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The Industrial-Strength Real-Time Enterprise

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For many years in business and industry there has been a gap between the top floor and the shop floor, between management and production, between the white collars and the blue collars. This gap has carried over in the approach to computing, where office systems crunch numbers in relational databases and churn out monthly reports, while production systems provide real time monitoring and control. Now, however, it seems that this gap may be closing. Visionaries are forecasting the coming of the real-time enterprise.

In a keynote address to the ISA Automation Week in Nashville, reported by Walt Boyes in Control Magazine, Dr. Peter Martin, Vice President of Invensys, said that one of the forces driving industry is a move from transactional business to real-time business. He also said that enterprises need to augment reporting-based systems with real-time performance measurement. And he predicted that the technology developed by industrial automation systems will drive that change.

Why is such change necessary? With their focus on historical analysis of data, office systems have always had the luxury of time. Software developers concentrated on building elaborate relations between disparate data sets, providing intricate and complex models of the enterprise. But these models were inevitably snapshots of the past. The recent past, true, but still the past. This is no longer sufficient to keep pace with the demands of business in the 21st century.

On the flip side, production systems never had time to spare. Developers of these systems had to find ways to collect, analyze, and interact with data in real time, to respond to changes in the system within seconds or even milliseconds, often with no human intervention. The data-handling capabilities of these systems typically included low latency as an integral part of the design. Here is a valuable resource that is only recently being discovered and brought into play in the upper echelons of the company.RTEnterpriseChart

In his talk, Martin summarized the situation in a simple chart. In the left column the CFO has access to monthly financial reports. On the right, the whole enterprise is managed based on these reports. But at the production level, the work needs to be managed on a daily basis, at least. And resources need real-time control. However, there is no corresponding real-time accounting taking place at either of these two lower levels.

Martin foresees this gap being filled sooner or later. Those who can use the real-time data coming from the factory floor will be able to run real-time analysis on it as it flows through their system. This live analysis will greatly empower and improve their resource control and production management.

As we see it, this new approach can be readily implemented using secure cloud services with real-time data handling capabilities. The approach calls for a way to connect the various production facilities, run real-time analytics on the data, and then stream the results to the people who need to make decisions, or indeed, to systems that are programmed to decide automatically. This is what a real-time cloud service can do.

Dr. Peter Martin says that automation is the key to a better world. He sees it solving big problems, even world hunger for example, as long as the gap between the top floor and the shop floor closes. “We cannot be plant-centric or enterprise-centric any more,” he said. “We need to measurably improve the profit of business. Technology and talent together define our future, and the future is very bright.”

Business Wakes Up to the IoT

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With a blast on the media trumpets and all the blaring fanfare that goes with it, the dawn of the Internet of Things (IoT) is being heralded as the next big thing in computing.  Visionaries marvel, gamers shrug, and homeowners stare up in wonder, while business people get up, make coffee, and do what they do best: check it out to see if there is any real value here.

A recent Intelligence Unit report from the Economist magazine, sponsored by ARM, titled The Internet of Things Business Index (article, video) indicates that, sure enough, “the IoT is on the agenda at most organizations–even if they disagree about its scope.”  Yes, business is waking up to the Internet of Things, and is starting to investigate the opportunities.

EconomistCover2The report’s survey methodology was based on a two-part question: How much is your organization using the IoT externally (eg. product and service offerings) and internally (eg. energy management and production)?  The main finding is that there is a quiet but growing interest in the IoT.  Among the companies surveyed, about 75% of them are at least exploring the possibility of using it internally, externally, or both.  In fact, a substantial portion of them are already moving into the planning and implementation stages, and a significant fraction are using the IoT extensively.

The more cautious companies are watching the early movers, and learning from their achievements and mistakes (42%).  Others are bringing in consultants and outside experts to help them navigate this new field of possibilities (41%).  Still others are doing market research to see what opportunities are to be had in their respective domains (27%).  A few are even releasing test products with an IoT component or tie-in to gauge the response.

One concrete step being taken by most players is to beef up basic capability.  There is some acknowledgement of a lack of knowledge and skills at both the employee and management level regarding the IoT, and so many companies are either hiring people with the know-how (31%), or getting their staff trained (36%).

