Board Forum Teollinen Internet

(1)

Board Forum 2015

Teollinen Internet

(2)

Internet of Things Ecosystem

JP Suortti

13.1.2015

(3)

(4)

A variety of terms are being used some dating back 15+ years

Definitions

Machine-to-machine

(M2M)

Industrial Internet

Internet of Things

(IoT)

Internet of Everything

(IoE)

“Technologies that allow both wireless and wired

systems to communicate

with other devices

of the same type”

- Siemens

“The integration of complex physical

machinery with networked sensors

and software

”

- General Electric

“

Ultra-connected environment

of capabilities and services, enabling

interaction with and among

physical objects and their virtual

representations

, based on supporting technologies such as sensors, controllers,

or low-powered wireless as well as services available from the wider internet”

- Kevin Ashton @ Procter & Gamble

“The networked connections of

people,

process, data, and things”

- Cisco

(5)

PHYSICAL

OBJECTS

Applications

”Smart, connected products”

What are we really talking about?

Sensor(s) & H/W

Software

Connectivity

Processing, analytics

plus storage capability

at scale

Security

External

information

Other

systems

Deloitte Confidential

Source: Adapted from Harvard Business Review (2014)

Key things

- Feedback loop

- Actionable insight

- Impact to value

(6)

Aircraft Engine Monitoring

Case example

1. Data from jet

engines and other

parts of the aircraft

are aggregated and

transmitted via GSM,

Wi-Fi, satellite

2. Data is analyzed

using advanced

algorithms to detect

potential failure and

information is routed to

appropriate staff

4. Staff for

maintenance, flight

scheduling, inventory

and asset

management operate

more effectively

3. New processes

enable aircraft to be

serviced on an as

needed basis rather

than as scheduled

§

Engines generate half a

terabyte of data per flight

§

Insight made possible from

data across many engines

Source: GE.com,GigaOM, Deloitte analysis

Key Benefits

• Prevent expensive failures and fines

• Right worker or part at the right

place at the right time

• Extend asset life by avoiding failure

• Reduce safety incidents

• Knowledge ahead of turnarounds

Can be applied to…

• Any rotating machinery e.g.

locomotives

• Any burning machinery e.g. turbines

• Equipment with high impact of failure

e.g. transformers

New business

models

1. Engine

2. Service

3. Air miles

(7)

IoT will have a broad impact across industries

Range of use cases are being applied

Manufacturing

Healthcare

Insurance

Banking & Securities

Retail & Wholesale

Remote machine control, Predicting equipment failures,

Minimizing downtime , Effective supply chain

Monitoring patients at home, improving drug compliance

Automatic damage reports, Smart vehicle insurances

Cash free transactions, Smart sensors, Remote

surveillance

Wearable technology, automatic grocery shopping

Computing Services

Government

Transportation

Utilities

Real Estate & Business Services

Wireless connectivity, ad hoc data collection,

Information security services, Server technologies

Remote services, Information sharing, Tax control

Collaborative parking slot finder, Smart tolls, Collaborative

eco-friendly navigator , Driverless vehicle

Smart grid, Smart metering, Power efficiency

Energy consumption metering, Sensors for damage

controlling, Smart Home Systems

Source: Gartner 2013 Deloitte Confidential

(8)

Current uses

Majority of IoT use cases are based on cost reduction and risk management.

Focus on revenue and innovation would offer considerably larger potential

Cost

Reduction

65%

(Transaction, facility /

asset lifecycle)

Risk

Management

22%

(Transaction, facility /

asset lifecycle)

Revenue &

Innovation

13%

(Relationship, product /

customer lifecycle)

Source: Deloitte research (2014) Sample 89 IoT implementations

(9)

(10)

Driver #1: Miniaturization and high-performance

computing enable more from less

Driver #2: Cost reduction and economics will increase

adoption and availability of connected devices

Driver #3: Ubiquitous connectivity and means to make

sense of large volumes of fast flowing data

(11)

Driver #4: We will not run out of IP addresses anymore

4,3bn (= 10

9

)

3,4 x 10

38

(12)

