HORIZONTAL IOT DATA AND THE INTERNET OF THINGS PLATFORM

HORIZONTAL IOT DATA AND THE INTERNET OF THINGS PLATFORM EPISODE 58 PODCAST TRANSCRIPT With me today on the IoT Business Show is Nigel Upton. Nigel is Director & General Manager of IoT solutions at HP Enterprise. Nigel has led multiple businesses at HPE in Telco, Unified Communications, Alliances and software development. I introduced Nigel at Internet of Things World and liked his presentation so thought I d invite him on the show. Nigel, welcome! Thanks, Bruce. It s a real pleasure to be here. What have you been working on lately in the IoT sphere of things? We ve been busy rolling out our platform. HP Enterprise has quite a few assets in the world of IoT. We have a universal IoT platform, which is if you like the data side, the Application Enablement side that deals with the data. We have connectivity pieces where we have our own Wi-Fi connectivity solution through a company were acquired called Aruba. This stuff s pretty clever. At that event, we ve arrived next to the stadium for the 49ers and in the stadium, they deployed several thousands of these Aruba Beacons and that means that as you walk in the stadium you launch the app, the app will guide you to your seat. If you want to order food you can order either from the app or you might want to go and get it. Then it ll guide you to the nearest stand for your favourite beverage and it will guide you there. It s very, very good; it s putting in a dense amount of beacons and being able t o guide you in any way you want. And when you think about the Internet of Things, you can also start finding lots of things using this Aruba solution with beacons to be able to do very accurate location of things using Wi-Fi. Nice. And that s Levi s stadium that you were referring to? I beg your pardon; I sometimes forget the acronyms because football to me means something else entirely. I m still suffering from the humility of England losing to Iceland. Well, we suffered our own humility here in California because if you follow basketball our beloved Warriors lost as well. I saw that but I didn t feel too bad about it. You guys won last year and maybe it was their turn. They hadn t won for over 50 years, right? Yeah, that is true. IOT-INC. 1 AUGUST 16, 2016

We also built platforms 5:00 and for us the Edge computing stuff is starting to get really interesting. We ve launched new Edge computing devices, which we call the Edgeline. We had already launched the EL10 and EL20 which is low-end limited amount of computing power but fits certain use cases. And now we ve just announced much larger Edge devices, the EL1000 and EL4000 so much more computing power. That s really good for where you can t send the data to the cloud, you re in environments where either there is no connectivity so think about oil platforms or at the production side of energy, you re in oil fields or out some place drilling or extracting things in the middle of the Australian outback but you don t have a connection so you can t really start sending data into the cloud to perform analytics or anything else so instead you do that closer and closer to where the thing is for the Internet of Things and you re needing more and more computational horsepower to be able to do the data crunching and perform the analytics almost in realtime. It makes a lot of sense for companies coming from IT obviously but there are two sides to networking and really you got the OT side, too and bringing the two of them together both the IT and the OT into that fog layer that you re kind of talking about is kind of one of the Holy Grails. Are you looking at Operational Technology as well as on the IT side? We see that as a partnership because our expertise is really from the consumer side coming through to the enterprise. The operational side, it s different. Being able to look at a locomotive upside down having sensors being placed on it or a jet aircraft engine where the sensors go that s not our business. The GEs and the Siemens and the ABBs and the Schneider Electric those companies know that stuff so well. So you re picking it up then right at the seam there, right where the OT-IT seam is? Absolutely, we join with them. We do a number of things. We announced the partnership with GE with the Predix platform; we announced that a couple of weeks ago. We will announce a whole bunch more and we will partner with those guys in a couple of ways. One is they need a compute platform and so we partner with them for finding the infrastructure the EL1000, EL4000, that type of thing. Second is we bridge the gap where IT meets OT. We are very comfortable on the enterprise and consumer space; we know what we re doing there but it s having the partnership that allows our systems interact with their systems; this is something we know how to do as well. It s something that s inevitably is going to happen and as we get those two systems to talk to each other then you start being able to digitize the whole value chain from the consumer, if you look at energy from the gas meter through to the management of the energy all the way back to the production of the energy, that way you digitize everything which is I believe what we re after. That s right. The communication part that you re talking about is complicated because you re talking protocols. But is HP going to provide hardware for gateways? That s IOT-INC. 2 AUGUST 16, 2016