In addition to this need for better knowledge and skills, respondents to the survey highlighted other areas that could impact the success of the IoT in their businesses.  Among these: infrastructure investment will be costly, many products and services are not inherently IoT-friendly, and consumers will need to be educated.

There is also some concern about developing standards for intercommunication between devices.  “Beyond storing, securing and analyzing these data,” the report states, “companies should also consider how they manage the commercial sharing of the data as the IoT becomes a platform for trading information.”  There is some agreement that the full value of the IoT will only be realized when there is universal participation across the board.  If not we may end up, they warn, with an “internet of silos.”

From our perspective, interconnectivity of data among the players in the IoT is key to its success.  The report says that Liz Brandt, CEO of Ctrl-Shift “envisages the IoT becoming one big trading system for data. The question, she says, is how those data can be traded across the whole ecosystem.”  How, indeed.  That is the challenge, and the opportunity for those who get it right.

Is Convergence the Future for Industrial Automation?

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In many ways, people today are converging.  Across the globe, farmers and peasants are converging on cities.  Inventions like the telephone, radio, TV, and the Internet are bringing us into a single social village.  Companies merge, associations form, grassroot organizations spring up, and people reach out to long-lost childhood friends and perfect strangers over the social airwaves of Facebook, Linkedin, and Twitter.

The powerful force of convergence is being felt in business and industry, and according to The Convergence eBook: The Future of Industrial Automation, in process control and automation.  This ebook outlines the reasons for convergence, and some of the technologies that will help support it.  From our vantage point, one of these is real-time cloud computing.

The Convergence eBook points out several trends that are facilitating this movement towards convergence:

  • Globalization has pushed companies beyond regional and national boundaries to create satellite offices and plants, building demand for fast and flexible communication between people and machines.  As the assets and resources diverge, the data communication must converge.
  • Corporate mandates for greater efficiency and sustainability mean that the status quo isn’t good enough any more.  Management is beginning to take a greater interest in the data pulsing through the veins of the industrial automation systems in their company, and looking for ways to feed that valuable information to the whole body of the company.
  • Moore’s Law describes how computing resources are continually getting smaller and more powerful, which translates into less and less expensive.  Low-cost sensors and other devices are making more and more data available, and this data converges on SCADA and MES (manufacturing execution system) platforms.
  • Concept, Main gear in mechanism on white isolated background. 3dAutomation technology is converging to the point where it is possible to host a single software development environment and runtime application on one control computer to provide multiple functionality over a single network.

All of these examples of convergence depend on real-time data communication.  In most cases the physical location of the devices, facilities, offices, or factories is spread apart.  What mediates the convergence is the data flow.  The more accessible, reliable, and quick the data flow, the tighter the integration and convergence.

Until recently the opportunity for convergence for real-time data was available mainly within a single factory or SCADA system.  What cloud computing offers is an opportunity to raise the level of convergence among multiple plants, between factory and main office, or even integrating offshore facilities.

Cisco Values the Internet of Everything (IoE) in Trillions

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Over 14 trillion dollars, actually.  In a recent white paper, Cisco visionaries Joseph Bradley, Joel Barbler, and Doug Handler say that the Internet of Things (IoT) will sooon evolve into the Internet of Everything (IoE).  In the coming decade, from 2013 to 2022, the Value at Stake is estimated at $14.4 trillion.  And they say now is the time to make your move.

IoE?  What happened to IoT?  According to Cisco, the IoT is merely the connection of things (devices) to the Internet.  The IoE, on the other hand, is the connection of everything to the Internet, where “everything” includes people, process, data, and things, which they say, when combined, will turn “information into actions that create new capabilities, richer experiences, and unprecedented economic opportunity for businesses, individuals, and countries.”

OK, that sounds wonderful enough.  But pretty abstract.  Can we get a little more concrete?  For a start, where do the 14.4 trillion dollars actually come from?  What is this Value at Stake that they claim?

