DEPLOY INDUSTRIAL INTERNET FUNCTIONALITY RAPIDLY AND ECONOMICALLY. Distrix Networks Thought Leadership and Government Use Cases.

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1 DEPLOY INDUSTRIAL INTERNET FUNCTIONALITY RAPIDLY AND ECONOMICALLY Distrix Networks Thought Leadership and Government Use Cases October, 2015 Dennis G. Defensor, President Kevin White, Vice President - Engineering and Client Services 2015 Distrix Networks Ltd. All Right Reserved 1

2 Introduction It s safe to say that we are at the start of another industrial revolution. The rise of connected objects known as the internet of things (IoT) will rival past technological marvels, such as the printing press, steam engine and electricity 1 (Dr. Shawn DuBravac, Chief Economist, Consumer Electronic Association) The Industrial Internet Consortium defines the Industrial Internet as an internet of things, machines, computers and people, enabling intelligent industrial operations using advanced data analytics for transformational business outcomes. It embodies the convergence of the global industrial ecosystem, advanced computing and manufacturing, pervasive sensing and ubiquitous network connectivity. 2 Cisco estimates that there are up to 14 billion objects connected to the Internet today, and this is projected to grow from billion connected devices by More than half of the Internet of Things activities are in manufacturing, transportation, smart city, and consumer applications, but within five years all industries will have rolled out IoT initiatives. 4 In the consumer market, the Internet of Things means wearable technology, health monitoring, home appliances and other applications. For the business and industrial sectors, it means big data analytics, autonomous machines and equipment sensors, among others. 5 The business and industrial applications will be greater than the consumer applications of the Internet of things, according to the latest McKinsey & Company report. 6 The technical drivers of the Industrial Internet are the explosive growth of mobile devices, declining costs of sensors, cost-effective cloud storage and the rising big data analytics. 7 The business drivers are greater operational efficiency, inter-organizational collaboration, data-driven decision making, safety, customer service, and growth derived from the integration of the formerly disparate Informational Technologies (the digital realm) and Operational Technologies (the physical realm) Distrix Networks Ltd. All Right Reserved

3 Adoption of the Industrial Internet The Industrial Internet brings Business Systems and Operational Systems together benefiting the entire supply chain with greater efficiency, improved automation, enhanced control, increased insight and reduced costs. From cutting edge to old guard Many commercial companies, ranging from GE to Caterpillar, are embracing Industrial Internet models. GE, an innovation leader, has initiated a multi-billion dollar initiative to add digital sensors to its machines which are connected to a cloud-based software platform. As a result, the company delivered more than $800 million in incremental revenue in 2013, and projected that annual incremental revenue to reach $1 billion thereafter. Caterpillar, with a brand name that reminds one of old guard corporate organizations, is increasing its agility as well by incorporating Industrial Internet technologies to its operations in order to enhance its competitiveness. 9 IBM, an IT stalwart, recently announced its $3 billion investment in a new division focused on the Internet of Things. 10 DOD Agencies According to the Defense Information Systems Agency (DISA), the Internet of Things will affect everything we do. Lt. Gen. Ronnie Hawkins Jr., USAF, DISA director said, IoT helps because the more information you have being provided, the better situational awareness you have. Retired Capt. Mark Hagerott, deputy director of cybersecurity for the U.S. Naval Academy said, Our ships are floating SCADA systems. 11 The applications include unmanned fighting and reconnaissance systems, transportation and logistics, building and base perimeter security, military hospitals, health monitoring of individual soldiers, and the gathering of missioncritical information from various sensors. 12 Civilian Agencies Civilian agencies, like the General Services Administration (GSA) is using this new technology to build automation information in about 81 large government buildings; involving 29 million data points a day from building lights, elevators, energy consumption, chillers and boilers. 13 The Department of Transportation has been considering vehicle-to-infrastructure communication, which include wide networks of sensors to monitor traffic patterns, weather, road maintenance and other related factors. 14 3

4 An astounding ninety percent (90%) of the total data in the world has been generated over the past two years, at the rate of 205,000 gigabytes per second, according to Norwegian search organization Sintef. Big Data analytics and Industrial Internet are critical in both commercial and government applications because of the huge volume of data generated and storage needed when every possible device becomes a data-providing sensor. 16 Bill Ruh, who spearheads GE s Industrial Internet initiative, warns Industrial people who aren t in the game today, who are not making the kind of investments we re making, it s like someone in the retail sector now saying, We want to be like Amazon too. But you can t be like Amazon. It s too late. And in the industrial sector, you have to take the risk now. Because by the time it s obvious, which is a few years from now, it s going to be too late. 17 And the price of being late to the game? The head of Cisco s consulting arm, Martin McPhee, pointed out that after the introduction of the worldwide web in the mid 1990s, just 25 percent of the Fortune 100 top U.S. companies were still in existence 15 years later Distrix Networks Ltd. All Right Reserved

5 Overview Distrix is an intelligent, resilient and secure Software Defined Infrastructure (SDI) technology that expedites the implementation of Industrial Internet applications for government, military, logistics, utilities, shipping, transportation, energy, healthcare and other industries. Distrix allows users to rapidly, yet securely, bridge the non-integrated Informational Technology and Operational Technology (IT/OT) worlds. Distrix robust SDI technology can overlay the existing network infrastructure, preserving the IT investment. Running on low-cost standard hardware, this overlay network allows connectivity to industrial devices for increased enterprise integration, flexibility, control, and security. Distrix interfaces with, and securely transmits various Industrial Control System protocols (ICS) such as SCADA, Modbus, BACnet and others. Distrix provides network-to-network or network-to-device secure connections at any of the seven network layers of the OSI stack. It can monitor, authenticate, capture, contextualize (by tagging metadata), filter, combine, analyze, compute, encrypt and route data streams at the edge (both IP and non-ip data) from sensors, actuators and other smart edge-devices. It can then channel data through secure gateways and virtual tunnels to big data analytics engines or other destinations in the wide area network. 5

