
As a modern working definition, Internet of Things is the advanced connectivity of devices, systems, and services
over a variety of protocols, domains, and applications. “Things”, in IoT, can refer to a broad array of devices, such
as heart monitoring implants, biochip transponders on farm animals, automobiles with built-in sensors or field
operation devices that assist firefighters in search and rescue. The interconnection of these embedded devices will
usher in omnipresent automation in nearly all fields.
As innovative product designers dream up countless ways to exploit the inherent connectivity that will be offered in
intelligent products, you can bet your sensor-covered shorts that an endless universe of new devices will explode
upon the market. And as user-oriented computing expands, so will the Internet of Things market.
From a product design perspective, the opportunity is big and the possibilities are endless. Sensors embedded in
everything from buildings to vehicles to clothing are solving real life problems. An office that tells you the lights are
on, a bike (or a dog) quietly alerts you that its been stolen with its location, dance aerobics shoes that can let you
know when they’re worn out, and a couch could holler, belch or burp depending upon your downloadable alert
tone when it has swallowed your keys.
Imagine how much easier Pee-Wee Herman’s quest to find his stolen bike would have been with an IoT solution.
Michael Keer, CEO of Product Realization Group (PRG), a consortium of Silicon Valley experts that helps bring IoT
product companies to market, believes the IoT market will impact every aspect of our lives, and transform how
we interact with both physical and digital worlds. “From virtual reality to self-driving cars to wearable devices, the
opportunities are endless,” says Keer. “We are entering a quantified world, so hold on to your IoT hat.”
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And while Tesla’s vision for a “perfectly applied” wireless technology and “simple” tools has not as of yet proven to
be totally accurate; there’s no doubt that the IoT market has become a viable reality with commercially successful
deployments in several markets, ranging from consumer electronics and fitness wearables to medical devices.
In the next wave of IoT development, we’ll see the aggregation of connected devices propagated into truly smart
homes, smart factories, smart grids and smart cities.
Internet of Things products introduced at Consumer Electronics Show (CES) offer endlessly imaginative solutions,
ranging from do-everything wearable devices to a connected tennis racket that records your strokes. Some
products inevitable veer into the realm of bizzare with the toothbrush that connects to the Web and records your
brushing activity, letting you know when your teeth need a more thorough cleaning.
On the other hand, there are healthcare IoT devices that serve a dead serious medical need.
Lessons Learned from the Medical Device IoT Market
The Internet of Things market includes everything from consumer device (refrigerators, clothes washers, door
locks, thermostats, watches, eyeglasses and wearable items) to cars and robots of all kinds; however, health
and life sciences are one of the most compelling, yet unheralded, application areas of IoT technology; in fact, the
healthcare industry helped pioneer IoT.
All the way back in 2008, a company called Proteus Digital Health won a U.S. patent for a pill you can swallow with
a tiny sensor inside of it. The sensor transmits data about when a patient takes his or her medication, and pairs
with a wearable device to inform family members if it’s not taken at the right time. Anyone else old enough out
there to remember the film “Fantastic Voyage”?
Internet of Things
Connected Cars
Wearables
Connected/Smart TVs
Five-Year (2014-2019)
CAGR 35%
Bi
lli
on
s O
f D
ev
ic
es
Source: BI Intelligence Estimates
Tablets
Smartphones
Personal Computers
2013 2014 2015E 2016E 2017E 2018E 2019E
30
35
25
20
15
10
5
0
Number Of Devices In The Internet of Everything
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With the increasing use of sensors by medical devices, remote and continuous monitoring of a patient’s health is
becoming possible. This network of sensors, actuators and other real time mobile communication devices, referred
to as the Internet of Things for Medical Devices (IoT-MD), is poised to revolutionize the healthcare industry.
A connected healthcare environment promotes
the quick flow of information and enables easy
access to it. Improved home care facilities and
regular health updates to clinicians reduce the
chances of redundant or inappropriate care,
ensure patient care and safety, and reduce
overall costs of care. Connected solutions can
also be used to track lifestyle diseases such
as hypertension, diabetes and asthma, which
need continuous monitoring.