According to the paper, Value at Stake is the value of increased revenues and reduced costs that will accrue to businesses who move quickly to embrace the IoE and its associated technologies.  They calculate that it is an “up for grabs” opportunity to increase profits by a global average of about 21 percent, coming from two sources:

1. New value based on technological innovation.
2. Acquired value through competitive advantage and increased market share.

The Power of Connection
The engine driving this huge increase in value for companies is attributed to the power of connection.  The paper says that the IoE “reflects the reality that business value creation has shifted to the power of connections and, more specifically, to the ability to create intelligence from those connections.” Apparently internal factors like core competency and the knowledge found among one’s own employees is not sufficient any more.  Companies in the age of the IoE will gain advantage through connecting to external sources of knowledge.  We can already see this trend in motion today, and as more things get connected to the Internet, it can only increase.

Security Considerations
As anyone with any experience with the Internet might guess, much of this hinges on the ability to provide solid security.  “Robust security capabilities (both logical and physical) and privacy policies are critical enablers of the Internet of Everything Economy,” the paper states.

The growth projections for the IoE are predicated on the idea that the environment will be secure enough to reassure potential participants to sign on.  Although the authors did not dwell on this point, they pointed out that security technology must be combined with sound policy and effective implementation to ensure the privacy of both companies and customers.

Smart FactoriesFactory Workers
The bulk of the paper looks at the various sectors that will benefit most from the IoE, and one anticipated big winner is manufacturing, by bringing so-called “smart factories” on line.  Close to 2 trillion dollars of value are expected to be generated within this sector alone.

Improved connectivity between machines, combined with better access to the data, are expected to increase efficiency and productivity.  Rapid feedback from users and other machines will help to eliminate production bottlenecks, improve utilization of equipment, and provide hard data for system design.  Even the machines themselves will benefit, as the intelligence gathered can be used to design superior, next-generation tools.

“Value in smart factories is obtained from cost-cutting, revenue growth, and better workforce collaboration,” the paper states.  “With this in mind, manufacturing leaders should accelerate adoption of IoE technologies and consider initiatives that focus on improved collaboration among workers to make employees more efficient.”

Will the Internet of Things evolve into the Internet of Everything?  Will people, data, process and things become well enough connected to produce billions of dollars in value in the next ten years?  Judging from the way things are currently moving, we think so.  It certainly make sense to plan for it.

Is Your Country Cloud-Ready?

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Just as the clouds in the sky have no geographic limits and glide over all borders, we might hope that cloud computing would also be an international phenomenon. At the very least, as the various countries around the world go increasingly digital, cloud computing and real-time data interconnectivity should begin to take on a greater significance worldwide. The question then comes to mind: Which countries are best prepared for cloud computing?

A few weeks ago the BSA Global Cloud Scorecard was released, the first report of its kind. The BSA (Business Software Alliance) positions itself as an advocate for the software industry, and its membership is made up of many leading firms such as Micrsoft, Apple, Oracle, Intel, Siemens, Sybase, and Dell. The Global Cloud Scorecard is an attempt to rate the top 24 ICT (Information and Communication Technology) countries in the world in terms of their readiness for cloud computing.

GlobeFlagsThe results are interesting, indeed surprising in some ways. Although we would expect the more “developed” countries to be more advanced in their ability to support cloud computing, “troubling obstacles emerge when you examine the lack of alignment in the legal and regulatory environments in many of those advanced countries,” according to the report. At the same time, the strong desire for ICT in advancing countries like China, India, and Brazil doesn’t necessarily make them ideal environments for cloud computing either. Each country has its own legal dynamic that plays out in unique ways.

The 24 countries were evaluated in three broad areas:

1. The legal environment that ensures privacy and security, defines and restricts cybercrime, and upholds the rights of intellectual property.

2. Policies and support for international standards, e-commerce, and free trade.

3. ICT readiness of the general infrastructure, and policies for broadband Internet support.

The printed report provides the detailed scorecard for each country, by category, as well as some graphs for making quick comparisons. The website also features a page in which you can get a verbal summary of the situation, country by country.

Some of the trends that caught my eye included:

Japan is at the top of the chart, as the country is active in cybercrime treaties, IP laws, and international standards. They also have high broadband penetration, and plan to provide access to 100% of households by 2015.