what they call it, right? In the OT side, we ve got gateways. In the IT side, we ve got routers, switches. Will HPE also be providing hardware on the OT side or again, strictly from the IT side? We will be providing the compute platforms the EL1000 and EL4000 for the OT to do more and more processing at the Edge. That s what I thought you meant. I just didn t know what the acronym meant and it s good to explain it. Nigel, tell us a little bit about yourself and your background in IoT. I joined HP a long time ago, years and years when child labor was still legal. Because I was brought up in what used to be Rhodesia back in the day turned into Zimbabwe, lived in the UK and Germany and the US. I started on the IoT side about 5 years ago when I was asked within HP to form an M2M taskforce. 10:00 Back in the day we were dealing primarily with smart meters when they were being rolled out. So I ve been involved that long and then I left HP, did some work in startups with drones. Again, it s more the same stuff, it s Internet of Things. Then I decided I actually had to get a job that actually paid you so I re -joined HP. But the industry of IoT obviously has been around for a long time with RFID tags. IoT Under a different name. Exactly but finally we have a cool name that everybody s grabbed hold of and there are shows every week on this and it s a bold level decision now. Business units are being formed in all of these major companies and you re seeing compani es like Schneider Electric just pivot entirely and say, IoT is where our future is and we are absolutely committed. We re building our own platforms. It s fast how this has changed so rapidly. And then you look at things like connectivity and the change that s gone because remember companies like the LoRa Alliance and Sigfox weren t really around until about 2 years ago. And suddenly you have all of these additional choices that you can make whereas before it was very much you have one choice and if you aren t going to use a cellular network then you have to build your own network and now you got all these additional choices out there. It s exciting times; it s moving very rapidly. Has HP done step 2? Often there are a couple of steps. Like you said, ther e are few companies that are all-in, Schneider Electric s one of them; we had Prith on the podcast a little while ago. PTC s another one; I ve interviewed their analytics folks. GE is another one. They re all in. We ve had a couple of them, I don t know if we had the on the podcast but we definitely had them on the videos and meetups. First step, identifying IoT, bring it up to the board level. Second step, sometimes you re going to figure out how to do reorganization. But what s really interesting is third step. Third step, when you start becoming accountable to the street by drawing lines around your P&L in different ways and now calling it IoT, breaking it out. So has IOT-INC. 3 AUGUST 16, 2016

HP taken this step yet? Because I think it s going to happen if you have it. Have you taken the step yet to reorganize the P&L to actually start showing the street your IoT revenue? That has not been done yet as far as I m aware but that s a little bit above my pay grade as they would say in the military. I can t comment on that. You know what I mean though, right? Because Intel has done that, GE obviously has done that; a number of companies have done that where they ve now just reorganized. I think what the significance is beyond it being potentially a parallel trick and something to feed off the hype because for the street that s something that s interesting. But the counter side of that and what I think is more interesting is it does provide this accountability, it does forces accountability into this business and so it really does show a level of seriousness. I don t know if it s above your pay grade, I m sure when they decide to do it they re going to talk to you. I don t know, I m guessing if you guys are really serious I m guessing this might be a next step for you. We continue to make announcement after announcement about our IoT offerings and we had some big announcements three weeks ago with one of our events in Las Vegas called HP Discover where we announced the new Edgeline service, we announced new functionality form the Aruba business, new analytics that would now run on the Edge. Before that, you and I met at IoT World where we announced the universal IoT platform. So we re doing announcement after announcement just to show how important this market is. But as for reporting back to the street, creating specific P&Ls around IoT, that I can t comment on. We re just doing announcement after announcement; we re doing a lot of stuff around connected car as well as smart cities, it s going everywhere. The big announcements of our collaborations with companies like GE and Predix and with National Instruments, what I would suggest is hit our website because there is a lot of stuff happening on there. There s no doubt in my mind that HP is taking this very, very seriously indeed. Prith (Banerjee) used to be at HP; he used to run HP Labs which was a very high profile, a very important job. The groundwork that Prith laid what we re looking at now, which is a lot of the IoT stuff, that foundation was laid when he was running HP Labs. 15:00 Before he went to Accenture? Yes, exactly. Let s dig into it. Let s start digging into the technology and a little bit about the business. I d like to get first your take. We re going to talk about IoT platforms today. It s always an important subject. And disclaimer, I always recommend to all my clients to use an IoT platform. It s plumbing and unless plumbing is part of your core competency, it just, in my mind doesn t make sense. Business models make sense. IOT-INC. 4 AUGUST 16, 2016

