Tag: iiot

How the Internet of Things Can Make Your Manufacturing Business More Sustainable

The Internet of Things, often abbreviated as IoT, refers to the network of physical devices, vehicles, home appliances, and other items that are embedded with electronics, software, sensors, actuators, and connectivity which enable these objects to connect and exchange data.

The Industrial Internet of Things, or IIoT, is a specific application of the Internet of Things that pertains to the manufacturing sector. In recent years, sustainability has become an important issue for manufacturers as consumers increasingly seek out products that have been made sustainably and with minimal impact on the environment.

Fortunately, the IIoT can help manufacturers reduce their environmental impact and become more sustainable. Here’s how:

  1. Collecting Data to Increase Visibility and Transparency Across the Value Chain
    The first step to becoming more sustainable is to have visibility and transparency across the entire value chain. This means understanding where your raw materials come from, how they are sourced, how they are used in your manufacturing process, what happens to your finished products after they are sold, etc. In order to gain this visibility and transparency, manufacturers must collect data at every stage of the value chain. This data can be collected manually or automatically through sensors and other digital technologies. Once this data is collected, it can be analyzed to identify areas where your company can become more efficient and reduce waste.
  1. Connecting Machines to Improve Efficiency
    One way that manufacturers can use the IIoT to become more sustainable is by connecting their machines together in order to improve efficiency. For example, if one machine is idling while another machine is overloaded, this presents an opportunity to optimize production by redistributing work among the machines. By connecting machines together and using data analytics to optimize production in this way, manufacturers can avoid wasting energy and resources.
  2. Using Renewable Energy Sources
    Another way that manufacturers can use the IIoT to become more sustainable is by using renewable energy sources such as solar or wind power instead of traditional sources such as coal or natural gas. While renewable energy sources may have been more expensive in the past, advances in technology have led to a decrease in cost while simultaneously increasing efficiency. As a result, many manufacturers are making the switch to renewable energy sources in order to reduce their environmental impact.
  3. Implementing Predictive Maintenance Schedules
    Predictive maintenance is a type of maintenance that is performed before problems occur. This is in contrast to traditional preventive maintenance which is performed on a regular schedule whether or not problems exist. By using predictive maintenance schedules based on data collected by sensors, manufacturers can avoid unexpected downtime due to equipment failures. In addition, predictive maintenance can help extend the lifespan of equipment which leads to fewer replacement cycles and less waste over time.

The IIoT offers many opportunities for manufacturers to become more sustainable businesses. By collecting data across the value chain, connecting machines together for improved efficiency, using renewable energy sources wherever possible, and implementing predictive maintenance schedules; manufacturers can reduce their environmental impact while simultaneously improving their bottom line. As consumers increasingly seek out sustainable products, there has never been a better time for manufacturers to take advantage of these opportunities presented by the IIoT .

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.

Artificial Intelligence and the Future of Jobs

My role here at SAP is IoT Evangelist. It’s my job to go around and speak about how the Internet of Things is changing the way we live, work, and run our businesses. IoT Evangelist is a job title that didn’t exist 5 or 10 years ago – mainly because the Internet of Things wasn’t a “thing” 5 or 10 years ago. Today it is, so here I am.

The fact is, technological change has a tremendous impact on the way we spend our working lives. Many of today’s jobs didn’t exist in the past. Of course, the reverse is true as well: a lot of jobs – mostly tedious/manual labor of some variety, think miners, lift operators, or similar – have gone away.

Robots and much more

Much of the discussion today about the relationship between technology and jobs is a discussion about the impact of artificial intelligence (AI). Robots in manufacturing is the most obvious example. A lot of AI has to do with big data analysis and identifying patterns. Thus, AI is used in data security, financial trading, fraud detection, and those recommendations you get from Google, Netflix and Amazon.

Screen Shot 2017-11-28 at 14.01.55

But it’s also used in healthcare for everything from identifying better subjects for clinical trials to speeding drug discovery to creating personalized treatment plans. It’s used in autonomous vehicles as well – to adjust, say, to new local conditions on the road. Some say it’s also coming for professional jobs. Think about successfully appealing parking fines (currently home turf for lawyers), automated contract creation, or automated natural language processing (which someday could be used to write this blog itself – gulp!).

The spinning jenny

Will AI continue to take jobs away? Probably. But how many new jobs will it create? Think back to the spinning jenny – the multi-spindle spinning frame that, back in the mid-18th century, started to reduce the amount of work required to make cloth.

