Finding the ROI in IoT (Cloud Next '18)
All. Right thank you everybody for attending, this, session this is the, best. Venue I've ever had an opportunity to present anything. In so. I'm gonna enjoy, that. And. For the folks who may be looking at it on the stream afterwards, we're in an IMAX, theater, so, if I try to make a few movie jokes that's why. So. This session again thank you very much for joining us. That, the conversation, for today is around. Internet, of Things and, how. To find, ROI. Return, on investment. Hopefully. The folks in this room, have. Experienced. Some of I, uh but, it's around the Internet of Things connecting, things to the Internet and within. IOT. There. Is a couple of different angles one is technical, right we. Hear a lot about IOT, technologies. MQTT. And TLS, and lots of three-letter acronyms, and that is important. But. There's a whole other side of it which is IOT, is not just a technology, but it's a whole new business venture I don't. Know about the folks in the room but like I haven't met my first you, know chief IOT. Officer, so IOT, is still very new and many, enterprises, are trying to figure out how it fits into their organization. As, part of that one key aspect of it is ROI like. How where, is the money in this stuff and a, lot of the companies that we work with and that we see are. Trying to figure that out so quick. Introductions, and we'll dive, right in so I'm Adam Michaelson, and I'm. A product manager inside. Of Google IOT, core which. Is Google's IOT. Offering, so. My job is to, build. Some of that tech to make sure IOT products are safe, and secure reliable low latency, but, also hopefully build a product that folks. In the enterprise can drive real value, from and frankly. That's as. Much, if not more challenging, than, building. A technical. Product with, low latency and high security so. Before. We dive right in I want to do the other introductions, of the guests who are joining us which I'm super excited about so when I learned about this session and, feel. And Doug would be joining, joining. Us it. Was kind, of an honor because it's. So. Exciting to see when IOT is being used in the field and have, customers. And actual users come forward and offer. Us their advice around, what's working, with IOT from a money perspective and.
What's Not, and. That's what that's what the feeling Doug you're here to talk about I'll give it. The. Mic over to them for in a second to introduce but, as a, quick introduction so, Doug Stanley, he's a partner. Of Google, and, he. Has a company called neo, labs that. Specializes. Building in building IOT, solutions and, has an IOT product to help customers and then, fill ads Mundson he, he. Owns a winery very, cool and, he's an agriculture, business so it's Phil's job to. Figure out is ara is is. IOT worth it it is there are ROI in it so to have these folks here today to share, their experience. It. Is is an honor for myself, to present with so Doug. Phil can you introduce, yourselves I am, Jack Stanley. Hi. I'm Doug Stanley I'm the CEO and co-founder of neo labs it's a really a pleasure to be here on behalf of our team we're. Very. Very excited to actually share with you a real, IOT, implementation. That. Is getting real results we. Were recently with Google at i/o tea world in their booth and the overwhelming. Reaction we got was is this really real and so, I think that was a my, take away around the state of the market and so we're excited today to not only share the tech but, the results, of something, very real built. And. Along, with my wife Kim were the owners of deep-sky vineyard, and adam said you wanted to tell. You a little about bit, about how IOT, and ROI might come from that in the field in this case it literally, is in, a field I. Am NOT a longtime wine, guy except, for enjoying it but. For. Until. Four years ago I was a vice chairman, and let our technology, media and telecom practice at Deloitte so I come from a tech background. Very easy for me to get into this and I'm excited to share what we've learned that deep sky vineyard. As. We dive in so a quick survey. So. When it comes to IOT, and, in the audience here, just a quick raise of hands, in terms of how many folks are. Experimenting. With IOT. In their organization. Which, is like somebody, somewhere. Has a Raspberry Pi doing. Something, or an, Arduino, or an Android things connecting. Great. It looks like the vast majority. We. See that as well and there's. Sort of ages, of IOT. We're, still much very much at the dawn of IOT so I think we're all together in this journey, to figure out how IOT, functions, but, we do see a lot of folks who. Want to experience, with IOT have, connected, something. So sort of like the connectivity. Age where maybe we're in the middle of or maybe at the end of in terms of can I guess get a device connected so. The. Next question and is. Around, how many folks in the audience have, full-blown. IOT. Products. Supported, in the field with. Customers. Using it your call center can answer questions, your. Your documentation, warranty, is out there how many of the folks have that. Less. Which. Is what we expect, so. That's. A. Lot of the the things that we want to talk about today is sort of that gap IOT, is new right so we don't expect a lot of IOT. Products, that are fully fully out there in the field but. There. Is a pretty. Dramatic gap, that's, sitting in between. The. Amount. Of projects. Being piloted in the amount of projects in the field so, there's a term that's being thrown about I look, at it sort of whims with whimsy which is pilot purgatory, if you, google it it's, a generic term but it's very much being associated with IOT, and what.