I like to talk about IoT platforms today. And I lik e to talk specifically to start anyway with how to choose an IoT platform. Nigel, how about if you can take us through what you consider your top 5, 4, or 6 areas, whatever it is, to consider when you re choosing an IoT platform? It s different for different folks. However, what we do see is a common set of challenges when you roll out an IoT platform. Often you ll find that customers will start where they find a device, a very cool device, it could be a tracking device or smart meter or something. And then there s an application that s tied, that s hard-coded to that device. It looks very easy and it s relatively simple to roll out and there s only one form of networking, you do that and away you go. Then the problems start happening when you have another d evice and another device and another device and if they re all hard-coded to their own specific applications then by the time you get to 10 devices with 10 applications, all hell breaks loose because you don t have a common data model, you can t perform an alytics on all of the data because it s in different formats, you ve got different types of security, different management all sorts of stuff and it s difficult. The first lesson that we share with our clients is no matter who you re dealing with first of all, have a data-centric platform that allows you to be able to gather the data in a consistent format and connect lots of devices to it and it should support any type of connectivity. We were talking to our major car manufacturers and car manufacturers have been doing connected cars for a while and these guys said to us, Look, if anybody else comes and asks us or tells us they have another killer app, we re going to kill them. What we want is a killer platform. I want a vendor that can allow me to have platform that can connect any type of device over any type of network. And I want the data to be treated consistently so that I can then do what I want to do with that data whether it s perform analytics or do data enrichment, whatever it happens to be but give me a common data model. That was the first big learning. We ve been doing this for several years and it s an idea to be able to build that common model. Let me just sort of jump in there. What you re saying, the scalability aside which is obviously very important but the ability to bring together different sources of data i s key then to look for in an IoT platform is make sure that there s a common data model or that you can produce a common data model to ingest all these different data. Is that what are you saying? When you ingest data from the device, say you re connecting over M 2Q series or whatever it happens to be, you need a layer in there that gathers the data off that device or switch that then will transform that data into a standard model. Now we ve chosen onem2m but whichever one you choose, choose a model so that you can then store the data consistently, you can perform analytics on it consistently, and you can manage it and all of that. IOT-INC. 5 AUGUST 16, 2016