Peter Lucas, the COO of Epic Medical Concepts & Innovations (EMCI), a company that translates scientific
research into IoT-ready medical devices, believes the IoT market introduces particularly exciting possibilities in the
life sciences industry. Within the medical realm, the interconnection of technology is more useful than highly touted
“big data” at identifying trends, improving response times, and locating small problems before they become big
problems.
“The idea that our medical devices can communicate with the lab hardware in which they operate in a meaningful,
real-time manner is really exciting,” says Lucas. “It manifests into improving medical outcomes and finding new
breakthroughs, especially for EMCI in the area of cognitive neuroscience.”
EMCI’s most recent disruptive medical device technologies include systems that track physical patient records
to reduce errors and speed retrieval time, as well as report on the status of biological specimens in a hospital
setting. “We envision these IoT systems eventually sitting in hospitals all across the country and having the ability to
communicate with each other” says Lucas.
IoT-MD will drastically change the face of healthcare monitoring and treatment outcomes. By providing
personalized and optimized services, it will promote a better standard of living and provides a timely and cost-
effective response to help nations around the world improve patient care. Moreover, recent developments in
sensor, internet, cloud, mobility and big data technologies have led to affordable medical devices and connected
health programs, vastly increasing the potential to influence further changes.
But IoT-MD design Nirvana is complicated by increasingly stringent regulation and compliance requirements. After
all, human lives are at stake.
“It’s one thing for your microwave to diagnose itself and call a repair tech; it’s another thing entirely to have medical
information passing from device to device,” says Lucas. “I believe this will be an area that grows quickly, but will
result in missteps along the way. I can almost guarantee there will be breaches of patient data, unanticipated
consequences, etc. But on the other hand, interconnectivity of this type will also bring about medical innovations
that would otherwise never happen.”
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For the IoT-MD market, a modern design solution that consolidates all compliance information, including bill of
materials (BOM), the design history file (DHF), and the device master record (DMR), into one centralized system
is imperative to meet increasingly stringent regulatory audits. FDA regulations and product quality business
processes include: 21 CFR Part 11, 21 CFR Part 820 and CAPA (corrective action and preventive actions).
And true, while compliance challenges are more treacherous in the IoT-MD space than other industries, the need
to adopt disruptive change while juggling stringent quality concerns impacts IoT companies of all stripes.
How Cloud PLM Accelerates IoT’s Need for Speed
While pain points, regulatory hurdles, and adoption rates can vary widely across industries, one challenge
that impacts every IoT company is the critical need to move fast. To ensure first mover advantage in a highly
competitive industry, more and more IoT consumer electronics companies rely on a cloud-based product lifecycle
management (PLM) solution to innovate while accelerating time to market. This is particularly true when products
have complex embedded electronics with a high rate of change.
A critical advantage of cloud PLM systems is that the solutions are maintained by the provider, which means setup
is easy and, most importantly, fast. And the flexibility to add and subtract licenses and modules is key to becoming
short-listed. On-premise PLM, on the other hand, has an expensive and time-intensive integration process, which
requires software licenses and a significant upfront infrastructure investment.
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“What I see most often with IoT clients is that they want to get up and running quickly with basic functionality,” says
Keer. “It’s part of the lean startup mentality. And as these companies grow in size and complexity, they need a
solution in place that has the cababilities to support them as they scale, without the need to switch during a critical
business ramp. Companies don’t want to be burdened with the installation, setup, and maintenance of on-premise
computer networks anymore.”
The speed of disruption is so fast in the IoT space, engineering teams must be rock solid in their delivery. Many
failed emerging IoT companies are unable to meet aggressive design and delivery schedules because they did not
have the proper tools in place to manage design data to meet their original product delivery estimates.
According to Manny Marcano, president and CEO of EMA, a company that offers a design automation solution for
Cadence OrCAD, “A lot of these companies are charging fast to grab a piece of the IoT market. And a lot of times
they’re starting with a back of the napkin design and a quick prototype to get some VC funding and then they’re off
to the races,” says Marcano.
“Companies in the IoT space are actually rolling out PLM at the same time they are building products and taking
orders. So if you have a design solution that can be implemented quickly, without a lot of overhead to get a
consumer electronics stamp and FCC approval— that’s a big value to them.”
For OEMs, the key to moving fast in the rapidly changing IoT market is maintaining rigor, discipline and forward-
looking strategies. Successful companies keep abreast of tech developments and make well-researched
judgment calls about how and when to pull the trigger and adopt new innovations into a product design; however,
companies without the vision and tools to respond to change and adopt new technologies quickly could lose the
razor’s edge in this competitive high tech market.
