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1 ISSN Journal ISSUE 21 // March 2014» PAGE 14 M2M platforms a market analysis by LionGate AG» PAGE 28 M2M Alliance and eco Join Forces What s behind PTC s aquisition of ThingWorx? Interview with Thomas Svensson The intelligent tram: A unique M2M solution in commuter travel The factory of the future in Ostwestfalen-Lippe Industry 4.0 gains traction

2 Contents 08 Interview with Thomas Svensson What s behind PTC s aquisition of ThingWorx? M2M platforms a market analysis by LionGate AG REGULARS M2M Alliance and eco Join Forces 03 Editorial by Prof. Dr. Jens Böcker, Executive Board M2M Alliance e. V Click view by Diana Schulte (Deutsche Telekom AG) Machina Research: Ten Predictions for M2M and IoT in 2014 by Matt Hatton (Machina Research) M2M projects made easier by Ronald Riegel (HY-Line Systems GmbH) The intelligent tram (Kapsch CarrierCom Deutschland GmbH) What s behind PTC s aquisition of ThingWorx? Interview with Thomas Svensson (EMEA, ThingWorx) Industry 4.0 gains traction (CENTRUM INDUSTRIAL IT (CIIT)) The fifth Aachen Information Management Conference (FIR) M2M platforms a market analysis by Frank Pensel (LionGate AG) Paving the way for M2M by Clemens Schuchert (COCUS AG) IT security and IT compliance aspects for M2M by Wolfgang Wanner (INSYS MICROELECTRONICS GmbH) OCS Vending Machines Interview with Peter Seidler (Materna GmbH) Predictive maintenance from wish list to reality by Joachim Hauck (Vodafone Group Services GmbH) IoT product development planning strategically by Ken Figueredo Cumulocity launches Connect to Innovate IoT platform features by Stefan Vailant (Cumulocity GmbH) The winners of the M2M challenge 13 / 14 IoT / M2M Cookbook by Harald Naumann M2M Summit from technology to business by Dennis Breuer (M2M Alliance Office) 27 Invitation to the 8th M2M Alliance themed event Events M2M Alliance and eco Join Forces by Tillmann Braun (Braun-PR) and Thomas Müller (eco Association of the German Internet Industry) New members of the M2M Alliance e. V. M2M Alliance 2013 / 2014 yearbook is out! 2 M2M Journal March 2014

3 Dear readers, Welcome to the first edition of the M2M Journal in We have relaunched the M2M Journal as regards our editorial and graphic look. We intend to inform our readers better about the variety and news of the M2M themes. Facts, details, backgrounders, interviews and application examples from the M2M world are given a larger focus. Copyright M2M Journal M2M Alliance 2014 Further editorial submission of articles in the M2M Journal is wel comed. Please send a specimen copy to the editor or, if published online, send the URL per to Despite thorough examination, the editorial staff and publishing company cannot be held liable for the accuracy of publications. Contributions with a by-line showing the name or initials of the author do not necessarily represent the opinions of the editorial staff. The CeBit in Hannover further intensified the discussion about Industry 4.0. At the heart of the discussion is the build-up of intelligent factories (smart factory), that will distinguish themselves due to highest flexibility, defining the value-added chain and efficiency of resources. Start and subsequent value-adding stages which includes suppliers, cooperation partners and customers are thus interwoven closely. It is a discussion about the future demands in industrial production. Industry 4.0 has further credence thanks to the political support of the German Federal Government, which believes that this approach to production will result in a decided advantage in the global competitive field. A prerequisite for the successful implementation of this vision is a comprehensive automation of all processes. Physical production units and software-based control systems (cyber systems) that are distributed worldwide must be able to communicate smoothly in real-time. M2M works simultaneously as key technology: firstly, with the compilation and transfer of data between decentralised machines and their control units and secondly, with the securing of real-time communication. As with countless successful projects implemented in the past, M2M technology plays an important part in the automation, increasing in efficiency and in process and cost optimisation. In light of this, the concept of Industry 4.0 urges a further development and acceptance of the M2M technologies in the market. This is steering the current discussion firmly in favour of the M2M Alliance: it is not the technology but the economical uses for businesses that are in the foreground! Last but not least, we would like to bring your attention to our new 2013 / 2014 yearbook. Entitled 2020: M2M as success factor for the Industry 4.0 and the Internet of Things, it was recently published as the second M2M Alliance yearbook. The order form is available on our homepage. We welcome your feedback about our current edition. All the best Your Prof. Dr. Jens Böcker March 2014 M2M Journal 3

4 One click view at a glance The more connected machines pervade our everyday life, the more important it is to keep an eye on individual M2M connections. Managing connected devices can be a challenge for companies like Systemsoft GmbH that have to manage several hundred M2M SIM cards simultaneously. Telekom s M2M Service Portal offers an opportunity to manage and control them all centrally. You don t have enough small change to pay for the cab from the airport to the hotel, so it is most convenient that you can pay the taxi fare by card. That is made possible by mobile ec and credit card terminals that transmit confidential customer data encrypted over the mobile wireless network during the payment process. For this purpose Ravensburg-based Systemsoft GmbH equips its card terminals with Telekom M2M SIM cards, and to keep an eye on the cards used and the devices and data involved the company uses Telekom s M2M Service Portal. The portal can be accessed worldwide via a secure Internet connection or can be connected via a programming interface (API). For Systemsoft Managing Director Andreas Schumacher, the advantages of service platforms like Telekom s are self-evident. Especially for events we have to provide our customers with new terminals at short notice, and they must be preconfigured and ready to use right away. With the M2M Service Portal we can not only see all active M2M SIM cards at a glance in real time but can also activate new cards fast and adapt them to what the customers want. Flexible management To do so the company accesses the M2M Service Portal via a web interface and can then see the status of all active cards. Systemsoft then equips the terminals with M2M SIM cards and configures them to suit the customer s requirements. The cards can be activated with a few mouse clicks on the service portal and tariffs can be chosen that are customized for the Systemsoft customer s needs. If the preconfigured data volume is exhausted, the portal alerts the user in good time by means of a traffic lights system and by or text message. Customers can also specify the countries in which the mobile wireless network can be used for mobile payments. Extra SIM cards can also be ordered directly via the portal. Secure admin user interface Security also plays a leading role. That is why all data is stored at ISO-certificated data centers in Germany in accordance with Telekom security guidelines. Users can therefore be sure that their data is kept in compliance with Germany s strict data protection legislation. The provisions of the German Data Protection Act are the strictest in the world. A further security factor is that Systemsoft employees can only access on the portal data that are of relevance for them in order, say, to activate cards, increase data volumes, extend contract terms, or record billing data to be imported directly into the customer s IT systems. On the M2M Service Portal itself, all changes can be tracked in the so-called logbook. Furthermore, activated M2M SIM cards are only ever configured for the specific terminal and cannot be used for any other purpose. Irregularities or manipulation can thus be filtered out. The M2M Service Portal thereby helps companies like Systemsoft to keep an eye on all of their M2M connections securely and flexibly. Contact: Diana Schulte fuer-ihr-unternehmen/m2m-serviceportal/ 0,23223,26822-_,00.html 4 M2M Journal March 2014