It Means is, we started a project, we. Haven't finished it, we're. Trying to figure out you, know, how. Does the connectivity, work how do all these components come together and how it is exactly provide business value. For, for, my. Boss my shareholders my, university whatever it may be so, this cons of the pilot purgatory, I think is very relevant when it comes to ROI. One. Thing that we're seeing is, what. Is the one. Of the major challenges around. Why. Products. In projects. Get stuck in pilot, purgatory, so this is just a study by McKenzie, there's, many such studies there that, are similar but this, is a good one to take, it as an example which, is around, 84 percent of the companies that's the, start of the pilot are still in it a year later that's, a lot right in IOT, is new and the promise of IOT is great, so our bosses, allow, us some, flexibility, to run. Pilots, but, a year's a long time 30%. Are still in a pilot two years in in, around 30% of projects, I, haven't. Even. Have. Gone to production so 70%, of the projects haven't even exited, pilot so, there's something here holding projects, back according. To this study the top three factors, are, executive. Support so does, the seat whatever keeps the CEO up at night is IOT solving, it maybe, not a, strong, business, case and. Also strong internal organization, alignment, so I think what's interesting here, is these are not technical. Challenges, these are business, challenges, so, the. Thesis is that many of the reasons we're stuck in pilot purgatory, isn't. Just all the technology, is getting woven together it's how. Do we establish ROI. In what's a methodology. To find, the revenue inside, of IOT. So. Why, and how, certainly. The, how, of IOT is super, interesting certainly, for geeks like me like, connecting, all this stuff here's an example of underwater, some underwater technology underwater. Cameras, that, Google has that we part up with Caitlin, and, that's. What's powering underwater. Street. View so if you google underwater, Street View you can like explore, the Great Barrier Reef, very. Cool if you're building a device like this then. I'd recommend, we spend a lot of time. Technically. Proving, this like, how does how does the device work underwater how does why if I work, underwater I've known it sounds like a good little interview question now that I think of it I I, actually, have no idea so if.
This Is what you're dealing with then spend, a lot of time with technology. Entire. Inside of your pilot's if it's not then. The, suggestion, is that you should we should trust our devices we will get them connected very, rarely do we see a device that can't be the, challenges. Is a lot of IOT technology, out there so how do I get, the right security protocols, the. Right connectivity, protocols, keep it secure, have, a create a device registry, basically it's an assembly challenge. Of getting the right components assembled to create an IOT solution but, we, should all have faith for the most part that the device will be connected. But. The challenge is really is, really the why. If. We spend a lot of our time 80% of our effort on the, on, the, how and that's what our labs look like and maybe 20% on the why we're, stuck in pilot purgatory. We need to balance that out a bit so. We've done is worked with a number of customers to. Come. Up with a framework. That. Is pretty simple where, we can discover. The. The, why where, is the ROI and that's what I want to present right now so. This is one of the key slides around, that. We show some customers. And prospects, and walk them through so. There's direct. ROI it's, the best type so, I did, this IOT project, and, because of it I derived. Actual. Value so when it comes to direct ROI, there's, a couple of sides, in the balance sheet simple, right I can sell more I can save one, way to sell more is feature enablement, it's a cooler product, so, if you think of like b2c. Or even b2b if if I have a product that has iot capability, it, has more features because. Of that people may buy it it's, also a great reason to refresh, so, you, know upgrade to the IOT, product versus. The one that wasn't which. Is great all, revenue. Is good revenue the problem here is it's a one-time, purchase right, and every time we IOT, enable the device we. The cost of that device goes up because we have to pay to, get that keep that device connected, what we've seen is that device can cost anywhere from, like 25 cents a year to a dollar or more year to, get connected, that. Increases your bill of materials, right and if, your margins, are high on your products and your. Lifespan, is relatively, low on your products maybe five to ten years you may be able to absorb, the. Bill of materials difference but, very. Few companies that we deal with can write, it's competitive market, so, what. Other techniques do we have to generate revenue, beyond just the individual, sales some of these out of categories, so sales enablement what, we're talking about here is replenishable. It's, kind of the razor and blade story so, I'll give you the razor for. Free if you'll buy my blades so, from a replenishable, perspective, if we can create a product or, we can identify that, something, has been consumed, create, a subscription automatically. Send it to you we can create.
