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1 ATA DRIVEN GLOBAL VISION CLOUD PLATFORM STRATEG N POWERFUL RELEVANT PERFORMANCE SOLUTION CLO IRTUAL BIG DATA SOLUTION ROI FLEXIBLE DATA DRIVEN V WHITE PAPER How to Accelerate Innovation in the Social Infrastructure Hitachi Integrates Operations and Information Technologies to Build a Sustainable Society By Hitachi Data Systems and Hitachi, Ltd. March 2013

2 WHITE PAPER 2 Contents Introduction 3 Energy Business 4 Demand Response 4 Transient Stability Control Systems 4 Water Business 5 Intelligent Water Systems 5 Intelligent Water Case Study 6 Mobility Business 7 Big Data Analysis Service 7 Cloud Services 7 Healthcare Business 8 Service Model: Providing Total Healthcare Solutions 8 Smart City Business 9 Smart City Business: Case Study 10 Smart City Business: Global Initiative Projects 10 Summary: Hitachi Works to Achieve a Sustainable Society 11

3 WHITE PAPER 3 How to Accelerate Innovation in the Social Infrastructure Introduction At Hitachi, we set strong goals for our company: to bring the world s ecosystems and people into harmony to reduce the load on the environment, and to increase comfort, safety, convenience and enjoyment. Hitachi believes that social infrastructure systems have a role in achieving these goals. In fact, we have incorporated these goals into the infrastructure that we have been building for many years. Our vision is to continue and accelerate social innovation in our current and future infrastructures. We define the social innovation business as establishment of an IT-based, advanced social infrastructure that ensures a balance between the economy and the environment. We create value through the integration of operations technology, information technology (IT), control technologies and social infrastructure systems to help solve social and business issues. By collaborating among these different types of infrastructure and social systems, Hitachi further harnesses the power of data to create new services and social innovations. Our endeavors to create new possibilities for people and companies are becoming more and more important for society. This white paper examines how Hitachi considers the specific needs of various industries as we work to accelerate innovation and build a sustainable society.

4 WHITE PAPER 4 Energy Business Demand Response To reach the right balance between supply and demand, the energy industry s system to respond to energy demands needs to integrate user demand with electricity generation and storage. Hitachi uses the full scope of information technology to help make the most of electric company resources and facility operation rates, and eliminate excess capital investment (see Figure 1). Our demand response system optimizes the entire electricity system and contributes to a safe, reliable, and green energy-demand and energy-supply business. We have a proven track record and established expertise for safe, reliable power generation control, system control, and transmission and distribution systems. We developed our expertise along with electric companies in Japan, using Hitachi IT systems that collect and analyze large amounts of demand-side data. As an infrastructure provider, we offer systems and expertise that add value to the global energy business. Our innovations include planning, financing, design, construction, operation and maintenance for a new IT-based electricity system (smart infrastructure) in collaboration with important partners. By using IT, Hitachi increases transfer capacity and regulates the power output of existing power grid systems. Figure 1. Integration of Electricity Demand With Electricity Storage and Generation for Optimal Demand and Supply Balance Transient Stability Control Systems As the number of distributed power supplies in the world is expected to increase, another vital technology to the energy industry is a transient stability control system. This kind of system prevents large-scale blackouts if a power system failure occurs due to lightning or other conditions. It can accurately understand the operations of distributed power supplies whose output changes according to weather conditions.

5 WHITE PAPER 5 Hitachi is developing a next-generation transient stability control system that collects power system information on line, and includes wind and solar power generation. The system calculates the power system s stability, plans steps for stabilization, if needed, and helps operators implement those steps at substations (see Figure 2). These capabilities enable highly efficient operation, as seen in the increased total transfer capability of transmission facilities and the enhanced flexibility of power generators. The transient stability control system helps to stabilize the power supply, which is the mission of electricity companies. It can also help to reduce construction and operation costs because it can use existing transmission lines to send the maximum power generated by efficient power generators. Figure 2. Transient Stability Control System Water Business Intelligent Water Systems The world s population is plagued by many water-related issues, including river and sea pollution in urban areas, lowquality water, water supply leaks, and the need to secure water resources. An intelligent water system that integrates advanced water process and information control or collaboration systems can provide an optimal urban water environment. This kind of system can improve service operation efficiency, minimize the load on the environment, and make effective use of limited water resources. The Social Infrastructure Systems Division of the Hitachi Infrastructure Systems Company is working with the Hitachi Water Environment Solutions Division to develop just such an intelligent water system. This system establishes a comprehensive water circulation system by connecting water resources, treatment plants, and consumers (see Figure 3). With this system, Hitachi uses our plant operations technologies and expertise to increase the accuracy of IT-based analysis and prediction, maximize business management efficiency, and minimize the load on the environment. We also take advantage of our proven track record of establishing water and sewage systems in Japan, and our high-quality seawater conversion technologies.

