Back in the early days of podcasting (2005-08) I ran a popular podcast called PodLeaders where I regularly interviewed luminaries from the tech world such as Vint Cerf, Matt Mullenweg, Robert Scoble, and others.
I have always had a soft spot for podcasts. I love listening to them as I walk the dog every morning, and/or when I’m on planes, or when I’m driving. And so, with the recent upsurge in podcast popularity, I recently decided to start up a new podcast focussing on the Internet of Things. I’m calling it IoT Heroes.
I will publish roughly one episode a week. Sometimes it will be a dedicated podcast, more often it will be a case of republishing the audio from one of the video interviews I carry out.
For example, I have just published as a podcast the recent video interview I did with Fybr CTO, Mrinal Wadhwa. Fybr do the full network stack for IoT devices which need to be in the field, reliably sending info back to base and using very little power so the battery life is in the order of 10 years. Typical use cases are parking meters for cities, soil moisture sensors for agriculture/horticulture, and sewage flow sensors for waste water organisations.
The event is the premier utilities event annually in Europe with 12,000 attendees, and 600 exhibitors. I was honoured to be asked, and of course accepted, without hesitation.
The talk wasn’t video’d but you can check out the slides I used above. In slides 3-29 I outline why utilities need to adopt new business models (revenues are falling due to factors like falling costs of generation, the rising popularity of renewables, climate change, etc.). In slides 33-40 I discuss some of the evolutionary business models open to utilities. While slides 41-60 outline some of the more revolutionary opportunities open to utilities – many being enabled by the Internet of Things, and utilities digital transformation.
With all the changes occurring, utilities need to disrupt, or they themselves will be disrupted.
TrenItalia has invested €50m in an Internet of Things project which it expects to cut maintenance costs by up to €130m anually, to increase train availability, and improve customer satisfaction ratings.
There is a lot of hype around the Internet of Things (IoT) these days, so it is refreshing to see an IoT story with some real traction (terrible pun, sorry!).
TrenItalia, the primary train operator in Italy, and SAP had a big launch event recently to announce a partnership whereby TrenItalia are using SAP’s IoT technology to help manage the maintenance of the TrenItalia fleet.
TrenItalia operates around 8,000 trains per day, which is in itself, no mean feat. However, it wanted to make its service even more efficient so it looked to the Internet of Things to help.
Historically maintenance on trains was scheduled based on how long the train was in service, how many kilometers it had travelled, or if a failure ocurred, and as a consequence many times the maintenance happened before it was needed.
Trains have had sensors installed for some time now, however typically they wrote their data to log files which were examined at the journey’s end. With the new Dynamic Maintenance Management solution (DMMS), TrenItalia is deploying sensors on all its trains to report back detailed data on the trains’ performance in realtime. The data is used to track where the trains are, to schedule maintenance when it is actually needed, and to increase the safety, and reliability of the entire locomotive fleet.
The trains have between 500-1,000 sensors capable of generating up to 5,000 data points per second measuring variables like motor temperature, line voltage, and braking effort. This data is transferred to TrenItalia’s 6 terabyte in-memory database, and can be stored ultimately in their 1 petabyte cloud storage facility.
The cost of the project to TrenItalia is €50m, which may sound like a lot, but according to TrenItalia CIO Danilo Gismondi, they expect the solution to save them between €104m – €130m per annum (8 – 10% savings in the annual maintenance budget of €1.3bn). There are also savings of an estimated €10-€20m from not having to pay fines and penalties to customers and regulators associated with train failures and delays.
