The IIoT market is booming—so why are half of all IIoT deployments failing?

The IIoT market is booming—so why are half of all IIoT deployments failing?

Management!

OK, the headline came from IHS Markit | Technology, an Informa Tech market analyst company. The answer from me.

One of the value adds of analyst firms is to provide market research studies. Where once I received industrial market information from just one analyst firm, now several send me updates. Helps round out information. But these are always estimates, and prone to some error. It’s a good guide though.

This research looks at Industrial Internet of Things (IIoT) nodes. It also does the analyst thing of providing some guidance on implementation. The research is interesting. The guidance requires another post on management practices, I think. However, what I’m hearing is that some executive reads about IIoT and picks an unlucky person to head up the project. A pilot project is authorized, mostly completed, and mostly forgotten.

Notes from the Report

The global IIoT business is arriving at a tipping point, with the industry reaching a connectivity milestone next year that will pave the way for market-changing events like the proliferation of cloud-based technologies. These developments will help propel annual IIOT node shipments to 224 million units in 2023, a 100 million unit increase from 124 million in 2018.

However, despite the industry’s progress, about half of all IIoT deployments are failing. All too often, these deployments are being hamstrung by planning breakdowns, including the failure to set reasonable objectives and to gather support and cooperation from critical personnel within organizations. Without addressing these issues, the global IIoT market could face major challenges in reaching its growth potential.

The connection inflection

Industrial assets have traditionally employed fieldbus for connecting to the industrial network, and while Ethernet solutions have been in place for a couple of decades, their adoption has been slow. However, after years of making progress in the market, Ethernet is set to displace Fieldbus as the primary network medium for the first time in 2020. Ethernet will account for 43 percent of IIOT node shipments next year, compared to 41 percent for Fieldbus.

“There are now more than 1 billion connected devices on factory floors around the world,” said Alex West, senior principal analyst, industrial technology, at IHS Markit | Technology. “This massive installed base is about to reach a tipping point, with Ethernet overtaking Fieldbus in 2020. The proliferation of Ethernet is enabling the transmission of larger volumes of data. This will ultimately bring in technologies like the cloud that are going to supercharge the IIOT business.”

Connecting to reduce downtime

The arrival of a faster connectivity solution will allow manufacturers to utilize cloud-based solutions to reduce downtime.

“One of the really significant challenges faced by industrial companies is unplanned downtime,” West said. “Just to quantity that challenge, it’s estimated in the automotive industry that $20,000 to $30,000 per minute is lost through unplanned downtime. New applications enabled through IIoT, maintenance and asset-health monitoring, are really helping overcome these challenges. We’ve estimated around a 30 percent average saving or reduction in unplanned downtime can be achieved through industrial IoT solutions.”

Monitoring assets

The benefits of IIoT solutions facilitated by enabled devices can be realized across the entire lifecycle of production, from product design, to monitoring inventory levels in the supply chain.

For example, Harley Davidson, a few years ago was facing business challenges in terms of fulfilling customer requirements. By improving the connectivity of its plant, the company was able to reduce the time to meet new orders filled from 21 days down to six hours.

Addressing IIoT deployment fails

While faster connectivity holds great promise for expanding the IIoT market, the reality is that current deployments are failing as often as they succeed.

“At the proof-of-concept phase, about half of IIoT projects are failing—which is acceptable for companies attempting to be agile and trial new applications,” West said. “However, there is a similar failure rate when companies move to the deployment stage. This means companies are investing enormous sums in these projects but aren’t getting the payback they expected.”

The failure of a project is defined as not meeting the customer’s expected payback. Many times, the high failure rate can be attributed to inflated expectations. A total of 50 percent of companies expect to see payback within one year, although many of these projects can take much longer to generate returns.