So you re talking then kind of the application protocol then I suppose? Is it contextualization of the data or is it a networking side? OneM2M I m trying to remember It s not the networking side. It s independent of that? Exactly. It s saying we know there ll be tons of different networks and we know there ll be tons of different protocols and so you have to support tons of them 20:00 like we support about a 120 of them but there are lots out there. But once you do that connection, then take the data and then transform it into a common data model so that you can then do whatever you want to do with it whether it s analytics or data enrichment or embedding it in applications. Make sure that you have a consistent data model so that it all behaves the same way. Okay. And again, just to break it down, I think what you re talking about is in application level protocol that takes the data and contextualizes it in the same way so that when you re comparing data from one source to another source, it s apples to apples, right? Yes, and you can then perform analytics on it so much more easily. Once you ingest it into the model that s within your application given your application enablement platform, which I m going to talk about. So that s number one. What else do you have for us? The second one is connectivity. You got to have a platform that allows you to connect lots of different types of protocols so whether you re connecting over a cellular, or Wi -Fi, or the long range low power type WANs, or personal network gateways, you need to cover all of them. Make sure you don t get tied in to one type of connectivity model. We find a lot of people will only get one route because that s all their provider sells them. That old adage if you got a hammer everything looks like a nail it all depends on the use case. From what we found, as you go and add more and more devices, those devices are going to be different and they will require different types of networking. In fact, in things like connected car, you need to be able to have not only the cellular connectivity but you also need to have Wi-Fi. And the Wi-Fi not over cellular backhaul but the ability to have Wi-Fi so that you re connected in your home, if you re a tester and you re downloading updates to your car. So you need that multi-protocol support to the network side. Never tie yourself into one connectivity, make sure that you have a platform that s open, that allows you to pick and choose the right connection for the right device. We ve said two things about protocols so far. We said it supports a common application level protocol to contextualize a data, put it in a common data model. And now what you re saying is make sure that you re not limited by the media protocols IOT-INC. 6 AUGUST 16, 2016

and that is again whatever type of radio. I guess it kind of comes down to that you need for your particular application. Exactly. You think about connectivity requirements could be satellite, sensors in the road you want something that is very unchatty to be able to maintain the battery life, that sort of device, there s local Wi-Fi and Bluetooth, you need it all so never get tied into that stuff. Third thing, just an observation is that data that you pull of your things, that data needs to be horizontal. Let me give you an example. A connected car by itself has a whole bunch of data that needs to be gathered in. A connected car, just the nature of it, it means it s moving so it s moving through smart cities, it s moving to your home, it s moving on roads which have other sensors on them, it s going to be exposed to weather. The idea is that your data flow should be horizontal. In other words, your connected car should be able to talk to smart cities so that you can figure out smart parking and smart lighting and all the rest of it, it should be able to figure out when they get home so that it can turn on its Wi -Fi connections and get over-the-air upgrades, and you should be able to talk to other vehicles for information that s passed between them. Some people call them swarm computing. I remember explaining this to my wife who was saying Waze does that, Waze is swarm computing by people. On the one hand, she s right. But on the other hand, sensors on vehicles are a little more sophisticated than Joe noticing a policeman standing on the side of the road and entering that into his Waze. This is the information coming off the car that is able to tell you if there s block ice on the road. You as a driver wouldn t even know but your suspension and the level of grip of the car 25:00 knows that and so that s useful information to pass on to other drivers. This concept of having horizontal information flows, it s something important because as you go on this journey, if you re a large enterprise you re going to be involved in lots of different spaces. You need to make sure the data flow is not just vertical but horizontal as well. Let me understand this a bit more, Nigel. Using the example of the automobile going to the smart city or even talking to each other, what does it mean? What am I going to be looking for from a feature point of view on a data sheet beyond protocol compatibility? Is there something beyond just using communication protocols? We ve talked about two of the three so far. Is there something different that someone should be looking for? I just want to make sure we put this in context so people will understand what you re saying. With the concept that if we digitize everything, that everything has to talk to each other, to do that you have to be able to exchange data. It s built on this two core tenants: one of standardized data, two of multi-protocol connectivity. This is really a reinforcement of the data piece, which is the data s going to be used all over the place. Therefore, put it in a format that everybody can use. IOT-INC. 7 AUGUST 16, 2016