5 Article Machina Research Every year Machina Research provides ten predictions for what will happen in the M2M and IoT world. Here are ours: 1. Dawning realisation of the evolution from M2M to IoT. There has been a lot of buzz around IoT in This year is when that becomes a reality. The old stove-pipe M2M application approach is giving way to a more integrated approach to application development which draws from a wider range of data sources (including M2M connected devices of different types and also corporate and other IT systems) and stitches these together with more sophisticated applications. This evolution presents massive opportunities but also threatens to sideline any company in the M2M ecosystem that does not evolve. 2. More traffic and more ARPU. The old days when M2M was only about low volume low ARPU sensor networks is passing. There will be more high bandwidth applications, generating higher ARPU. 3. Fears over 2G refarming will continue to dog the growth of M2M. Buyers of M2M are struggling with how to cope with mobile operators plans for 2g switch off and the impact it ll have on their technology choices. This will inhibit growth in some geographies in some sectors in Low power wide area networks will see much more widespread deployment. We re going to see some much more substantial deployments of low power wide area radio access technologies such as SigFox and Weightless. These networks are perfect for many M2M applications and we expect a number of announcements of network deployments during Customers will move away from roamingbased services, towards localised connectivity using remote provisioning (and MNOs / SPs will resolve associated commercial issues). In December 2013 the GSM Association published its specifications for OTA provisioning of M2M SIMs. This is on the back of pre-standard solutions available from vendors such as G&D and Gemalto. Customers and operators alike will recognise the benefits of multi-national (i. e. relationships with facilities-based operators) in each territory, rather than relying on roaming SIMs. The service providers and operators offering these localisation options will resolve the commercial arrangements necessary to let it happen. 6. Those selling to the M2M market will find their focus, and smaller operators will find their feet. Today almost everyone in the M2M value chain is attempting to address all customers: MNOs, service providers, module vendors, systems integrators, and everyone in between, are trying to sell to the same set of M2M customers. As a result they are spreading themselves too thinly trying to be all things to all potential customers. There will be a settling down in the value chain in 2014 as players find their position and the customers to which they should most appropriately be addressing themselves. Smaller, national MNOs will begin to assert their position in the M2M market as they come to better understand their optimum strategy and key market segments. 7. The big data analytics star will rise... and fall. The value of data is in having a monopoly on the right kind of data. Or in being able to use it in some clever way. But the market will come to realise that there isn t much value in the actual analytic part of big data analytics. 8. More M&A is coming. The M2M industry is evolving very rapidly and with changing dynamics we d expect more consolidation, as all major players gear up to become full service providers. The consolidation will cut across all sectors, including device vendors, service providers and software / cloud platforms. ThingWorx would have been our big tip for acquisition in 2014, if they hadn t been bought by PTC at the tail end of The ratio of products revenue to services revenue will sort the men from the boys. With huge growth expected across all of M2M, it will be those players best able to productise their offerings that will win through. The cost of service provision tracks service revenues, only products scale allowing products-focussed companies to outcompete servicesfocussed companies in the same domain. 10. Connected homes finally arrive. They ve been promising so much for so long, but 2014 looks like it will be the year when it actually gains some momentum. Contact: Matt Hatton Director Machina Research March 2014 M2M Journal 5

6 Article Use of flexible hardware and software designs for fast and efficient project implementation M2M projects made easier Many good project ideas often fail due to high initial costs to complete the pilot phase. A fast and cost-efficient live test in the field under user conditions is particularly needed for M2M applications. Many M2M projects have similar task descriptions. Capture data, process data, transfer data and provide to the end-user. A modular system with hardware and software components can provide fast, efficient and costoptimized development. Customers and investors can be convinced only by a functioning complete application. It is possible to implement a pilot within a few weeks. A high-performance terminal can be provided, including radio transfer technology from the HY-Line Company; this is flexible in its features and use. This flexible terminal can use various radio transfer media, including GSM / GPRS, Edge, UMTS and LTE. Elements such as 3-axis sensors, optically isolated inputs and outputs, RS232 interfaces, CAN, I2C, USB, W-LAN, Bluetooth and audio interfaces are available. Data are now available for transfer; these can be presented and assessed on an existing webserver. This includes, of course, encryption of data and application updates over the air. There are many areas where these modern M2M solutions can be used: Telemedicine Personal protection Sales and ticket machines Traffic control technology Monitoring mobile assets Logistics Effective project implementation M2M projects can be implemented with little risk. This applies in particular to customers with little M2M experience. The benefits of a flexible hardware and software design lie in shortening product development time, significantly reduced development risks, cost optimization, faster live tests in the field and easy customization of applications. Contact: Ronald Riegel Managing Director at HY-Line Systems GmbH Specific software and the right hardware are needed for a successful application. A modular concept is also essential to proper implementation. One must differentiate between firmware and applications. The Jaxtra operating system, based on Unix, provides standard, requisite components. The applications parts must be customized to customer needs. This can be easily implemented and maintained in your own development department after a short training course. 6 M2M Journal March 2014