Innovation is the holy grail of many product companies as they seek to differentiate their products from those
of competitors. Integration of quality processes into the design cycle through collaborative quality tools can
give companies the competitive edge they seek. All it takes is a shift in thinking, a willingness to embrace user
feedback, and a methodology to drive quality into the product development process.
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How to Turn Disruptive Change Into IoT Innovation
Change happens fast and manufacturers must react quickly to embrace it. New technological developments
impact product design and require OEMs to have the tools in place to streamline design processes.
By minimizing costly product errors and shipping delays — especially for a sector with complex products and
frequently changing parts, such as batteries —a cloud PLM solution helps companies get to market first, stake a
larger market share, and maximize profit margins.
“Some of the biggest disruptions in IoT products are changes in electronic components. Sensors, controllers, and
batteries are all rapidly evolving to better support new applications like wearables that need smaller and lower
power consuming parts,” says Keer. “After all, you wouldn’t want to buy a smart watch that weighs 10 lbs and runs
out of juice in 4 hours.”
PLM helps OEMs plan with the flexibility to be agile, make changes
quickly and implement based upon supply chain issues, tech advances,
competition and consumer demand.
According to Keer, a cloud-based PLM solution is critical to keep track
of these electronic components. A better understanding of which parts
are going obsolete can provide a competitive edge for IoT companies.
A strong PLM system enables the successful execution of a technology
pivot, facilitates a contract manufacturer switch, and accelerates a new
product launch.
“As engineers collect components, operations would be adding those
components into Arena PLM. They then can figure out lead-time for each
component, which impacts time to market,” says Keer. “So if an engineer
selects a component that has a two-month lead-time, operations may say,
here’s an alternative part, which has a one-week lead time. This example
drops straight to the bottom-line of time savings on their critical path which
has a direct correlation with collapsing time to market.”
Most new IoT companies have global design and supply chains, which afford them greater flexibility during
development and the ability to scale quickly as volumes ramp. Strong collaboration and management tools to
support these global chains are now a must-have for these businesses. The old bootstrap combination of Microsoft
Excel, DropBox, Google, etc. are too risky as these business move from idea to scale.
IoT companies we interviewed unanimously concurred that a cloud-based PLM system offers OEMs the flexibility to
be nimble, make changes quickly and implement based on supply chain issues, tech advances, competition and
consumer demand. The overwhelming consensus is that on-premise PLM simply cannot provide these benefits.
Note: Sierra Wireless, a leading developer of industry-leading wireless PC card lines for portable computers, turned
to Arena to reduce ECOs and streamline processes. “With Arena, it’s easy to track product changes, and the
amount of work we are able to achieve with Arena is unbelievable,” says Sierra Wireless.
Gartner predicts that one in
five vehicles on the road will
have some form of wireless
connection by 2020.
Mercedes-Benz already has
a partnership with Nest that
adjusts the temperature
when a driver arrives or
leaves home. And it's really
good news for Arena
Solutions customer Sierra
Wireless, which already has
Ford, BMW, Tesla, Volvo,
and Toyota as customers.
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Why IoT Success Depends Upon a PLM Ecosystem
The only way to manage the IoT product lifecycle – from regulatory compliance, to global monitoring, quality
assurance, risk management and part nonconformance – is through a holistic approach that brings all of these
moving parts together into a single, integrated view. When quality, design control processes, and risk management
are embedded as an integral part of the day-to-day product design and development cycle, OEMs can
dramatically reduce supply chain oversights, employee missteps and product design errors.
“A lot of these IoT companies are growing very quickly and are looking for a ‘one-size fits all,’ off-the-shelf, plug-
and-play environment,” says Marcano. “Because Arena and EMA are working together, we’re able to address that
need on the electrical side and the PLM side, so we can get them up and running in a matter of hours, in some
cases.”
A highly integrated and robust design system is imperative to address hurdles, such as obsolescence, single-
sourced components, regulation compliance, and market availability of electronic components. Arena’s suite of
interconnected solutions connected with the product record offers a higher level of visibility into design processes
to offset the risks of quality failure.