By the early 19th century, a movement known as the Luddites emerged where groups of weavers would go around smashing these machines as a form of protest against what we’d now call job displacement. But these machines helped launch the industrial revolution.

As a result of the spinning jenny’s increased efficiency, more people could buy more cloth – of higher quality, at a fraction of the cost. This led to a massive uptick in demand for yarn – which required the creation of distribution networks, and ultimately the need for shipping, an industry that took off in the industrial revolution.

As the spinning jenny came into use, it was continuously improved – eventually enabling a single operator to manage up to 50 spindles of yarn at a time. Other machines appeared on the scene as well. This greater productivity, and the evolution of distribution networks also meant there was a need for increasingly comprehensive supply chains to feed this productivity boom.

Muscle vs caring

Economists at Deloitte looked at this issue of technological job displacement – diving into UK census data for a 140-year period stretching from 1871 to 2011. What they found, not surprisingly perhaps, is that over the years technology has steadily taken over many of the jobs that require human muscle power.

Agriculture has felt the impact most acutely. With the introduction of seed drills, reapers, harvesters and tractors, the number of people employed as agricultural laborers has declined by 95% since 1871.

But agriculture is not alone. The jobs of washer women and laundry workers, for example, have gone away as well. Since 1901, the number of people in England and Wales employed for washing clothes has decreased 83% even though the population has increased by 73%.

Many of today’s jobs, on the other hand, have moved to what are known as the caring professions, as the chart below shows. The light blue bars represent muscle-powered jobs such as cleaners, domestics, miners, and laborers of all sorts; the dark blue, caring professions such as nurses, teachers, and social workers. As you can see, these have flipped.

Screen Shot 2017-11-28 at 13.53.19

The Deloitte study also points out that as wealth has increased over the years, so have jobs in the professional services sector. According to the census records analyzed, in England and Wales accountants have increased from 9,832 in 1871 to 215,678 in 2015. That’s a 2,094% increase.

And because people have more money in general, they eat out more often – leading to a fourfold increase in pub staff. They can also afford to care more about how they look. This has led to an increase in the ratio of hairdressers/barbers to citizens of 1:1,793 in 1871 to 1:287 today. Similar trends can be seen in other industries such as leisure, entertainment, and sports.

Where are we headed now?

Will broader application of AI and other technologies continue the trend of generating new jobs in unexpected ways? Most assuredly. Already we’re seeing an increased need for jobs such as AI ethicists – another role that didn’t exist 5-10 years ago.

The fact of the matter is that technology in general, and AI in particular will contribute enormously to a hugely changing labour landscape. I mentioned at the start of this post that my role in SAP is IoT Evangelist – this is a role I fully expect to no longer exist in 5 years time, because by then everything will be connected, and so the term Internet of Things will be redundant, in the same way terms like “Internet connected phone”, or “interactive website” are redundant today.

The rise of new technologies will create new jobs, not just for people working directly with the new technologies, but also there will be an increasing requirement for training, re-training, and educational content development to bring people up-to-speed.

Will there be enough of those jobs to go around – and will they pay enough to support a middle-class existence for those who hold them? That’s another question – but it’s one that’s stimulating a lot of creative, innovative ideas of its own as people think seriously about where technology is taking us.

 

Photo credit Jessie Hodge

What the Internet of Things will look like 10 years from now

I was asked recently where do you see the Internet of Things in 10 years?

Steve Jobs presents iPhone

It is a cool question to think about, and to frame it properly it helps to think back to what the world was like 10 years ago, and how far we have come since then.

Ten years ago, in 2007 Apple launched the iPhone. This was the first real smartphone, and it changed completely how we interact with information.

And if you think back to that first iPhone with its 2.5G connectivity, no front facing camera, 3.5 inch diagonal 163ppi screen and compare it to today’s iPhones, that is the level of change we are talking about in 10 years.

In 2027 the term Internet of Things will be redundant. In the same way that we no longer say, “Internet connected smartphone”, or “Interactive website” because the connectedness and interactivity are now a given, in 10 years time all the things will be connected and so the term Internet of Things will be superfluous.

Having said that, while the term may have become meaningless, that is only because the technologies will be pervasive, and that will change everything.

