Category Archives: market predictions

The INSIDER is out! The February issue has stories…

Insiderlogo3Walt Boyes’ analysis of the ARC Orlando Forum 2018

Videos and commentary from the ARC Press Conference including:

–Stratus Technologies

–Siemens

–Emerson

–Honeywell

–L&T Technologies

–Schneider Electric

–OPC and Fieldcomms

–Microsoft

–Inductive Automation

–more

Joy Ward on the Human Face of Automation

Joe Weiss’ speech at DefCon last year

Walt Boyes on How to Make Open Standards Work

Rajbahadur V. Arcot on Industry 4.0

 

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Read the January 2018 INSIDER for free!

Because of the very high interest in the cover feature, “The Future of Automation in the Age of the Internet of Things” we have decided to make the January issue open sooner than we would normally.

So, effective immediately, you can download a copy of the issue at 2018-01 INSIDER.pdf.

And if you like this kind of content, and you want to read it regularly, visit

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India’s Expanding Economy and Emerging Growth Opportunities

Insiderlogo3India’s expanding economy and emerging growth opportunities

By Rajabahadur V. Arcot,
Independent Industry Analyst / columnist and Automation Consultant with extensive experience in writing industry and technology trend articles, market research reports, case studies, white papers, and automation & manufacturing IT insights
rajabahadurav@gmail.com

India, with a growing economy, has been an important market for global automation supplier companies for the past couple of decades. Resulting from the growth dynamics that are in play in the country, the economic and industrial profiles of the country are undergoing changes. The transformations taking place will further enhance India’s importance for the global automation industry.  Until now, process industry control system suppliers mainly benefitted because of large investments that have been taking place in industries, such as electric power, oil and gas, cement, and steel. With the expected expansion of industries relating to construction & infrastructure development, electronics & semiconductors, and defense in the coming years, the future looks bright for discrete industry automation suppliers as well.

Influenced by global trends, even electric power industry, which presently accounts for a significantly large share of the control and instrumentation market in India, is at an inflexion point. Investments in fossil fired power plants are set to decline. According to industry sources, by 2030, almost 40 percent of the country’s total generating capacity is expected to come from renewable energy sources.  Renewable electricity generation, which presently stands close to 50 GW, is set to rise to 175 GW by the year 2022, with solar power contributing to almost 100 GW. This implies boost to the growth of industries relating to production of solar cells and modules, battery, invertors, and such others. The automotive industry’s plan to switch over to electric vehicles by 2030 will also provide additional impetus for the growth of the battery, charging stations, and other related industries.

After course corrections, India’s economy scales back

India’s economy, as it expands, keeps mutating and evolving with the State initiatives continuing to play a crucial role. Some of these initiatives are major course-corrections and hence have lingering negative impacts in the near-term. Examples of such initiatives are the recent measures to free the economy of the influence of unaccounted money through demonetization of high value currency notes and the introduction of more transparent and efficient Goods and Services Tax (GST). While both these measures are long-term positive for the Indian economy, their near-term impacts have been negative leading to growth slowdown in recent quarters.  The World Bank’s report – Global Economic Prospects – that was released few months after demonetization, foresees GDP growth to scale back. Also, it attributed the initial growth slowdown to the withdrawal of a large volume of currency in circulation and their subsequent replacement with new notes. While responding to questions on the slowdown in India’s growth, World Bank President Jim Yong Kim called the recent slowdown in India’s economic growth as an “aberration” caused by temporary disruptions due to the introduction of GST. He further said that GST will have a positive impact on the Indian economy.

According to the newly released data, India’s economic indicators have turned positive once again and point to economic revival.  The United Nations’ ‘World Economic Situation and Prospects 2018’ report, which states that India will clock a GDP growth rate of 7.2 percent in 2018 and 7.4 percent in 2019, reaffirms this optimism. According to the report, India, driven by robust private consumption, public investment, and government reforms, is set once again to emerge as the fastest growing economy in the world. Other reports are also positive about the country’s growth prospects. Indian economy is expected to witness a sharp recovery in the first quarter of 2018 and its GDP growth is likely to be around 7.5 per cent for 2018, says the recent Nomura report.