7 The intelligent tram LINZ AG lines is the first firm in the world to use a unique M2M solution in commuter travel Kapsch CarrierCom, Bombardier, manufacturer of rail vehicles, and LINZ AG LINIEN, operator of public transportation in the greater Linz, Austria, area, have collaborated and shown for the first time how M2M communication can contribute to significant improvement in commuter travel. The M2M solution developed by Kapsch was tested with Bombardier in September 2013 on three streetcars, and installed by year-end in 20 second-generation Cityrunners. Now, 33 older LINZ AG LINIEN streetcars will be fitted with the system. The operations director rides along Intelligent streetcars are fitted with a large number of sensors. These measure current energy consumption, show the position of the streetcars, and capture data on occupancy in the individual cars (empty, half-full, full), for example. The approximately 50 system parameters captured are gathered in a black box and transmitted to the operating center in real time, where the data are constantly assessed. Wolfgang Leindecker, Vice President Public Transport & M2M Kapsch CarrierCom AG, illustrates this as follows: The operations director rides along in the intelligent streetcar. Expandable in many directions LINZ AG LINIEN can implement short-term and long-term measures on the basis of these data which improve energy use, reduce operating costs and improve passenger convenience. One can also imagine that the information chosen, about current arrival times for the next street car, can be transmitted to passengers over smartphone apps. The city of Linz is taking a pioneering role in deploying this M2M solution, and is showing that the use of intelligent, innovative technology can provide further improvement in streetcar operations. LINZ AG LINIEN is now considering equipping its busses with the system. 85 tonnes less CO 2 We can reduce the energy consumption in the 23 second-generation Cityrunners by 10.2 % using this solution in regular operation-primarily through efficient use in accelerating and braking procedures and in the heating systems. We thus produce 85 tonnes less CO 2. The savings potential for the entire vehicle fleet at LINZ AG LINIEN will therefore be equivalent to the yearly energy needs of 300 households, says Erich Haider, Chairman of LINZ AG. In addition to lowering energy costs, M2M solutions provide significant improvements in maintaining streetcars. We now have significantly better information about the status of the vehicles, and can carry out maintenance works in a much more targeted fashion, says Erich Haider. Total solutions, easily transmitted The solutions are installed in modules, and can be used by traffic operators in other cities and regions, as well as in other forms of transportation, such as busses or city trams. We have developed a total solution which can be quickly and easily implemented. Costly integration into existing IT systems or adapting current IT infrastructure is not needed. Thus implementation can be paid for in less than one year, says Wolfgang Leindecker. The asset management platform functions as a so-called Software-as-a-Service (SaaS). In addition to providing a great deal of individually structured assessment options, it also offers very secure data retention. M2M supports innovative transportation designs About 70 % of the world s population will live in urban centers by Mobility needs will increase by 260 % by that time. We need innovative transportation designs and intelligent solutions in order to create truly smart cities, says Dr. Kari Kapsch, CEO of Kapsch CarrierCom AG. Our solutions clear target is to improve energy use and operating procedures for our operators in order to realize significant cost savings, while improving customer service and performance capabilities in the transportation system, says Kapsch. March 2014 M2M Journal 7

8 Interview What s behind PTC s aquisition of ThingWorx? Interview with Thomas Svensson, Senior Vice President EMEA, ThingWorx M2M Journal: PTC acquired ThingWorx in order to help manufacturers gain competitive advantage as they create and service smart, connected products. What competitive advantages do you see for these customers? Thomas Svensson: With the acquisition of ThingWorx, PTC is well positioned to support manufacturers and service providers in the emerging IoT era, as the company can now provide manufacturers seeking a competitive advantage with a full range of solutions to design, build, and then operate, manage, and service smart, connected devices. In a nutshell, the idea is to transform service from being reactive to proactive by monitoring and predicting events via connected devices and sensors.... the idea is to transform service from being reactive to proactive... In addition to smart asset management, there is also an opportunity to greatly improve the traditional service workflow, by enabling field technicians to complete repairs with only one site visit instead of two or more. By having products connected and software enabled, a problem diagnosis can be completed before a service technician travels to the site. In this way, he would take along the correct parts and tools and complete the repair with a single visit. This saves significant time and cost for the company and goes a long way in ensuring satisfied, loyal customers. Another example is having a product problem which is predicted for customers and repaired accordingly, as opposed to the customer experiencing the breakdown and then reporting the problem to a call center, waiting for a diagnosis appointment and the resulting repair appointment. With smart, connected products, supported by the kind of IoT applications that ThingWorx helps companies build, manufacturers and others can predict a service incident and preemptively correct it. The Mayday service provided by Amazon Kindle, where a live technician is available on demand to talk customers through a troubleshooting process, is a step in this direction. 8 M2M Journal March 2014

9 A further competitive advantage lies with product managers and the sales force. When a company can learn about the actual usage of its products, it can also determine the best time for product upgrades and up-sales such as offering training services if remotely captured data indicates a decrease in usage that correlates with new or untrained operators. M2M Journal: PLM is PTC s core business. How does ThingWorx fit in and what role will IoT play? Thomas Svensson: Organizationally, ThingWorx is a subsidiary of PTC and will retain its own brand and operate under its own president, who will report directly to the CEO of PTC. ThingWorx will supply PTC with the critical technology needed to deploy its products and services advantage strategy for the manufacturing industry. At the same time, ThingWorx maintains the freedom to continue to develop its technology and supply it to non-manufacturing industries via its current sales channels. The high-level roadmap for ThingWorx in the PTC realm is threefold: X X PTC will maintain the ThingWorx platform, quickly developing connected apps for customer-specific requirements. PTC will deliver ThingWorx-enhanced PTC solutions, adding real-time product connectivity and condition monitoring to existing PTC SLM, ALM, and PLM solutions. PTC will develop future generations of new solutions, aimed at improving product and service advantage. analyzing customer or market requirements, regulatory requirements, sustainability, etc. This should provide a new area of growth for PTC and could be a competitive differentiator. M2M Journal: Do you have the impression that your customers understand the IoT challenges and are beginning to prepare themselves? Thomas Svensson: In only a few year s time, the Internet of Things has taken on a life of its own and various definitions for the IoT have evolved. McKinsey defines the IoT, a. k. a. the Industrial Internet as networks for low-cost sensors and actuators for data collection, monitoring, decision making and process optimization. Gartner expands the definition to include things, people, places and systems. Whatever the definition, everyone agrees that the IoT will be one of the biggest stories with potentially one of the largest economic impacts as we move further into the 21 st... the IoT has the potential to unleash as much as $ 6.2 trillion (USD) in new economic value by the year century. According to a recent report from the McKinsey Global Institute, the IoT has the potential to unleash as much as $ 6.2 trillion (USD) in new economic value by the year Most companies already realize the potential and are preparing to take advantage of all potential business value at hand. Beyond being able to offer more proactive monitoring and services, entirely new business models are beginning to take shape. Responsibility for maintaining products is shifting from the customer back to the manufacturer. Manufacturers are developing business models where the customer no longer buys or even leases the asset from the manufacturer. The customer pays for the uptime and use of the product while the manufacturer still holds and maintains the asset. We believe the focus should be on the importance of applications. In the first generation of IoT (2000 to 2010), all of the focus was on connectivity. That was a huge challenge that no longer exists today. Unfortunately, many voices in the market still focus on this as the main challenge in IoT this includes many of the older vendors that invested in the connectivity layer (that has become commoditized). Today, the real challenge is the need to rapidly and efficiently create the new, innovative applications that drive the value of IoT. It is estimated that five million new apps will have to be created to deliver business value from the 50 billion smart connectable things that will be deployed by ThingWorx focus on IoT Application Enablement is now starting to become recognized as the main challenge in IoT. In his keynote address at Cisco s inaugural Internet of Things World Forum in Barcelona, we heard Cisco CEO John Chambers state that this huge explosion of devices doesn t do you any good without the applications to make them practical. Across the PTC product line, including SLM, PLM, and ALM, there are immediate opportunities for enhancement with Thing- Worx technology. Monitoring of tags or sensors in manufacturing execution systems (MES) has been around for years, and putting a sensor and an app into a process will not necessarily be a game changer. But integrating IoT into a big data scenario and analysis across multiple vectors of data could be. As you digitize more data, you can move from a limited amount of data for product lifecycle phases to continually March 2014 M2M Journal 9