A Subscription, model and that's the Nirvana of, ROI. The, next one down is service enablement here. You think of sort of like anything. As a service. Like, if you want to be cool at an IOT, cocktail, party say um something. As a service, so. The idea is like I am an HVAC provider, but, since. I know the air quality of the, indoor building I can say I'll sell you air quality as a service, and the higher the better air quality you want the more you'll pay me in and I'll figure out when to switch out all, the various filters so, that's service enablement, and then the Nexus scale in pricing, which is that if you become operationally. Efficient enough then. Sometimes, your product you can actually produce more product, than you used to be able to and. Maybe even charge a premium so it's just another avenue. To achieve money on, the right-hand side are around efficiencies. Right think of a warehouse so. Increased, uptime I added one more nine to, my number of nines on my on my manufacturing. Floor we, lowered risk for your employees, by. IOT. Enabling equipment, and make sure nothing hits somebody. Resource. Efficiency, certainly, to make sure that you're consuming. Your resources effectively, and then a higher quality product so you may think of more based on your your vertical, but, these. Ones we've seen work, again and again for 80% of the businesses we work with so direct. Revenue. Now. We see all this indirect, revenue, okay so, this is a blessing. And a curse this, indirect, revenue is the, promise, of IOT, it's where phrases. Like data, is the new oil comes, from or big. Data and data, science. And the, idea is you collect you sensor, all your data put sensors on it collect, lots of data and then, money comes out the other side except. Very rarely does that happen these, indirect, revenue. Impacts. Are meaningful. But, if all of our business cases are based on them then we can definitely get stuck in pilot purgatory, because. We're looking for long-term money. That is a little hard to connect so to go around the wheel really quickly in the upper-right. Targeted, marketing its. The. Idea is that manufacturer. Who makes whatever a dishwasher. Now that I get to know my customer better through IOT, and because of that because, I know my customer my customer segment I can market to them more effectively, building, better products, I see how customers are using my products, therefore. My. Next Rev is going. To be of a higher quality and enhanced. Brand, I guess the marketers could debate this but in. Like b2c, anyway, when I put IOT, enabled, the, brain becomes a little cooler like a little blue light shows, up and it's just an you're a you're a cooler brand, new. Business services, so we've seen customers, who are like in the electrical, business they'll make, a. Surge, suppressor and. Now what, they can see is there's, been a surge, maybe, some of the equipment is out so, what they can do is create join, the gig the gig economy and, have. Electricians. Who are roaming around give. The deal deal. To them to go and fix the job so I used to be a manufacturer, and now I'm participating in the gig economy. Brand-new, business opportunity. And then customer, engagement, this is where like a customer calls into your call center now. You can see their device most. Manufacturers. Are participating in IOT know, the customer basically through a warranty, card but, now through IOT. In an app I can know the customer directly that's a responsibility, but. It's also an opportunity to increase my NPS, my Net Promoter scores, because, I can service the customer I can get a first-time fix so, all these are great. What. We see is we go around the born here work with customers and say check off as many of these as you can to. Say how you're going to generate. ROI and, what. We'd love to see is an early pilots right, so many of us are in pilots we just saw like a, raise. Of hands try, to get as much a direct revenue as possible because you could prove to your business in a short term that this is valuable and then around the outside the, indirect revenue may be even larger opportunities. But, those will become second. Once you have more time rolled, out a larger, pilot, collected, more data and had the opportunity to mine that data the. More, check marks the better it's just a little bit of a warning sign if they're all on the outside ok. So, what, I want to do now is it's. Pulling dug and pull and fill and have, them walk. You through the specific, agriculture. Example. What. Did they find on this what were the bet so they were placing, at the beginning of their project, what was the reality of what they found and how, can we also learn, from from. Their mistakes that's, what we want to do as. Well, as as well as what they accomplished, for. For. And apply that obviously, to the to the folks in the room so.
Done. Thank. Thank you gotta and. So just to keep. His frame of her in mind we, were able to look back at the deep sky project, over in our third year actually, we're in our fourth year and. Third. Year sorry, how are you thinking about next year and. Have, a really accurate view of did. We achieve our goals you. Know make no mistake. Phil. As Phillip mentioned that he was a former Deloitte partner I too am a former Deloitte. Partner we, knew how to do business case and we know certainly know how to do ROI we. Think these frameworks are very solid tools and frankly, we followed the methodology. We. Didn't make decision to move forward deep sky until we had collective, alignment. Between our, customer, the Asthma sons and each given ear and our team so and. Fortunately. Which was sherry to do we're going to granular level and on the results a little bit later but as you look at the the wheel of fortune here of ROI benefits, we, really hit the ball out of the park and again, I'm excited to share it with direct as well as the intangible, items and, you'll. Hear about Phil talking about some of the strategic they're making. That's their making now because, of these frankly, longer-term benefits. But. First you view indulge me a little bit Neil, Labs is not an Ag tech company that's the first thing I think that surprises, people, truth, be told we, decided to connect this vineyard because of a screaming phone call I received from a former partner at Deloitte. The. Outrage of him watching, his wife get up and drive two hours to their been here just to see if the water was turned on and, so, that started the conversation we, had a big pain point from, the customer. You. Know to our surprise the. It, was an amazing, qualifying. Application. For us for our platform we still operate in a horizontal business, model, and. We have lots of demand for AG our, preference, is to be that horizontal platform, and partner with others so let, me take you through a little bit of the experience that deep sky vineyard this.
