- By Alan Griffiths
- Special Section
- Connected applications are the place where Industrial IoT and digitalization can reveal benefits.
- IT/enterprise software and service providers are growing in their ability to help with industrial digitalization and IoT implementations.
- Connected (IoT) applications let users keep their familiar OT user interface and use existing databases and infrastructure from their enterprise system provider.
The benefits possible when OT and IT organizations cooperate can be found where domains cross
By Alan Griffiths
As the drumbeat for digitalization continues to get louder, industrial operational technology (OT) and enterprise-level information technology (IT) departments are learning to speak each other’s language. The necessity of transitioning from analog signals and manual processes to “connected plants” and “smart manufacturing paradigms” is becoming apparent. So is the need for help.
The benefits possible when OT and IT organizations cooperate can best be found in specific applications related to the Industrial Internet of Things (IIoT) and digitalization. The basic components of the IIoT have been effectively deployed for many years in industries such as process manufacturing and power generation and distribution. The Internet, cloud computing, analytics, and new software tools are now making IoT feasible for many other industries and new areas of application.
Connected applications have become the new place where IIoT and digital transformation service providers can differentiate themselves and grow. Users who understand who these providers are and where they are coming from can find the best partners for their organizations.
Most IIoT solution providers currently offer either IoT technology (e.g., platforms, cloud hosting, analytics) or digital transformation services, and many implementations are just pilot projects. But many leading enterprise software providers are focusing on connected applications: packaged software that is more attractive to users, as it is easy to install and delivers clear business value. These industry-focused, connected applications generally fall into nine market areas (shown below).
Connected application areas: Cambashi research reveals that leading OT software providers are focusing on “connected applications” that fall predominately into nine key categories:
- Connected Production
- Connected Transportation
- Connected Asset
- Connected Product
- Connected Infrastructure
- Connected Supply Chain
- Connected Worker
- Connected City
- Connected Building
Sorting software providers
Let’s look at some of the main, global, software providers leading the charge into this new area of connected applications. They fall into two broad groups:
- IT companies provide enterprise-level systems. We have included within this group engineering technology (ET) firms that offer computer-aided design/computer-aided manufacturing (CAD/CAM), product life-cycle management (PLM), and similar solutions.
- OT companies provide software to control operations at the factory, field, and distribution levels.
Both groups use IoT technology to develop software applications, and so the boundaries are blurring. Increasingly, the terms “IT,” “ET,” and “OT” relate to the background of the companies rather than the type of software they provide.
The IT, ET, and other enterprise software companies that offer cloud computing, data storage, and enterprise-level solutions fall into four categories.
1. Cloud computing, data analytics, and storage providers. Connected applications require sophisticated IT infrastructure to support them, ranging from cloud storage to distributed or edge computing. This is provided by some of the world’s best-known IT companies, such as Hewlett-Packard Enterprise, IBM, and Microsoft, as well as by global cloud-computing platforms such as Amazon (with AWS). Google (with Google Cloud Platform) provides IoT capability, but it is not prominent in IIoT.
IBM has a global cloud network and a range of applications with IoT, such as Maximo Enterprise Asset Management, TRIRIGA Facilities Management, and The Weather Company. PTC’s ThingWorx can be integrated with Maximo to provide advanced condition monitoring and anomaly management to identify and schedule necessary service or maintenance work orders.
In addition to offering proprietary products like Amazon AWS, IBM has made strategic moves to embrace open source solutions. Its Cloud Functions are based on Apache OpenWhisk, an IoT-ready platform that executes functions in response to incoming events and IoT sensor data. In a move that signals its commitment to open source, IBM announced late in 2018 its intention to acquire Red Hat software for about U.S. $34 billion, which will enhance its hybrid cloud offering.
Microsoft has successfully embedded Azure Cloud and other tools within offerings from industrial connected application providers. For example, Schneider Electric uses Azure in its EcoStruxure architecture. Rockwell Automation uses it to give manufacturing customers real-time insight into their operations. IFS uses Azure as the backbone for its IoT Connector and analytics. The Microsoft Azure IoT Hub provides cloud capability, development tools, and analytics for the Siemens MindSphere IoT operating system. Microsoft is also working with PTC to integrate ThingWorx with Azure IoT and IoT Hub to improve connectivity and support application development. Amazon’s AWS cloud platform and IoT capability underpins many IoT projects and has been adopted by many global corporations.
2. Enterprise resource planning and supply chain management (SCM) providers. Oracle has several connected applications targeted at specific market areas, such as IoT Fleet Monitoring, IoT Connected Worker, digital twin, and AI/ML-based IoT analytics capabilities. Oracle offers the “full stack” for an enterprise solution, from the low-level Oracle Java-embedded technologies at the thing level to its suite of cloud-based connected applications.
This approach leverages the strategic commitment to the cloud that Oracle has already made. It has spent about U.S. $35 billion in the past five years on its own cloud data center network, and more than 1,800 customers are live on its SCM Cloud.
Earlier this year, SAP announced that SAP Leonardo IoT will work with Microsoft Azure IoT Hub for connectivity and device management systems that allow its customers to embed IoT into line-of-business solutions. SAP Leonardo IoT Edge also extends support for business processes that use Microsoft Azure IoT Edge and improves latency, bandwidth, and connectivity.
3. Product life-cycle management providers, including virtual and augmented reality. PTC promotes the concept of “smart, connected products and operations.” As explained by CEO Jim Heppelmann, “It is the expanded capabilities of the smart, connected products and the data they generate that are ushering in a new era of competition, innovation, and novel business models.” Rockwell Automation recently invested U.S. $1 billion in PTC in a strategic partnership to leverage resources, technologies, industry expertise, and market presence.
