The Digital Twins market is fast evolving, and many companies have the opportunity to lead the Digital Twins services business. Joe Perino, a...
Hannover Messe is the Super Bowl for industrial technology analysts, and 2017 did not disappoint. LNS Research had a very successful show, with myself, Andrew Hughes, and Greg D’Andrea in attendance. Across the three of us, we met with over 25 vendors and this post represents our version of the ESPN highlight reel.
The resurgence of the show that started five years ago continued in 2017. While the resurgence began with the introduction of Industry 4.0, in our opinion the hype surrounding Industry 4.0 and the IIoT/IoT has peaked. The show has now become focused on real applications of digital technology to industrial assets and operations, with an increase in the presence of US-based software and technology companies.
- 3D Printing
- APM as Service
- GE Digital
- Hewlett Packard Enterprise (HPE)
- Rockwell Automation
- Schneider Electric
3D Printing presents Future Vision
Although most of the fair has shifted from promoting a vision of the digital industrial future to delivering on that vision – 3D Printing was the exception. 3D Printing has been noticeably absent from the Industry 4.0 and Smart Manufacturing discussions. Five years ago, cost, quality, and speed issues relegated 3D Printing mainly to a realm of novelty and prototyping. This year, printer companies like Stratasys and HP were demonstrating industrial grade printers ready for scale. At the same time SAP and Siemens were announcing new integrated marketplaces to enable the design, print, and deliver value chain. Although 3D Printing at scale is still at the vision stage, if it moves as fast as the rest of the industry has, we should be at execution in the next 2-3 years.
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APM as a Service
At its heart, Hannover Messe is an industrial show with thousands of exhibitors showcasing the value of industrial assets to potential industrial customers. This year the value prop of these asset providers shifted from enabling Industry 4.0 to offering IIoT enabled Cloud services to improve asset performance and reliability. This included assets such as automation, networking equipment, motors, drives, pumps, packaging equipment, and much more. Although each of these individual solutions offers considerable value to customers, it is not a holistic solution. When we were walking through one of the booths with a large automotive OEM client, the comment was made that, I don’t need all this information on 12 different screens from 12 different vendors – I need a single view. And there is the rub.
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Vendor Announcements and Analysis
ABB Ability, an IIoT Platform, was announced at ABB Customer World a month and a half ago and the platform was on display at the fair this year. ABB has for many years had a broad portfolio of software assets for industry. However, the company has failed to gain momentum in its own Digital Transformation. This has changed with the addition of Guido Jouret, formerly of Cisco, as Chief Digital Officer and the launch of ABB Ability IIoT Platform running on the Microsoft IoT stack. ABB now claims over 180 legacy apps now run on the ABB Ability Platform and are expecting to use it to move into new industries like Food and Beverage. Although due to time constraints, LNS Research couldn’t verify how deep and broad the Platform integration goes, we are happy to see the change in the direction of the company and will be following future advancements in detail.
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Among US tech companies, Cisco was one of the early entrants into the industrial operations market and consequently has one of the broadest set of customers and partners. Those partnerships over time have served the market well, forming a path forward for IT-OT convergence. This year, Cisco has shown itself to be much more willing to engage directly with industrial companies to have a value-based discussion, without relying on the subject matter expertise of industrial automation companies. This new stature exemplified in the launch of Cisco’s Connected Factory for Industry 4.0, consisting of:
• Time Sensitive Networking – The idea is great, running all automation and control on standard unmodified Ethernet; I’ve been a big theoretical proponent for years. Development has been under works for many years at Cisco, with partners, and has now been announced to the market. There are still some industrial automation standards holdouts yet to approve, but all signs point to ultimately achieving technical feasibility.
The challenge ahead of Cisco now is not technical, but selling TSN to the market. Today the TSN pitch puts a lot of faith in the self-evident benefits of moving from multiple networks to a single network. Although the benefits of this may be obvious to Cisco, especially after seeing the benefits of VOIP, industrial customers will likely need more hand-holding to understand the advantages of a single network. If Cisco can convince industrial companies of this benefit, it will go a long way to overcoming switching costs and creating demand in the market.