10 Interview In IoT, the very nature of applications has changed IoT is ushering in a new era of constant innovation where new ideas need to be rapidly tried, deployed and iterated. This is the opposite of traditional enterprise application development where long development cycles and high project costs have created applications that are slow to change and slow to iterate. M2M Journal: What advice do you give customers who want to prepare themselves for IoT? Thomas Svensson: Driving value from an IoT project requires the rapid authoring of business application solutions. At ThingWorx, we believe IoT applications intersect people, processes and Things (products, assets, devices, and sensors) that are smart and connected. We deliver an application platform and out-of-the-box application capabilities that enable customers to develop and deploy IoT solutions 10 times faster than conventional business application development. We ask companies to consider these seven key points before going down the IoT path. 1. Are your Things remote or dispersed assets and products smart and connected meaning do they have the ability to generate, collect and disseminate performance and status information? 2. Do you have connectivity and suitable networking in place to make the most of those Things? 3. Have you prioritized the applications and use cases that will unlock the value that IoT and smart and connected Things can create? 4. Look closely at both the methods and tools you employ to manage customer service and support when developing your IoT strategy, a lot of solutions originate from this domain. 5. Plan on an iterative approach to developing and deploying IoT solutions lots of small successes, some fast failures, move quickly and plan for future by deploying a platform and solution suite that can grow with your business. 6. Consider a solution provider who is committed to building a marketplace of partners and third-party solutions, so you don t have to! 7. Don t be surprised if your approach leads to a fundamental rediscovery of your business; many of our customers have transitioned from being a products business to delivering products as a service and reinventing the way they service and support their client-base. Another key message we share is to provide a rationale for moving now and to view it as a ten-year journey. I would tell customers to see IoT for what it is, not a fad, but a transformational shift that will change how businesses operate and compete. This is something that every business should be investing in today so that they don t find themselves in a rapidly changing business environment where their competitors have both a head start and internal expertise on how to leverage IoT to their advantage. This happened in the early e-commerce days where some retailers saw online sales as a distraction, not a transformational shift, and ignored or outsourced the work this ended badly for these businesses. Our recommendation for every business would be to: Build an IoT competence center to develop internal expertise Select IoT tools that can accelerate you on this ten-year journey of IoT transformation Select your three-five most promising IoT initiatives Get going Whether these initiatives succeed or fail, you will develop the expertise, and core competency that will allow you to use the IoT to create a differentiated offering to the market and a competitive advantage. 10 M2M Journal March 2014

11 complete for the purpose at hand creating gorgeous, break-through IoT killer applications. M2M Journal: What do you think the key M2M and IoT trends will be in 2014? Thomas Svensson: First, we believe the market will continue to shift its focus from devices to applications, as more stakeholders recognize that this is where the value is generated. This refocusing will catalyze deployment of new, successful IoT applications that will contribute to the overall market growth rate. Secondly, M2M and IoT will continue to grow rapidly. We have already expanded our EMEA and Asia operations. M2M Journal: Among the most commonly reported problems for M2M and IoT service providers are making services scalable and simple to deploy. How do ThingWorx address this issue? Thomas Svensson: Making IoT and M2M services simple to scale and deploy has been the mission statement of ThingWorx since its inception in We accomplished this by building the first complete and purpose-built IoT application platform designed to reduce by 10X the time, costs and risk required to develop and deploy IoT and M2M services. We added to this the flexibility to deploy ThingWorx at cloud scale, on-premise, or embedded on the device, where all parts of an application can participate in a federated deployment model. This differs from traditional IoT approaches, where customers have had three choices: build the complete solution with general purpose programming tools; buy packaged applications; or act as a systems integrator and integrate numerous point solutions / packages to create a solution. Any of these decisions have strategic, business, and technical implications. At ThingWorx, we ve worked hard to obviate the need to make this decision, by delivering a complete, purpose-built IoT application platform that includes the out-ofthe-box functionality and services to assure your IoT initiative delivers immediate value while maintaining the flexibility and extensibility required to meet your future IoT need. In addition, we have worked to build a thriving ecosystem of hardware, software and solution partners that enhance our platform with extensions that enrich and verticalise the platform to add to the out-of-the-box functionality. These are delivered through the ThingWorx Marketplace, the first App Store for the IoT. Lastly, ThingWorx has been architected for elastic deployment as you dictate; on premise, in the cloud, or hybrid. Continuous, fast innovation means reducing the skills burden needed to innovate... Continuous, fast innovation means reducing the skills burden needed to innovate by making the process simple often times without the need to code at all. Less code means less programming expertise, which means more work being done by subject matter experts in the first place. Unification makes sure that everything you need is at your fingertips, pre-architected and Thirdly, there s a lot of fragmentation in the market and many start-ups are entering the space. Point products and solutions are clamoring for visibility in the market and a lot of start-ups with minimal resources are trying to be heard. But, the companies that view IoT as a feature, versus a holistic market requiring a platform-based approach and investment will fail. Now that Thing- Worx is a PTC business, we have the global reach, financial resources and the basis for connected application solutions for SLM, PLM, and ALM, so that we can make a lasting impact on the market. Fourthly, scalability, deployment flexibility, and security, will become key drivers in IoT the ability to deploy solutions in the cloud, on premises, and in a hybrid manner as well as the ability to ensure security, regardless of deployment method. We ve invested and spent a great deal of time to assure the connectivity, flexibility of deployment methods, elasticity of scaling and security is present from the core to the edge. To sum it up, we see failure for big companies that view IoT and M2M as a bolton feature set, or start-up companies that do not have the resources to really impact the market, and we see tremendous growth and success for vendors with a strong platform and applications approach. Fortunately for ThingWorx customers, we are well positioned as both the technological leader and safe haven for serious M2M and IoT developers and users in March 2014 M2M Journal 11