IHS Markit | Technology recommends manufacturers take the following steps to increase their chances of IIoT success:

  • Specify the project by determining in advance which exact challenges you want IIoT to address.
  • Start small, with some pilot projects of concepts to see how the technology can be utilized.
  • Go right to the top, with senior-level management support for projects.
  • Get the urge to converge, by ensuring support from all relevant functional groups.
  • Leverage your people power, by getting staff involved with deploying the technology and encouraging them to view IIoT not as a threat, but as an augmentation to their job capabilities.
Acquisitions Bolster Incumbents Further Consolidate Industry

Acquisitions Bolster Incumbents Further Consolidate Industry

The IT architecture of industrial / manufacturing applications increasingly boosts the role of cloud and edge. These technologies have become core to Industrial Internet of Things (IIoT) and improved Software as a Service (SaaS).

These recent acquisition news items reflect the acceleration of the trend. One is from Siemens and the other PTC.

Siemens plans acquisition of Edge technology

In brief:

  • Siemens further expands its digitalization portfolio for industry
  • Technology basis is the Docker IT standard
  • Siemens Industrial Edge ecosystem enables easy and flexible use of Edge apps

Siemens is planning the acquisition of Edge technology from the US company Pixeom. With this action, Siemens is strengthening its Industrial Edge portfolio by adding software components for Edge runtime and for device management. Siemens Industrial Edge provides an ecosystem, which enables the flexible provision and use of apps. This means for example that appropriate apps can analyze data locally at the machine and send relevant data to the higher-level Industrial Edge Management System for global analytics. With this acquisition, Siemens is driving forward the expansion of its Digital Enterprise portfolio and the integration of cutting-edge technologies for the digital transformation of industry.

With the resulting Industrial Edge ecosystem, industrial companies can use production data even more efficiently and react more flexibly to changes in conditions.

Ralf-Michael Franke, CEO of Siemens’ Factory Automation Business Unit, explains: “Cutting edge technologies such as Edge Computing open up new scope for automation. With Siemens Industrial Edge, we are creating an open edge ecosystem which offers benefits for companies of any size.”

Siemens is using Docker standard container technology: the provision of apps in the management system will therefore be just as simple as functional upgrades and updates of Edge devices in the factory from a central point.

Siemens intends to acquire this technology from Pixeom and use it in the Factory Automation Business Unit, which is part of Siemens Digital Industries. Pixeom has sites in San José, California and Udaipur, India and employs 81 people worldwide. Closing of the transaction is planned for the fourth quarter of 2019. Both companies have agreed not to comment on the financial details of the transaction.

PTC Makes SaaS Acquisition

I sat in on the analysts/press conference where PTC president and CEO Jim Heppelmann discussed the reason for this announced acquisition of Onshape, creators of the “first” Software as a Service product development platform. The company had also just released fourth quarter results. PTC has a little more than $1 billion in revenues, with about 45% CAD and 35% PLM. Interestingly, the IoT business contributes just over 10% of revenues.

Onshape’s product development platform unites computer aided design (CAD) with data management and collaboration tools, for approximately $470 million, net of cash acquired. The acquisition is expected to accelerate PTC’s ability to attract new customers with a SaaS-based product offering and position the company to capitalize on the inevitable industry transition to SaaS. Heppelmann believes that that cloud-based SaaS is the future of CAD. Pending regulatory approval and satisfaction of other closing conditions, the transaction is expected to be completed in November 2019.

Located in Cambridge, MA, Onshape was founded in 2012 by CAD pioneers and tech legends, including Jon Hirschtick, John McEleney, and Dave Corcoran, inventors and former executives of SolidWorks. Onshape has secured more than $150 million in funding from leading venture capital firms and has more than 5,000 subscribers around the world. The company’s software offering is delivered in a SaaS model, making it accessible from any connected location or device, eliminating the need for costly hardware and administrative staff to maintain. Distributed and mobile teams of designers, engineers, and others can benefit from the product’s cloud nature, enabling them to improve collaboration and to dramatically reduce the time needed to bring new products to market – while simultaneously staying current with the latest software.