All this is expected to enable exponential growth

Source: Machina Research (2013), Pyramid Research (2012), Gartner, Nov. 2013, IDC, Oct. 2013, The Economist, Oct. 2013, Deutsche Bank May 2014, GE 2012

2 3

4

5

6

8

10

12

14

16

19

0

2

4

6

8

10

12

14

16

18

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

21

20

22

G

lo

ba

lM

2M

C

on

ne

ct

io

ns

(b

ill

io

n)

Global M2M Connections 2012-2022

§

46%

of global GDP can benefit from

Industrial Internet

§

$19 trillion

of value at stake by 2020

§

$1.9 trillion

global economic value

creation by 2020

§

26 billion

embedded devices and

intelligent systems by 2020

§

$9 trillion

in annual sales by 2020

§

4 billion

connected people

§

50 trillion

GBs of data

§

25+ million

apps

§

75%

of executives exploring/adopting IoT

(13)

Deloitte predicts that in 2015…

One should remain pragmatic amidst the hype

•

1bn wireless IoT devices will ship, up 60% from 2014, with an

installed base of 2.75bn devices.

•

IoT-specific hardware is likely to be worth $10 billion

•

Associated services enabled by the devices about $70 billion

•

About 60% of all wireless IoT devices will be bought, paid for

and used by enterprises and industries.

•

Over 90% of the services revenue generated will be

enterprise, not consumer

(14)

•

The IoT ecosystem is in its early

stages of evolution and is

characterized by a high degree of

complexity

•

Startups, incumbents, M&A,

alliances, partnerships…

•

The desired outcome is an

ecosystem where everyone

benefits

‒

Standards

‒

Security

‒

Interoperability

‒

Breakdown of silos

‒

Horizontal layers

‒

Data common with open

access

Network

Service

Providers

Cloud

Service

Providers

(CSP)

Hardware

Makers

(Device)

manu-facturers

IT services

vendors

Middleware

vendors

Software

vendors

Standards

bodies

Industry

Groups

Regulators /

Government

You do not succeed alone!

One thing is certain

(15)

GLOBAL MEGATRENDS

Pekka Lundmark

President and CEO

Feb 25, 2014

(16)

(17)

By 2020, the strongest

companies will be those with

most industry digital platform

control.

STRATEGIC PLANNING ASSUMPTION

(18)

EXPLODING NUMBER OF NEW BUSINESS

OPPORTUNITIES

(19)

VALUE DELIVERED BY INDUSTRIAL INTERNET IN

2013-2022 IS MEASURED IN TRILLIONS

Manufacturing

27%

Retail Trade

Information Services

Finance & Insurance

Other Industries

11%

9%

44%

$3.8 Trillion

INDUSTRIAL

Internet of Things

(Cisco IBSG, 2013)

(20)

(21)

(22)

ENEVO – AN EXAMPLE OF A GREAT FINNISH

COMPANY

(23)

INDUSTRIAL INTERNET REQUIRES A

MINDSET CHANGE

Competition

Customer needs

Products &

services

Importance of data

New business

opportunities

Traditional equipment business Industrial internet mindset

Competition from same industry

New startups, new companies and

existing partners will become

competitors

Reactive mindset

Predictive mindset

Stand alone product and lifecycle

services

Product updates through more

software centric offering

Data is used for maintenance

Data to knowledge transformation

creates new business models and

new services

Leverage existing processes and

incremental improvements for

products and services

Understand the possibilities to find

new ecosystem partners that can be

interested in our data

(24)

FINLAND HAS AN UNIQUE OPPORTUNITY TO BECOME

INDUSTRIAL INTERNET COMPETENCY HOT SPOT

– Pack of market leaders in small geographical area

– High quality Universities with supporting curriculum for

both heavy industries and ICT.

– Dynamic Start-up scene

But there is work still needed….

