The Industrial Internet: Building Your Smart Connected Products. 21 January 2015
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1 The Industrial Internet: Building Your Smart Connected Products 21 January 2015
2 A fundamental new rule for business is that the Internet changes everything. - Bill Gates, 1999 Or has it? 2
3 Where We ve Been 3
4 Even Robbing Banks! SHck em up! is now: 9 May 2013: Gang of cyber- criminals steals US$45 million completely online Brooklyn U.S. ASorney LoreSa Lynch called it "a massive 21st- century bank heist Eight members of the New York cell withdrew $2.8 million in cash from hacked accounts in less than a day Lynch called it a "virtual criminal flash mob. "It's a really easy way to turn digits into cash," said Gartner analyst Avivah Litan 4
5 Discrete Manufacturing 1980 Programming a 584 Programmable Controller 2014 Programming a 984 Programmable Controller 5
6 Energy Management 1950 Energy grids delivered power (not informahon) from small number of plants to millions of businesses & homes 2014 Energy grids deliver power (and a lisle informahon) from small number of plants to millions of businesses & homes 6
7 AviaGon 1960 Jet performance data is downloaded by hand 2014 Jet performance data is downloaded by hand 7
8 No, the Internet Didn t Change Everything There is much more to be done: Oil & Gas ExploraHon Geological data integrahon from mulhple sensing sources Rail & other transportahon Failure sensing and automahc rerouhng of mulhmodal systems, far more extensive than JapanRail automahc stop Smart homes & smart energy usage And on and on and on Internet Thinking is key to Smart Connected Products 8
9 The Industrial Internet is leading the next economic revolugon GDP data extracted from the Futurist
10 DisrupGve Technologies lead to TransformaGonal Change Internet Revolu:on Industrial Revolu:on Industrial Internet Adopted from Industrial Internet: Pushing the Boundaries (2012, Evans & Annuziata) 10
11 There are key differences between the Industrial Internet and Consumer IoT 11
12 The Measurable Outcome will be in the Trillions of Dollars GE: $32.3 trillion opportunity represenhng 46% share of GDP today. Cisco: Internet of Things (IoT) will increase private sector profits 21% and add $19 trillion to the global economy by 2020 Gartner: IoT product and service suppliers will generate incremental revenue exceeding $300 billion in McKinsey Global InsHtute: $36 trillion operahng costs of key affected industries could be impacted by IoT The convergence of Internet of Things, Industrie 4.0, Cyber- Physical Systems presents an enormous opportunity. Sources: GE, Cisco, Gartner, McKinsey 12
13 Making Sense of the Numbers Revenue Genera:on RevoluHonary new products & services à CreaHng new markets à Changing the way the world works New Opera:onal Efficiencies that drive down costs Workforce produchvity gains à digihzahon of tasks, beser deployment of resources Reduced maintenance costs à predichve maintenance Material, energy savings à reduced need for product over- engineering Reduced waste à Precision monitoring to predict and control machines Improved Customer Sa:sfac:on Improved service levels à fewer unplanned disruphons 13
14 OpportuniGes across every industry: GE s 15- year outlook $30B fuel cost saving in aviation industry 92M vehicles with Internet connectivity on the road by 2016 $63B productivity improvement in healthcare Beyond the numbers, the Industrial Internet is changing how things work. $66B fuel cost saving in gas powered fleets * Projected savings are based on 1% efficiencies/savings 68% decrease in crime rates with video surveillance $90B reduction in Cap X in oil & gas exploration and development Source: Industrial Internet: Pushing the Boundaries (2012, Evans & Annuziata) 14
15 The Industrial Internet in AcGon: Energy Industry * Remote Wellhead Control & Monitoring Business Problem: An oil and gas customer had a legacy SCADA system with a need to integrate advanced IP video monitoring and event cloud storage for all wellheads throughout their extensive remote operahon. Each system needs a self- contained power back- up and all units must be UL Class 1, Division 2 cerhfied to cope with the extreme environment of the high- desert. Solu:on: A cellular soluhon was deployed at every wellhead applicahon to link to a distantly located data center that monitors site status, produchon flow and supporhng solar power sources. The flow meters, sensors, and IP cameras are fully integrated into a legacy SCADA system and automahcally stored in a central server. Partners: MSI Tec, Terra Ferma and Moxa Results: Remote assets in the field can now be controlled and monitored in real- Hme via remote access. 15
