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IoT, the Internet of Things,

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is actually a bigger phenomena

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and will have a bigger impact on us

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than the internet itself.

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IoT today has become much more pervasive

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than I think all of us realize.

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The cost of sensors has gone down dramatically.

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The cost of transmission of data

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has improved 20x.

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The cost of storing all this data

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has gone down tremendously,

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and what all of that does is it allows us

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to collect all this data,

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to connect all these devices,

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and fundamentally change how we all work,

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live, and play.

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If you look at wearables,

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the smartwatches that we wear, that's IoT.

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If we look at cars and how cars are now connected

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to the internet,

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they're providing you data,

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that's IoT.

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There's almost no aspect of life

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that is not going in the direction of us sensoring

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that real world activity and connecting us

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to that real world.

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The foundational and more interesting changes

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are on how we interact,

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how we impact and engage with our environment,

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how we look at ecosystems and value chains differently.

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My favorite example is around the insurance industry.

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If you allow them to track the usage of your car,

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they'll send you a little dongle in the mail.

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They will track how far you go above the speed limit,

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how many left turns you make,

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how many right turns you make.

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Because of that,

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they can give you a 20% to 30% discount.

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That's the entire insurance company focusing

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on what is the best price to target

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and what value to provide to you?

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So that micropayment of insurance

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is a fundamentally different way

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of that ecosystem between the insurance companies,

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the car companies thinking differently.

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You really need to think about

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an integrated, holistic ecosystem of capabilities,

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of stakeholders, above and beyond a supply chain,

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above and beyond your service providers, and so on.

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Your success will absolutely depend

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on the quality and the engagement with your ecosystem

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to deliver value to your customers.