6 General Use Cases Rapid integration of disparate communications and sensor systems Distrix can integrate, manage, analyze and relay data from disparate communications and sensor systems into one central command while filtering and managing data at its source to prevent central system overload. This can be leveraged by a single-agency or multiple agencies (such as the hurricane Katrina logistics operations). Since Distrix utilizes Software Defined Infrastructure technology and can run over a variety of terrestrial and satellite link facility types, it can be deployed rapidly. Backhaul or channel industrial control systems over existing IT network infrastructure As software-defined network middleware, Distrix can integrate, backhaul, and channel data from SCADA, Modbus, BACnet and other industrial systems across existing IT networks using softwaredefined secure virtual tunnels that deliver information and meta-data to specific network destinations, analytics systems, or other applications Distrix Networks Ltd. All Right Reserved

7 Import operational control data into analytics systems easily The Distrix network embeds intelligence from the core to the edge of the network. It can contextualize, combine, analyze, filter, compute, encrypt and feed data from various edge devices, through a secure and resilient virtual channel to the analytics engine and/or a reporting portal. High value data can be prioritized to make the entire data analytics process extremely efficient. Deploy an integrated perimeter defense network of sensors and actuators for military bases, government facilities or even national borders As software-defined network middleware, Distrix can backhaul and channel data from SCADA, Modbus, BACnet and other industrial systems across the existing IT network using software-defined secure virtual-tunnels to specific network destinations or analytics systems. Enable rapid adoption of smart strategic, tactical and micro-grid energy systems The increased use of, and dependence on, electronics in both military and civilian agencies for communications, sensors and targeting devices often requires the support of an integrated micro grid, using multiple types of alternative energy systems. A smart, integrated, resilient and self-healing grid network, using last-mile types of communications facilities, provides the optimum command and control effort required to manage these energy systems without numerous mobile technicians - reducing the number of generators needed, determine impending maintenance issues, monitoring variations in loads, and other advantages. Manage backup power systems for operational security Military bases, civilian agencies and large commercial complexes require immediate back-up power if the central utility grid becomes disabled. Increasingly, these backup strategies rely on large battery systems. One of the challenges inherent in this approach is the lack of a central system to manage and monitor their status locally and remotely in order to assure that the batteries are adequately charged and maintained at all times. Distrix can provide a networked monitoring and managing system for large battery backup management, maintenance and support. Track high value assets on location or in transit Distrix provides the capability to use connected sensors, actuators and other smart devices to provide multi-layer monitoring and tracking of transports, shipping containers and specific packages of highvalue assets within the shipping containers on location or in transit through an intelligent overlay communications network. 7

8 References 1. Shawn DuBravac and Carlo Ratti. The Internet of Things: Evolution or Revolution. AIG and CEA. p Industrial Internet Reference Architecture. Industrial Internet Consortium. June 4, P Internet of Things Connections Counter. Cisco Systems, IDC Reveals Worldwide Internet of Things Predictions for The Internet of Things: Evolution or Revolution. p Manyika, James, Michael Chui, Peter Bisson, Jonathan Woetzel, Richard Dobbs, Jacqueline Bughin, Dan Aharon. The Internet Of Things: Mapping The Value Beyond The Hype. McKinsey & Company. McKinsey Global Institute. June world?cid=other-eml-alt-mgi-mck-oth The Internet of Things: Evolution or Revolution. AIG White Paper. p IDC Reveals Worldwide Internet of Things Predictions for Marcos Iansiti and Karim R. Lakhani. Digital Ubiquity: How Connections, Sensors and Data Are Revolutionizing Business. Harvard Business Review. November IBM says to invest $3 billion in Internet of Things unit. Reuters. Technology. March 31, Sternstein, Aliya. Navy Takes On Internet of Things With New Task Force. Nextgov. October 31, Seffers, George I. Department of Defense Awakens To The Internet Of Things. Signal (An AFCEA publication). January 1, Walker, Molly Bernhart. GSA, USPS Finds Early Success With Internet Of Things. Fierce Government IT. May 18, Vehicle-to-Infrastructure (V2I) Communications for Safety. ITS Research Fact Sheets. Department of Transportation. Aug 17, The Internet of Things: Evolution or Revolution. AIG White Paper. p Seffers, George I. Department of Defense Awakens To The Internet Of Things. Signal (An AFCEA publication). January 1, John Gertner. Behind GE s Vision For The Industrial Internet Of Things. Fast Company Eric Auchard. Many Big Companies Live In Fear For Their Future In Digital Age. Yahoo News. June 25, Distrix Networks Ltd. All Right Reserved

9 About Distrix Distrix unlocks the benefits of advanced, integrated enterprise and operational systems to increase security, competitiveness and asset utilization while reducing costs and risks. Distrix Application Specific Software Defined Networking is the ideal platform to leverage the advantages of the Industrial Internet of Things. Distrix solutions do not require wholesale network equipment replacement, they are easily staged for minimal business disruption, and they are easily integrated with a remarkably small footprint helping ensure asset longevity and upgradeability. To contact our offices: Distrix Networks Ltd West 1st Ave, Suite 200 Vancouver, BC V6J 1G5 Canada info@distrix.com 9