“PTC has earned a reputation for successfully pursuing new innovations that drive corporate growth,” said Heppelmann. “Building on the strong momentum we have with our on-premises CAD and PLM businesses, we look to our future and see a new growth play with SaaS.”

This acquisition is the logical next step in PTC’s overall evolution to a recurring revenue business model, the first step of which was the company’s successful transition to subscription licensing, completed in January 2019. The SaaS model, while nascent in the CAD and PLM market, is rapidly becoming industry best practice across most other software domains.

“Today, we see small and medium-sized CAD customers in the high-growth part of the CAD market shifting their interest toward SaaS delivery models, and we expect interest from larger customers to grow over time,” continued Heppelmann. “The acquisition of Onshape complements our on-premises business with the industry’s only proven, scalable pure SaaS platform, which we expect will open new CAD and PLM growth opportunities while positioning PTC to be the leader as the market transitions toward the SaaS model.”

For customers, the SaaS model enables faster work, improved collaboration and innovation, with lower up-front costs and with no IT infrastructure to administer and maintain. For software providers, the SaaS model has been proven to generate a more stable and predictable revenue stream, increase customer loyalty as customers benefit from earlier adoption of technology innovations, and enable expansions into new segments and geographies.

“At Onshape, we share PTC’s vision for helping organizations transform the way they develop products,” said Jon Hirschtick, CEO and co-founder, Onshape. “We and PTC believe that the product development industry is nearing the ‘tipping point’ for SaaS adoption of CAD and data management tools. We look forward to empowering the customers we serve with the latest innovations to improve their competitive positions.”

Onshape will operate as a business unit within PTC, with current management reporting directly to Heppelmann.

The IIoT market is booming—so why are half of all IIoT deployments failing?

Inductive Automation Announces Ignition Firebrand Awards

Inductive Automation has selected the recipients of its Ignition Firebrand Awards for 2019. The announcements were made at the Ignition Community Conference (ICC), which took place September 17-19. I get to see the poster displays and chat with the companies at ICC. I love the technology developers, but it’s fascinating to talk with people who actually use the products.

[Disclaimer: Inductive Automation is a long-time and much appreciated sponsor of The Manufacturing Connection. If you are a supplier, you, too, could be a sponsor. Contact me for more details. You would benefit from great visibility.]

The Ignition Firebrand Awards recognize system integrators and industrial organizations that use the Ignition software platform to create innovative new projects. Ignition by Inductive Automation is an industrial application platform with tools for the rapid development of solutions in human-machine interface (HMI), supervisory control and data acquisition (SCADA), manufacturing execution systems (MES), and the Industrial Internet of Things (IIoT). Ignition is used in virtually every industry, in more than 100 countries.

“The award-winning projects this year were really impressive,” said Don Pearson, chief strategy officer for Inductive Automation. “Many of them featured Ignition 8 and the new Ignition Perspective Module, both of which were released just six months ago. We were really impressed with how quickly people were able to create great projects with the new capabilities.”

These Ignition Firebrand Award winners demonstrated the power and flexibility of Ignition:

  • Brock Solutions worked with the Dublin Airport in Ireland to replace the baggage handling system in Terminal 2. The new system has 100,000 tags and is the largest Ignition-controlled airport baggage handling system in the world.
  • Corso Systems & SCS Engineers partnered on a pilot project for the landfill gas system of San Bernardino County, California. The pilot was so successful, it will be expanded to 27 other county sites. It provides a scalable platform with strong mobile capabilities from Ignition 8 and Ignition Perspective, plus 3D imaging from drone video and virtual reality applications.
  • ESM Australia developed a scalable asset management system to monitor performance and meet service requirements for a client with systems deployed all over Australia. The solution leveraged Ignition 8, Ignition Perspective, MQTT, and legacy FTP-enabled gateways in the field.
  • H2O Innovation & Automation Station partnered to create a SCADA system for the first membrane bioreactor wastewater treatment plant in Arkansas. The new system for the City of Decatur shares real-time data with neighboring water agencies as well as the mayor.
  • Industrial Networking Solutions created a new oil & gas SCADA system in just six months for 37 sites at ARB Midstream. The solution included hardware upgrades, a new control room, and a diverse collection of technologies with cloud-hosted SCADA, MQTT, Ignition Edge, and SD-WAN.
  • MTech Engineering developed an advanced real-time monitoring and control system for the largest data center campus in Italy. The project for Aruba S.p.A. had to work with huge amounts of data — and was done at a much lower cost than was possible with any other SCADA solution.
  • NLS Engineering created a single, powerful operations and management platform for more than 30 solar-power sites for Ecoplexus, a leader in renewable energy systems. The solution provided deep data acquisition, included more than 100,000 tags, and led to the creation of a platform that can be offered to other clients.
  • Streamline Innovations used Ignition, Ignition Edge, Ignition Perspective, and MQTT, to facilitate the automation of natural gas treating units that convert extremely toxic hydrogen sulfide into fertilizer-grade sulfur. The solution increased uptime, reduced costs, and provided access to much more data than Streamline had seen previously.
The IIoT market is booming—so why are half of all IIoT deployments failing?

GE Digital Updates IIoT Software

I guess I did attend the last GE software conference Minds + Machines. However, the reconstituted and independent GE Digital recently held a user conference where it announced a number of upgrades to its IIoT software. These are firmly within the current trends of connecting and mobility.

The product updates include:

  • Predix Essentials, which makes it easier for industrial companies to connect, visualize and analyze their data
  • Asset Answers, which helps customers to understand the competitive potential of Asset Performance Management (APM) software
  • Webspace 6.0, a new HTML5 interface that seamlessly brings automation data to operators across any mobile device

Edge-to-Cloud Accessibility

Predix Essentials is an easy-to-use SaaS solution, helping companies connect to disparate data sources, monitor operations, and leverage edge-to-cloud predictive analytics–reducing time-to-value for operational teams looking to reduce waste, lower costs, and increase performance.

Developed in partnership with a number of customers, including silicon chip manufacturer Intel, Predix Essentials is a natural first step for industrial businesses looking to leverage the power of cloud-based Industrial IoT technologies, providing the connectivity, visualization and analysis capabilities that are the cornerstones of a digital transformation journey, regardless of vertical or maturity.

Suitable for industrial companies of all kinds, Predix Essentials is also the foundation of GE Digital’s APM and OPM application suites, providing core functionality and bridging the entire software portfolio by connecting GE Digital cloud-based solutions to on-premises data from its Automation, MES and Historian solutions.

Identifying Maintenance Strategies

Asset Answers is a benchmarking tool that helps customers quickly import and assess data to better understand how their asset maintenance compares with similar companies in their particular domain, or even against their own internal performance across sites.

With this intelligence, customers can determine where best to invest in updating maintenance regimes or capabilities, and ultimately provide a seamless path to products like APM to manage and optimize assets across their business. Asset Answers is available for many sectors, including power generation, oil and gas and chemicals.

Improving Operator Mobility

Webspace 6.0, a web and mobility solution, brings the full visualization and control capabilities from GE’s iFIX and CIMPLICITY HMI/SCADA software seamlessly across devices, including smartwatches, phones, tablets and desktops.

Offering enhanced encryption and new zero-install HTML5 client, Webspace 6.0 improves the way that operators receive and react to operational insights, whether they are in the field, on the plant floor or at a desk, providing them the flexibility to make informed decisions and share their expertise, regardless of location. By dynamically extending automation solutions, Webspace 6.0 increases information sharing across teams, speeds the right operator actions, and improves agility with real-time visualization and control anywhere, anytime.

