C3 IoT sees a fourth IT revolution from integrated platforms, Big Data and the application of machine learning. We caught up with Ed Abbo, president and chief technology officer, to discuss C3 IoT’s recent funding round of $70 million and the challenges that cybersecurity and fraud are posing to mobile devices and the IoT.
In investing, whether across equities, private placements or venture capital activity, no one likes the term “anemic.”
But that may be the appropriate term — at least, in describing the latest documentation of fund flows through our Investment Tracker.
The total investment activity came down to a less-than-impressive $204 million, which pales in comparison to past weeks when we’ve seen $1 billion or more. Of that figure, 71 percent, or $145 million, came from the FinTech sector, with the biggest deal, at $119 million, tied to OfferUp, a Craiglist.com rival, raised through Warburg Pincus and also GGV Capital. The money just raised brings the cumulative funds raised by the firm to as much as $210 million.
SessionM followed quite a bit down the totem pole, with fundraising activity again a key headline, as the loyalty software company gathered up $35 million in fundraising, with the money, via private placement, to be earmarked for staffing expansion and client acquisition initiatives.
The U.S. — perhaps not surprisingly, given the two transactions just mentioned — represented the bulk of concentration, to the tune of 86 percent of all investment activity.
It’s not just the payments and financial sectors that are worrying about cybersecurity and the threat of hackers when devices and systems are linked to the internet. The Department of Justice recently set up a team to investigate cybersecurity and what it considers to be a threat to national security stemming from driverless cars. Fiat, last year, recalled 1.4 million autos following media coverage of internet-linked cars and the threat that they pose if hacked.
And according to Ed Abbo, president and chief technology officer of C3 IoT, fraud detection is paramount in the global power industry, which is a $30 billion–$40 billion industry.
C3 IoT is a leading IoT development platform that initially focused on the energy sector but is now tapping the lucrative spaces of fraud detection, health care and banking. PYMNTS caught up with Abbo to learn more about C3 IoT’s work, particularly in the areas of mobile devices, Big Data and fraud protection.
Back in April, ZDNet predicted that C3 IoT was scaling and would soon expand. It wasn’t wrong. On Sept. 2, 2016, the company raised $70 million in Series D equity funding and has raised a total of $110 million in four rounds since its founding in 2009, according to Crunchbase.
CEO Tom Siebel has a knack for predicting when to scale IoT deployment. Before C3 IoT, he headed Siebel Systems, a CRM startup, which he later sold to Oracle. C3 IoT was formed when Siebel saw the potential convergence of cloud, Big Data, machine learning and mobile sensors in solving business problems.
Has Seibel’s vision materialized in C3 IoT?
According to Abbo, C3 IoT has the only full-stack platform that has succeeded in scaling in production. C3 IoT manages 70 million sensors and has over 20 customers who report significant ROI because of fraud protection, predictive maintenance and improved energy efficiency.
So, how has C3 IoT managed to scale and to integrate cloud, Big Data and machine learning for IoT applications? And what are its competitors doing wrong?
Abbo said that competitors, such as GE Predix and Microsoft Azure — neither of which can be considered insignificant players — “are making claims” to stake early market position, and investors have largely determined the valuations of smaller players, such as Cloudera, MapR, Pivotal and Uptake. But Abbo said that most of the platforms from these competitors develop solutions from independent software components known as the open-source Apache Hadoop stack.
“This requires developers to stitch together hundreds of disparate software components in various stages of maturity, designed and developed by more than 350 different contributors using different programming languages with incompatible software interfaces. A loose collection of independent, open-source projects is not a true platform but rather a set of independent technologies that need to be somehow integrated and maintained by developers,” said Abbo.
“The C3 IoT platform was built from the ground up over the last seven years and is the only comprehensive and cohesive technology stack.”
According to Harbor Research: “C3 IoT is clearly miles beyond its established competitors” in terms of product development, devices under management, customers and scale of deployments.
So, we get that C3 IoT has a cohesive platform that the competitors lack, but how does that translate to money for clients?
The McKinsey Global Institute estimates the total potential impact of digitally transformed business processes to be $3.9 trillion–$11.1 trillion per year in 2025 — digitally transformed meaning those companies able to harness and apply advanced analytics and machine learning to Big Data in real time and produce results.
And, according to Abbo, C3 IoT’s track record on this score is impressive.
“One customer credits C3 IoT applications with $20 million in annual savings from smarter fraud detection. Another company reduced equipment failures between scheduled maintenance by 50 percent, lowering costs and downtime. One large enterprise lowered energy costs by 10 percent, and another reduced greenhouse gas emissions by 14 percent. A large manufacturer in the U.S. cut energy costs 16 percent across all of their plants, saving millions of dollars and achieving 230 percent return on their investment.”
But smart devices and integrated, connected systems are vulnerable to hackers. What is C3 IoT’s approach to cybersecurity and fraud protection?
Abbo explained that traditional rule-based systems are replaced by machine learning and predictive analytics. These processes detect patterns in real-time data and recognize cases of theft or fraud.
The IoT Big Players
C3 IoT already has a partnership with Amazon Web Services, and it also partners with CapGemini, McKinsey & Company system integrators and designers of mobile and embedded IoT devices, such as ARM.
The payments industry is also undergoing a digital transformation and replacing traditional rule-based systems with sophisticated Big Data and machine-learning technology.
According to Abbo: “Financial services organizations will increasingly apply predictive analytics to transaction data to improve fraud detection, predict customer churn, reduce customer acquisition costs and deliver next-generation product and service offerings.”
The Fourth IT Revolution
Abbo believes that growth in the IoT, the increased use of mobile devices and the volumes of data that will be available for business intelligence will mark the fourth IT revolution.
“The fourth IT revolution is underway. Multiple technologies are converging and shifting the platform of computing to scale out architecture on distributed computing platforms, such as Amazon Web Services.”
“The use of mobile devices, expected to grow by 6 billion by 2020, will soar to 26 billion in five years’ time, factoring in IoT devices and services. This represents a step-function increase in the amount of data being generated by smart, connected devices and an opportunity to transform all industries.”
Abbo sees a burgeoning market for connected, low-cost sensors, adaptive systems, a new generation of smart applications and a renaissance in business process reengineering.
“This new generation of smart business processes and applications will ultimately replace the current enterprise software applications stack. IoT is essentially an entire replacement market in global IT.”