Is About two minutes long. Pharming. It's. The oldest, industry, on earth and arguably the most important, it. Feeds the world employs, millions, sustains, life and, it's. Under siege. Agriculture. Consumes 70%. Of the world's water its most precious resource, a single. Almond the size of a thumbprint requires just over a gallon, to reach maturity, put. Another way that water, that California, uses in a single year just to grow almonds, is enough, to serve all the homes and businesses in the Greater Los Angeles area, for, nearly three years. Farmers. Rely on diverse, data and generations, of accumulated, experience, to do what they do but. Farming is still farming and operating, margins are slim the, oldest industry, on earth also, has the oldest challenge, consume, less produce. More, the. Data that empowers 21st, century farming, pours in from sensors, in the ground that measure moisture, content, from, water volume, monitors, deep in the aquifer from, weather stations, and from generations, of experience, and knowledge but. Here's the challenge how. Can all that data become a single, meaningful, real-time, indicator, of how, the crop is doing well. There is a solution. Imagine. That you're a vineyard operator, with the ability, to log into a mobile app to see contextualized, data from thousands, of sensors telling, you everything that's happening, in your in real time from, anywhere in the world that. Same app helps you anticipate, and respond to equipment failures, before they occur through, rich predictive, insight, and provides detailed information, about the vineyards microclimate. Imagine. Receiving requests. For water directly, from the plants and having, a system that can automatically, respond or, being able to focus specifically. On one row of lines or on the data for the senior plant imagine. Being able to view and analyze the color of the grapes on that plant or the ratio of the Sun above the canopy to the shade below it. This. Is precision, agriculture, this. Is neo we. Combined millions, of unrelated complex, data points and convert, them into a simple visual richly, insightful, experience and, the, result lower.
Cost And resource consumption, higher crop yields, and better product, quality, precision. Agriculture, is a game-changer, for farming when, experience, combines, with real-time data collected. At the plants themselves we, redefine, the world's oldest and most revered industry. And that, is only, the beginning. We. Are outrageously. Proud of the work we've done a deep sky vineyard but we're also, pragmatist. About this and, the. Partnership, that we formed with the Google now has us frankly, we're reciting, the Google terms we think about precision, agriculture, is it, is it scalable for the planet let. Me take you through as you're developing a use case for for, ROI for. A for IOT one. Thing that people tend, to forget is number. One as Adam mentioned they focus really too much on the how I'm, a big lesson we learned man, we really overwork this we, did everything in this vineyard as Phil could attest we, built the boxes, we built the specs we dug the trenches, we augered the holes we, did every, single aspect of it, initially. We wanted to know the challenges, that our platform users, would face when they took our product into the market but frankly we really overdid it right, so. I would. Tell you focusing, on the why we did a great job of that but think. About the macro economic opportunities. That IOT can unlock you, know the reality, today is, our. Farmable. Land has decreased by 40%, by. 2050, we have to increase our food production by 70%. Today. You, know nobody's, pining, to go into farming where there's a massive labor shortage, I won't get political, I promise, and then. Lastly farming. Consumes 70%. Of the freshwater on our planet and it's. Trending towards 80 or 90 percent now. The big bomb that we all need to consider is it's a known fact that 60%, of the water used in farming, is wasted, now. Later we're gonna get into a granular, experience, and deep-sky vineyard, and frankly, the stats add up. So. Now. We're gonna actually take, you into the vineyard you know in our limited time here one. One morning I have you you can go in and it's a real time experience from the needle out website, or you can go to our booth and I want to get pitchy, but. You can look at deep sky vineyard in real time any, time you want, Philips, not gonna let you control his vineyard and, he's not going to disclose his private, reporting, tap that I'm that. I'm not going to expose to you here but let. Me. I do, that okay. There. We go oh. That's. It we're, done Jack, Jack Jack Jack. Bear. With me one second. Technical. Problem. Up. Here comes the man. Okay. If it works so great in our warm-up. The. Demo gods. You. Know while we're waiting to do that let me just give you a little bit more history on deep sky itself, and how, a guy, with 34 years at Deloitte senior. Partner there vice-chairman, ended up you, know scratching, dirt, for. My 50th birthday my wife decided, to take me down to Argentina we had a hell of a lot of fun in, fact so much fun that instead of buying a shirt we bought a vineyard and.