12 Article The factory of the future in Ostwestfalen-Lippe Industry 4.0 gains traction The Fraunhofer Application Center for Industrial Automation (IOSB-INA) is researching and working with the Institute for Industrial Information Technology (init) and the OWL Technical University s Laboratory for Industrial Engineering on the factory of the future, the SmartFactoryOWL. This will be unveiled to the public for the first time at the 2014 Hanover Trade Fair. The so-called Internet of Things is part of all areas of our lives. No matter if it is in households, cars or production facilities so-called embedded systems accompany us in our daily lives. Coffee machines, toasters and even plants can all have a say and be spoken to. Computer systems linked to the Internet enable users many conveniences. This means production facilities can run themselves; work pieces which run on an assembly belt inform themselves, where they should be transported to and processed. This makes production more flexible and the flow process and batch production is no longer mutually exclusive. In context of the Federal government s high-tech strategy, the trend to mix production technology with IT technology has been given a catchy name, Industry 4.0, the fourth industrial revolution. Industry 4.0 is technologically-based on the Internet of Things, (IoT) which removes the division between the virtual and real world. The focus of this is the smart factory. The Lemgo researchers have been working since 2005, on technologies to create the factory of the future. In 2014 the research focus remains the same, but the tried-and-trusted Lemgo model factory is developing in an evolutionary fashion into a smart factory. The Lemgo researchers are not yet within reach of creating the entire Industry 4.0 scenario. They want to show in Hanover, that current solutions do exist, and that the smart factory is no longer a pipe dream for many business areas, says Professor Jürgen Jasperneite, Director of the Lemgo Fraunhofer Institute and init. The researchers will be showing definite solutions at the Hanover Trade Fair. They will bring a conversion-capable mounting system from their smart factory. This is significantly modular from a mechatronic and an automation and software standpoint, where the most important parts of the smart factory, such as versatility, plug-andplay and user utility are demonstrated with augmented reality techniques, said his colleague at OWL Technical University, Professor Sven Hinrichsen. But, says Hinrichsen, the ensemble is a practical installation system, which is down-to-earth, solid and tangible Industry 4.0 with its feet solidly on the ground. Proximity to business practice is illustrated in the component and software solutions integration by the smart factory partner companies in the CENTRUM INDUSTRIAL IT (CIIT) network. These are integrated in the manufacturing system for the Hanover Trade Fair, showing the interplay in actual production. The fairgoers will be connected interactively to production, and may make a figure out of Lego bricks which will be put together for them. They can even have a name lasered onto the figure. And as true OWL local patriots we also gladly produce the Hermann monument, the Hermannsdenkmal as well, says Jasperneite with a grin. The SmartFactoryOWL assembly system will be shown on the BMBF cluster called It s OWL Intelligent Technical Systems OstWestfalenLippe in Hall 16, booth A04. The cluster is the biggest Industry 4.0 initiative in Germany. 12 M2M Journal March 2014

13 Information management provides strategic success News about the fifth Aachen Information Management Conference About 100 economists and scientists visited the fifth annual Aachen Information Management Conference on March 12 th and 13 th in order to exchange views on Information Management Providing Strategic Success. It was particularly important to us that visitors to the Information Management Conference could learn more about the importance of a global IT strategy and learn about trends and current challenges in information management. We achieved our goals, said the Managing Director of FIR, Director of the Logistics Cluster, Professor Volker Stich. 20 speakers presented their experiences with IT projects and provided stimulating ideas on how to work with and implement IT strategies. Two parallel conference parts were offered. One focoused on Processes and Organization, while the other dealt with Innovative IT Solutions. FIR s Institute Director, Professor Günther Schuh, gave the opening talk, calling Information Management the core of the fourth industrial revolution. But most companies do not have a fully-formulated IT strategy. Christian Metzner spoke about how important such a strategy is; he is Vice President of Marketing and Purchasing Portals at the Deutsche Post DHL. This company demonstrates through its virtual marketplace, meinpaket.de the significance of professional information management and particularly agile IT. Furthermore, he highlighted in his presentation that companies must make IT projects part of their core business. One can use the leading questions (1) What am I doing? (2) Why am I doing it? (3) How do I do it, and (4) For whom am I doing it. These questions must be kept in focus when implementing complex IT projects. Long-term information management development can be supported by strategic IT innovation management. Jan Falke, Manager Corporate Finance, IT and M&A, IT Innovation Management at ZF Friedrichs AG, discussed how this can be inculcated into corporate strategy and organization at ZF Friedrichshafen. Dr Stefan Bleck, Principal at Ritzenhöfer & Company, related to the audience his experience of many large IT transformations. He discussed the strategic direction of these transformations and their organisational effects. He also discussed methods and tools to manage IT transformations. Despite the ever-increasing significance of corporate IT, many departments frequently see themselves confronted only with additional costs. Therefore, most IT departments are not incorporated into overall corporate strategy. Stich argues that this needs to be re-thought. Successful IT projects require sufficient project management by interdisciplinary teams which can respond to customers growing requirements for more flexibility, transparency and meeting deadlines. In addition to change management measures, there was a call for CIO s in companies. The participants were nearly unanimous on one point: IT must be a component of corporate strategy, permitting companies to respond to increasing competitive pressures. March 2014 M2M Journal 13