Apart from the financial savings, other benefits of the solution include:
a reduction in the unplanned unavailability of trains (leading to a 5-8% increase in train availability)
a reduced stock of spare parts
a reduction in the amount of time locomotives spend in maintenance and
a realtime look into the status of the entire TrenItalia fleet with the ability to be alerted to issues on any one individual locomotive before problems arrive
At €50m, this is a significant outlay for TrenItalia, but they are now battling against competitors on many fronts (air travel, buses, and even ride-share schemes like Uber). Knowing this, a big motivator for TrenItalia’s undertaking the project was to increase customer satisfation ratings. As TrenItalia CEO Barbara Morgante put it
Customers have to choose us because we’re better than others
The transformative nature of the Internet of Things should not be underestimated. With this one solution TrenItalia is saving over €100m a year, it is increasing the safety and reliability of its trains, and it is providing a better service for its customers.
SAP have just announced Imagine IoT – a free course on openSAP, SAP’s Enterprise MOOC (Massive Open Online Courses) learning platform.
Why is this important?
The Internet of Things is an incredibly nascent area. Today. But it is going to explode. Slowly at first, and then all at once, such that some day soon everything will be smart and connected.
Think back to the state of the Internet in 1994. Almost no-one had a website, or their own domain even. Most companies didn’t even have a company email address, never mind one per employee. That’s where the Internet of Things is today. Most devices, are dumb and not connected, but soon all devices will be connected, the same way everybody has an email address, and when they all start talking to one another, it will transform the world as we know it even more than the Internet has to-date.
Now you see why the Internet of Things is important. It is globally transformative. Now, if you want to learn a little about the technologies underpinning the IoT, this course could well be for you.
The course is open to all comers and in the course
you will learn the fundamentals of the Internet of Things (e.g., sensors, the cloud, and more) and be introduced to new interaction paradigms (augmented reality, wearables, and more) that are changing how we interact with the world around us. You will also learn how to design and create your own IoT prototype
At the end of the course there is a “prototyping challenge” where you submit the prototype you have designed and completed during the course for feedback from your peers. The prototypes will be voted on and the winning prototypes will be showcased, and get to choose how SAP donates $50,000 to charity.
The course consists of 3 weeks of lectures commencing on September 28th, followed by four weeks of the prototyping phase.
The course curriculum looks like this:
Week 1: Get to Know the Internet of Things
Week 2: Go Deeper into IoT with SAP
Week 3: Create Your First IoT Prototype
Week 4: Submit Your IoT Prototype
Week 5: Evaluate IoT Prototypes of Your Peers
Week 6: View Results of Your IoT Prototype
Week 7: Winners Announced
And the course doesn’t require any previous knowledge of coding (though, it probably wouldn’t hurt!).
I signed up for the course, and I’m looking forward to trying out some of the technologies that will be showcased.
Full disclosure – I work for SAP but I’d have blogged about a worthwhile initiative like this regardless given how important and pervasive the Internet of Things is going to become. Knowing how to work with IoT will be a hugely important skill.
It has been an exciting few months in the meantime. I’ve had fascinating discussions with lots of companies (including the CEO of a US electric car company who wanted me to move to Palo Alto to work for his organisation).
After weighing the various options though, I decided to accept SAP’s generous offer, for a number of reasons:
The Internet of Things is at its very inception – it is now where the Internet was in 1994 – back when organisations didn’t have websites or a company email address even. So there are going to be seismic changes in the workings of the IoT over the next few years. This ever changing landscape, and the incredible outcomes which will accrue, are what makes this topic fascinating for me.
Also, when I worked on cleantech, it was an area which was very broad and cut across many verticals. IoT similarly crosses many verticals, so it maps very closely with what I’ve already been doing.
Then there is SAP – SAP is a large enterprise software company. SAP has in the region of 77k employees, and reported revenues in excess of €20bn in 2015. By any measure SAP is an enormous organisation. And I have only ever worked for very small companies, so why go for SAP?
Well, that’s the point, isn’t it? Working for a small company it is very hard to make an impact, but when you are working for a company with hundreds of thousands of customers, if you make even a small difference, it can have really significant outcomes.
And then there’s the fact that we live in the city of Seville. It is a beautiful city, and my family and I love living here. SAP had no problem with me living in Seville and didn’t even think of asking me to move to Germany, to Palo Alto, or even require me to work out of the SAP Madrid office. This was a big factor inthe decision too.