Transformations and Initiatives underway augur holistic and sustainable growth

Additional economic and industrial transformations are also underway and they are expected to spur the country’s economy further and contribute to accelerating growth and making the growth more holistic and sustainable. Until now, the service & informal sectors and domestic private consumption largely contributed to the country’s economic growth. The manufacturing sector’s contribution was mainly related to meeting the essential needs of a nascent economy, such as electric power, steel, and cement.  While subsequently it began to encompass industries, such as generic pharmaceuticals, petroleum refining, and automotive, the country continues to depend on large-scale imports to meet the ever-expanding needs for consumer durables, electronic goods, defense equipment, and such others. With imports exceeding exports, the country, already, finds it challenging in balancing its trade account and the deficit is unsustainable in the long run. This situation dictates the growth of a manufacturing industry that caters to the needs and wants of evolving consumers and the country.

The manufacturing industry presently contributes to only 15 percent of India’s GDP. Driven by the fact that the growth of the service industry and private consumption beyond a point can be sustained only when they are backed up by the growth of the manufacturing industry that is broad-based to meet the aspirational wants of consumers, India is making efforts to increase the role of manufacturing both for achieving sustainable economic growth and job creation. The ‘Make in India’ program aims to make the country a manufacturing hub and push the share of the manufacturing industry to 25 percent from the present 15 percent, and in the process create millions of jobs in 25 industry verticals that include electronics and electronic systems, defense equipment, and infrastructure, such as construction of roads & highways, ports and others.

Yet another feature of the Indian economy is that its growth until now has been domestically funded. With limited access to capital, the country had to prioritize its investment. As a consequence, enough funding was not available for the development of infrastructure, such as the construction of roads, highways, ports, cities and others. Wealth generation that the country has witnessed in the last couple of decades has contributed to increased domestic savings, tax collections, and growth of banking & other financial sectors.  In addition, India has become attractive for global institutional investors and has emerged as an attractive investment destination. Investment in physical assets, such as gold has been the traditional means of savings in the country. But that is changing.  More and more domestic savings are finding their way to the banking and financial sectors. This is helping the country to channelize funds for building the country’s infrastructure that include building smart cities, railway networks, highways, waterways, airports, industrial corridors, and such others.

For example, the government has approved plans to develop approximately 84,000 km of roads by 2022, the biggest highway construction plan so far in the country. Other projects that the country has embarked upon are the Smart Cities Mission and Sagarmala. Smart Cities Mission is an urban renewal and retrofitting program by the Government of India with a mission to develop 100 cities and make them citizen-friendly and sustainable with the help of technology. Sagarmala is a series of projects to leverage the country’s coastline and inland waterways to drive industrial development and encompasses modernization and enhancement of port infrastructure, improve port connectivity, create 14 coastal economic zones, and develop skills of fishermen and other coastal and island communities. India needs over $1.5 trillion in investments in the next 10 years to bridge infrastructure gap, said India’s Finance Minister Arun Jaitley recently.

India set to become destination of choice for automation companies

India, apart from working on these catch-up strategies as a latecomer to industrial development, is also focusing on making the country future-ready.  The Digital India program is a flagship program of the State with a vision to transform the country into a digitally empowered society and knowledge economy. It aims to make government services available to citizen electronically through online infrastructure and by making the country digitally empowered.  India has developed a 12 digit unique-identity number, called Aadhaar, based on their biometric and demographic data. With close to 1.1 billion enrolled members already, it is the world’s largest biometric ID system. The Indian State is slowly pushing people to use this biometric ID system as proof of their residence, for opening of bank accounts, for availing social security benefits, and such others. There is also a strong thrust to make people use digital payment systems and thereby wean them away from cash transactions. All these initiatives mean greater reliance on information technology and this will spur the growth of discrete industries, such as semiconductors & electronic systems, smart phones and other communication equipment & gadgets, smart sensors & actuators, and similar others. Perforce, defense is yet another industry which is expected to witness robust growth. Strategic compulsions dictate that India builds a more vibrant domestic information-technology hardware and defense industrial base.

