Tag: cloud computing

Digital Supply Chain, Industry 4.0, and IoT/Edge Computing – a chat with Elvira Wallis (aka @ElviraWallis)

On this second Digital Supply Chain podcast on the theme of Industry 4.0, I had a great chat with Elvira Wallis (@ElviraWallis on Twitter and Elvira Wallis on LinkedIn). Elvira is the Global Head of IoT at SAP, so obviously I was keen to find out her take on how Digital Supply Chain, IoT and Industry 4.0 intersect.

We had a great conversation covering Supply Chain, Internet of Things, Edge Computing, Cloud – their use cases, challenges and opportunities.

Read the full transcript of our conversation below, or listen to it using the player above.

Elvira Wallis [00:00:00] The Internet of Things is a key enabler for industry 4.0, and it is required to make industrial IoT, to make industry 4.0 possible because you need to connect to sensors, you need to connect to autonomous systems. You need to connect to CoBots. You need to connect to big data lakes and so forth.

 

Tom Raftery [00:00:21] Good morning, good afternoon or good evening. Wherever you are in the world, this is the digital supply chain podcast. And I’m your host, Tom Raftery. Hi, everyone, welcome to the supply chain podcast. This is another of the industry four-point all themed podcasts of the digital supply chain podcast. And my very special guest on the show today is Elvira Wallis. Elvira would you like to introduce yourself.

 

Elvira Wallis [00:00:48] Sure Tom. Thanks for having me on the podcast. So hello, everyone. My name is Elvira Wallace and I am running Internet of Things here at SAP.

 

Tom Raftery [00:00:58] Super. Well, that’s a great role. Can you tell me Elvira, we’re on the obviously Industry 4.0 themed podcast today, so how are we connecting Industry 4.0 and Internet of Things? Cause, you know, for a lot of people who think about Industry 4.0, they might think about maybe, you know, improvements in manufacturing and things like that. But it is just that? Is it more than that? How do you how do you see Industry 4.0 and the connection to IoT?

 

Elvira Wallis [00:01:27] Yeah. So, let me maybe start with some, you know, regional flavour here. In Europe we often like to call things industry 4.0. If you look into North America the same phenomenon, namely the phenomena of an industrial transformation using new digital technologies such as Internet of Things or Edge and cloud computing, big data lakes and so forth, is termed industrial IoT, so dependent on the region of the world, the terms industry 4.0 and industrial IoT are used interchangeably and referring to an industrial transformation using new digital technologies. And if you didn’t go to Asia, it’s called ABC Country 2025 or D E F Country 2030. In other words, we’re all talking about a phenomenon of industrial transformation which we often call Industry 4.0 in Europe. And it requires new digital technology such as the Internet of Things, edge and cloud computing, big data lakes. So, in other words, the Internet of Things is a key enabler for Industry 4.0. And it is required to make industrial IoT to make industry 4.0 possible, because you need to connect to sensors, you need to connect to autonomous systems, you need to connect to Cobots, you need to connect to big data lakes and so forth. So, you need an enabler. And the key here is, all of that data in and by itself is relatively uninteresting. Where SAP comes in… And that has to do with our rich history and also our hopefully very rich future is bringing this type of data with our technologies in the context of business processes.

 

Tom Raftery [00:03:21] OK, OK. Now, for people who may be unfamiliar… We’re obviously not a hardware company. We’re a software company. And IoT is very much a mix of hardware and software. So, where do we fall into that kind of ecosystem?

 

Elvira Wallis [00:03:37] It’s a very, very good notion that you bring up. Clearly, Industry 4.0 as well as Internet of Things is not a one person’s island. Whoever sets out with the idea of it’s me, myself, and I shall fail miserably. It is an ecosystem play that requires the OT players, it requires the hardware players. It requires some clearly various software companies and even into software realm, it’s not SAP alone, it’s us and our esteemed ecosystem. Where SAP is playing is clearly solely in the realm of software, right? Not hardware. Of course, we have a lot of hardware partners that we work very closely with so we can recommend to our customers in specific situations, specific types of hardware.