Came. Home 27, page document, in Spanish sure enough how to translate, it we had bought a vineyard it's kind of a condominium, vineyard but a vineyard just the same around. The same time we were moving out to Arizona from. Connecticut, and while, we were out there driving around I happened, a comment to or how much it reminded, me of Mendoza Argentina. So. She decided to go out and check, around if there was a wine industry there sure enough there was and. About. Six months later I got a text that said hey about 20 acres of land down, in Wilcox, Arizona, and we're gonna plant a vineyard that's. Literally, how we got here today at that point in time to, put certainly. My, wife he's done a fabulous job with this in a perspective we. Have no live plants, in her house at all, they're all dead so. We had to replace them all with silk plants, and so I had to ask her said what in God's name makes, you think you can grow vines. Suffice, it to say that was kind of the battlecry, to, challenge. To her and she, has done a magnificent. Job and it, is really done wonders over, planted. It in 2011, so - through. Today it has made tremendous, strides, and this is kind of a culmination of what we wanted to do to, really make sure we. Were growing the best grapes possible, because in Arizona nobody. Knows the answer to that yet it's very much like our name deep sky it's exploration. There is no right or wrong nobody, has the magic formula neo, is helping us find those form. So. What I'll do is I'm gonna just drop you through a little bit of the user experience, and how Phil and then frankly, turn it over to Phil and he'll tell me where to navigate, he'll take you through how he uses the platform, on it on a daily, basis. So, we start obviously with the proverbial. Dashboard. View which. He takes a glance at he. Peeks at his irrigation. We. Have multiple ways of capturing the weather macro, and all, the way down to micro even down to leaf moisture, now, the interesting thing about farming, your, macro forecast, your weathermen can tell you it's raining like hell and you don't get an iota of water in a farm or it can rain in one block of a vineyard and not in another but, more importantly, if it's windy you won't absorb any of that wine so, we have multiple.
Sensory Capability, down to even a weather, station on site as well as within the rows and, just. To re-emphasize this, is live so it is a hundred and one degrees down there right right now. He. Takes a look at the equipment diagnostic, some pumps. Neo. Is fully instrumented throughout that factory so well all the way through pressure, and flow throughout various. Sensors. He. Has the ability to add observations, from the vineyard this is something I'll expand, on a little bit later he. Looks at the events of the vineyard and lasting, all spent a little bit of time on this it's it's certainly squint print you can see it for yourself but SystemVue, this, is these are streaming, perspective. Of what's happening in vineyard alt all time by block it's. A really a powerful diagnostic you. Know one thing that I learned many. Years ago you know fakery, we don't only get you so far in innovation, so. Everything. You're looking at here is real and fortunately. For us that the as mice's allows to expose it to to, the world frankly. Real-time. Deal. So let's walk us through walk us through a day okay. For, me you, know the dashboard, go go down to weather real quickly. Now. There's a couple other things here daily, et that that kind, of down here and the. Up. Up, there on the right side know the two inches you'll see daily, et that's really a measure of how much water the. Plants are basically, expiring, to cool themselves down that's what they use water for it. Brings, nutrients, up but they're also using it to cool it down so. You know looking at this for you know GDD, is-is-is. Degree. Days and, that's, an indication you need a certain number of growing. Degree days in order to get your fruit ripe and so we actually track that so, that we know about how far we might be from harvest because we have that history. From year to year so, there's more there than just might meet the eye that. UV index is very important, that UV index is an indicator how much warmer that fruit will be if it's in the Sun if it's, in the direct rays of the Sun you don't want that fruit dorm up so too much fortunately, have a good canopy to shield that but, let's go onto the irrigation this is where the real stuff starts and and, and kind of you. Know to set this up. You. Know Doug mentioned the, the. 100, mile drive to our trip, to get down there and have. Having, the ability to see remotely, into this vineyard was very much a driver and that. Was kind of the start of it but it really got its start when I watched my wife and, her vineyard consultant, sit there and auger. Hole after hole know this is a big hand auger it drills down about three feet she, pulls it up and there's a big clump of dirt in the little cylinder there and they drop it into their hands and they start squeezing it and they yell out 55%. 60% and, I, just looked at my said what the hell are you doing and they told me they're checking for soil moisture and I, just decided there had to be a better way and in my vision, as I thought about this I could see what was happening up above the ground of the plant I wanted, to see into, the ground what, was happening to the water when it went in and what was happening to the water when it went out and that's really what this section is all about.
