Technologies such as 5G, IoT sensors and platforms, edge computing, AI and analytics, robotics, blockchain, additive manufacturing and virtual/augmented reality are coalescing into a fertile environment for the Industrial Internet of Things (IIoT), which is set to usher in what's often described as the Fourth Industrial Revolution or Industry 4.0.
Here's how analyst firm IoT Analytics sees the relationship between the broader IoT and the IIoT/Industry 4.0 sector:
In this brave new world, supply chains will have end-to-end transparency thanks to sensors, data networks and analytics capabilities at key points. All other things (trade barriers, for example) being equal, parts and raw materials will arrive just in time at highly automated factories, and the fate of the resulting products will be tracked throughout their lifetimes to eventual recycling. Similarly, 'smart farms' will combine emerging IIoT-related technologies into integrated high-resolution crop production systems based on robotics, big data and analytics.
As a result, businesses deploying IIoT systems will see increased operational efficiency, will reduce their environmental impact, and will have better information on which to base their future plans.
That's the theory anyway, but how are things progressing in practice? This guide examines available information on IIoT adoption, market size estimates, startup activity and IIoT platforms. See the rest of ZDNet's special report for more detail on other important areas, including security.
Who is deploying IIoT solutions?
PTC is a leading IIoT software platform provider, and this research, published in February 2018, was based on data gathered from the company's customer base.
The Americas led the way on IIoT adoption in PTC's survey (45%), followed by EMEA (33%) and Asia Pacific (22%). The leading sectors deploying IIoT solutions were industrial products (25%) followed by electronics & high-tech (23%) and automotive (13%):
"These industries lead the IoT charge because they have complex manufacturing and operational processes, along with high-capital equipment, that can benefit greatly from IoT solutions and data-driven insights that drive more sustainable, resilient, and efficient processes," the report said.
The majority of IIoT-adopting companies were larger organisations (58% had revenues over $500 million), although a third (31%) were smaller, presumably nimbler, companies with revenues of less than $100m.
IIoT use cases in PTC's survey encompassed manufacturing/operations, service, product design and IT:
"The most predominant use cases employ the IoT for manufacturing operational intelligence and operational asset monitoring. These smart, connected capabilities help product manufacturers increase throughput, improve production quality, and reduce manufacturing costs," the report said.
IIoT deployments generate vast amounts of data, and decisions need to be made about where best to store and analyse that data. PTC's report noted that factories and hospitals, for example, might favour on-premises deployments due to the need for security and low-latency response, while for smart cities, transportation or oil-and-gas the scalability of the cloud could win the day. At the time of PTC's survey, on-premises deployments outnumbered cloud deployments (62% versus 38%).
In conclusion, PTC stated that "IoT is no longer a wait and see technology; companies must act now or risk being left behind," noting that 83 percent of adopters in its survey planned to move their deployments from proof-of-concept to full-scale production environments within 12 months.
Industrial IoT on Land and at Sea (Inmarsat)
Inmarsat's 2018 research looked at the adoption of the IIoT in the agriculture, energy, maritime, mining and transport sectors (with an emphasis, naturally, on the role of satellite connectivity as an enabling technology).
Market researchers Vanson Bourne interviewed 750 respondents with decision-making or influencing responsibilities for IIoT initiatives in their organisations, which covered the Americas, EMEA and APAC, and had at least 500 employees. (An exception was the maritime sector, where 45 percent of organisations had less than 500 employees.) Here are the headline findings.
Nearly half (46%) of businesses reported either fully deploying (21%) or trialling (25%) IIoT solutions, with the main drivers being resource efficiency, improving health & safety and monitoring environmental change.
The main barrier to IIoT adoption was skills, followed by a lack of turnkey/off-the-shelf solutions, higher-than-expected costs, and security. Specific IIoT-related skills identified as lacking were security (56%), analytical/data science (48%) and tech support (42%), with decision-making, management, planning, database management and customer service also mentioned in dispatches.
On the security front, nearly two-thirds (65%) of respondents recognised that their IIoT defences should be stronger, with external cyber-attacks, poor network security and misuse of data by employees being the biggest challenges.
Data is the key to IIoT-based transformation, and Inmarsat's respondents flagged up cost-saving and efficiency opportunities, productivity monitoring and health-and-safety improvements as current data-related concerns. Going forward, better decision-making, increased internal data visibility and greater supply-chain insights were seen as important potential benefits.
Unsurprisingly, the maritime sector placed the most importance on satellite communications (Inmarsat's core business) in their IIoT deployments. RFID and Bluetooth LE headed up the list of other connectivity technologies used by survey respondents.