I m liking it now. Actually, I m now kind of coming around the onem2m. Just for our listeners, there are three levels of protocols: we ve got the media protocols that we ve talked about and that is communicating what radios you re going to be using, sometimes Bluetooth, sometimes Wi-Fi, sometimes cellular, LPWA, whatever the case; we ve talked networking protocols and on the IT side, generally IP (Internet Protocol) but on the OT side that s when as Nigel was saying they support many, many of the different Canbus, Profibus, all the rest of those; then we ve got the application protocol and that s contextual information with the data so when you take it and where M2M is and what you re talking about here is kind of a fourth layer and this is an information protocol in the sense of it s not actually put into protocol form but per industry or per different segments, and we re starting to see it in the manufacturing industry and now you re saying is onem2m is having an information structure that says this is the structure of the data that you need to save. And if everybody saves that type of data in that type of structure and then this attached using the application protocol then we ll be able to talk to each other. I think that s what you re saying is using a common data structure beyond just the protocols but information structures so that everyone s kind of playing in the same area. I couldn t have put it better myself actually. In fact I think I ll listen to the podcast. Perfectly understood. That makes sense. We re starting to see that now and I ll put a link to onem2m in the show notes but we re starting to see this fourth layer of information structure coming out on industry by industry basis. Listeners can click on onem2m and see what that s all about. MTConnect is actually the other one I was thinking about for discrete manufacturing. Of course again, it s like this information structure. That makes a lot of sense. Are there any others? One other area I ll drill into is partners. Nobody can provide everything and we all know that. Now, when you add new devices you probably want to look for somebody that s maybe tested that device or platform because the dream is to have a platform that can connect any type of device. Now you want somebody that provides that platform, two, at least have tested the devices so that you as a client are not left holding the bag to do the testing and then trying to solve out any issues. That partner program is useful two ways. One is making sure that all of the devices that you want to pre-test and integrated by the vendor. But the second is those partnerships, they create innovation. Some of the things for example that we do is we partner with companies like AIV that are a very big component provider in the automotive space, they make head and units and stuff. We do hack -a-thons with them and we then present the results to a series of car manufacturers that then look at the type of use cases that we come up with. 30:00 Hack-a-thons are becoming more and more popular because it s a very simple way, a very cost-effective way to drive innovation, to drive new use cases, to drive stuff you wouldn t have expected because sometimes the bigger the IOT-INC. 8 AUGUST 16, 2016

company the harder it is to innovate because you have all this legacy and it s and. The ability to work with a company that has a strong partnership program that will take care of the integration, testing for you to reduce your pain, and also one that figures out how to work with different partners to be able to create innovation. My personal view is that there would be a consolidation on the industry and on the infrastructure side so the enablement platform, that type of thing, there would be unbelievable innovation on the device side and also on the connectivity side. And the reason I say that is there s more than 300 IoT platforms out there but as IoT becomes more complex as it rolls out, it ll take more and more heavy lifting and fewer and fewer companies will have the resources to be able to manage that heavy lifting on the platform side. But this gets back to the point that you so eloquently put, if you have common data models, common ways of dealing with connectivity, then that allows innovation to really happen on the device side, which is in my view that s what the client sees and what they tend to buy is the device. The companies with stronger investments will take care of the backend. I like where you re going with this and I agree on the platform side, the heavy lifting. Again, I m just repeating myself but if that s not one of the core competencies of your company, you don t need to do that. You can rent that; you can lease that. But what you re bringing up now Nigel is an important point and I m going to frame it slightly differently and that s the ecosystem. An ecosystem is going to be the bringing together of the technology providers and their buyers, like an ecosystem, to monetize it and to monetize the platform. I think what you re saying is when choosing a platform, maybe see if there s an ecosystem associated with it, which is kind of the business counterpart to technical platform and that s going to make life good at a very high level. So we re talking ecosystems I think. Exactly. It s really because the use cases are now starting to evolve so rapidly. The things, smart pockets have been around but we re seeing a ton of interest in track and trace around personal safety. Again it depends on which region you re in. In certain regions, track and trace is absolutely critical for them. We re seeing for example in India, the government is investing heavily in smart cities and putting a lot of money into it and it reminds of the days back about 4 or 5 years ago when the US government put a lot of money into M2M, for smart meters. That s being done at a much bigger scale in India. Each city is choosing its own 5 to 10 top use cases and starting to roll them out. What are they doing exactly? For smart cities and they re selecting 5 to 10 use cases within smart cities that ranges from smart parking, smart lighting all the usual suspects but unique to India. I don t know if you ve ever driven there. I ve been driven there, yes. IOT-INC. 9 AUGUST 16, 2016

