Finnish understanding regardingIndustrial Internet

27.5.2014Industrie 4.0 & Industrial Internet CollaborationForum 2014 at Aachen

Heikki Ailisto, Research ProfessorVTT Technical Research Centre of Finland

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Industrial internet is a part of “throughdigitalization” – everything goes digital

Industrial internet meanssystematically applying sensor,communication and dataanalysis technologies forimproving productivity andcreating new business.

All objects haveunique digital

identity.

All objects haveunique digital

identity.

Smart things haveconnectivity.

Smart things haveconnectivity.

Internet of Thingsis a digital

representation ofthe real world.

Internet of Thingsis a digital

representation ofthe real world.

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202020101990 -In

dust

ryC

Indu

stry

A

Indu

stry

B

Fixed/wirelessconnectivity

(heterogenous)

Silo

1H

VAC

Silo

2Li

ghtin

g

Silo

3Ac

cess

cont

rol

Silo

X

Silos within one domainand company (systems donot share data), case FM.

Business domains in silos.Waste of resources becauseof duplicating systems, ICT.

Faci

lity

mng

mt

What is new – remote monitoring and control has been here fordecades: Trend from M2M silos to IoT, or Industrial Internet(but this is not the whole picture…)

Local smartnessSmart machines withsensing and connectivity

Act:OptimizeControlManage

Interoperability, connectivity, accesscontrol, service discovery, privacy

(IoT platform)

Fixed/wirelessconnectivity(Internet)

App App App App

intelligent machines smart sensorsUnique ID for every object

Industrial internet broader benefits: Sharing informationbetween systems, within companies, and even betweendomains; Metcalfe’s law V ~ N2,advanced data analytics and DSS bring not only savings butnew business.Enabling new business models, e.g. from sale to pay-by-use

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Affordable technology is here

Why is it happening now?

Computing power growsSmart machinesIntelligent analytics, decision support systemsBig data“Store everything” paradigm (dirty cheap GB)

Connectivity like newer beforeInternet IPv6, no limit to nodesIoT paradigm – connected objectsLow power communicationIdentify and track everything (QR, RFID, GPS)

Sensing everything in real timeExtremely low cost and smallConnectedAdvanced sensingBio-mimicing

People are ready for it

CompetencesAverage person has goodcompetences with digital servicesand products.

AcceptancePeople in all age groups use web,smart phones, car computers athome and on free time.Digital natives, Y-generation, notonly accept, they expect!

5

What does it mean: Views of industry leaders

Although these visions share a lot, they also have different emphasis andfocus.Due to the nature of Finnish industry, i.e. investment-type machinery andICT, we tend to emphasize asset management type of approach.

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IoT field and players

Communicationhardware

Cisco, Ericsson,Nokia, Huawei..

Communication& connectivity service

Vodafone, KDDI,TS, Elisa

IoT serviceplatform

Oracle, IBM, SAP, Axeda,Tieto, CGI, Wapice, Oliotalo..

“The ActualBusiness” Asset /

Brandowner

Systemintegrators

Sensorsactuators, RFID Actuator X Sensor X VTT Node RFID X

Sec

urity

&pr

ivac

y

Vert

ical

play

ers

Sch

neid

erG

E

Assetmanagement

servicecompanies

OEMsystem +service

providers

Sie

men

s

Intelligent assets (with sensors, actuators, ID, connectivity)

Many companies here want to become “vertical players”

Industrialautomation

Honeywell,Siemens,Rockwell

MetsoAutomation, ..

Wild cards: Googleand Microsoft, Apple

Telcos, and otherstoo, want to expandtheir role

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Challenges

Identifying and exploiting business benefit.

Finding win-win solutions in value networks vs.fighting who owns the data, who can use it.

Building and deploying applications fullyleveraging data from multiple sources

Cyber security and privacy threats

Closed / fragmented / lock-in solutions(vs. open internet-type solutions)

Installing and managing 50 B smart devices

Powering 1 T sensors

8

The opportunity of IndustrialInternet for Finnish industry

9

“Industrial Internet is not an opportunity– it is a must!”

Finnish CEO

10

Here’s what Google gets for its money:A Product Master Who Beat Apple to theNext Big ThingBefore co-founding Nest, CEO Tony Fadellwas best known for designing the iPod, ...

When Google announced yesterday its $3.2billion cash purchase of Nest, the jokes flew. “Ifyour house is burning down you’ll now getgmail ads for fire extinguishers,” Valleywag’sSam Bidd

What Google Really Gets Out ofBuying Nest for $3.2 BillionBY MARCUS WOHLSEN, Wired Magazine01.14.2014

Nest Learning ThermostatThe bottom line: Thesecond generation of theenergy-saving NestLearning Thermostat putsthis device even furtherahead of the (nearlynonexistent) competition.Is this a threat or opportunity to established

companies?

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Finnish strengths

World class machinery industry in certain sectors,technology-savvy, able to create new services.

ICT and electronics sector looking for newbusiness opportunities after the disruption ofNokia.

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RDI activity

EU Horizon 2020: Cyber Physical Systems,Internet of Things

ECSEL PPP: embedded systems, IoT,smart systems, critical systems

Digile SHOK: IoT, D2I

FIMECC: S-STEP, S4Fleet

VTT Productivity with IoT

Tekes program on industrial internet (TBC)

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Module 4.1Ismo Vessonen, Pirkka TukevaGlobal asset management• CBM• Remote operation,monitoring

• Digital spare parts

Module 4.2.Miimu AiraksinenIntelligent infrastructures• Smart lighting (Janne Aikio,Marko Jurvansuu)

• Responsive buildings

Module 4.3Anu SeistoDigital society• Interoperable services• Digital infrastructure

Module 3. Information management and analysis, cyber security, Heli Helaakoski

Module 2. Connectivity, Pertti Raatikainen

Module 1. Networked sensors, Jukka Hast From real world phenomena to digital data

Program Lead, Heikki AilistoBusiness development, Petteri Alahuhta

Industrial internet is a VTT priority:ProIoT program – 90 M€ RDI investment 2013-16

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ConclusionIndustrial internet is coming. It will disrupt most businesses and publicservices during next 3 to 15 years.

All the major Finnish companies, whether machinery, processor ICT have recognized this, at least verbally.

Finnish view emphasizes asset management– as opposed tp manufacturing

Risks and threatsTalk does not lead to actionMajor information security breaches (company level)

OpportunitiesImproved competitiveness through offering productivity to customersOpen new business or take somebody else’s old one

What we should doPrepare IoT/II strategy – think networks, can’t do it alone.Analyze your services, products and processes. How does industrial internetimpact them? Is the game going to change? Should we change it?Start early with experiments, learn from experience, also from setbacks.

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TECHNOLOGY FOR BUSINESS

Contact: Heikki Ailistoheikki.ailisto AT vtt.fi

+358 40 555 0726