A quarter of Inmarsat's respondents expected to spend more than 10 percent of their IT budgets on IIoT solutions over the next three years, and overall were expecting good returns on their investments: "a 10 percent reduction in costs and a five per cent lift in turnovers expected at the end of this period, and more by 2023," the report said.
Finally, to assess the level of readiness for IIoT solutions, Inmarsat scored survey respondents on six key areas (adoption, security, connectivity, skills, data and investment/ROI) and divided them into categories (laggards, starters, progressives and leaders). On this basis, the maritime and transport sectors are leading the way on IIoT, with mining bringing up the rear:
Inmarsat has recently announced a collaboration agreement with Microsoft combining the former's satellite communications network with the latter's cloud-based Azure IoT Central platform. Data generated by IIoT infrastructure, wherever it may be located, will be transferred via satellite to Azure IoT Central for analysis. This tie-up will focus initially on IIoT solutions for the agriculture, mining, transportation and logistics sectors, says Inmarsat.
The IIoT market
Given the number of core and supporting technologies in the IIoT, and the need for manufacturing businesses of all sizes to keep up with digital transformation or fall behind their competitors, it's no surprise to find that analysts are forecasting impressive (if somewhat varying) growth for this market over the next few years:
Current market size
Research & Markets (May 2018)
10 industries, 10 technologies, 4 revenue sources, 5 regional and 22 national markets, offering 2016-2017 estimates and 2018-2023 forecasts and analyses for each
The major winners might be those that control Industry 4.0 Platforms -- software layers that syndicate various devices, information and services, on top of which other firms can build their own offerings
Markets & Markets (June 2018)
Devices & technology (sensor, RFID, industrial robotics, DCS, condition monitoring, smart meter, camera system, networking technology), software (PLM, MES, SCADA), verticals and geographies
| IIoT market for smart beacons technology to grow at a high rate between 2018 and 2023; Manufacturing vertical to hold largest share of IIoT market in 2018; The IIoT market for the agriculture vertical is likely to grow at the highest CAGR between 2018 and 2023; IIoT market in APAC to grow at highest rate during forecast period |
Zion Market Research (July 2018)
Components (sensors, industrial robotics, Distributed Control Systems [DCS], condition monitoring, camera systems, smart meters), software [Product Lifecycle Management [PLM] Systems, Manufacturing Execution System [MES], SCADA systems, distribution management systems), verticals (manufacturing, utilities, oil & gas, metals & mining, retail, healthcare, transportation & logistics)
The camera system segment is expected to grow at highest CAGR in the forecasted period; In the software segment, the demand for distribution systems has increased over the period of time due to increasing use of distribution systems in transportation and logistics; The manufacturing sector is expected to witness moderate growth in the IIoT market due to the adoption of advanced robotics and cloud robotics in manufacturing practices
IoT Analytics (November 2018)
6 connected industry building blocks, 6 supporting technologies, 12 use cases, 7 regions
Key findings include 9 disruptive trends that have the potential to fundamentally change existing industrial network architectures, business models, and technology stacks. Three of the nine disruptive trends relate to the traditional 5-layer automation pyramid. One such trend is for I/O and PLC hardware to bypass the traditional automation pyramid and instead connect to the cloud either directly or via industrial gateways
IDC (January 2019)
The Worldwide Semiannual Internet of Things Spending Guide forecasts IoT spending for 14 technology categories and 82 named use cases across 20 industries in nine regions and 53 countries
The industries that are forecast to spend the most on IoT solutions in 2019 are discrete manufacturing ($119 billion), process manufacturing ($78 billion), transportation ($71 billion), and utilities ($61 billion)
Here's how the November 2018 report from IoT Analytics sees the Industry 4.0 (I4.0) market growing between 2017 and 2023:
Among the 12 use cases identified by IoT Analytics, the largest in terms of market size will be Advanced Digital Product Development, while the biggest growth rates between 2018 and 2023 will be for Additive Production (i.e. industrial-scale 3D printing) and Augmented Operations:
In a statement, Matthew Wopata, the report's main author and IoT Analytics' lead expert for Industrial IoT said:
"Advanced digital product development emerged as the largest use case for I4.0 technologies as companies are using additive manufacturing, AR/VR, and digital twin technologies to reduce product development costs and time to market. Other large use cases such as data-driven quality control, predictive maintenance, and data-driven asset/plant performance optimization will continue to grow in popularity as manufacturers use I4.0 technologies to improve their operational KPIs, such as OEE [Overall Equipment Effectiveness]. The leading vendors of I4.0 solutions are hyper-focused on customer pain points/use cases and ensure that the data-driven insights generated from I4.0 solutions lead to measurable improvements and tangible ROIs."
