industrial internet of things - transformation of … internet of things - transformation of...

Industrial Internet of Things - Transformation of

Products to Services and new Business Models

Frank Schinzel

Managing Director

Accenture Digital

2Copyright © 2015 Accenture All rights reserved.

Everyday physical objects are becoming uniquely identifiable and embedded with the ability to connect to other devices or networks

Vision - Internet of Things and Services (IOTS)

1) Gartner 2014: The Internet of Things is the network of physical objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment; SAP 2013: Systematic use of the Internet for new ways of value creation in the services sector. We frequently called it the Internet of Services.

19955.7 bn people0.7% connected

20056.5 bn people15% connected

20157.3 bn people75% connected

in 2015>10 bn devices will be connected … or more

3

Everything is digital, Everything is connected

Copyright © 2015 Accenture All rights reserved.

@ @ @

Security company says it discovered spam and phishing campaign run over Christmas, which involved internet fridge

• In the 'internet of things cyberattack", more than 100,000 everyday consumer gadgets were

attacked, including an internet fridge. Photograph: Martin Argles for the Guardian

• If you thought the internet fridge was a bad idea, here's confirmation: a security company says an

internet-connected fridge helped send more than 750,000 spam and phishing emails over the

Christmas break.

Source: The Guardian, Charles Arthur http://www.theguardian.com/technology/2014/jan/21/fridge-spam-security-phishing-campaign

Help! My fridge is full of spam and so is my router, set-top box and console

4

5

A convergence of technology forces is changing the industrial ecosystem, triggering the Digital industrial revolution or Industry 4.0

The Digital Industry 4.0 - Drivers for change


Profound changes in

the entire industrial

ecosystem

+

=

Connected, always-on,

intelligent, software &

data powered

autonomous devices

Connectivity

Hyperscale Data Centers

Analytics and Algorithms

CPU PerformanceChip Miniaturization

Software PushInternet Backbone

LTE

Technology

Progress

Smart Devices

Cyber Physical

Systems

(4th Industrial

Revolution)

Technological progress made possible through Embedded Software & miniaturization.

Past & Present

6


As we speak, within 60 seconds

Data is increasing faster than ever before!

7,000pictures uploaded

370,000 Skype

voice-calls

700,000 search engine

inquiries

700,000 Facebook status updates

170 million

e-mails sent

600 videos

uploaded700 new Twitter accounts &

140,000tweets

Over the past 30 years, the cost per gigabyte of hard disk data storage has halved every 14 months

0

50.000

100.000

150.000

200.000

250.000

300.000

350.000

400.000

450.000

1980 2013

Cost per GB of Hard Disk in US $

Cost per GB of Hard Disk in US $

Huge Data Lakes – How is this possible?

Copyright © 2014 Accenture All rights reserved. 8

US $ 400.000

US $ 0.05

Who will be affected by the Internet of Things?

9

@The usual suspects?

NO! No Sector will be excluded!



A sobering fact

52% of the Fortune 500 firms since

2000 are gone


…And the next decade doesn't bode that well for those companies that don’t adapt


A few trends that are making a big impact

13

Shopping Watching LearningStaying

HealthyTravelling Paying Working

Make it mineAccess not

assets

Every product

is a service in

waiting

Share with

strangers

These new business models are all enabled by

analytics, outsourcing, and globalisation

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=RKfWUMZcBjpTkM&tbnid=NyJmTGZM0ozkrM:&ved=0CAUQjRw&url=http://www.haulagetoday.com/michelin-solutions-makes-cv-show-debut/&ei=xklpU52APIOsyAS8xoCYDQ&bvm=bv.66111022,d.aWw&psig=AFQjCNG-lT3zUoK1MYRNn-ZWgmzHUjQ-qg&ust=1399495455932979

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=RKfWUMZcBjpTkM&tbnid=NyJmTGZM0ozkrM:&ved=0CAUQjRw&url=http://www.haulagetoday.com/michelin-solutions-makes-cv-show-debut/&ei=xklpU52APIOsyAS8xoCYDQ&bvm=bv.66111022,d.aWw&psig=AFQjCNG-lT3zUoK1MYRNn-ZWgmzHUjQ-qg&ust=1399495455932979