So now that I have started, I am looking forward to getting to know all my SAP colleagues, helping craft SAP’s Internet of Things strategies, and showcasing all the seriously impressive IoT solutions that are possible with SAP’s software.
If you want to get in touch to know more, feel free to leave a comment here, DM me on Twitter, email me at tom.raftery at sap.com, or get me on my mobile +34 608 252 871
Aviation – according to Bill Ruh, GE’s CEO of Digital, GE’s jet engines produce 1TB of data per flight. With a typical plane flying 5-10 flights per day, that’s in the region of 10TB per plane per day. This data gives near realtime data on the status of planes engines, increasing their reliability, fuel efficiency, and safety
Cost – Internet connected things for the home are not cheap. In an industrial setting, adding $1,000 worth of sensors to a wind turbine (for example) is a no-brainer if that wind turbine costs $10m, and the sensors are going to make it more efficient at producing energy, and reduce the chances of its failure, whereas if you are a homeowner, it is very hard to justify paying €200 for 3 internet connected Lightbulbs when a regular Philips LED bulb retails for €6!
Lack of convenience – this may sound like a strange one given I said that the Internet of Things was supposed to add to your convenience. Unfortunately the opposite is often true. Each of the IoT items I listed above has its own app, which you need to download, setup, create an account on, and then open up, every time you want to use/control your Thing. We are starting to see some over-arching platforms now which are supposed to help us control all our devices (HomeKit from Apple, SmartThings from Samsung, and Thread from Google), but, if anything are adding to the confusion.
We have Philips Hue, and Lifx LED bulbs in my home, along with Belkin WeMo Switches. The bulbs are now turned on and off at the wall, because it is easier than using an app, and so could just as easily be ‘dumb’ bulbs, and the Belkin WeMo switches failed shortly after getting them (they no longer can connect to the wifi network), so they are taking up space now at the bottom of a drawer somewhere.
So, in time, the cost of making connected bulbs will be so low that all bulbs will be connected by default. Ditto coffee machines, refrigerators, etc. Whether we choose to make use of devices ‘smarts’ will depend then very much on how the standards war works out.
The transition will take longer as well because, while we typically change phones every 1-2 years, Our home appliances (doorbells, refrigerators, even LED lightbulbs) tend to have a life more typically of 10-20 years.
So, the residential Internet of Things, as long as it remains expensive, lacks the type of economic imperative which the IIoT has, and doesn’t have a dominant, open standard, will proceed slowly. It will be 5-10 years at the very least, before homes are truly ‘smart’. And even then, a lot of the growth in this sector will likely come from devices subsidised by utilities (such as British Gas’ Hive product range), for energy efficiency programs, or the provision of services.
In the meantime, the Industrial Internet of Things will boom. Justifying the hype, changing enormously how businesses operate, and demonstrating that this is no passing fad.