Okay. So why, don't you click, on just, just as a general orientation the, top is what we're all irrigating. This little map right, there the brown part over. Here is really, a map of the vineyard those are all the zones well what did you do Doug. We. Just disintegrated. The vineyard, just. Accenting it to read it again what, helped. Tempo. Help but. You know seeing in the ground is important, because nobody, really knows what to do you don't know what happens when it's a hundred one degrees out and there were if you ask ten vineyard, operators, down there you know ten totally, different answers. - what the right way to treat your vines are and for, the most part people just said put 20, gallons of water on per, vine. Every. 5 days and just do that but the fact of the matter is soil, is all different and you're gonna see that here so there's, our map we've. Got another little chart ok so you've gone into five that's fine let's just go there for a minute so, this is where it kind of all comes together let's. Go back to five Doug that's. Five you'll, see at the top that 100.8, degrees that's at 101 you saw before, you'll, see a, recommended. Gallons, of 11 that's. Actually what we're putting on if we went back up at the irrigation screen, you'll see that five is scheduled to be water today for 11 gallons you'll. See something called available, water 54.6%. In field capacity, 84, points then I'll, go a little into Field capacity I'll try to stay away from available, water content, except to just give you an idea of what it is why, don't you scroll down Doug and we'll get into this zone five sensor 5 area the. Numbers, on the. Left-hand, side of that chart over here then the, numbers of the left are actually the current soil, moisture percentages, at each of those depths, those depths are 4 8 16, 24 32, and. 40 inches. The. Number next to that is the degree of the soil so, as you would expect it gets cooler as it goes down it's gonna be warmest, up at the top and get, cooler going down those, are more important, to us when we're approaching bud break when the plant actually comes back up and you start to see green because. There's there certain temperatures, for different varietals that will indicate when that's about to happen so not quite as important because remember this is now this, is during variation if nobody knows what version is it. Means when these hard green berries, start to soften and in the case of red grapes they turn red in the case of white wine grapes they turn kind of golden in color so. This is the start kind of the the, prequel. To the actual ripening. Process during, during harvest, those. Buttons, in the middle the two that are green are green. Because right now those, are our zones of interest we want to try to make sure water gets to those zones because, those numbers over there on the right hand side is the percent, of water that is being taken up at each of those depths, so.
Let's Just think about that for a moment so what I know I said I want to be able look into the ground I not. Only watch the water as it goes down into the ground but, I watch it as it comes out and if. You could just click on why don't you click on the eleven. Gallon, per vine irrigation. Up there on this left, side Doug seven twelve oh. That's. The ten go down to eleven if you could. He. Was always a great partner but he did not well. The, eleven gallon one go down seven twelve there. You go there we go so, um you, gotta look up a little bit on this one but what you see is this tells me what the starting and soil moisture percentages. Were what, the ending ones were and then what this plus, 24. Is this. Is important, the way water dynamics, work and believe it or not it's incredibly. Consistent, from irrigation dhira Gatien if you look all the way over to the left you'll see something called observed, FC. Or Field capacity think. Of that as the glass is full the. Soil that's the point at which the soil can hold the water against. The force of gravity and you, really find that out not when the irrigation, is done because you'll see those numbers are higher than, the twenty-four ones and. What they're doing is they're coming back down to field capacity, in about twenty four hours later it's, at that point that I start capturing, how much why how. Much water the vines are pulling from, each depth and if you have follow across I think it's sixty six point seven three and sixty, seven I'll see it better down here and, sixty. Six to sixty six point three nine that'll. Almost be the exact same thing all the time so that's why when. I'm looking at this and I'm trying to figure out what I want to do I actually, went in and looked at that eleven gallon per vine watering. To see what happened and that's the one I chose to do now. You'll. See that if you went down to fifteen go down to the fifteen one seven seventeen for a moment just to show a difference, seven. Seven sorry, down. There, you go right there you. Can see we practiced this a lot. Which. We did actually what, you'll notice on this one is the. The four and eight ended. At sixty six point seven and sixty five point five four and they had a little bit of gain in the, 16 inches but we used four gallons, more to do and the, reality is as you looked at that uptake, it's really not taking water from 16 inches so, this is what we also consider we don't want to over water I think, of water as the new oil so, we're constantly trying to minimize, the amount of water but, hit the zones that we want to hit that's, what's most important, and we use that by making, sure we know what FC is tracking. Each one of these irrigations. And that's what we're building our algorithms, around so that neo will just do it for us it already is if, you'd gone back to one. Of those, earlier. Earlier, I think it was actually the dashboard. It was recommending, five for eleven point seven gallons, I I. Wouldn't, go there Doug but, um if you can now Doug click on the open. What's. It called yeah that one there you go so. Wait a second here and you'll see something and this is where it really came to life for us this. Is a chart, for the last about, month that. Shows the red is irrigations, and the, blue line is showing where we went to and you'll notice there's great, symmetry, amongst, all of these we're. Trying this is exactly, what we're trying to do when you can start to manipulate the water in the ground and know. What the vines are taking up you have suddenly an opportunity, in the, early part of the year all raise all those lines up I'll give it as much water as at once why because I'm trying to grow the canopy, I'll do that right into early May at. The end of May when the when the fruit is about to set I'll actually bring those lines down because. I'm trying to set very small berries for a very simple reason the flavor is in the skins so, if the berries are smaller your. Your your fruitful, skin is a greater ratio, to the pulp of the berry of the juice and so, you're gonna you bite by by. Definition or theory you're gonna have more flavorful, grapes now, every one of you are gonna go be able to go out and get drunk and buy a vineyard after this with a lot more confidence, but Philip we better reel this in a little bit and get to the benefits. Okay. I'll do that all right. So. Let me let me close out take, me on that anyway suffice it to say this is a total, game changer for, us I mean we have confidence when we go to bed that, we, know we've watered what we need to water I don't wake up the middle night saying oh my god have we, this we, know we have neo helps us do that.