With significant progress in low cost connectivity, sensors, cloud-based services, and analytics, in 10 years we will see:

  • Connected Agriculture move to vertical and in-vitro food production, which will see higher yields from crops, lower inputs required to produce them including a significantly reduced land footprint, and the return of unused farmland to increase biodiversity and carbon sequestration (in forests)
  • Connected Transportation will enable tremendous efficiencies, and a major increase in safety as we transition to predictive maintenance of transportation fleets, as vehicles become autonomous and have vehicle-to-vehicle communication protocols as the norm, and as insurance premiums start to favour autonomous driving modes (Tesla cars have 40% fewer crashes when in Autopilot mode according to the NHTSA)
  • Connected Healthcare will move from the current reactive model to a more predictive healthcare, with sensors alerting of irregularities before any significant incident occurs, and the possibility to schedule and 3D print “spare parts”
  • Connected Manufacturing will enable the transition to manufacturing as a service, distributed manufacturing (3D printing) and make mass customisation with batch sizes of one very much the norm
  • Connected Energy with the sources of demand able to ‘listen’ to supply signals from generators, will facilitate moving to a system of demand more closely matching supply (with cheaper storage, low carbon generation, and end-to-end connectivity). This will stabilise the the grid and eliminate the fluctuations introduced by increasing the percentage of variable generators (solar, wind) in the system thereby reducing electricity generation’s carbon footprint
  • Human computer interfaces will migrate from today’s text-based and touch based systems towards Augmented and Mixed Reality (AR and MR) systems, with voice and gesture enabled UIs
  • And finally, we will see the rise of vast Business Networks. These networks will act like automated B2B marketplaces, facilitating information sharing amongst partners, empowering workers with greater contextual knowledge, and augmenting business processes with enhanced information

Many other aspects of our lives will be greatly improved (I’ve not mentioned improvement to logistics and supply chains with complete track and traceability all the way through the supply chain as a given, for example).

We are only at the start of our IoT journey. In 2007 when the smartphone was starting out the incredible advances we’ve seen as a consequence (i.e Apple’s open sourced ResearchKit being used to monitor the health of pregnant women) weren’t obvious, but they have happened. With the increasing pace of innovation, falling prices for components, and amazing network effects from the connected Internet of Things, the future looks very bright, even if we no longer use the term Internet of Things.

Photo credits Blake PattersonGarry Knight on Flickr

Internet of Things, renewables and storage – a perfect storm for utilities’ digital transformation

Without doubt it is a time of great turbulence in the electric utilities space.

In most regions globally, wind and solar are now our cheapest sources of electricity generation, even without subsidies.

As a consequence of this, wind has overtaken nuclear, hydro and coal to become the second largest source of electricity generation in EU in 2016 [PDF]. And at the same time in the US, the solar market is smashing records and grew 95% in 2016 alone.

Then there is storage. Costs here have been tumbling too. So much so that Morgan Stanley predicts the storage market to grow from the roughly $400m in 2016, to a market size of $2-4bn by 2020. This will have big implications for utilities’ ability to add more variable generators (renewables) to their mix without destabilising the grid.

Speaking of grid stabilisation, the refrain up until now has been that for every MW of renewables built, a MW of gas had to also be built as a backstop (for days with no wind, or overcast days, or nights). However, this too has changed. Last August First Solar ran a tests with CAISO (the California grid operator) to test a solar farm’s ability to smooth out grid fluctuations. The results of the test demonstrated that solar farms are able to meet, and sometimes exceed, the frequency regulation response usually provided by natural-gas-fired peaker plants.

Things are changing on the consumption side of the house too.

solarinstall2016

Source: GTM Research / SEIA U.S. Solar Market Insight report

As can be seen from the chart above, installations of residential PV are rising, as is home storage, and another form of potential consumption and storage (v2g), the electric car, saw sales rise by 37% in the US in 2016.

Then there is the whole digitisation of the grid. Now all new equipment is being built with inbuilt ‘smarts’ and connectivity, and even older infrastructure can be retrofitted, so with the advent of the smart grid, we will finally have the possibility of the Electricity 2.0 vision I was talking up back in 2008/09. This is a smart grid where appliances in the commercial or residential worlds can ‘listen’ for pricing signals from the grid, and adjust their behaviour accordingly, taking in electricity when it is plentiful, and switching to alternative sources/lowering consumption when electricity is in high demand.

With the cost of generation dropping, with no end in sight, the cost of storage similarly falling, as I have posited previously, there is a strong possibility that utilities will have to switch to broadband-like ‘all-you-can-eat’ business models with the utilities differentiating, and making their revenue on added services.