(25)

FINNISH INDUSTRIAL INTERNET RESEARCH

25

VTT

TEKES

SHOK

FIMECC

DIGILE

FIIF

AALTO

ETLA

(26)

(27)

TEOLLINEN INTERNET

HALLITUKSEN AGENDALLA

Kimmo Rasila

Hallituksen puheenjohtaja, Nixu Oyj

040 7327524, kimmo.rasila@execnet.fi

13.1.2015

(28)

OMA VIITEKEHYKSENI

TEOLLISEEN INTERNETIIN

12.1.2015

28

ICT

KYBER

Ohjelmistot

Digitalisointi

Palvelukonseptit

Harmillista

Todellista

Muuttuvat uhkakuvat

IBM

Etähuoltoa

80-luvulta

eBusiness

90-luvulla

(29)

Analytics

Enevo servers

Optimized collection

schedules and routes

Ultra low-power

wireless fill

level sensor

Here is how the Enevo system works!

Enevo web service

and API to fleet

(30)

What we do

Enevo develops and operates Enevo ONe, a wireless sensor network and

online service that cuts

40% of waste collection costs

for waste management

companies and municipalities.

We use smart wireless sensors to gather

fill level and usage pattern data

from

waste containers, analyze it using our proprietary algorithms and generate

(31)

MAHDOLLISUUDET

SUORAT

EPÄSUORAT

(32)

ONKO ENEVO

12.1.2015

32

EPÄSUORA

SUORA

MAHDOLLISUUS

(33)

12.1.2015

33

VALUE CHAINS OF YOUR CUSTOMER CHAINS

KUVAT POISTETTU

TARKOTUKSELLA

(34)

IPR

SUN, MUN, MEIDÄN…

…VAI KOHTA KILPAILIJAN?

R&D:stä yli 50%

on ohjelmistoja

(35)

PONSSE SCORPION

19.1.2015

35

19.1.2015

35

Järjestelmässä

1 000 000

koodiriviä, jonka

omistuksella

on väliä

(36)

12.1.2015

36

Joulukuu 2013:

”Kemppi lanseeraa

uuden Kemppi ARC

System 3 -ratkaisun ja

täydentää osaamistaan

hankkimalla norjalaisen

Weldindustry AS:n

”

(37)

§

Yli 50% tuotekehityksestä softaa – kenen softaa?

§

Mikä on teille strategisesti oikeasti tärkeää?

§

Kuka omistaa teidän strategisesti tärkeät ipr:t?

§

Missä nämä tiedot sijaitsevat, kuka niitä hallinnoi ja miten?

§

Onko strategisesti tärkeät tiedot oikeasti suojattu?

INDUSTRIAL INTERNET JA IPR

12.1.2015

37

vs.

(38)

KYBER &

(39)

12.1.2015

39

(40)

12.1.2015

40

(41)

12.1.2015

41

YOUR SUPPLY CHAIN – CYBER ROBUST?

KUVAT POISTETTU

TARKOTUKSELLA

(42)

DAILY MAIL > DAILY BLACKMAIL

(43)

(44)

INDUSTRIAL INTERNET JA KYBER

12.1.2015

44

Suojaa strategisesti

tärkeät tiedot

Varaudu

Valvo toimitusketjua

(45)

12.1.2015

45

(46)

(47)

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related

entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients.

Please see

www.deloitte.com/about

for a more detailed description of DTTL and its member firms.

This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte

Network”) is, by means of this communication, rendering professional advice or services. No entity in the Deloitte network shall be responsible for any loss whatsoever

Board Forum Teollinen Internet

Board Forum 2015

Internet of Everything

of capabilities and services, enabling

“The networked connections of

at scale

engines and other

management operate

Key Benefits

• Equipment with high impact of failure

Retail & Wholesale

Computing Services

Smart grid, Smart metering, Power efficiency

Reduction

computing enable more from less

All this is expected to enable exponential growth

0

embedded devices and

1bn wireless IoT devices will ship, up 60% from 2014, with an

enterprise, not consumer

Standards

Regulators /

most industry digital platform

2013-2022 IS MEASURED IN TRILLIONS

ENEVO – AN EXAMPLE OF A GREAT FINNISH

New startups, new companies and

new services

INDUSTRIAL INTERNET COMPETENCY HOT SPOT

FINNISH INDUSTRIAL INTERNET RESEARCH

KYBER

Here is how the Enevo system works!

fill level and usage pattern data

…VAI KOHTA KILPAILIJAN?

Kuka omistaa teidän strategisesti tärkeät ipr:t?

INDUSTRIAL INTERNET JA KYBER

Please see

sustained by any person who relies on this communication.