So you know what I m talking about. They have a few challenges on traffic. So it s being able to use technology, to be able to manage that. You and I both know that if you ve been there then putting laws in place or rules in place is one thing, having them enforced is quite another. But trying to use technology to be able to drive slowly but surely a change of behaviour in the behaviour of traffic is the dream anyway. This kind of applies to the ecosystem in the sense that specifically when you re talking about smart cities, this is pretty going to be encompassing in those 5 use cases that you re talking about. It d be sure nice if they talk together. This would mean this is where the technical and the business, the platform and the ecosystem come together and work together. I like that. Let s talk about value generation now. My perspective is that 35:00 all value comes from information in IoT. It comes from transforming the data into something that s useful. And where that s happening, that s going to be in the application, it s going to be happening in the analytics and kind of between the two of them is the modeling. There are different types of platforms, we ve talked about Jasper already which is more of a connectivity platform but I think yours is a little beyond that, it s more of an application enablement platform? Is that right? Yes, exactly. Little known fact but HP worked very closely with Jasper to be able to build their platform and so a lot of their platform runs on HP s technology. Our platform is an enablement platform so very much as you said it s that drive to value. Let s talk about that a little bit more. What I want to talk about and get your perspective on is tell me about the application development environment, what should people be looking for? Maybe define it. What should pe ople be looking for? Again, under the thought of when you re making a choice between different platforms if you agree that value creation is pretty important and one of the areas where it s done is in the application. Then it stands to reason that the appl ication development environment is very important. What should be people be considering when looking at application enablement platforms or I should say the application development environment within the application enablement platform? Our view on this is that you re getting data from different devices and sometimes they have a value all in themselves and they link to the application and that s right. But often and particularly when you start moving into the OT world, you re getting a lot of data for lots of different type of devices and so the real value is being able to tie the data from one to the other. A simple example is your airbag in your car goes off so that s an event and that s a piece of data. You want to make that data contextual, how do you pu t that into what speed the car was going? What are the road conditions? What s the weather? What was the traffic pattern? All of these stuff then suddenly makes that one piece of data incredibly valuable because you ve contextualized it. So you need to have a platform that allows you to be able IOT-INC. 10 AUGUST 16, 2016

to build context, do integration on a massive scale with different types of data sources. What we found particularly with connected car in the auto industry was that the build out of these micro services is your drive to value for the end user because the end user, again we just show simple examples of this such as you driving from Which micro services are you referring to? One example would be you re driving from Germany and you re about to cross into the border from Austria. So you re using geo-fencing and you re using a knowledge database that says the difference between the traffic laws in Austria and Germany. And so the difference is you need to drive with your headlights on in Austria all the time and so a message pops on the screen of your car when you re a couple of miles before the border saying, you re about to enter Austria, the law is that your headlights have to be on. Do you want to turn them on? It s just a very, very simple use case of being to show h ow you build a set of micro services like that. Another one might be you re driving in your car and the car ahead senses rain, it s two or three miles ahead of you. Your car is communicating with other cars and your car also knows that your sun roof is open and your windows are down because where you are, it s not raining. And so it s smart enough to say, three miles ahead, heavy rain, your sun roof s open and your windows are down, do you want to close them? It s this type of stuff that the end user derives value from because for them that s valuable information. It s all the perception of what value is. We work from car companies doing fairly simple demonstration, use cases like that to show micro services through the Telcos that are building out quite complex micro services because they have so much information if somebody is using a cellular device. They know everything 40:00 about that device because they have all of the backend data tied up in the HLRs and they know exactly what s happening so they re able to readily provide very rich data. Things like geo-fencing particularly for track and trace down to very accurate level so it s incredibly valuable. What you re saying then is to be able to develop these micro services within your IoT product and whether it s for the automotive industry or some other one; you re going to need a pretty robust application development environment. What are we looking for? Is this something that ties into an existing development environment? Is it the development environment that s within the platform itself? Maybe just lift the hood a little bit and talk a little more as to, again I m looking to buy a system, I want to buy a platform, application development is really important to me because I want to be able to do all these micro services, I want to put micro services to create this extra value which I agree, what am I looking for? What are the differences? You re looking for something that enables you to be able to do something fairly simply yourself because often you ll find that you ll find an environment that is very complex and every time you want to add something or build something, you ll need to call a Systems IOT-INC. 11 AUGUST 16, 2016