Dassault Systèmes, known as a major CAD/CAM and PLM player at the forefront of digital technology, has IoT within its core offering, bringing together design, industrial automation, and operations management under the 3DEXPERIENCE platform. Siemens and Autodesk—also major CAD/CAM and PLM providers—are discussed below.
4. Building information modeling or management (BIM) providers. Autodesk, one of the largest BIM software suppliers, has a collection of software packages that includes Revit, Civil 3D, Infraworks, and AutoCAD. Autodesk Forge and Microsoft Azure IoT Hub are used to integrate digital models with BIM 360 software to connect and monitor equipment and then use predictive analysis to cut building maintenance costs.
Nemetschek, a global software provider of workflow offerings for buildings, recently acquired MCS Solutions, whose smart building platform COBUNDU uses IoT sensors and big data analytics to optimize productivity and efficiency in occupant experience and service delivery. This will be available under the brand name Spacewell, which becomes Nemetschek’s offering in the building operations and management segment.
OT software companies
OT software companies have been providing industrial automation systems, such as manufacturing execution systems (MESs) and supervisory control and data acquisition (SCADA) for many years. OT providers like Bosch and Honeywell have invested heavily in IoT and connected applications, to the extent of restructuring their businesses to gather IoT offerings into dedicated business units. Leading OT software providers include the following companies.
AVEVA and Schneider. In March 2018, the AVEVA group merged with the industrial software business of Schneider Electric. AVEVA’s software and presence in capital-intensive industries, such as power, utilities, oil and gas, and mining, combines with Schneider’s EcoStruxure IoT strategy to strengthen its range of connected products, edge applications, and analytics.
GE has a long heritage in industrial automation from machine controllers to plant automation. In 2016, GE committed to digital technology. Predix, its IoT platform, uses both Amazon AWS Cloud and Microsoft Azure for cloud capability and cybersecurity. In December 2018, GE announced plans to establish an independent company to include GE’s Predix IoT platform, asset performance management, operations performance management, SCADA, MES, power digital, and grid software solutions in a $1.2 billion annual software revenue business.
Siemens has a history of blurring the boundaries between the engineering and operational domains. Its new Xcelerator product combines software from electronic design automation to product life-cycle management using the Mendix platform, for low-code software development, and the MindSphere operating system for application support. This allows it to connect a range of devices and enterprise systems and integrate with its portfolio of industrial software for digitalization, including Teamcenter, Tecnomatix, Polarion, Mentor, PLM Components, and Solid Edge.
Siemens MindSphere runs on Microsoft Azure, Amazon’s AWS cloud services, and Alibaba Cloud with an ecosystem of partners, such as Atos, Bentley, and Flutura, that develop connected applications. In September 2019, Siemens formally announced that it was changing the name of Siemens PLM Software to Siemens Digital Industries Software (within the Siemens Digital Industries operating company).
IoT technology providers
The following IT and OT solution providers use IoT technology to build and deploy their connected applications for industry. Most of the major semiconductor manufacturers, such as ARM, Intel, Nvidia, Qualcomm and TI, develop microprocessors or microcontrollers that are used in IoT systems. For example, ARM develops the technology for Cortex-M microprocessors that support most connectivity standards. Nvidia was a pioneer of graphic processor units (GPUs) that turned out to be very effective in neural network simulation and analysis, which is used in machine learning and AI in IIoT applications.
A number of specialized IoT technology providers also exist. They continually develop innovative solutions and, although often deployed via enterprise solution providers, they have the potential to be disruptive agents. For example, AT&T recently announced strategic alliances with both Microsoft and IBM to provide edge computing technology using the 5G network and connect to devices and sensors. Cisco, well-known for providing routers and other connectivity devices, is another innovator in IIoT in the “edge” and “fog” areas.
Some of the pure technology providers will thrive, others may be acquired, and some may find it necessary to move into niche areas to survive. RTI, for example, has decided to specialize in autonomous systems. These are used in a variety of industries from automotive to power generation, where they provide the secure infrastructure for connectivity in the edge area between IoT devices and cloud-based platforms.
Cooperation is essential in Industrial Internet of Things due to the complexity and breadth of technology involved. There is plenty of opportunity for niche players to partner with software providers and system integrators to provide specialist capability. This gives the user the best of both worlds: a familiar, overarching IT platform (probably from their existing enterprise provider) coupled with specialist capability (such as autonomous control or machine learning) from a niche provider.
The opportunity for users is to keep the same user interface that they are used to and use the existing core databases and infrastructure from their enterprise system provider by adding connected (IoT) applications.
As IIoT technology matures from simple monitoring to control and then to full autonomy, new applications like autonomous vehicles and lights-out manufacturing will become commonplace. This will require plants to look beyond IIoT and connectivity to the data analytics, deep learning, and artificial intelligence capabilities of Industry 4.0.
Insight from IIoT services provider growth
From the supplier perspective, 2018 was quite a significant year for IIoT. There was a lot of reorganization within supplier companies, and a lot of change taking place. Cambashi analyzed the IIoT and connected applications revenues of OT/industrial and IT/enterprise providers since 2017—our base research year. There is a clear distinction between IT/enterprise and OT/industrial providers. IT/enterprise providers grew by 65 percent in 2018, compared to 30 percent growth for the OT/industrials.
This shows that IT/enterprise providers are making significant advances in their connected application offerings, even though OT/industrial providers started from a higher base value. This is consistent across geographies, where IT/enterprise providers are outperforming their OT counterparts in terms of year-on-year growth. OT and IT providers are both turning their attention to focus more heavily on the Asia-Pacific region.
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