6 WHITE PAPER 6 We will help solve global water resource issues by participating in the water business as an infrastructure provider. As shown below in the Maldives project discussion, Hitachi is planning to use operations technology and IT in various water-related scenarios. Figure 3. Intelligent Water Systems Intelligent Water Case Study The Maldives has a population of 300,000 people in a beautiful environment in the Indian Ocean. It is composed of small flat islands with a highest point of only 2.4 meters above sea level, so it is at risk of being submerged by rising sea levels caused by global warming. Much more urgent is the difficulty the Maldives has in securing water resources. As a social infrastructure service business, Hitachi has already deployed a symbiotic, autonomic water business based on deep-sea water. Current projects include improving facility management efficiency through AQUAMAP Hydrographic Services and improving monitoring efficiency through Island SCADA (Supervisory Control and Data Acquisition) construction. We are also constructing a deep-sea-water and sea-water conversion plant. We have water and sewage facilities under construction and we are participating in facility operations. We are also providing facilities for water intake, seawater conversion, and sewage treatment. For our deep-sea water-based air conditioning project, we are planning to use operations technology and IT to take in deep-sea water and deploy cooling facilities at the airport and elsewhere. The system takes advantage of the temperature differences between ambient air temperature and the deep-sea water temperature of 4 degrees Celsius. We will provide the Maldives with an energy-efficient water business solution, covering tasks from design and construction to operation and maintenance. We will participate in the water business as an infrastructure provider, offering complete services.

7 WHITE PAPER 7 Mobility Business Big Data Analysis Service As the automotive market in developed countries becomes saturated, auto manufacturers are extending their sales channels to developing countries. These emerging economies can have harsh business environments. For example, in many of the markets, the majority of sales are low-profit, low-priced small cars. As a result of these conditions, auto manufacturers are exploring new ideas and have begun to collaborate with different industries and enter related markets. These new ideas include services supported by partnerships with insurance companies, and car sharing designed to re-stimulate interest in cars among people who do not have cars. On the positive side, strong social demand for reducing the car s load on the environment increases the market share of electric vehicles and hybrid cars. Hitachi coordinates partnerships and links data among industries, and provides services that create new value (see Figure 4). For these innovations, Hitachi accumulates and uses data generated by vehicles, such as vehicle diagnostics, vehicle usage, user behavior and schedules, and vehicle position. Hitachi derives value from this data by linking it to a wider range of data, forming a pool of big data, then developing information for use by the partnerships to develop and operate useful services. Cloud Services In addition to big data analysis, Hitachi provides highly reliable cloud services and data centers together with network products that allow rapid data exchange among them. By applying this infrastructure expertise to our expertise in diverse industries we also build automotive electrical systems we can turn the car data owned by auto manufacturers into cloud services that can be applied to still other services. Hitachi is establishing a business model that supports customers core businesses with cloud and big data analysis services, and outsources noncore businesses that build mutually rewarding relationships. By coordinating partnerships among industries, we create new value. Figure 4. Big Data Analysis Service