 

Elvira Wallis [00:04:23] So we’re not ignorant, we’re just not owning that space. Yet to your question, where we’re playing, we’re playing in two places if we cut it very broadly. One is the cloud where we have, of course, the applications that run in the cloud as well as the underlying technology for Internet of Things that works in conjunction with the applications and the second realm where we’re playing is edge computing. The world is moving more and more towards distributed computing. And when SAP says edge computing, we’re of course again referring to software and our software runs on various types of hardware, very close to the source of data. And as to the hardware we run on we’re agnostic, we play with many of the key industry leaders here.

 

Tom Raftery [00:05:17] OK. OK. So, for anyone who is unfamiliar with the concept of edge computing, could you just give us a 101 on that?

 

Elvira Wallis [00:05:25] Oh, definitely. And it’s one of my favourite topics. So, let’s not start with, you know, with SAP. Let’s start with the trends in the market. Right. Great. And. If we put it very, very generically, then edge computing is a new form of distributed computing, meaning not all data will be processed in the cloud. Some data will be processed at the edge. So, what is the edge? It’s basically edge computing means running data applications and business processes near the source of that generated data. So, the source of the generated data could be a factory, a plant, a mine. And it refers to the concept of running the data running the application, the business process near to the source of the data, and if people now say, oh, isn’t it very far away and do we need to deal with that today?

 

Elvira Wallis [00:06:19] Maybe some data points, Tom. If we’re if we’re looking at edge computing, it has been growing steadily in the past and if you if you listen to the analysts, Gartner, for example, predicts that by 2025, 50% of enterprise generated data would be created and processed outside a traditional centralized cloud data centre. Now, 50%, is that a lot or not? Well, that would be up from 10% in 2019. So that’s quite a big growth in the ability to, you know, extend and run business processes at the edge, meaning in the plant, in the factory close to the source of data that enables customers to automate and run their operations independently, and that’s what a lot of people want in the world of industry 4.0, in the world of industrial I.T. in order to endorse the digital transformation. They say, hey, my plant, my factory needs to run independently of the cloud. So, in order to endorse the cloud, we see a new form of distributed computing, namely the edge. And the edge addresses customer concerns with running and low latency. Right. Very often we hear that I need to run low latency, low bandwidth. And then let’s not forget in many places of the world there, specific security and regulatory requirements which says, hey, the data must be processed locally instead of in a centralized cloud. So, it can also be regulatory reasons why edge computing starts to prevail. And if you listen to some more data points and then IDC, for example, predicts that by 2023, 70 percent of IoT deployment will include edge-based decision making, right. So, the decisions will be made decentral supporting the organization’s agenda. So, meaning we can do industrial IoT. We can do industry 4.0 without it, meaning some central cloud-based system taking over. Local autonomy can happen if edge computing is involved. And if we look at the IDC saying they’re saying, OK, 70 percent of all enterprises will run varying levels of data processing at the edge. And that also means organizations will have to spend a lot on IoT edge infrastructure in that timeframe.

 

Elvira Wallis [00:08:53] So I think edge is here to increase in prominence and in relevance for our customers, and it’s a good idea to get prepared. I mean, we at SAP we’re very well positioned to run data driven business processes at the edge. We can run manufacturing processes at the edge orchestrated from the cloud, and we provide our customers the option to run applications in a hybrid approach meaning, at the edge and clouds and this hybrid cloud edge offering helps customers accelerate the transition to the cloud by addressing their need around data privacy, around security, around latency and regulatory requirements.

 

Elvira Wallis [00:09:37] Now, going back to no person is alone. It’s, of course, clear that we also in the realm of edge computing, we’re in need to be committed to a strong ecosystem. No one can do it alone. You need the hardware providers, and we have announced strategic partnerships with the hyper scalars and also in some cases regional industry specific players in IoT and edge where we leverage the strength of all the players in the ecosystem to help our customers be successful. It’s a joint digital transformation where SAP participates together with our customers and our partners.