14 M2M platforms a market analysis by LionGate AG The market for M2M suppliers is young, and still unstructured. New developments are everywhere, and it is difficult to obtain a clear overview of M2M platform suppliers. There are a number of market studies in English-speaking countries which provide an overview of M2M platforms on offer. LionGate has created a market analysis in German-speaking areas which provide transparency about local M2M platform suppliers for the first time. The study offers an overview which also makes it possible to compare the M2M platform market which covers suppliers as well as possible customers. The market analysis is based on answers from volunteer participants in an online survey. The study presents each participating company and their M2M platform products individually and in a comparative format. The M2M platform market analysis gives the first overview of the current market, compares products on offer, and supports taking the right decision for a platform to meet the required user scenario. As an example, one question posed in the survey deals with the relative share of costs in hardware, software and integration. This revealed significant differences among the participants in the survey. The market analysis shows the distribution of each participating supplier in comparison to the average of all participants. One significant topic covered in the market analysis is the definition of an M2M platform and its architecture. One member in the IT Summit working group of the Federal Ministry for Economics and Technology related to a developed recommendation for M2M reference architecture forms the basis to delimit the scope of an M2M platform: M2M module, including software components M2M connectivity M2M components and applications M2M management M2M development environment Available (back-office) IT systems in the company There is no clear delineation of an M2M platform, corresponding to the various positions of M2M suppliers. The following core requirements can be defined for an M2M platform: Interoperability and abstraction Applications and development environment Integration Operation The individual components of an M2M solution form an intelligent network which can be as complex as one wishes. Three significant building blocks must be considered to master the complexity of an M2M system and communications infrastructure: Data end-points Communications networks and Data integration points The study provides an answer about the sufficiency of this definition, and what necessities can be derived from it. The final study will be available in the first quarter of Contact: Frank Pensel Board of Directors LionGate AG 14 M2M Journal March 2014

15 Article Paving the way for M2M After years of painstaking development, M2M communication now offers companies across a wide range of industries the opportunity to streamline processes, reduce costs, and to develop new markets. However, M2M is by no means a magic pill that automatically boosts a company s efficiency and its profits. Nor is there a one size fits all solution, as even direct competitors often have a completely different infrastructure in place. That s why the implementation of M2M measurements should only be initiated after the requirements and needs of the company have been examined and a clear strategy has been developed. Some general rules apply nonetheless. Clemens Schuchert It goes without saying that the development of a holistic business case is crucial for the success of any M2M project. Because of the diversification of M2M, it is particularly important to look into each individual case and its classification as thoroughly as possible. This type of process optimization is now rated significantly higher within companies than it was a few years ago. Companies are well advised to focus on this area first in line with their size and objectives. Potential security issues must not be underestimated either. Even apparently unimportant sensory data gained from metering can pose a risk even for the entire future of the company (think of Big Data). Therefore, it is never a mistake to start with the development of appropriate measurements as early as possible. The exchange of information always entails a risk that the information may be diverted, analyzed and used for fraudulent activities. Intelligent rules and guidelines, based on the analysis of the data, can give a company a decisive advantage over competitors and must be classified as sensitive. That s why it must be ensured right from the outset that all data is being transmitted through secure connections. This also applies to information about employees and customers. If the customer has the feeling that his data are not in safe hands, or even worse: a data leak makes big headlines, then serious consequences in the form of law suits and loss of reputation are looming. There is also a good reason why standards and norms exist. Certifications help to ensure compatibility and to avoid complications in the future. The well-known GSM module manufacturers offer certified modules that meet all industrial requirements. Those who are new to the M2M market are well-advised to rely on the experience of these companies rather than buying cheap components to combine themselves. Last but not least, choosing the right network operator also plays an important part regarding the success or failure of one s M2M solution. Even though all of the major providers nowadays offer global M2M platforms, there are still differences between them when it comes to roaming, the scope and convenience of APIs, etc. In most cases, contract periods in the M2M sector range from 2 to 15 years. Some network operators require minimum orders when it comes to quantity, too. It is important that companies are aware of the different functionalities of the M2M platforms, and that they have certainty about all developments and cycles. A holistic view when choosing the right network operator is therefore crucial for the success of the project and company. Contact: Clemens Schuchert Head of Competence Center M2M COCUS AG March 2014 M2M Journal 15

16 Article Industrial communication in the age of the Internet IT security and IT compliance aspects for M2M Industry 4.0, Cyber Physical Systems, M2M whatever you want to call it; the modern world of communication does not go without intelligent wide and local area networks. Whether we want it or not, contact with the Internet cannot be avoided in most cases with this. This means that security-critical applications that have been sealed off before are now in public space and must be protected against unauthorised access and manipulation. IT security becomes a basic requirement. Additionally, you should not forget IT compliance as well. Internet the unknown variable Network-linking is a great thing, especially in automation. Machines and plant from various suppliers want to be integrated in the production network and maintained remotely. Moreover, detailed failure messages should be dispatched and operation / production data needs to be collected and transmitted permanently (Condition Monitoring). This technological progress provides manufacturers and customers with many benefits, but has also risks. Because many applications already communicate via Data collection, remote maintanance, integration of service providers, access via mobile phones: M2M applications can be very complex and nevertheless have to be secure! ( INSYS MICROELECTRONICS GmbH) the Internet and, additionally, to a large extent autonomous. Events trigger actions without a human exerting influence on this. The latest reports about back doors in products of well-known manufacturers, hacked heating controls, and spamming refrigerators have triggered many users of industrial communication to start a thinking process. Information security definitely gets more into the focus for machine communication and in the Industry 2.0 field. It s about time to protect oneself. An awareness for consequences is missing You ll definitely not be willing to make compromises regarding security for online banking. Of course, it s about your hard earned money. On the one hand, security has already played a major role for a long time in some industries like energy generation and distribution. On the other hand there are companies that have just set out for data communication. They often act amateurishly, make controls accessible from the Internet and sacrifice security for costs or apparent practicability. A loss of reputation is the least evil regarding this: The impending financial loss is more risky due to possible data loss, production downtime or questions of liability! I can t be found, right? Unfortunately, you can be found and in fact quicker than you might think. Many users are not aware that their applications are accessible via special search engines like Shodan (www.shodanhq.com). They provide any public accessible IP addresses and make finding poorly protected systems a breeze. The BSI (Bundesamt für Sicherheit in der Informationstechnik, Federal Office for Information Security) has not published a report with the Top10 Threats for Industrial Router of INSYS icom do not just connect, they are little security experts. ( INSYS MICROELECTRONCIS GmbH) 16 M2M Journal March 2014