The slides by themselves can be a little hard to grok, so I’ll go through them below. I should note at the outset that while many of my slide decks can be over 90, or even 100 slides, I kept this one to a more terse 66 😉
And so, here is my explanation of the slides
A little about me
The IoT section start
IoT has been around for a while, but the recent explosion in interest in it is down to the massive price drops for sensors, combined with near ubiquitous connectivity – we’re heading to a world where everything is smart and connected
According to the June 2016 Ericsson Mobility Report [PDF], the Internet of Things (IoT) is set to surpass mobile phones as the largest category of connected devices in 2018
Depending on who you believe, Cisco reckons we will have 50bn connected devices by 2020
While IDC puts the number at 212bn connected devices. Whatever the number is, it is going to mean many devices will be creating and transmitting data on the Internet
What kinds of things will be connected? Well, everything from wind turbines (this is an image from GE’s website – they have a suite of IoT apps which can “improve wind turbine efficiency up to 5%” which in a large wind farm is a big deal)
A nod to one of my favourite comedy movies (“See the bears game last week? Great game”), while also introducing the next three slides…
Planes – according to Bill Ruh, GE’s CEO of Digital, GE’s jet engines produce 1TB of data per flight. With a typical plane flying 5-10 flights per day, that’s in the region of 10TB per plane per day, and there are 20,00 planes – that’s a lot of data. Plus, GE is currently analysing 50m variables from 10m sensors
That depends, different devices have different data profiles for creation and consumption of data, depending on geography, time of day, and day of year
Because, as Mary Meeker pointed out in her 2016 State of The Internet report, global data growth has had a +50% CAGR since 2010, while data storage infrastructure costs have had a -20% CAGR in the same timeframe
243,000 refrigerated shipping containers connected through AT&T
AT&T have a partnership with GE for intelligent lighting solutions for cities and public roadways
In the equipment and heavy machinery space, nearly half of all tractors and harvesters in the US are connected through AT&T
While in healthcare, AT&T predicts that wellness tracking and virtual care solutions will reach 60m homes & 74m users by 2019
Then there’s outdoor advertising. AT&T knows data analysis. For years they owned the largest telemarketing organisation in the US. Now, with cellular data, they can completely transform outdoor advertising. Previously for advertising hoardings, the amount of footfall, or vehicular traffic passing a sign could be guesstimated, but no more info than that was available. But now, because AT&T knows where everyone is, their gender, age, and approximate income, they can transform this business.
Recently they carried out a study with a customer who wanted to advertise to women in the Dallas area who earned over $75,000 per year. They queried the data and found that the customer only needed to buy two billboards in all of Dallas, to adequately cover the target demographic. Needless to say the customer was impressed
They’re far from being alone in this – Verizon have an Internet of Things platform as well called ThingSpace Develop
While t-mobile has announced that it is teaming up with Twilio for its Internet of Things play
And it is not just cellular technologies they are using – there are also other low bandwidth radio protocols such as Lora and Sigfox which the telcos are looking at to broaden their reach
I spoke to a senior exec at a telcom firm recently (who for obvious reasons preferred to remain unnamed) and he told me:
“Telcos want to own everything, everywhere“The internet of things is certainly one way for them to get there
How is all this impacting the data centre industry?
“As datasets grow ever larger, the most efficient way to perform most of these computations is clearly to move the analysis functions as close to the data as possible”
In other words, instead of bringing all the data back to the data centre to be processed, more and more of the analysis will need to be performed at the edge
As a graduate biologist, this reminds me of the reflex arc – this arc allows reflex actions to occur relatively quickly by activating spinal motor neurons, without the delay of routing signals through the brain
So there will be a greater need for event stream processing outside the data centre – this will bring about faster responsiveness, and reduce storage requirements
This also explains the rise of companies such as EdgeConnex – companies who provide proximity, and lower latency
And the rise of new designs of racks for hyperscale computing, such as the 150kW Vapor.io Vapor Chamber which, according to a study conducted by Romonet is $3m cheaper per MW and reclaims 25% of floor space
Well, there are many ways the internet of Things will impact the utilities vertical, but one of the least obvious, but most impactful ones will be the ability to move energy demand, to more closely match supply. If you’re curious about this, I’ve given 45 minute keynotes on this topic alone
Another way the Internet of Things will help utilities is renewables management (such as the GE example referenced earlier), and preventative maintenance applications
And finally, energy information services will be a big deal, for everything from remote monitoring for seniors, through to device maintenance, and home management
I received extremely positive feedback on the talk from the attendees. If you have any comments/questions, feel free to leave them in the comments, email me (email@example.com), or hit me up on Twitter, Facebook, or LinkedIn.
The data comes from April 26th this year through to Mar 3rd. The sever small graphs along the bottom are daily demand curves, going from Tuesday April 26th on the left, through to Monday May 3rd on the right. You can see that the demand curves for each day are virtually the same.
Saturday and Sunday are however, obvious due to the lower demand on those days, and if you are wondering why Monday the 3rd looks to be lower than the rest of the weekdays, it is because that Monday was a holiday in Spain.