“While Arena was helpful across a broad range of issues, the interconnection between Arena PLM BOMControl
and Arena Quality is where the value really shows itself,” says Lucas. “We know when we change a specification
on one part of one of our devices, immediately what other parts, products, procedures, and manufacturing
processes are affected. We can jump straight from there into engineering and document change requests and
orders, as those can interconnect with our CAPA process within Arena Quality.”
An IoT company with design tools that can store, control, and communicate their product data across global
design and supply chains will help overcome design challenges, such as security, compliance and corralling
disruptive change.
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“The need for product design tools has always been there, but now it’s increased because of the ubiquity of
IoT products that will scale even more in the next five years,” says Kevin Rowett, Director of Graphite Systems,
which makes unified data analysis products. “IoT electronics will now be in products that previously did not have
components. In five years, a refrigerator that doesn’t report its temperature doesn’t make it to market anymore.”
He continues, “When it comes to compliance stuff, you better have a design tool that ensures you have the
documentation that shows you actually are compliant with these various things. We’ve learned over the last 20
years that there’s a direct correlation between quality and design solutions.”
It’s an exciting time for product companies. With the right design tools in place they can streamline processes,
change directions, and meet demands for new opportunities in this booming market.
By 2020, the amount of Internet-connected things will reach 50 billion, with $19 trillion in profits and cost savings
over the next decade, according to Cisco Systems.5
PLM was created to allow all product companies — not just IoT OEMs — to better manage documents to
streamline their extended supply chain efficiencies, improve cross-functional collaboration and increase enterprise-
wide visibility into the design process. In addition, Arena’s PLM applications simplify bill of materials (BOM) and
change management for organizations of all sizes, especially IoT companies.
By this very function alone — bolstered by the fact that we’re a cloud solution that eliminates setup delays — IoT
companies can accelerate time to market with the ability to continuously manage costs, requirements, and design
specifications from the early phases of the process.
PLM helps IoT OEMs plan with the flexibility to be agile, make changes quickly and implement based on supply
chain issues, tech advances, competition and consumer demand. By minimizing costly product errors and
shipping delays — especially for a sector with frequently changing parts — Arena’s PLM solution helps IoT
companies get to market first, stake out a larger market share, and maximize profit margins.
And that’s why over 100 innovative IoT companies (Fitbit, Pebble, GoPro) rely on Arena to unlock their imagination,
speed innovation, and tame even the most unconventional design ideas into the IoT’s next big thing.
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Bibliography:
1) http://www.techradar.com/us/news/internet/cloud-services/the-internet-of-things-will-be-a-3-trillion-industry-
by-2020-1272263
2) http://www.industryweek.com/supply-chain/supply-chains-need-be-ready-internet-thingsz
3) http://www.gartner.com/newsroom/id/2819918
4) https://www.idc.com/getdoc.jsp?containerId=prUS24794914
5) http://www.cisco.com/c/en/us/solutions/collateral/enterprise/cisco-on-cisco/Cisco_IT_Trends_IoE_Is_the_
New_Economy.html
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About Arena
Arena pioneered cloud PLM applications. The company’s products,
including BOMControl, Exchange, and PartsList, enable engineering
and manufacturing teams and their extended supply chains to
speed prototyping, reduce scrap, and streamline supply chain
management. Arena cloud PLM applications simplify bill of materials
and change management for companies of all sizes, and offer the
right balance of flexibility and control at every point in the product
lifecycle—from prototype to full-scale production. Based in Foster
City, Calif., Arena has been ranked as a Top 10 PLM solution and
also holds a spot on the San Francisco Business Times’ Best
Places to Work List for 2013.
Contact
Arena Solutions
Foster City, CA 94404
P. 650.513.3500
F. 650.513.3511
Cloud. Connected. Content. Makes Making Easier.
Author
John Papageorge, the author of “Secrets to Success
in the Hot IoT Space,” has worked with some of the
biggest names in technology, including Oracle, IBM,
Hewlett Packard, Cisco and Silicon Valley Bank, to
analyze and communicate emerging business and
technology trends.
Secrets to Success in the Hot IoT Space
As the volume of new IoT devices increases, product launch failure rates have scaled way past 50 percent. Here’s what you need to know to unlock your imagination, turn design ideas into product realities and make money in the IoT market. Download to learn more.
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