Everything is changing for the electric utility industry – and so, against that backdrop, and the fact that I will be presenting on IoT and Utilities at the upcoming International SAP for Utilities Conference in Lisbon, I decided to have a chat with IDC Research Director Marcus Torchia, about the implications for utilities of these huge changes.

We had a great discussion, and many of the themes we touched on, I will be talking about at the Utilities event in Lisbon.

You can check out our chat in the video above, play it in the audio below, or listen to it on the IoT Heroes podcast site.

SAP Announces: Leonardo, Jump-Start program, and Leonardo event to help organizations get started with IoT

…learn how to see. Realize that everything connects to everything else

Leonardo da Vinci

SAP made a big announcement today related to its Internet of Things (IoT) products. The announcement is in three parts:

  1. SAP is branding its IoT Innovation portfolio SAP Leonardo – naming it after the great visionary, inventor, and artist Leonardo da Vinci
  2. Then, following on from SAP’s announcement of the €2bn investment in IoT, SAP is a launching a Jump-Start program to help organisations get started on their IoT pilot programs quickly and reliably and
  3. SAP also announced plans for its first global SAP Leonardo event for SAP customers, partners and IoT experts in Frankfurt Jul 11-12

 

SAP Leonardo

Digging into the announcement a little bit, SAP has long needed strong branding to pull together its offerings in the IoT space. The choice of the Leonardo name is a particularly apt one given, da Vinci’s timeless association with breathtaking vision (Leonardo dreamt up helicopters, tanks, submarines, amongst other things long before the technologies existed to create them). But there is another, possibly less obvious reason, it is an appropriate choice of name – the Internet of Things crosses all verticals (this is one of the reasons I find it so interesting), and so too did da Vinci. He didn’t restrict himself to painting, or sculpture, as many other great artists did. In fact, the Wikipedia entry for Leonardo states

Leonardo was an Italian polymath whose areas of interest included invention, painting, sculpting, architecture, science, music, mathematics, engineering, literature, anatomy, geology, astronomy, botany, writing, history, and cartography. He has been variously called the father of palaeontology, ichnology, and architecture, and is widely considered one of the greatest painters of all time

Apt indeed.

The SAP Leonardo Portfolio has the following components:

  • Connected Products – Enable end-to-end visibility to product-centric operations and ability to optimize compliance visibility and service availability
  • Connected Assets – Connect production systems and assets with manufacturing and Maintenance business processes to reduce operational and maintenance cost and increase uptime of assets.
  • Connected Fleet -Track, monitor, analyze and maintain all moving assets, wherever they are in the network
  • Connected Infrastructure – Delivers new forms of digital operational intelligence to transform physical-infrastructure systems to improve service, drive economic growth, and allow for more efficient and cost-effective operations, infrastructure compliance and risk mitigation.
  • Connected Markets – Foster local markets, cities, urban and rural areas to optimize utilization of natural resources and assets, reduce emissions, congestion and energy usage and improve the environment.
  • Connected People – Strives to improve lives, work and health by connecting people and communities and providing better lifestyle experiences and opportunities for organizations to evolve into new business models

 

SAP Jump-Start program

Then under the new SAP Leonardo brand, and following on from the recent announcement of SAP’s €2bn investment in the Internet of Things, part two of the announcement talks about the new SAP Leonardo Jump Start program. This is, I believe, hugely important for any organisations looking to start an IoT pilot program in earnest.

The offering consists of an executive design thinking session to kick off the customer’s project and identify an area for innovation, a rapid prototyping workshop to develop a real prototype to validate the vision, and finally an implementation phase to convert the prototype into a live pilot project and define an IoT roadmap for further business processes.

To my mind, the most interesting aspect of the offer though is that it has a fixed price for the software and services to cover the pilot and first year of usage of SAP Leonardo solutions. I can see this proving very compelling for organisations looking to investigate seriously the IoT, but not wishing to encounter sticker shock.

The details of the offer are as follows:

  • Today there are offers for 4 solutions in Q1 – Connected Goods, Vehicle Insights, Predictive Maintenance, and Asset Intelligence Network
  • In Q2 SAP plans to further offer Global Track & Trace, Distributed Manufacturing
  • Jump-Start uses the standard solution in pilot and all are Cloud solutions
  • It is available in all regions
  • Industry Value Engineering is included to help generate the business case
  • The pilot includes services and a 1 year contract for the Cloud license for 1 solution. The pilot is a 3 month project.
  • Can be purchased by client through their sales representative or visit SAP.com.
  • And SAP are currently evaluating opportunities for 3rd party participation.