 

Tom Raftery [00:10:14] OK, super, super for any of our customers, potential customers or just anyone who’s listening, who is interested on embarking on some kind of industry 4.0 project. How do you start something like that? Where do you kick off?

 

Elvira Wallis [00:10:35] And so it’s a very good point to raise. My first perspective would be. There is no one size fits all right? Customers are. By and large, all increasingly challenged to adapt to ever changing conditions. Now, mind you which of these conditions is the most prevalent and in which line of business is it the trade wars? Is it managing the global supply chain? Is it skills shortages? Successful customers need to embrace the digital transformation right to discover new ways to solve their business problems and to keep their customers engaged. Because this is also to do with customer experience and customer loyalty. Now, customers might start in different areas. They all centre on their customers. But whether they start with reinventing production to centre on their customers or whether it is connecting various departments in their company to overcome their own segregation of duties in a way that is hindering success. That is something that customers really will vary. In other words, SAP can help make industry 4.0 an everyday reality. Now where customers start, whether it’s with the intelligent asset and managing the overall equipment effectiveness or whether it’s the intelligent product where customers want to understand the business impact of design and engineering changes in products, or whether it’s the intelligent factory where IoT helps enterprises to be agile and deal with varying production volumes and new manufacturing technologies, or whether it is with empowering people so that people can fulfil complex tasks with a fast work-around that is really dependent on the customer need. We need to understand that it’s important to centre on the customers and connect the entire company, but it doesn’t mean you need to start everywhere at the same time with the same urgency. Our clear perspective is customers have a choice where they start and we recommend to start somewhere, where of course there is an immediate need and it can be time boxed because nothing is more convincing than initial positive results and then you can widen the exercise.

 

Tom Raftery [00:13:02] Okay, very good. What kind of challenges are companies likely to face on a journey like this? I mean, you mentioned, you know, having skilled staff there. Is it is the staffing or is it technology or is it a combination or is it something else entirely and you know, having then identified a couple of the challenges, what would be ways of overcoming them?

 

Elvira Wallis [00:13:28] It’s a very good question. And there are some interesting studies out there in the market that I enjoyed. One is by McKinsey and that study showed clearly that the success rate of these digital transformation projects are not necessarily tied to the area within which they are started. So, you couldn’t say, oh, let’s start it in production or let’s start around the asset and as it is more successful than production or, vice versa right? What they showed is it is other factors that correlate with success. In other words, the more initiatives a customer ran. So, in other words, if they addressed digital transformation in more lines of business, they were likely to be more successful than if they were just doing what I would call island exercise in one area. So, spreading wide helps clearly with the RoI. The other thing that some of the studies showed is time boxing is key, having a line of business sponsor is key. So, in other words, it doesn’t work if you have just some little IT exercise or if it’s just some innovation centre not connected to the line of business. So, sponsorship, time boxing, clear KPIs as to what do we want to achieve, and which problem do we want to solve. In other words, all that is more successful than what I would call analysis paralysis and looking for the perfect case. Or the what I would call research approach where let’s take some sensors and collect them and produce a dashboard. So, you need to have a clear proof business problem to solve, a business sponsor, time boxing, clear KPIs and ideally more than one initiative. Spreading it and seeing what are the successful front runners and building on those. Those are clearly some of the what I would call non-technology challenges in a way they are common sense that we learned from various studies, but also from working with our customers.

 

Tom Raftery [00:15:30] OK. OK. Very good. We’re coming up towards the end of the show, now Elvira. Is there any question that I haven’t asked you that you think I should have?