The large graph on top is a zoomed-in look at the demand on one of those days – Friday April 29th. From that you can see that the demand starts to rise early in the morning with the peak occurring between 8-11am. Demand then falls off until late afternoon when people are cooking their evening meals, peaking around 9pm, and then falling until it starts again the following day.
The pattern varies slightly by day of the week, as well as by season, but overall while it is variable, it is also highly predictable.
This can be problematic though when you have high penetrations of variable energy suppliers, such as wind and solar.
Here is the energy supplied to the system by wind, for example on April 29th
As you can see, it doesn’t map well with the demand, and this is challenging for grid management companies, especially with increasing pressure on them to decarbonise.
That can lead to circumstances where wind power ends up supplying 140% of your demand, as happened in the Netherlands last summer. Fortunately, the Netherlands has good interconnects, and so was able to sell this excess energy to its neighbouring countries. This won’t always be the case though, and will become a more common issue as the penetration of wind and solar increases globally.
Obviously, if you can’t manage the supply side of the grid, what about managing the demand – how achievable is that?
Interestingly, this is now becoming a real possibility. Already there are companies who aggregate the demand of large organisations with facilities for reducing demand, if required, and sell that reduced demand to utility companies. This can save the utility from having to build new generation sources to meet the increased demand at times of peak load.
What if this were more widespread?
Looking at the chart above, if we could shift the yellow demand line up during its overnight dip, and then reduce the yellow demand line during the morning and evening, this would make the grid more stable, and allow for the introduction of more variable generators (solar and wind) onto the system, as well as reducing the requirement for expensive ‘peaker plants’.
Reduced, or negative pricing is a better option than wind farm curtailment because curtailment lowers the income for the wind farms, making them a less attractive investment for renewables developers, while reduced pricing moves the demand to a more suitable time.
Now, with the advent of the Internet of Things, everything starts to be smart and connected. If our electricity devices can listen for realtime electricity signals from the grid, they can adjust their consumption accordingly.
Of course, not all loads in the home are movable – not many people will decide to cook their evening meal at 3am just because the wind is blowing and energy is cheap.
However, many loads are eminently movable. Pool pumps, are a good example. And also many loads that have a heating or cooling component associated with them, such as an electric hot water heater. When it is well insulated it doesn’t matter when it heats the water. Similarly for fridges, freezers, ice bank air conditioning, and so on. These are straightforward and affordable forms of energy storage.
Dish washers, washing machines, clothes dryers can also be made to listen to electricity pricing, and adjust their behaviour accordingly. Often, when you put the dish washer on in the evening, you don’t care when it comes on, as long as the dishes are clean and dry when you get up the following morning.
As more of our appliances become connected and smart, this will become the norm. Obviously, for widespread adoption, this kind of behaviour has to be totally automated. If the device owner has to think about it, it won’t happen.
And then there are the real storage options, using batteries. This can be in the form of batteries in electric vehicles using vehicle-to-grid technologies, in-home batteries such as the ones Tesla, and others sell, or reconditioned electric vehicle batteries – a market that is just starting to get going.
So, good news, technology is moving us inexorably to a world where energy is getting cheaper, smarter, and less carbon intensive.
Those of you who are connected to, or are following me on LinkedIn may have noticed an update to my profile there the other day. I have joined The Futures Agency.
What is The Futures Agency?
The Futures Agency is like a speaker’s bureau except that it specialises in futurists – people who are looking at trends in technology and society and who attempt to predict from that where we are headed.
Is this a full time gig?
No, this is a non-exclusive arrangement – The Futures Agency prefers to call us Members, so I can continue to work with other organisations, as before.
How did this come about?
I was invited to be one of two keynote speakers to address the 56th CEPIS Council Meeting in Athens recently. The other keynote speaker was Gerd Leonhard, Futurist, and CEO of The Futures Agency.
Gerd and I got to talking over lunch and he was interested in some of the things I had to say.