16 The Industrial Internet in AcGon: A care device solugon for homebound healthcare Business Problem SoluHon Doctors and family can't supervise home- bound pahents around the clock. IoT plaoorm collects healthcare and sensor data from care devices (e.g., walker, wheelchair), and sends alerts to medical staff and family members as appropriate. Industrial Internet Technologies Results IoT plaoorm with overlay network provides separate communicahons to mobile communicahons devices to the pahent s family, doctor, and partners virtually on exishng networks. Doctors, family and partners can remotely receive the status of homebound pahents in order to immediately idenhfy crihcal situahons. Plaoorm and device vendors can maintain the devices remotely. Even integrated populabon health stabsbcs are possible. Family Security Companies Doctors Vendors IoT Platform with overlay network (Data Collection/Deliver, Management, Application Platform) Healthcare & sensor data Maintenance Healthcare Solu:on from 16
17 Life Safety: Oil and Gas Accenture developed a unique safety solubon that relays gas detector alarms in real Bme and allows for workers to be located and rescued ConHnuous gas monitoring for each individual for abnormal levels of H2S, LEL, O2, NO2, CO and SO2 present in refinery Panic buson for medical and other emergencies MoHon sensor in case individual is unconscious and stops moving All alarms managed by Operators in Central Control Room Must include locahon in order to facilitate rapid recovery Copyright 2013 Accenture All rights reserved. Joint paper presented with Marathon at the NPRA Annual MeeHng in Phoenix, Arizona on March 22, 2010 OperaHons at Marathon Petroleum Company finalize drar of business process arer live field teshng of Life Safety for over 3 months in the Robinson Illinois Refinery Roll out completed in November 2011 hsp:// en/pages/success- marathon- teamed- acn- protects- employees- summary.aspx 17
18 Yet there are current roadblocks to widespread adopgon Government Industries Connectivity Big Data Technology Security Standards Systems Integration Research Academia 18
19 The IIC: Things are coming together Connectivity Government Industries Big Data Technology Things are coming together. Security Standards Research Academia Systems Integration 19
20 IIC Founders/Large Industry Members IIC Founder Companies 20
21 IIC Small Industry Members
22 IIC Nonprofit/Academic Members 22
23 Industrial Internet ConsorGum Mission To accelerate growth of the Industrial Internet by coordina:ng ecosystem inihahves to connect and integrate objects with people, processes and data using common architectures, interoperability and open standards that lead to transforma:onal business outcomes. Launched in March 2014 by five founding members: Community. Collabora:on. Convergence. The IIC is an open, neutral sandbox where industry, academia and government meet to collaborate, innovate and enable. 23
24 Why now? Driving the OT IT Convergence: Low cost, powerful technology Cheap sensors & devices Low- cost processing power, data storage Connected everything By 2020, the number of things connected to the internet will be approximately 7x the number of people on earth today. 1 Big Data CollecHng, storing and analyzing data is now more cost effechve Smarter Machines Equipment is increasingly embedded with sensor & sorware 1 Source: Cisco Systems 24
25 In pargcular The Rise of Smart Connected Products Smart Connected Products (IT in the product) Smart ProducHon Methods (IoT in the factory) Smart complex systems (smart cihes, integrated health environments) No company can go it alone It s not an Apple Ecosystem play the whole point is finding new products & services by beser integrahng the value chain It s Ray Noorda s Co- ope::on
26 What Next? If you went to bed last night as an industrial company, you re going to wake up this morning as a software and analytics company. Jeff Immelt, Chairman and CEO, General Electric Which of your products and services can be sold with a different business model (opex/capex)? be connected more closely with other products/services in the value chain? be easily commodihzed by your compehtors? How can you connect your closely with your value chain? Can you integrate with another value chain, even a compehtor s? How can you collaborate more closely with your suppliers & customers? How should you collaborate with your compehtors?
27 The Future How will we reduce jet engine failure & maintenance costs? How will we save lives through beser pahent care? How will we reduce passenger fatalihes? How will we minimize unplanned factory downhme? Things are coming together. How will we reduce waste of natural resources? 27
28 Community. Collabora:on. Convergence. Things are coming together. 28
29 For More InformaGon Dr. Richard Mark Soley ExecuHve Director Industrial Internet ConsorHum tel: fax: hsp://
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