IIoT industry associations
There are a number of industry associations relevant to the IIoT, and on 31 January 2019 two of the leading bodies -- the Industrial Internet Consortium (IIC) and the OpenFog Consortium -- announced that they had united.
The IIC's goal is to accelerate the industrial internet in five areas: utilising existing and creating new use cases and testbeds for real-world applications; delivering best practices, reference architectures, case studies and standards requirements; influencing the development of global standards for internet and industrial systems; facilitating open forums to share and exchange real-world ideas, practices, lessons and insights; and building confidence around new and innovative approaches to security.
The OpenFog Consortium's raison d'etre is defined thus: "Our efforts will define an architecture of distributed computing, network, storage, control and resources that will support intelligence at the edge of IoT, including autonomous and self-aware machines, things, devices, and smart objects. OpenFog members will also identify and develop new operational models. Ultimately, our work will help to enable and drive the next generation of IoT."
According to the IIC/OpenFog merger statement, "the organizations will work together under the IIC umbrella to drive the momentum of the industrial internet, including the development and promotion of industry guidance and best practices for fog and edge computing."
"This agreement brings together the two most important organizations shaping the Industrial Internet of Things. The combined organization offers greater influence to members, more clarity to the market, and a lower-risk path to the future for end users. We will be the center of gravity for the future of Industrial IoT systems across industry verticals," said Stan Schneider, CEO of Real-Time Innovations (RTI) and vice-chair of the IIC Steering Committee in a statement.
Other IIoT-related bodies (listed by IoT Anaytics) include: Plattform Industrie 4.0, Labs Network Industrie 4.0, OPC Foundation, Industrial Data Spaces Association, CyberValley of Baden Württemberg, Center for the Development and Application of Internet of Things Technologies, and Manufacturing USA.
The IIoT represents the convergence of operational technology (OT) and enterprise IT systems, the potential benefits being improved asset management and operational visibility. IIoT software platforms need to enable these benefits and interface with enterprise systems, and need to do so securely.
Gartner's first Magic Quadrant for Industrial IoT Platforms (May 2018) included the requirement that "the product must be available as both a cloud industrial IoT platform and an on-premises deployment". This raised eyebrows because several companies with "significant brand equity associated with IIoT" -- including Bosch, GE Digital, Microsoft, Schneider Electric and Siemens -- were excluded from consideration for lacking the on-premises component.
"Simply put, the culture of industrial engineers, while changing, places high trust in what they can touch and control," Gartner explained. "An on-premises deployment of an IIoT platform is the genesis of forming trust."
Gartner also required vendors to "develop, market and sell IIoT platforms as asset-agnostic, horizontal middleware that is salable as a stand-alone offering", in order to "ensure broad availability and usefulness for industrial enterprises conducting due diligence". This also ruled out some large and important manufacturers.
All this helps to explain the somewhat sparse nature of Gartner's inaugural IIoT Magic Quadrant, and the fact that it's devoid of any entries in the Leaders and Challengers quadrants:
For Gartner, PTC's strength is in its core applications for product lifecycle management (PLM), computer-aided design (CAD) and service lifecycle management (SLM). The company focuses on solutions for asset monitoring, predictive maintenance and operational excellence.
SAP's Leonardo is a multi-cloud (AWS, Google, Microsoft) platform with a separate on-premises solution. According to Gartner, Leonardo is best suited to SAP customers seeking to combine IT/OT integration with SAP's IoT applications, asset intelligence network and legacy industry applications.
Hitachi Vantara's Lumada platform is best for industrial environments involving Hitachi equipment, says Gartner, where customers can leverage prebuilt functionality for edge device interaction and off-the-shelf 'solution cores' that address requirements such as industrial asset monitoring, maintenance, scheduling, quality, safety and productivity.
The IIoT platform market was examined in The Forrester Wave: Industrial IoT Software Platforms, Q3 2018, with somewhat different results.
For Forrester, an IIoT software platform must do five things: (1) create the link between industrial machinery and digital systems; (2) protect IoT devices and data from attack; (3) control the provisioning, maintenance and operation of IoT devices; (4) transform data into timely, relevant insight and action; and (5) create applications and integrate with enterprise systems.