Integrator and it gets expensive. So you want to be able to have an environment that your own guys can do simply and easily. You re going to need backend help on some of the more complex structures but for simple onboarding a device and data enrichment, you want to do that yourself so you got to make sure that the platform provides that in a really simple way for you to be able to do that type of data enrichment and micro services. So look for simplicity in the tools that are allowing you to do that. And by the way, our tools are great and really simple. Just thought I d mention that. Listen, you triggered something in my mind. We re adding these different services and that makes sense. Now we want to charge for them. What are business models that you re finding today associated with the IoT platform? Walk us through some of the business models because I think that s important too when looking and choosing a platform. What s it going to cost me? How is it charging me? Maybe take us th rough that a little bit. When people are starting out, when companies are starting out, they tend to want to have an as a service model because they don t know how big this is going to scale. So they want to be able to have somebody else host the infrastructure. As you said before, it s not a core competency so have it hosted by somebody and then consume it on a cost per device type thing. The price points that you should be able to get should be around 10 cents a device a year. That s the sort of price point that you want to look for. Is that in the telematics industry or is that you saying pretty broadly? That should be pretty broadly actually. Okay, 10 cents per year. Are you saying that will be a charge that the platform would charge you? If for example you were buying it from us then we would charge you depending on the scale and everything but roughly 10 cents per device per year would give you the enablement platform being hosted as a service. That s it? That s the only cost? Yeah. So like it doesn t matter how much data for example you store in your cloud, it doesn t matter how much computation that you re doing on it. Your business model sounds pretty good, it s simply on a device basis? This is how we enable a device, the enablement platform. Often people will have their own ideas on analytics and where they store things. for us to store that data it s pretty simple but sometimes companies, particularly larger enterprises already have an analytics strategy in place and whether they ve selected HP Enterprise or whether they ve selected SAP with HANA or Microsoft with Cortana. The 10 cents per device per year is for us to do the IOT-INC. 12 AUGUST 16, 2016