• Industrial Network Director – New software that discovers CIP and PROFINET devices on the network and puts in the context of traditional network management tools with visualization, dashboarding, and alarms. LNS sees this offering as having the potential to help industrial companies close the gap between network management, automation equipment, and production processes; ultimately improving performance and reliability of all three.
• Cisco Asset Manager for IoT Intelligence – Is moving Cisco’s existing IoT and Collaboration capabilities to focus in on fleets of industrial assets. The new positioning will put Cisco into co-opetition with IIoT Platform providers; both are now going after similar use cases like machine health and utilization, track and trace, energy efficiency, and compliance.
Although Cisco lacks the subject matter expertise of many automation companies with offerings already in this area, the company has been working with these partners to deliver such offerings jointly for many years. Cisco also has some capabilities that other companies don’t have, like proximity to the data with owning the network as well as expertise with video and collaboration.
Time will tell if industrial companies will feel comfortable dealing directly with IT companies like Cisco for an IIoT Platform or if they would rather deal with an OT provider that has embedded IT capabilities within the platform.
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With the emergence of the IIoT, Dell is an IT company that has moved into the industrial operations space primarily with an Industrial Gateway offering. At the 2017 fair, Dell broadened its contribution to the space, announcing the EdgeX foundry managed by the Linux Foundation. Essentially, EdgeX is an open source project focused on accelerating IIoT adoption by defining a common and open framework to enable plug and play edge computing in the industrial sector while preserving the ability for value creation by the ecosystem.
The vision of the Foundry is a future where vendors no longer compete via customer lock-in with proprietary or differentiated connectivity. Instead, competition is based on the value delivered by plug and play hardware and software. It's a future vision that is hard to argue with and not all that different from the vision being pursued in the Open Process Automation Forum hosted by the Open Group. Today there are 50+ vendors in the Foundry, although not the ones that benefit from and persist the current environment. It will be interesting to see how quickly if at all, Dell competitors and vendors with significant existing installed bases move to contribute and push adoption.
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Of all the companies exhibiting at Hannover Messe, GE is arguably taking the most aggressive approach to Digital Transformation. The change has been tremendous over the past several years. This includes the internal reorganization of GE Digital, which is now housing all former internal IT functions across business units and external software offerings. Leadership changes now put Googlers in charge of the overall Digital vision as well as Brilliant Manufacturing solutions. Being first to market, and essentially create, the IIoT Platform space with Predix, GE Digital is aggressively making a wide range of acquisitions and embedding GRC capabilities with specific Industrial Cyber-Security subject matter expertise across the organization. With all this disruption, LNS does not consider it hyperbole when GE claims GE Digital is a startup in a 125+-year-old company. Of course, it must be noted this brings just as many challenges as benefits.
One of the highlights from the fair for GE was an integrated demo across asset management, manufacturing, and service; showcasing GE capabilities across APM, MOM, IIoT Platform, and interoperability with 3rd party enterprise applications. GE also showcased the latest version release of Plant Applications (formerly Proficy Plant Applications) now embedding ThingWorx for much-improved usability and visualization of the applications from the plant operator all the way to executive. Finally, GE also showcased third party services that are now available for purchase through Predix.io; including:
- Pitney Bowes – Geospatial
- Ericsson – Blockchain
- SAS – Streaming analytics
- Splunk – Collection of machine data
Such a marketplace has been a common vision for many companies providing a platform approach to the IIoT. It will be interesting to see if this early advantage persists for GE or if these services will be easily portable to other platforms and we quickly see these same services on many other platforms.
Overall GE’s strategy of Digital Transformation and offering of an external IIoT Platform is receiving the highest praise it can, imitation. But there are two important questions that keep coming to mind for me: "Will GE be first to announce a large industrial client that has made an enterprise commitment to its IIoT Platform spanning across internal industrial operations?" And second, "Will GE IIoT Platform competitors benefit by having waited to build their own Platforms on top of more horizontal IoT Platform providers like Microsoft?" The next few years will be very interesting, and it is a wonderful time to be an industrial technology analyst.