Where Forrester parts company with Gartner is in its judgement that 'the place to be' is the public cloud:
"Practical considerations about providing connectivity to remote locations, plus a general suspicion about the security, capability, and trustworthiness of startup-obsessed public cloud providers, led the early entrants in the industrial IoT space to invest in building their own networks of data centers. Those days are behind us. All of the evaluated vendors retain some ability to deploy in private data centers, but the direction of travel is clear: They, and their customers, are headed to the cloud."
Other changes since Forrester first evaluated IoT platforms in 2016 include: modern API-backed user interfaces; analytics, plus machine learning and AI, as a core component; increased data flows with other enterprise systems (ERP, CRM, service desk); digital twins, with augmented reality on the way; and solutions focused on use cases such as predictive maintenance.
Forrester included 15 vendors in its evaluation: Amazon Web Services, Atos, Bosch, C3 IoT, Cisco, GE Digital, Hitachi, IBM, Microsoft, Oracle, PTC, SAP, Schneider Electric, Siemens and Software AG.
Judged on their current offerings, strategies and market presence, IBM, C3 IoT, Microsoft, SAP and PTC and emerged as Leaders:
According to Forrester: IBM's Watson IoT Platform offers 'extensive analytics with industry-specific and services expertise'. C3 IoT 'leaves management of things to partners and differentiates with analytics'; Microsoft's Azure IoT 'offers enabling cloud infrastructure and more' -- including development tools, advanced analytics capabilities, augmented reality (HoloLens) and edge computing; SAP Leonardo 'encompasses IoT as well as other digital innovation technologies' — including machine learning, blockchain and big data; and PTC 'fuses device connectivity strength with augmented reality vision'.
There are many more companies involved in the IIoT ecosystem than just software platform vendors, of course. For its Industry 4.0 & Smart Manufacturing 2018-2023 report, IoT Analytics identified over 300 companies that deliver products and services driving the fourth industrial revolution. The analyst firm divides these into suppliers of 'Connected industry building blocks' and suppliers of 'Other Industry 4.0 supporting technologies':
Analytics and connectivity hardware lead the way in the building blocks category, while additive manufacturing (industrial 3D printing) and AR/VR head up the supporting technologies:
Companies highlighted in each category were: Microsoft (hosting); Microsoft, General Electric, PTC and Siemens (IIoT platforms); Uptake (analytics); Nvidia (microchips); Festo (sensors); HMS (connectivity hardware); Claroty (cybersecurity); Accenture (systems integrators); General Electric (additive manufacturing); Upskill (augmented and virtual reality); ABB (collaborative robots); Cognex (connected machine vision); PINC (drones/UAVs); and Clearpath Robotics (self-driving [material transport] vehicles).
Digital Twin: A key emerging IIoT technology
As noted earlier, a number of emerging technologies are creating suitable conditions for the adoption of IIoT solutions, including 5G, edge computing, AI and analytics, robotics, blockchain, additive manufacturing and VR/AR. One that deserves special mention is the digital twin, which can be defined as a virtual representation of a real-world entity or process. With real-world 'things' modelled in software and fed with real-time sensor data, engineers can head off potential problems and use simulations to optimise performance.
Digital twin technology is firmly at the 'peak of inflated expectations' in Gartner's 2018 Hype Cycle for Emerging Technologies, so it's worth looking at some recent research into the current state of play.
Digital marketing specialist Reboot Online has analysed data from research facilities provider Catapult on digital twin technology. Catapult's information comes from a survey of 150 engineers and is reported in more detail in its report Feasibility of an immersive digital twin: The definition of a digital twin and discussions around the benefit of immersion.
The key components of a digital twin, according to the engineers, are a physical asset, live and offline data sets, a 3D representation and real-time simulation:
When it comes to the value of digital twins in the product life cycle, maintenance, repair & operations and manufacturing are the clear leaders, followed by simulation and quality control:
"We are in an era of rapid technological developments. At the forefront of that has been the rise and evolution of digital twins," said Naomi Aharony, managing director of Reboot Online in a statement.
"With the technology having the ability to cover the entire life cycle of a physical system, process or product, it provides businesses with a powerful analytical tool which can thoroughly assess key performance indicators and provide insights as to where enhancements can be made. In the long-run, the lessons and suggestions taken from digital twins will drive various opportunities for innovation and growth," Aharony added.
Although many IIoT projects are still in the proof-of-concept or trial stage, there are clear signs of a widespread move towards full production deployments. The relevant technologies are available, investment decisions have been made, and returns on those investments are expected.
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