enablement at that presented through to the analytics and whatever else you wanted to do. What we found is that many companies will start off that way while they figure out whether they, if they re selling this as a service for example like a Telco and you re going after consumers, you can model things as much as you want but you really don t know if a service will take off or not so you want to kind of try and see. And then once it starts scaling out, you then reach another decisions point which is, do I continue this as a service 45:00 or do I think now that this is so strategic to my business and I know that there s a crossover point about three years down the road that means that I ll then start paying more as a service than I would have paid if I abort it? Do I invest now in it as capital or do I continue just with a pure Opex model? And it depends on the appetite and the cash flow, the depth of the pockets of the organization that s actually dealing with it. operators for example, for some of them this is absolutely strategic, they want to in-house and they will experiment with it as a service, once it starts taking off then they ll move it in-house. Some enterprises, they have no intention of ever doing any of this whatsoever so they ll always continue as a service. It just depends on their level of competency as to how far they drive on this. I think Prith would tell you from Schneider that for them it s absolutely strategic and that s something that they do in-house. Whereas other companies would say, for us it is strategic but we don t want to provide that competency in-house, we just don t have the skills so we ll have it as a service. Just to clarify, Nigel, when you say buy it, are you talking about licensing it kind of like you would some software, you still have support, you still update it? Are you saying to actually get the source code and dig into it and own it? You would buy it as you would any software. So you re not necessarily then owning the source code, it s more again your licensing the platform kind of like what used to do. You just buy a one-time fee and then maybe you have 10%, 15%, or 20% per year support fee that gives you updates and support? I just want to clarify. Yes, exactly. Just buying a standard software platform. Okay, that s what it is. People talk about platforms but let s just call it what it is, it s middleware. It s a bunch of software and as we ve identified is talking protocols, it s talking APIs, and it is in the middle between your devices and the value -generating components of it. You did mention something I did want to talk about that kind of keys off for this and that s APIs. If you have your own analytics platform that you re using today, can t get away from that word platform, I guess where I m going with this is what should our audience be considering if they have already an analytics solution and they want to marry it, they want to connect it, they want to interface it with their platform, what should they be looking at in the speeds and feeds when making the buying decision, IOT-INC. 13 AUGUST 16, 2016

leasing decision on a platform? Do all platforms support all analytics through their APIs or is there anything that we should be thinking about in particular here? I can speak for our platform and that s why we went down the route of a common data model because we knew that we would have to feed multiple analytics engines so that s why we went down to onem2m standard. When a buyer looks at an IoT platform, you need to make sure it s open so that the data is accessible so that any analytics engine can do its job. We made our choices. At least the platforms I ve seen, if it s too closely tied to its own analytics engine then you tend to run into issues. I agree. You re going to run outrunway unless they re an analytics company and you don t want that. And I think you bring up a good point, make sure it s open. The other point that you re bringing up is one thing just to be able to connect up to an analytics package in an API but it s another thing to be using a data model that shortens the ETL stage in analytics, Extract, Transform and Load. But that s huge and so if you can have a very nicely structured model and what we re talking about is kind of like that fourth layer protocol, it really does make that communication easier, doesn t it? Absolutely. By the way I just figured out another thought because of that ETL layer, when you re starting off, the ETL layer you just assume that it s going to scale. In most of my experiences, it doesn t. To be honest, our best clients, the ones that are very keen to move on this are the ones that have been doing this for a year or two have scaled out and they run into issues. That scalability at the ETL layer, literally you have to be dealing with billions of transactions a day so 50:00 just make sure you buy a platform that has actually done that before rather than you being the test case. Right, so getting into the scalability issues is what you re talking about then? But it s kind of scary because it started off with this wonderful marketing term of IoT and how it ll be. Before you know it, we re talking about the ELTs, scalability, and nowwe re talking about platforms and we re talking about middleware. Alright, Nigel. I ve enjoyed it. Where can our audience find out more about you and find more about what HPE is doing in IoT? The easiest thing is for you just to Google HPE and IoT and that will take you straight to the website. Or you can go on http://hpe.com/iot but quite frankly, Googling it is by far the easiest way and you will find us right there. I ll put the URL in the show analysis notes for people that may forget that. Just remind me, I know a little bit that HP did a bit of bifurcation, is that why it s HPE now? There s HP Enterprise and HP everything else? What is that? IOT-INC. 14 AUGUST 16, 2016

When HP split in November last year, the Entries business, that s all this service, the networking, storage, the software, security. The print side and the PC side went with HP Inc. So HP Inc and HP Enterprise. Got it. I ll also get your Twitter and put that in the show analysis notes. With that, thanks, Nigel. I appreciate it and I enjoyed the time. Thanks, Bruce. Likewise. IOT-INC. 15 AUGUST 16, 2016