 

Elvira Wallis [00:15:44] It’s a very good question. I would say when we look at the type of use cases, what kind of typical use cases do we see is one question that I very often get asked and I mentioned before, yes, we have the area of intelligent asset, intelligent product, intelligent factory and empower people. Now, another dimension to look at it would be what type of goals are people pursuing? Is it about new business models? Is it about efficiency? Is it about customer experience? In other words, what type of goal do people look at? And one thing I’d point out is we see increasingly people looking at some product as a service offerings. Now, that doesn’t work for all types of offerings, but that is something that we see a shift to product as a service in the construction, transportation, hospitality, realm and insurance industries. Where we see a shift and I believe we look at new customer experience, in other words, does my digital transformation help me create a better, better customer experience is clearly something that we see where people look at their customers, but also their customers customers. And I would encourage people to take that line of sight to look in addition to the productivity gains and the overall production. Really the focus on the customers and to put that at the forefront and the centre of a digital transformation.

 

Tom Raftery [00:17:17] Superb. Elvira if people want to know more about Elvira, or IoT, or Industry 4.0, or any and all of the above where would you have me direct them and feel free to give multiple links? I’ll put them into the description of the show notes when I publish this.

 

Elvira Wallis [00:17:35] Oh definitely join me on Twitter. Join me on LinkedIn. And of course, we have our flabbergastingly great web site SAP.com/IoT. And not to forget, we’re going to run an openSAP IoT course in the near future. And I would really appreciate you joining us in that openSAP course.

 

Tom Raftery [00:17:56] Fantastic. I’ll have links to all of those in the show notes. OK, that’s been great. Elvira. Thanks a million for joining us on the show today.

Elvira Wallis [00:18:01] Thank you, Tom. It’s always great to be one of your interviewees.

And if you want to know more about any of SAP’s Digital Supply Chain solutions, head on over to www.sap.com/digitalsupplychain and if you liked this show, please don’t forget to rate and/or review it. It makes a big difference to help new people discover it. Thanks.

The Internet of Things – trends for the telecoms, data centre, and utility industries

I gave the closing keynote at an event in Orlando last week on the topic of The Impact of the Internet of Things on Telcos, Data Centres, and Utilities.

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 ūüėČ

And so, here is my explanation of the slides

  1. Title slide
  2. A little about me
  3. The IoT section start
  4. 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
  5. 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
  6. Depending on who you believe, Cisco reckons we will have 50bn connected devices by 2020
  7. 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
  8. 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)
  9. Rio Tinto has rolled out fully autonomous trucks at two of its mines in Australia. They developed the trucks in conjunction with Komatsu. The trucks, which are supervised from a control room 1,000km away in Perth, outperform manned trucks by 12%
  10. A nod to one of my favourite comedy movies (“See the bears game last week? Great game”), while also¬†introducing the next three slides…
  11. 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
  12. Trains – New York Air Brakes has rolled out a sensor solution for trains, which it says is saving its customers $1bn per year
  13. And automobiles – in the 18 months since Tesla starting collecting telemetry data from its customers’ cars, it has collected 780m miles of driving data. It is now collecting another 1 million miles every 10 hours. And the number of miles increases with each new Tesla sold
    And since 2009 Google has collected 1.5m miles of data. This may not sound like much in comparison, but given its data comes from Lidar radars, amongst other sensors, it is likely a far richer data set
  14. With the rollout of smart meters, UK utility Centrica recently announced that it will be going from 75m meter reads a year, to 120bn meter reads per annum
  15. Wearables, like the Fitbit now record our steps, our heartbeat, and even our sleep
  16. This was my heartbeat last November when I presented at the SAP TechEd event in Barcelona – notice the peak at 2:30pm when I went onstage
  17. Lots of in-home devices too, such as smoke alarms, thermostats, lightbulbs, and even security cameras and door locks are becoming smart
  18. Even toy maker Atari has announced that it is getting into the Internet of Things business
  19. Which is leading to an enormous data explosion
  20. In 2012 analyst form IDC predicted that we will have created 40ZB of data by 2020
  21. In 2015 it updated that prediction to 75ZB
  22. Where will this data be created?
  23. Well, according to the 2016 Ericsson Mobility Report, most of the IoT devices will be in Asia Pacific, Western Europe, and North America
  24. When?
  25. That depends, different devices have different data profiles for creation and consumption of data, depending on geography, time of day, and day of year
  26. And why?
  27. 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
  28. In 2011 EU Commissioner Neelie Kroes famously said that Data is the new gold
  29. And if that’s true, as is the case with any gold rush, the real money is to be made supplying the prospectors
  30. Now, let’s look at some of the trends and impacts in the telecoms industry
  31. From Ericsson’s 2016 Mobility Report we can see that the big growth for the telecoms is in data traffic
  32. And not content to be merely infrastructure providers, telcos are looking to climb the value chain
  33. To facilitate this data explosion, telecom companies are building fatter pipes with LTE growing significantly in numbers between 2015 and 2021, while 2019 will see 5G kicking off
  34. Telcos are now offering cloud solutions. Their USP being that their cloud is fast, reliable, and end-to-end secure
  35. There are huge opportunities for telcos in this space
  36. In the next few slides I did a bit of a case study of AT&T, and some of the ways it is leveraging the Internet of Things. First off AT&T¬†has partnered with solar company SunPower to connect residential solar panels for remote monitoring of the panels’ performance
  37. In its connected vehicle portfolio, AT&T manage the connections for Tesla, Audi, GM, and Uber. They have 8m connected cars atm, and expect to grow that to 10m by the end of 2017
  38. And, an interesting data point to back that up – in the first quarter of 2016, in the US, 32% of all new cellular connections were for cars. The largest percentage of any segment
  39. 243,000 refrigerated shipping containers connected through AT&T