Most European countries scored reasonably well. Germany is near the top, but may drop in the standings if they begin interpreting laws to restrict the flow of data across borders.

The USA is a leader in cybercrime laws, privacy protection good at the individual level, but inconsistent at the state level. The country has high Internet use, but broadband coverage is not consistent.

China, India, Brazil, and Thailand all exhibit a strong and growing interest in ICT, but some significant gaps in privacy protection and cybercrime legislation.

Although there may be a few setbacks, my guess is that all of the countries in the report will have made substantial improvements in their scores in the next few years, and there may be new ones added. We look forward to seeing next year’s report.

CEO Perspectives 4: Leading the Transformation

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Is cloud computing inevitable?  Some people seem to think so.  Try typing the words “cloud,” “computing,” and “inevitable” into Google and you’ll get millions of hits.  Last year cloud computing reached a peak on the Gartner Hype Cycle.  While the more conservative players are willing to sit back and take a wait-and-see approach, a growing number of companies are diving in, and leading the transformation.

According to Andrew McAfee in his article What Every CEO Needs to Know About the Cloud, there is a gradual but inevitable shift toward the cloud.  He expects those who get in early to be in an increasingly better position as time passes, while those who linger to be put at a greater and greater disadvantage, until they either join or get lost in the dust.  McAfee gives some general guidelines for starting a move into the cloud, which can be used by anyone interested in putting real-time data on the cloud.

Know Your Responsibilities
To start with, McAfee suggests becoming aware of legal implications.  Clouds in the sky have no respect for man-made concepts like country borders, but your data does not have the same luxury.  Some countries limit what kinds of data can be moved or stored outside their borders.  For example, the EU Data Protection Directive restricts data on personal status from passing through countries that do not provide an “adequate level of protection” for the data.  Other countries have  strict privacy laws for any data transmitted on a public network or stored in a cloud server.  You will need to verify that your system meets the legal requirements of all countries in which you expect it to function.

Understand the Risks
We talked about security risks last week, pointing out that they may be different than common wisdom would suggest.  Questions about cost and reliability were addressed in an earlier blog.  McAfee advises executives to become informed of the risks and limitations of cloud computing, involving their general counsels and compliance departments early on.  There are a few areas, such as data subject to export regulations or related to personal health information, that may warrant a conservative approach, but in general he advocates boldly moving forward.  Plant managers and engineers will of course need to take a close look at their specific circumstances to decide what parts of their data sets can be made available in a cloud application.

Evaluate Attitudes
As with any new undertaking, there will be different levels of interest and willingness to change, both within the organization and outside.  Those most eager to implement a real-time cloud system will need to gauge its appeal among key decision makers and managers who are expected to implement it.  McAfee says, “a CIO’s lack of enthusiasm about the cloud these days is about as red a flag as a factory manager’s disinterest in electrification would have been a century ago.”

At the same time, consider software vendors.  What is their attitude toward cloud computing?  What plans do SCADA suppliers and other providers of software for real-time applications have in place to support a move to the cloud?  Some may add the word “cloud” to their networked process control software, but does it really meet the core requirements for a real-time cloud system?

Experiment
Having done your homework, you are ready to try it.  McAfee suggests starting small.  Experiment.  He talks about non-real-time business systems, but the principle is the same.  Don’t expect to immediately move a whole SCADA system onto the cloud.  Maybe you can implement a web-based HMI to present a limited data set to selected customers.  Or possibly connect remote field devices to a cloud server for monitoring in a web browser.  As you gain experience, you may want to set up a private or a hybrid cloud.  Then, as time passes and cloud computing goes even more mainstream, you’ll be in a position to consider expanding further.

It is still too early in the history of cloud computing to know with absolute certainty that this is indeed the way of the future.  But things have reached a point where it would probably be wise to consider it seriously.  As consumer and business applications increasingly move into the cloud, real-time solutions won’t be far behind.  Somewhere between head-in-the-sand and off-the-deep-end, McAfee suggests a cautious, realistic, small-scale, try-and-see attitude to gain experience and build capabilities that may prove valuable in the near future.