Okay. Phil listen let's get to the meat of it show, me the money show. You the money well it's. Pretty straightforward 30%, labor efficiency, because we have them doing the right things at the right time we're not we're. Not guessing we have so much better information about our vines that we can direct our workforce to do what we need them to do when we need them to do that. It says 40%, reduction of water that's my guesstimate, for over the year in. In June it was well over 50% in in, terms of gallons applied in 2018. Versus 2017. And, up. To about a million, gallons, will be saved this year at deep-sky and remember this is a small, twenty, acre vineyard now Doug I think you have some pretty interesting take. This notion a. 15. Acre vineyard in Willcox Arizona saved. A million gallons, of water right, there. Are, eighteen and a half billion, acres under plant, worldwide. Of viticulture if we got 1/7, of those 1/7. Of these results, worldwide. 185. Billion. Gallons, of water that could be saved now, as, I mentioned earlier coincidentally, farming, was it wastes about 60%, of the water that that's provided, Phillip, is running fifty to sixty percent savings. So, the, value of instrumentation, this is think, of agriculture's of metaphor to many many other markets, right, and. The value of connectivity, and frankly, a proper. Platform so. Yep. Sure and those last two crop efficiency, and price lift I mean I kind of look at those together a little. Bit and it's, this is really all about quality at the end of the day everyone. Wants to know how much water we're saving and we are saving a lot of water but I always say it's not about saving water as much it's about using the right amount of water but if you use the right amount you will definitely save but. It's also about quality, of fruit quality of fruit definitely. Yields, higher quality, wine we, like to say 80% of the wine is grown in the field and we're. Actually seeing that and you know quality is a subjective, thing I mean you know you can guess at it you can look at it but you can taste it you can you, can get the tannins, you can get the ripeness of the fruit the fruit flavors, and all that but, I'd rather look at my customers.
Because We don't keep all of our fruit we sell. Less than half of it and. We. Have three main buyers every one of those buyers now puts. On their label something called vineyard designation. And their bottles even though it will say name, a winery, it'll say deep-sky vineyard, right there on the label as well they're, doing that because we've become known for higher quality fruit. And just, putting our name on their bottles, lifts, their ability, to sell it for a great amount of money so. That's the real to, me that's the real kicker to me because it really is our, customers. Are telling us your quality's better which has allowed us to lift lift, our price and none. Of them are here but that's going up next year as well because we're really excited about our crop this year, one, last thing to look at seventy-five percent lower cost of human error that was, real we had people not showing up we live in Marana Arizona this, is in Wilcox Arizona, we had one one month where the guy told us oh yeah water and water and water and we got our electric bill it was about twenty dollars you. Couldn't run that pump for for three, or four hours without it being 20 bucks and. The guy just hadn't done it and and, you know we couldn't, be there all the time but we needed that visibility we took a cruise in Alaska last year we were we were monitoring, that vineyard doing the entire crew putting on water looking. At needs of water all of that all from a ship somewhere, in a fjord in, Alaska. With, that Doug turn it over to you yeah so the road map and our progress today it is, one. Tip is again, if you avoid the overthinking, the how but look for a really quick win now, in this case the quick win was having, Phillips stop calling me screaming, about his wife Emma got two hours of check and see for the water on was, on or not. Trusting, the people managing. Their vineyard so we got them the the, confidence. In the quick wind that they could remotely manage, this vineyard very. Very quickly the, other thing that we discovered, is that the entire thesis, about water usage frankly, it was wrong they. Thought they were distributing. I forget. How many gallons it was now but it was Lily's one fifth was the actual, amount, once we instrumented the vineyard the water that was getting to the plant was a small percentage of what they thought it was okay so that. Was a real quick win the, first year we connected, to connected the system God, has stabilized, really, focused on the user experience. Made, some adjustments to it last. Year we made further, modifications. Went in and tuned some algorithms, filled us a lot of back work data crunching. This. Year has been extremely, productive we're turning the ROI up. He's. Transforming, his business as he mentioned he's getting things like vineyard, designates we're really achieving, the goals frankly, none of this is a surprise. From. The original vision we had alignment, that this could happen but frankly there's a leap of faith right, so, we focused hard in the quick win and now we're really seeing no pun intended the fruit of our effort now, the super exciting part particularly with the partnership with Google is we're really looking forward to next year. Refining. This instrumentation. And. Computation. Model. Starting. To incorporate ml. Both. From a data standpoint as, well as some video analytics we can talk more about that offline, we're getting a little short on time but. You. Know frankly, this project, is is now it's. Just too compelling, we. As a company are thinking about you, know how do we scale this so, even. Though we're gonna stay horizontal we're, now very focused on this the results are just. Undeniable. Lastly, for the for the tech audience I'll give you a quick flyby I think now this is a second day of next, so you've seen slides. That looks something like this but. This is really an elegant, marriage between Google. Handling, the cloud elements, and our, neo platform, handling, everything below we are a distributed, edge processing. Platform. So. You see the data flow it starts, with in my world it starts in the far right we, have tightly, wrapped IOT, core into, our deployment, model we, use it it's functioning, we, use it in everything we do now, it's. Working beautifully, Google. Is involving, us and they're forward-thinking about where the product line goes and. We're super excited about that but. We also remember now this is this is Willcox, Arizona Adam. Joked about if you're not at the bottom of the ocean well Willcox Arizona is, is about like being in a bot in the ocean it is a very, very remote place our.