  40. AT&T have a partnership with GE for intelligent lighting solutions for cities and public roadways
  41. In the equipment and heavy machinery space, nearly half of all tractors and harvesters in the US are connected through AT&T
  42. While in healthcare, AT&T predicts that wellness tracking and virtual care solutions will reach 60m homes & 74m users by 2019
  43. 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
  44. Because they don’t have a monopoly on ideas, AT&T have opened up their M2X Internet of Things developer platform to allow outside developers create solutions using AT&T’s infrastructure
  45. They’re far from being alone in this – Verizon have an Internet of Things platform as well called ThingSpace Develop
  46. While t-mobile has announced that it is teaming up with Twilio for its Internet of Things play
  47. 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
  48. 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
  49. How is all this impacting the data centre industry?
  50. Well, in the next four years data centre capacity will need to increase 750% according to IDC. Also required will be significant ramp-ups in analytics, security and privacy
  51. As Jim Gray pointed out in his book The Fourth Paradigm:

    “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

  52. As a graduate biologist, this reminds me of the reflex arc Рthis arc allows reflex actions to occur relatively quickly by activating spinal motor neurons, without the delay of routing signals through the brain
  53. 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
  54. This also explains the rise of companies such as EdgeConnex – companies who provide proximity, and lower latency
  55. 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
  56. Other initiatives in the industry include Google’s attempting to create a new standard for HDD’s¬†to make them taller, adding more platters, and thus increasing IOPs
  57. Microsoft and Facebook are getting together with Telefonica to build a 160TB transatlantic fibre cable (the largest to-date) to handle the vast streams of data they see coming
  58. While Intel are warning that organisations need to become more security aware, as more devices become connected
  59. I also decided to address a trend in data centres to require renewable energy from their utility providers, and did so by referencing this excellent letter from Microsoft General Counsel Brad Smith on the topic (recommended reading)
  60. Finally, what about the utilities sector…
  61. 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
  62. Another way the Internet of Things will help utilities is renewables management (such as the GE example referenced earlier), and preventative maintenance applications
  63. And finally, energy information services will be a big deal, for everything from remote monitoring for seniors, through to device maintenance, and home management
  64. The conclusions
  65. Thanks
  66. Any questions?

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 (tom@tomraftery.com), or hit me up on Twitter, Facebook, or LinkedIn.