 

And finally there is the announcement of the first SAP Leonardo event this coming July.  This should provide an amazing opportunity for customers, partners, and SAP experts to discuss progress on the first six months of the SAP Leonardo announcement, and Jump-Start program.

Leonardo da Vinci once famously said:

…people of accomplishment rarely sat back and let things happen to them. They went out and happened to things

Leonardo da Vinci

With this announcement SAP are telling the market that now is the time for SAP to go out and happen to the Things.

IoT, IIoT, Industry 4.0 – what’s what?

The Internet of Things is a very nascent area, and as with all maturing topics, the language surrounding it can be a little confusing. This is especially true when the terms are so new, and not always self-explanatory.

So, what are the Internet of Things (IoT), the Industrial Internet of Things (IIoT), and Industry 4.0?

Well, IoT (the Internet of Things) is obviously the broadest of all the terms, and it encompasses the Industrial Internet of Things (IIoT) as well as Industry 4.0.

 

However, IoT also includes the consumer’s Internet of Things. Devices like Nest thermostats, Philips Hue lightbulbs, and August smart connected door locks, for example fall into this category. As mentioned previously on this blog, smart home, or consumer IoT is languishing at the moment for a variety of reasons.

The Industrial IoT (aka IIoT), on the other hand is starting to really take off.

When you talk about the IIoT, you talk about everything along the value chain. Not only manufacturing, but also connected vehicles, transportation optimisation, instrumented agriculture, smart cities, and so on. This space is now starting to see serious investment because the technologies are hitting the right price point, the standards are starting to come together, and successful examples such as the SAP-TrenItalia implementation which is providing savings of €150m per annum on a €50m total investment demonstrate the viability of such investments.

Organisations such as the Industrial Internet Consortium (IIC) work with companies to set the standards, best practices and processes of the Industrial Internet. This work is vital for the success of the IIoT. This is why SAP is heavily involved in this organisation, with SAP EVP Dr Tanja Reuckert being Vice Chair of the Steering Committee.

Here’s my interview with the IIC’s Executive Director, Richard Soley.

And finally we come to the term Industry 4.0, which you can also hear mentioned in conversations about the internet of Things. What exactly is Industry 4.0? Well it refers to digitisation of manufacturing specifically – it focuses primarily on production and the shopfloor within manufacturing organisations.

The term refers to the fourth industrial revolution, and unsurprisingly it has its roots in Germany. Industry 4.0 (sometimes called Industrie 4.0) also has a number of organisations working with industry to create standards. One of the most active is Platform Industrie 4.0, a body which has its roots in the manufacturing arena, and is now converging with the IIC with respect to standards. And again, because Platform Industrie 4.0 is so heavily involved in setting the standards for Industrie 4.0, SAP are deeply engaged.

So, to summarise, IoT is the overarching term referring to all aspects of the Internet of Things, IIoT is IoT as applied to industry, while Industry 4.0 is IIoT specifically for manufacturing organisations.

Italy’s train operator invests big in IoT

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.

Is the IoT hype justified? Will it change everything, or is it a passing fad?

All the buzz in tech these days is about the Internet of Things. Is the hype justified? Will it change everything, or is it a passing fad?

Tl; dr. It depends, yes, and no. In that order.

To expand a little on that:

Is the hype justified?

It depends on where it is being used, and what for.

So, the use of the Internet of Things (IoT) in industry is really taking off. In fact, just recently (end of July 2016) 451 Research released a report stating that 65% of enterprises are already using the Internet of Things.

There are numerous examples across many sectors – everything from:

As you can see the Industrial Internet of Things (often termed IIoT) is booming, driven by large cost savings, accompanied by deep data insights, and very often reduced carbon emissions.

In the residential sector though, the story is quite different.

There are now Internet of Things connected doorbells, thermostats, lights, televisions, coffee makers, watches, baby monitors, security cameras, lawn sprinklers, refrigerators, even hearing aids.

But the smart home Internet of Things is not yet living up to the hype. The Google Nest, for example only sold 1.3m devices in 2015. All these Things are supposed to offer more convenience, so why aren’t they flying off the shelves?

Two reasons:

  1. 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!
    Amazon Screenshot
  2. 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.

standards

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.

Is the residential Internet of Things doomed?

Not at all. If the technology world has taught us anything it is that devices get better and cheaper as time goes by. Just compare the first iPhone to an iPhone 6 to see what I’m talking about.

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.