Gross, Networked, pipe is a 10-5 rural, cell card that's it that's all we've got now we're very very efficient network management, numerous, low-power networks, operating here but there's a lot going on so we run a local network, at the, vineyard the vineyards got a run it can't be dependent on Internet connectivity and that of course we we, then filter and share up to the cloud with. Pub/sub, up through into data flow bigquery, and we use think of it as our data warehouse there, and of course everything is deployed with kubernetes so. Numerous. Nodes ranging, from quad. Core down to single core nodes because. Neo is not just a data capturing, platform, this is a full control system this, vineyard runs on auto mode right. It does not have to literally. Neil will run to make recommendations, and run to vineyards so we've. Got mobile tools we have a lots going on there we have recently. Introduced a little bit of low raw as well so, it's, a super exciting but for me it's just it's a magnificent. Elegant, collaboration. Between Google. And us and a fantastic, customer so it's just it's just a win, and. On that I think I'll turn it back over to Adam. Yes. So, yeah quick closing. Thoughts so to. Kind of circle back to the ROI hope, that from. The context so agriculture is a major use case for IOT. Manufacturing. Is a major use case smart home medical, we're, seeing a number of, verticals. Begin, to really realize. The the benefits and it often starts in this sort of way it's like oh I don't want to get up and drive two hours, so in these boutique, way our disruptors. Right it's what the big folks are worried about but for the folks in the room who are already big, folks. It's. Good not to start with these huge, huge aspirations. With other data but start with something small, you know don't drive two hours make the CEO happy and then go from there but, when when looking for ROI the, the the good mindset is first think outside your company. What's the macroeconomic. Trends in this case its water it's labor shortage, what's happening, in the world that's gonna affect because, we're kind of we're skating to the puck with IOT, right it's gonna be a two.
To Five year journey so what's gonna happen. Competitive. Disruption, like, we're saying X as a service, so, are your competitors, shifting, especially, if you're manufacture are they getting into the are they becoming software, vendors the minute you launch an app you're a software vendor, in. What what's happening there in your industry and then regulatory, we didn't talk about here but we see a lot of regulatory pressure, and where. That comes in IOT is a great release valve because, IOT provides a lot of transparency so, rather than having auditors, having having, expenses. To deal with regulation, IOT, can, deal with it so just some macroeconomic. Trends I'm sure you can think of more, after. That you, think of your internals, like the chart we went through before internally. Focused where. Can we find revenue. Get, as many tick marks as you can, direct. Revenue first indirect, second, and see. If that if your thesis is achieved it can be achieved in a very small way at first. And lastly, no ROI no pilot, but basically if you see 80%. Of your pilot, effort in. Our pilot effort is kind of precious right you get you all an audience can be doing lots of things with your time the, fact that so many hands got raised around, efforts, around IOT, we, are all, responsible. Right. For sort of exiting pilot. Purgatory, together in finding. This ROI it's not mission impossible. Huh, that's a movie reference well you know and to that point Adam um we. We, talked about this and and you. Know if a little vineyard in Arizona, of 20 acres can get the kind, of results we've, achieved, and. It wasn't easy I mean there were some fits and starts but, you know if we can do it I can only imagine the, impact you guys can make on your companies which are much larger and probably, have a much bigger, you know Apple to take a bite out of this stuff. And. So it's. So quick thoughts in terms of wrap-up obviously, we're, in the middle of next here so really appreciate your time. But given the number of hands that went up around IOT. We're really excited, if you haven't, seen Google's, IOT. Offering, yet please. Check us out so. We're. Over in, the end muskan, self please come over to our our, booth and check it out and we'll show you IOT, core the neo labs folks are there as well if you want to talk. About other IOT solutions or, if you're into agriculture, or. Into, one, become, a sommelier so. You could learn more about the the, industry and we have a booth over there as well on and then do please check us out at, Google. Slash. Google. Cloud IOT, and learn. More about the solution and we'd obviously, love. To hear your feedback as, well within, the IOT. Group, like, I'm on the product team I can tell you we're very, interested I'm, and we are very interested to hear your feedback so you. Can find me or anyone else from the product team and just, would love to hear your use cases because, we're, learning and growing together and. We'd like to thank you for your time.