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Hewlett Packard Enterprise (HPE)
With other US tech companies looking more and more like competitors to industrial software and automation vendors, HPE is building up to be one of the leading partners to these companies. HPE’s longest and deepest partnership is with GE Digital, but that has, and will likely continue, to broaden to other players over time; with PTC and National Instruments have already signed on.
Today HPE is primarily going to market with IT infrastructure, but also has IIoT enabling products like extensible networking (location services and security), industrialized computing platforms like Edgeline Converged Edge systems, and industrial gateway offerings. These offerings are all critical components for delivering industry solutions like APM, and HPE is careful not to position its IoT and Analytics capabilities as part of these solutions; opting to leave it for partners. Although HPE did not have a lot of new announcements at the fair, it was clear that HPE is highly committed to the space, delivering value through its partners, and LNS expects to see more good things to come.
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Among all the companies exhibiting at Hannover Messe in 2017, it could easily be argued that Microsoft had the most impressive performance. In just three short years of attendance, Microsoft has grown to have one of the largest and highest traffic booths at the show with a whole slew of compelling partner presentations as well as direct offerings.
One of the announcements that got the most interest was Time Series Insights for Microsoft Azure. Although, in the short term, it looks like this offering is focused on using Microsoft’s Cloud and IoT infrastructure to take Splunk head on and provide analytics on time series data coming from edge devices, in the long run, as the cost of connectivity comes down, there is no reason it couldn’t disrupt the data historian market as well.
The other major announcement was the Microsoft IoT Central, a SaaS offering targeted at companies offering connected products, including connected assets. To start, Microsoft is focusing on the SMB market, but there is no reason it can’t go up market; in fact, TetraPak, a leading packaging company, was showcasing what it had built using the capabilities. Based on what was shown at the fair, I again came away with two major questions: "Will Microsoft be able to address some of the challenges highlighted above with APM as a Service by enabling multi-vendor solutions?" And, "Will Microsoft run into channel issues as its own Platform offerings look more and more like those offered by its partners, including Honeywell with Sentience and ABB Ability?"
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There were also two partner presentations worth mentioning:
OSISoft is the market share leader in the Data Historian market, but as with Rockwell Automation you wouldn’t know it from the fair. Instead, OSIsoft focused on the Azure partnership and how companies are gaining value from operational data with Machine Learning and Artificial Intelligence. Presentations like this help end users address the biggest challenge with Big Data Analytics, building a business case when future benefits are unknown before the project is started.
OSIsoft showcased how Deschutes Brewery (6th largest craft brewer in US) used ML/AI to solve a batching issue that resulted in major quality issues that were causing the company to lose entire batches and weeks of capacity. What was thought to be a relationship between pressure and temperature, is determined by timing of batch process and is variable based on natural differences in yeast. Using ML/AI the brew masters built a model to optimize batches on previously unknown relationships. There was also a waste water example where a local sewer utility in Poland (HM partner country) correlated demand spikes in flow to television commercial breaks. This allowed operators to refrain from bringing on additional and now known to be unneeded capacity saving money and energy. The company was also able to correlate IP addresses of social media activity to issues, like leaks, in the system that can now be identified faster than in the control system itself.
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• Rockwell Automation
Rockwell Automation is the market share leader for PLCs in North America but you wouldn’t have known it from its booth. Thankfully, the company left its hardware at home and focused its presentations on its Digital offerings, including new Cloud-based machine analytics and the Digital Twin. Using Mixed Reality capabilities, with the HoloLens, the company showcased a high-speed packaging machine with a live Digital Twin running simultaneously. The Digital Twin is moving in the direction LNS sees needed for Smart Connected Assets, improving not only design but also commissioning, training, maintenance, and machine optimization.