In 2015

Uber, the world‘s largest taxi company owns no vehicles

Facebook the world‘s most popular media owner creates no content

Alibaba, the most valuable retailer has no inventory

Airbnb the world‘s largest accomodation provider owns no real estate

S o f t w a r e



We believe there are 6 “no-regret” capabilities required to win in next few years

Sense and

interpret

disruption

Understand

and leverage

data

Partner and

build “camps"

Develop and

launch new

ideas faster

Reorganise

for speed

Build a high

Digital

Quotient

team


Your industry—and next competitive frontier—is being redefined by software

NEW INDUSTRY LEADERS WILL EMERGE FROM SOFTWARE-DRIVEN BUSINESS MODELS

Auto makers, for example, use their connected vehicle ecosystems to innovate with new partners. • Software is a disruptive

force in every industry.

• Competitive windows open and close faster than ever before.

• Will you take the lead, or get left behind?

SOFTWARE STRATEGY

INDUSTRY EXPERTISE

COMPETITIVE ADVANTAGE


Are you ready for the high-velocity, software-driven world?

640,00050B

67% of IT budgets go to run the business

BUSINESS CHALLENGES

Expanding business ecosystems

and the Internet of Things

IT CHALLENGES Rising application complexity

70% of business transactions are still processed in COBOL

50 billion “things” will be connected to the internet by 2020

Partners in Microsoft’s ecosystem

Siloed business and IT

functions hinder agility

Weight of legacy

70%67%

Source: Figure 11, “IT Key Metrics Data 2014: Key Industry Measures: Cross Industry Analysis—Multiyear,” Gartner, December 16, 2013

Source: InformationWeek Source: Cisco Source: Microsoft Partner Network Guide

http://www.informationweek.com/government/leadership/breaking-the-cycle-of-legacy-it-investment-/d/d-id/1114106

http://share.cisco.com/internet-of-things.html

http://en.wikipedia.org/wiki/Microsoft_Partner_Ecosystem

19

Example – 3D Printing


3D printed meat production will become technically

feasible and could create competition for traditional

meat producers as consumers will ultimately be able

to print their own meat products – although much

research and development still remains, say

American food academics.

http://www.globalmeatnews.com/Industry-Markets/3D-printed-meat-on-the-way-

and-it-will-be-disruptive-say-American-specialists

http://www.globalmeatnews.com/Industry-Markets/3D-printed-meat-on-the-way-and-it-will-be-disruptive-say-American-specialists


The IoT vendor landscape has grown 3x in the last 20 months

Reference IoT Landscape – FirstCapital/ TechCrunch

May 2013, 199 vendors December 2014, 612 vendors


Automotive – Next Generation


Healthcare – Next Generation


My Dad says

you are spying

on us online!

He‘s not

your Dad


Attacks on critical infrastructure have already begun

IP NETWORK

BUSINESSSYSTEMS

Operating system and enterprise application vulnerabilities, and pointed attacks like social engineering allow attackers to gain access to process control systems via enterprise systems used for business operations

Application Domain Network Domain Process Domain

Exploiting various vulnerabilities in the operating system and communication protocols enable the impersonation of devices or insertion of rogue devices leading to unauthorized network access

ICS components are often located in geographically remote areas and can be vulnerable to physical attack. Legacy communication protocols for ICS equipment also leaves them vulnerable to man-in-the-middle (MITM), denial-of-service (DoS) and data manipulation attacks

THREATS

In 2014, the German Federal Office for Information Security reported how a steel mill was severely damaged in a cyber attack resulting from information obtained through a spear phishing attack

In 2007, a nuclear power station in Alabama was forced to shutdown by a large spike in local network traffic resulting in unresponsive control systems

In 2010, the Stuxnet worm attacked industrial PLCs and manipulated pressure, vibration and rotation parameters so that destructive commands could be issued to uranium enrichment centrifuges without detection

EXAMPLE

CENTRALCONTROLROOM

REMOTEDISTRIBUTEDCONTROLUNIT

(DCU)WIRELESS

LAN

PROGRAMMABLELOGIC

CONTROLLER

SENSORS

ACTUATORS

industrial internet of things - transformation of … internet of things - transformation of...

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