The annual consumption of electronic hardware in India is expected to touch US$ 400 billion by the end of the decade. If the domestic industry’s growth does not accelerate, India may well have to depend on imports to the extent of US$300 billion annually. It is imperative for the electronic industry to robustly expand if India is to avoid the impending import nightmare that can push the country into a spiral of unsustainable imports. This would necessarily entail higher external debt / borrowings and this does not bode well for India’s economy in the long term. India is the fourth largest spender on defense. Due to geopolitical compulsions, India’s defense spending accounts for almost 1.8 percent of the country’s GDP and this is set to increase. Only about 35 percent of the required defense equipment is manufactured in India. If we take into account the import component of materials that go into domestic production, both at the system and sub-system levels, the overall import content may exceed 70 percent. There are clear indications that these hi-tech industries are growing.  Apple has announced its plans to make its iPhones in India, one of the fastest growing markets for smart phones. According to available reports, the company is taking the ‘Make in India’ route. According to the Lockheed Martin’s recent news release, the company has signed an agreement with India’s Tata Advanced Systems to produce F-16 fighter jets in India. The news release goes on to say that “this unmatched U.S.-Indian industry partnership directly supports India’s initiative to develop private aerospace and defense manufacturing capacity in India.” The company is eyeing orders worth billions of dollars from the Indian Air Force. Few months ago Dassault Aviation laid the foundation stone for the Dassault Reliance Aerospace Limited’s manufacturing facility in India. Dassault Aviation is investing over 100 million euros in this a joint venture project to manufacture aircraft components as part of the ‘offset obligation’ connected to the purchase of 36 Rafale fighter jets from France.

With all these exciting developments taking place in India, the country is emerging as a destination of choice for automation suppliers. The party has begun.

This article first appeared in the December 2017 Industrial Automation and Process Control INSIDER. If you liked this type of content, you should consider subscribing to the only magazine in the automation field that is not advertiser supported. Visit http://www.spitzerandboyes.com/insider to subscribe.

 

Is Malware the Achilles Heel of the IIoT?

Insiderlogo3Is Malware the Achilles Heel of the IIoT?
By Walt Boyes

(Originally published in the December 2017 Industrial Automation and Process Control INSIDER)

The big appeal of the Industrial Internet of Things is the potential vast increase of meaningful information we could obtain by increasing the sheer number of sensors and the analytical methodologies of Big Data and the latest visualization tools for working with that data. The central axiom of the IIoT is that this information will be used to operate plants and even entire enterprises much more profitably.

There are some obvious problems with this axiom, It is pretty glaring that you have to collect the right information. It doesn’t help to add 100 or 1000 sensors to a process if the values of those sensors aren’t critical information. The problems don’t stop there.

We have pointed out before that the cost of sensors must decrease dramatically be- fore the IIoT can become a reality. I remember hearing a friend from Shell saying that if they needed a measurement, they’d be willing to pay for it. The flip side of that is that if the cost of making those measurements goes down substantially, the impetus for needing the measurement goes up.

But the real issue that IIoT boosters don’t want to talk about is security.
There are two basic schools of thought about IIoT security. One is that nobody would try to penetrate a network through its edge devices. The other is that the problem is so large that it is basically unsolvable, so who cares.

The first school of thought is the same old “security by obscurity” nonsense. Our concepts of cyber security have been formed by network-centric security experts. There have been some lonely security researchers, like Joe Weiss, and others like the INSIDER who have been pointing this bias out for years. And for years, we have noticed a steadily growing number of “security researchers” at Blackhat and other gatherings, who have concentrated their research on network penetration through the sensor network.

The other school of thought is much more pervasive and even more insidious. This claim is the reason that there is always the next patch coming out for software. You can’t solve the problem because there are always smarter black hats.

Somehow, it seems to us, that both schools of thought are missing the point. Which is that if the potential users of the Industrial Internet of Things see that from a cost-benefit viewpoint the potential loss from an attack far outweighs the potential gain from all that beautiful information, adoption of the IIoT will stall.

We are already seeing this in the commercial IoT world. Sales of Nest thermostats and household control systems have stalled. People are concerned. Now, with the latest revelations about inherent design flaws in Intel, AMD, and other processor chips, they are becoming frightened. All they can see to do is to pray that nobody ever attacks them. And we see the same fear in the industrial space.
So, if the IIoT is to be a success, we have to focus on two things. First and foremost, we need to make security inherent in every de- vice and the firmware and software that runs on them, from field sensor to process controller to MES and ERP systems.