Gerd was seemingly impressed by the talk, and so he invited me to join his agency. And I was honoured to accept.
You’re a Futurist, what are next week’s winning lottery numbers? Good question – that will take a little time to think about. How about you leave that one with me, and I’ll have an answer for you, oh I don’t know, say… next week? 😉
If anyone has any more questions for me, feel free to leave them here in the comments, to email me, or hit me up on Facebook, Twitter, LinkedIn, or whatever is your preferred chat app.
Build sports car
Use that money to build an affordable car
Use that money to build an even more affordable car
While doing above, also provide zero emission electric power generation options
And with the launch (for pre-order) of the Tesla Model 3 last month, the Secret Master Plan is now well under way (if a little behind schedule!).
However, I’ve long suspected that Elon Musk has even greater ambitions than moving the world to electric transportation. I think he has two more Secret Master Plans, and I’m going to lay them out below. See if you agree with me.
The first is the more obvious of the two – to disrupt Uber, public transportation, and other ride sharing operators, by allowing owners of fully autonomous Tesla vehicles to participate in a Tesla operated ride sharing scheme.
How would it work – well, when I drive to work in the morning in my Tesla. I park the my car, and engage the Ride Share mode. The car then broadcasts its location and availability to the network, which assigns it rides as and when they are needed. At the end of my work day, my car knows to meet me back at my place of work to take me home, and I can choose once more to set it to Ride Share mode, or have it charge (or both if I have the Tesla robotic charging arm).
The trips would be undertaken on a revenue sharing basis, so money made could well be put towards the car loan/lease costs. In this way, the car could go a long way towards paying for itself, while also reducing traffic congestion, reducing global emissions, and making the roads safer.
The second Secret Master Plan is less obvious – it involves disrupting the utility industry. How?
By using the batteries in the electric vehicles to buy and sell energy. I know this may sound totally outlandish, but bear with me.
Most home energy storage systems store somewhere between 4-8kWh of electricity (with Tesla’s PowerWall coming in at 6.4kWh). But if you own a Tesla car, your battery is 70-90kWh (for the Model S, it may be as low as 50kWh for the Model 3). That’s still a lot more than a home energy system.
But let’s be conservative and say that Tesla manages to deliver 200,000 cars in 2020 with an average battery of 60kWh. A quick bit of maths tells us
60KWh x 200,000 = 12,000,000KWh
12,000,000kWh = 12,000MWh
12,000MWh = 12GWh
12GWh is a lot of storage. For context, that’s the ability to store an hour’s output from 12 typical modern nuclear reactors.
Now, add to this the fact that every Tesla sold has an always-on data connection.
Suddenly you realise Tesla has the ability to control dozens of virtual nuclear power plants worth of storage, and Tesla will be selling at least 12 more nuclear power plants worth of storage, every year. Conservatively.
So the business case – Tesla can sell usage of this distributed storage to utility companies to use as backup, or for frequency regulation, to help smooth the demand curve on the grid, and remove the instability introduced by the addition of variable generators (wind and solar). If utilities can buy energy from Tesla at times of peak demand, it can mean they avoid having to build a power plant (or 12), which is a huge cost saving for them, and also reduces their emissions because peaker plants are invariably powered by burning fossil fuels.
For Tesla car owners, they get paid on a revenue share basis for use of the battery in their car, and the increased grid stability allows for more variable generators (wind and solar) to be added to the grid, making the world a better place for everyone. And that sounds just like something Elon Musk would want.
After all, Musk is the guy who said, when he published his Master Plan back in 2006:
the overarching purpose of Tesla Motors (and the reason I am funding the company) is to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy, which I believe to be the primary, but not exclusive, sustainable solution
So what do you think, will Tesla be the next ride-sharing platform, while also becoming the Uber of electricity?
Tom Raftery – Global VP, Futurist, and Internet of Things Evangelist for SAP, keynote speaker, influencer (with a big side of CleanTech, and Energy)