17 Automation, Process and Control Systems in 2012 for nothing. They include unauthorised use of remote maintenance accesses, introduction of malicious code, attacks to network components and human sabotage. It is as interesting as it is threatening here that most risks can already be minimised by measures that should actually belong to the basics. For example, factory passwords must always be changed, larger networks must be segmented or firmware updates must be installed to close security vulnerabilities. Rethinking required Operators and administrators of IT networks that are connected via the Internet need a new awareness for security aspects. A connection was quite secure in modem times. There was a point-to-point connection that was established and held as long as the two terminal devices did not close it. Communication via Internet works differently, namely in packets. These data packets reach their destination where they will be reassembled via different ways. The path in between is public, i. e. anyone can eavesdrop, trap, reroute or manipulate data in theory. That s why a VPN (Virtual Private Network) with a protected tunnel is definitely part of a basic configuration of an intelligent communication solution meanwhile. But 1:1 connections are not up to date any more in times of industrial network connection. Moreover, it requires a software solution like the INSYS Connectivity Service, which supports forming and managing a whole VPN network. Local security would you have thought it? Even if you have perfectly protected communication paths, there is a security risk that is often not in mind, because the bad guy is not always on the Internet. Moreover, local applications that are connected to central company structures via communication devices may become the starting point of attacks. A fence around your system and video cameras are not sufficient as protection (any more). Imagine a solar park that is connected to the local energy provider due to the required controllability via a router. If one connects his notebook to the local LAN port of this router, the connection into the network of the provider is only a question of minutes any more for a somewhat experienced hacker. It s not nice to imagine what can be damaged with this. Intelligent routers like the MoRoS series of INSYS icom are able to block configuration accesses or disable whole interfaces that are not required. Moreover, these devices detect plugging or unplugging cables for example, dispatch a message thereupon and disconnect the communication interface from the running application. Top 10 commandments for increased IT security Nevertheless: There is no 100 % security. It is a question of resources and will to get access to a certain application. But it is possible to make it hard for the opponent. The communication experts of INSYS icom have published a guide in an entertaining manner together with MOSES 2.0 exactly for this: The top 10 commandments for increased IT security in industrial data communication. Users shall be provided with rules like Be closed! or Control servant s entrances! together with concise explanations and approaches about how they can improve the security of their applications significantly. As simple as these commandments sound fundamental and essential they are for IT security. An appropriate measure catalogue can also be downloaded for free on the respective Internet page What has IT compliance to do with IT security? Not only the compliance with legal provisions is a fix basis for operating a communication system from the view of compliance managers. The evaluation of operational risks and their handling are also integral parts of business continuity concepts. The standards ISO (Information Security Management) and ISO (Business Continuity Management) get a wider distribution in the pharmaceutical, automotive and telecommunications fields and contain also clear requirements for selection, protection and control of communication components. The use of systems that are fraught with risk or cannot be controlled from the view of the standards inhibit a certification. If a large manufacturer of communication hardware has classified a recently found back door as irremovable, the use of such hardware is not possible for any company that wants or must follow such a standard. However, since the compliance with these standards forms a basis for an assignment, the pressure to go for secure and transparent systems increases not only from the side of the legislative authority, but also from the side of the customer. Thus, it is very important from the legal and contractual IT compliance view that industrial communication systems do not only pretend to be secure. The question is how good is the documentation of such systems, how direct is the support by the manufacturer, and whether it is based in an EU country or comes from a third country that is insecure regarding data security. This includes still and more than ever since the NSA methods became public the USA. It will become more and more important in future for the selection of hardware and software providers in the industrial field how fast they respond to security vulnerabilities and which concepts are used to prevent intentional or unintentional back doors besides the good old reference. Conclusion IT security is a very important and widely discussed topic since Stuxnet, NSA et al. An integral IT security concept that must be very profound depending on the application is recommended for everyone who uses public wide area networks for connecting his applications and communicating with them. Seemingly simple measures can already provide a certain degree of protection. But only the interaction of technical, physical and organisational measures leads to maximum possible security. As important as the functional scope, the price or also the compatibility may be, the security aspect of a communication product from technical and compliance view should already be wellestablished in decision-making when selecting products. Contact: Wolfgang Wanner Head of Marketing INSYS MICROELECTRONICS GmbH March 2014 M2M Journal 17

18 Interview OCS Vending Machines Interview with Peter Seidler, Product and Sales Manager Communication Solutions, Materna GmbH More than just a cup of coffee The management of vending machines, known as Vending Machine Monitoring Systems, is a market with a real future. In a wide range of Machine-to-Machine industries, components from IT, hardware and communication technology aim to achieve efficiency, data security and, most importantly, service. IT specialist Materna in Dortmund specialises in what is known as Office Coffee Services (OCS) within the vending sector. Business Development Manager Peter Seidler explains the concept in an interview with Thilo Korte. M2M Journal: Peter, we are sitting near a coffee machine which contains not only espresso capsules but also M2M technology from Materna. What happens in this machine but not in others? Peter Seidler: The user presses a button to get a specific product: espresso, latte macchiato or cappuccino. So far, so normal. But with our product, something decisive happens behind the scenes. Each coffee-making process is noted and collected. The result is encrypted every day and sent to a Materna M2M server in our data centre. The data is then processed into figures and graphics. The next morning, the service provider, our customer, can view the data for the coffee machine via a web front end, analyse and draw his own conclusions. M2M Journal: Why is encryption necessary? Peter Seidler: For an operator in the vending business, the position, the site is the most important factor, almost as important as for a wine-grower. It is enormously difficult to get good sites. And when they have found one, the last thing they want is for site data to get into the hands of their competitors. M2M Journal: What does the business model for our OCS solution look like? What is the added value? Peter Seidler: We are working on a pay per cup principle here. The machine operators provide the coffee machine and the coffee for a corporate customer, e.g. a large company. The corporate customer then pays 18 M2M Journal March 2014