8 WHITE PAPER 8 Healthcare Business Service Model: Providing Total Healthcare Solutions It s no secret that medical costs are increasing globally. They account for 17% of the GDP in the U.S., and 10% in other developed countries. Reduction of medical costs is a big challenge for developed countries experiencing financial problems. In addition to these costs, other problems include health disparities between the rich and poor and among regions, an uneven distribution of doctors, and an aging population around the world. To achieve a sound society where most people enjoy healthy lives, we should advance medical technologies. Now is also the time to think about which medical costs are necessary and how to make healthcare decisions as effective as possible. To help solve some of these medical issues, Hitachi uses a wide range of medical technologies, ranging from hardware and software to complete systems. We have medical equipment, such as X-ray computed tomography (CT) and magnetic resonance imaging (MRI), as well as radiation measuring equipment, and clinical laboratory and analysis equipment. We also have medical information systems such as electronic health records and picture archiving and communication systems (PACS), and security technologies, such as encryption and privacy protection. We provide them as a total solution. In addition to systems, we openly connect and circulate people, things, money and information to contribute to collaboration, communication, the use of knowledge and resources, quality of life improvement, and regional economic growth (see Figure 5). By managing and consolidating sensitive medical information efficiently and securely, Hitachi provides an environment in which extremely varied data (big data) can be used for preventive care and drug development. The data can also help to achieve a society in which more people enjoy healthy lives. Figure 5. Total Healthcare Solutions

9 WHITE PAPER 9 Smart City Business A smart city is an environmentally friendly city that takes advantage of IT to efficiently use energy and other resources. It employs comprehensive measures for solving global environmental issues such as global warming and rapidly dwindling natural resources caused by a growing population, along with issues associated with rapid urbanization. Hitachi will establish sustainable, growing, next-generation smart cities that reduce the load on the environment and ensure security, safety and comfort for their residents. In addition to improving energy efficiency, we focus on satisfying the needs and values of people living in the city, striving for a good relationship between people and the earth. We do this by connecting social infrastructure, people s lives, and community services with an urban management infrastructure that is built around a system of information control and integration (see Figure 6). Hitachi is promoting 3 efforts to establish smart cities: Packaging Japan s advanced infrastructure (as depicted in the case study below). Participating in the project from the planning stage as a business entity, through public and private cooperation. Developing relevant and innovative technologies and systems. Hitachi is assembling these efforts into a business model and will consider deploying the business globally. Figure 6. Smart City Infrastructure

10 WHITE PAPER 10 Smart City Business: Case Study As a city that creates a vision of the future, Kashiwanoha Campus City will become a safe, secure and sustainable smart city in harmony with the natural environment. The city will have a healthy population with a long life expectancy, and it will create new industries. Hitachi supports the city by building and providing an integrated IT platform to implement the information control and integration environment for area energy management and electronic vehicle systems (see Figure 7). In this manner, we support the smart, integrated management of all urban infrastructures that have traditionally been managed separately. The smart city project is a joint venture of leading environmentally related companies, and it uses the various technologies and expertise of Hitachi and other participant companies. By integrating such technologies and expertise, we will establish a smart city model on Japan s Kashiwanoha Campus City. We will demonstrate and promote it globally as a defacto standard. Figure 7. Integrated IT Platform Acts as the Operating System of Area Management Smart City Business: Global Initiative Projects To achieve the smart city business ideas described above, Hitachi is now participating in various advanced projects all over the world (see Figure 8). This participation not only demonstrates our current technologies and develops expertise, new technologies, and a proven track record, but it also promotes urban development. We remain committed to expanding business globally by developing technologies for various types of urban infrastructure management, including energy, and cultivating expertise in projects.

11 WHITE PAPER 11 Figure 8. Participating in and Promoting Global Initiative Projects Summary: Hitachi Works to Achieve a Sustainable Society Hitachi will continue to solve society s issues and advance the social infrastructure business. We will accelerate innovation by integrating operations technology, information technology, control technologies, and social infrastructure systems. We will also promote the use of information as the source of useful innovation. We believe that our unprecedented, unique approach will take markets and industries to the next level of a sustainable society.

12 Corporate Headquarters 2845 Lafayette Street Santa Clara, CA USA Regional Contact Information Americas: or Europe, Middle East and Africa: +44 (0) or Asia Pacific: or Hitachi Data Systems Corporation All rights reserved. HITACHI is a trademark or registered trademark of Hitachi, Ltd. All other trademarks, service marks, and company names are properties of their respective owners. Notice: This document is for informational purposes only, and does not set forth any warranty, expressed or implied, concerning any equipment or service offered or to be offered by Hitachi Data Systems Corporation. WP-453-A DG March 2013

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