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The past several years SAP successfully showcased an autonomous production line (decentralized control with materials and machines interacting directly) integrated with SAP ME and other enterprise applications from SAP. This year SAP moved to showcase KUKA robots connected directly with Leonardo (the new branding for SAP’s IoT Platform capabilities formerly under the HANA brand). The demo clearly demonstrated SAP’s desire to continue to move into industrial operations and provide connectivity and analytics directly to production assets. Next year I hope SAP takes this demonstration a step further and begins to address the challenges highlighted above with APM as a Service and dealing with multi-vendor environments. SAP is uniquely positioned to provide a single pane of glass across all connected assets in an integrated environment, making this a reality would resonate with customers incredibly well.
3D Printing was another highlight for SAP at the show. The company is moving to provide an environment, much like what the company already does with Ariba, where manufacturers can securely submit part designs to a network of printing providers. 3D Printing is a technology that is going to transform both manufacturing operations as well as supply chain design. Will this current version of 3D printing services support the long-term evolution of the market? It is hard to say, but with SAPs capabilities in financials, supply chain management, procurement, and now early mover advantage, the company has a great opportunity to evolve with the market and capture share in a new space.
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There were several important announcements made by Schneider Electric at this year’s show, including the launch of System Platform 2017 and a continued focus on EcoStruxure as the path forward for the IIoT. EcoStruxure has been around for years, but over the last six months, Schneider Electric began to use the brand to highlight the company’s architectural approach to enable the IIoT. Although at first, it wasn’t completely clear to the market if EcoStruxure was a product, platform, or architecture. The company’s continued focus has lent clarity. EcoStruxure is now understood to be an architectural framework for bringing together connected products, edge control, apps, analytics, and services by industry.
The other major announcement, System Platform 2017 powered by Wonderware has tremendous potential. Although the company hasn’t gone as far as saying it is an IIoT Platform, this is the space in which LNS Research sees the product competing over time, and likely competing well. System Platform has a long legacy in the industrial space, with a heritage of impressive openness, connectivity, users, and apps. Where some other industrial companies have opted to build entirely new platforms, if Schneider Electric can successfully modernize its existing platform, with Cloud and analytics from its partnership with Microsoft, momentum could be gained in the market. LNS is looking forward to more in-depth demonstrations of the new release.
One final announcement that didn’t get a press release but LNS sees as perhaps even more important than the others is that Schneider Electric’s software group is now part of its larger industry group. LNS sees this move as a positive for the company, and should help better integrate software into the broader company and quell continued rumors that software maybe spun out of the company.
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Hannover Messe maybe the Super Bowl of industrial trade shows, but it is also a home game for Siemens, and the company did not disappoint. Across the 27 show halls, Siemens has the largest exhibition, many football fields in size. In Siemens typical fashion, the company showcased its impressively broad, deep, and integrated portfolio of digital capabilities across industries and value chains.
Although Siemens is still a conservative company, over the past several years the company has been more willing to publicly display its future direction and technology. This was exemplified by many impressive MindSphere apps shown on the floor that are still not generally available until the next release of MindSphere. These applications include merging together mapping and geospatial technology, with real-time information like pump or valve performance, with engineering data coming from COMOS and the new Bentley partnership.
Regarding MindSphere, the UGS acquisition from a decade ago looks like it is still paying dividends. MindSphere, the company’s IIoT Platform for the past year has been developed and managed by Siemens PL, which represents a proven group of enterprise software veterans. When compared to the team’s responsibility for delivering IIoT Platforms at competitors, the Siemens team is unique and very well positioned to successfully deliver value to the market.
The final announcement of note from Siemens was 3D Printing. As with SAP Siemens is also launching a Digital Marketplace. As noted above, the market is quickly evolving and will continue to evolve. Siemens unique value for its marketplace will be on the openness of its PLM capabilities, depth of its 3D printing software modeling capabilities, and being an early mover in the creation of the market. Siemens also recently announced a partnership with 3D printing software and service bureau, Materialise; this should help it to support a myriad of different printers. LNS will continue to follow the creation and adoption of these marketplaces, as well as how printer and printing companies evolve to engage with these markets.
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As you can see, there was a lot of ground to cover at this year’s Hannover Messe. These 13 highlights were just the tip of the iceberg. If you would like to go deeper or discuss other topics from the fair, please reach out to your client success manager, or request an analyst here.