19 the machine operator the product price agreed per coffee-making process and not per coffee, as before. This is important, as it means there is no incentive for the company to go against the contract and buy cheaper coffee elsewhere. The technology prevents misuse and displays when new coffee consumables need to be delivered as the operator has a precise overview of stock levels. M2M Journal: A service provider using Materna technology can both control and offer additional services. Peter Seidler: Spot on. So the provider can guarantee compliance with the contract and even add bonuses or discounts to the contracts. This is new, it is something that couldn t be done before. And he has active control of the necessary technology. This is particularly important when it comes to deliveries to sites which are affected by the seasons. For example, hotel capacities can fluctuate massively and coffee machine use also fluctuates accordingly. The provider can see everything via our web front end. M2M Journal: Do particular groups of people who use coffee machines more? Peter Seidler: We know there is a real coffee machine culture in Japan and the Benelux countries. But the world champions are undoubtedly the North Americans. On the highways, there are service stations consisting entirely of rest rooms and at least four master-slave combinations made up of multiple devices, one pointing in each direction. M2M Journal: What kind of differences are there between the countries? Peter Seidler: There are completely different framework conditions. To name just a few factors: different currencies, different legal regulations on data security and, of course, different customs goods in Israel, for example, need to be kosher, even coffee. M2M Journal: An important component of M2M solutions is the secure communication connection between the data end point (machine) and the data integration point (M2M server). Is this Materna s USP? Peter Seidler: Absolutely. Three factors in this business are brilliantly covered by Materna know-how. The first is the terminal based on our design, including an MDB interface to read the data. Secondly, we have incorporated end-to-end encryption which means the operator can even use his own data key and we cannot read the data even if requested to do so by the customer. We also control the service with a back end in Germany, meaning the data is subject to German data protection legislation. And, thirdly, we have a certified project management team to control even international projects. M2M Journal: OCS is a combination of different components. But what exactly is in the machine? Peter Seidler: There are differentiated models. Our OCS model has no digital interface and no external power supply for the terminal, but we can still read out information on each coffee making process. Materna provides the firmware which controls the terminal and the hardware design for the terminal. There is still a lot more that can be done in the premium sector. We are working with a highly developed router. It is a mini-computer to which we add additional services. M2M Journal: What does the future hold? Peter Seidler: There are digital signage elements on the future, i. e. the use of embedded screens for different services. The relevant business models need to be developed by the operators here. M2M Journal: In other words: The user can drink a coffee and read the weather forecast direct from the machine. Peter Seidler: Exactly, and other content could be considered too: Advertising or even e-commerce. M2M Journal: What are the benefits of these kinds of services for the customer? Peter Seidler: They can not only earn from the sale of goods, but also from the active service. What is the use of a cheap machine if the location has high operating costs. The overall product package including the service concept at the end is not only more cost-effective, they can also generate additional sales, e.g. with content, advertising, magazines, newspapers, etc. M2M Journal: Peter, tell us about your first contact with a modern vending machine? Peter Seidler: It actually was a memorable moment. There are two wonderful machines at the Frankfurt Exhibition Centre. They are really classy machines, covered in glass and even built into a marble surface. It looked really exciting and interesting, like a drinks hall but more modern. I just had to go and get a snack. In this case, my purchase had nothing to do with hunger.... my purchase had nothing to do with hunger. March 2014 M2M Journal 19

20 Article screenshot dashboard screenshot analysis screenshot customize Predictive maintenance from wish list to reality How integrated platforms transform maintenance for manufacturers and service providers From power stations to vending machines, medical equipment to street lighting, any downtime across complex equipment landscapes racks up service costs (and raises tempers). In an ideal world, organisations would check on their assets from a single point of control and proactively maintain them. Yet this is just a wish, as it needs a moneyis-no-object approach. This is changing, with platforms based on M2M (Machineto-Machine) communication via mobile networks, integrated with applications to monitor devices which predict when service is required. Integrated platforms for remote device monitoring and control Remote device monitoring is not new, but the integrated platforms such as Vodafone s RMCS are ramping up M2M opportunities. Combining SIM hardware, wireless network connectivity worldwide, plus reporting and analysis tools accessed through an easy-to-use web portal, RMCS brings M2M to more organisations and enables manufacturers and service providers to balance service quality with service cost. There are several levels of service. At the basic level, condition monitoring, enterprises can generate reports on uptime and downtime, and compare data across sites. Taken a step further, M2M can alert organisations to device errors, and suggest a response. Next comes remote repair, in which problems are diagnosed using expert software, with uploads of firmware updates. The real game changer is predictive maintenance. Service managers have a dashboard overview of every machine in the fleet, complete with dedicated service plans per machine, electronic documentation, and automated linkups with parts suppliers to order required parts. Combining up-todate machine information with available statistics and error patterns allows for warnings before failures happen. Transformative technology Remote monitoring and control has transformed service delivery across diverse industries. Councils can track the fill level of bins and adjust collection schedules, arranging calls only when the bin is full. SIM-equipped vending machines can be tracked via RMCS, which alerts operators about problems, reduces callouts and helps predict service patterns. Based on predictive maintenance, organisations responsible for a fleet of complex industrial equipment can monitor wear-and-tear and replace parts proactively, before a problem causes downtime. What the integrated platform does is focus knowledge. With less time, and more devices to manage, service providers and manufacturers can keep their insights in one place no matter where devices are located. Unlike distributed solutions, an M2M-based platform that connects devices through a mobile network can easily be scaled up as the asset landscape expands. The outlook is win-win These new platforms connecting SIMequipped devices create a win-win situation. Customers benefit from prompter, more efficient service without a hefty bill. Assisted by reporting and analysis tools, organisations can ramp up service quality, without raising their budgets. For tomorrow s service engineers, the must-have tool will be the device SIM card. Contact: Joachim Hauck M2M Sales Central Europe Connected M2M Products Vodafone Group Services GmbH m2m-machine-to-machine.html 20 M2M Journal March 2014

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