Availability

“GE Digital continues to release innovations that forge the way for industrial customers working on transforming their operations,” said Pat Byrne, CEO of GE Digital. “By continuing to invest across our portfolio of industrial software, and by making it easier than ever for our customers to unlock the power of the Industrial IoT, GE Digital is strengthening its customers’ ability to become more productive, efficient and safe.”

Predix Essentials, Asset Answers and Webspace 6.0 are generally available today as part of GE Digital’s portfolio of industrial software products covering HMI/SCADA, Historian, Asset Performance Management and Manufacturing Execution System applications. Today’s announcements build on a strong thread of recent investments in product innovations, all designed to solve a broad range of industrial customer challenges, including iFIX 6.0; Historian 7.2, Plant Applications 8.0 and Predix Manufacturing Data Cloud for the manufacturing sector; Grid Analytics for the power transmission and distribution market; and APM Integrity’s Compliance Management for the O&G and Power Generation industries.

Acquisitions Bolster Incumbents Further Consolidate Industry

Where’s The Edge with IIoT–Emerson Exchange

Presentations abound at Emerson Global Users Exchange. Attendees can choose to take deep technical dives into Emerson products, get overviews and trends of technology and the industry, and even personal development. Yes, there was even a 6 am fitness time with either running or Yoga.

Where’s “The Edge”? Yes, you can use good presentation skills for career success. Building Your Personal Brand through Digital Transformation–or social media an networking. Here’s a recap of the 2019 Emerson Global Users Exchange based upon several sessions I attended led by people I’ve known for a long time–Dave Imming, Mike Boudreaux, and Jim Cahill.

The Secure First Mile–IIoT and the Edge

A panel discussion assembled and led by Emerson’s Director of Connected Plant Mike Boudreaux, discussed Industrial Internet of Things in relation to “Where is the Edge”. The blend of IT and OT on the panel was refreshing and informative. Most instructive was how far each has come toward understanding the entire picture broadening from each’s silos.

Attila Fazekas, ExxonMobil, stated that IoT connects to Level 4 of the Purdue model. He is part of the IT organization taking the view from that side of the divide. He noted that his company tries to have a hard line between the IoT (IT) and control systems, although he admitted that occasionally the line becomes blurred. He was a strong proponent of  IT governance, notes they have a hard line between IoT and control system (although in effect the line sometimes gets a bit smudged).

Peter Zornio, CTO Emerson Automation, relates IoT and Edge to “a giant SCADA system.” He reflects those who come from the plant where intelligent devices are connected to an automation system, which formerly was the single point where data was collected and then passed through. I have talked with Zornio for years. Few people in the industry are as knowledgeable about the plant. He is beginning to adjust to the IT world with which he’s going to have to work in the future. Especially given Emerson’s expanded strategy into digital transformation and “Top Quartile Performance.” He sees security helping drive Edge applications to divide systems providing a firm break between control systems and IT systems.

Jose Valle, CTO Energy/Manufacturing at MIcrosoft, brought another IT view to the panel. For him, The Edge becomes a place for security with a separation of functions. He  also brought an emphasis on provisioning devices through the cloud.

Rich Carpenter, Executive Product Manager, Emerson Automation / Machinery (former CTO of GE Fanuc/GE Intelligent Platforms), discussed a new Edge computer from Emerson (GE). It uses Hypervisor to run RTOS and PLC control on part of chip segmented by firewall from regular PC chip running Linux for IoT functions. Noted that for the latter, they’ve discovered it better to use Node-RED and Python for programming. Congratulations  to Rich for landing at Emerson—he’s another long-time contact. And thanks for mentioning Node-RED.

Overall, the panel expressed concerns about providing security with the IIoT and Edge devices. The best part was Boudreaux’s assembling a panel split evenly with IT and OT and there was no acrimony or “you think this, we think that” nonsense. They are all trying to solve bigger problems than just IT or OT only. Businesses are driving them together to solve “digital transformation” challenges. Good stuff.

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