And, second, we need to focus on providing the right information at the right time, or there will be no value add with the IIoT.
End users vote with their feet, and their dollars, pounds, euros, pesos and yuan. For all the ballyhooed new IIoT centric plants, there are dozens more built to the old standards, because we are sure that they work, and the perceived risk is less.

Change the risk and the IIoT will grow to its potential.

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Rockwell’s Automation Perspectives Aptly Named

Insiderlogo3My tweets and retweets from Rockwell Automation’s Automation Perspectives on Tuesday:

Tue, 08:13: Rockwell Automation’s President and CEO Blake Moret welcomes Automation Perspectives to Houston #houstonstrong… https://t.co/0zafvi1YQx

Tue, 08:15: $6.3 Billion in FY2017 Sales and a shareholder value curve outperforming the Dow… https://t.co/mdV3o60ASC

Tue, 08:16: #AF2017 If Rockwell had a company song, we’d all be standing and singing it. https://t.co/MhZheD93r9

Tue, 08:19: #AutoFair17 The Connected Enterprise is based on people. https://t.co/NaNzVmA0m2

Tue, 08:20: #AutoFair17 The value of digitization in Smart Manufacturing— Frank Kulaszewicz https://t.co/HM3pb6BkHK

Tue, 08:21: #AutoFair17 We believe that manufacturing will change dramatically in the next 25 years because of higher levels o… https://t.co/iSY1G7nus9

Tue, 08:23: Digital transformation enables better design. Digital design is sustained by digital operation— emulated by the Dig… https://t.co/PrRmJvi25O

Tue, 08:24: RT @m_littlefield: CEO @ROKAutomation lays out strategy. Stays focused on Connected Enterprise. Stressed corp values, improved control & an…

Tue, 08:26: #AutoFair17 Mixed Reality visualization https://t.co/WBy2ztmaHP

Tue, 08:32: #AutoFair17 Factory Talk Team One is working, and we know, because we are watching! https://t.co/96e8r55gZW

Tue, 08:33: #AutoFair17 Frank K introduces Andrew Ellis to talk about Project SCIO. https://t.co/6K4jlWuQwB

Tue, 08:34: Descriptive, Diagnostic, Predictive, Prescriptive —we must adopt advanced analytics. #AutoFair17 https://t.co/EXg9c8Atap

Tue, 08:36: Lack of data isn’t the problem. https://t.co/PQXNYdXrSR

Tue, 08:38: #AutoFair17 Data ingress from the edge…but the secret is in the middle— the data orchestration provides the real… https://t.co/GIR0uTuPyE

Tue, 08:41: SCIO discovers devices and ingests data and uses a storyboard model to display mashed data and construct work flows… https://t.co/ifbaRDgz5u

Tue, 08:43: Scio storyboards… #AutoFair17 https://t.co/y5GMVIc9Pv

Tue, 08:45: There are no limits to data quantities or data types— not just realtime or transactional. Scio ingests and mashes a… https://t.co/POg5BhPFIq

Tue, 08:48: #AutoFair17 What is cool about Rockwell is that the top executives both know and understand the technology they are… https://t.co/n6OCHXYaOM

Tue, 08:54: Scio can get you to predictive and prescriptive analytics. #AutoFair17 https://t.co/IT33dy9wBV
Tue, 08:56: Wind speed and direction into “function bubbles” to control blades of wind turbines. #AutoFair17 https://t.co/XBAVzXVYwS

Tue, 08:57: World class partners and ecosystem are ESSENTIAL! #AutoFair17 https://t.co/SYjlMONAw1

Tue, 08:58: Gavin Rennick “We are in Houston, the home of oil and gas. Brent crossing 60 for the first time in weeks.”… https://t.co/DazsAGJNaY

Tue, 09:00: Rennick extols the interconnected world— about 8 billion devices today, and in a decade, over a trillion. Data mana… https://t.co/t5Fs3XWHvx

Tue, 09:03: Rennick: This outcome is very material. #AutoFair17 https://t.co/fZ9QKohhx5

Tue, 09:04: Here’s what digital technology does to the ecosystem. #AutoFair17 Excellence in cybersecurity is really the ticket… https://t.co/LlPwVKQmkf

Tue, 09:07: Very rapidly, we were enveloped in the digital technology ecosystem… #AutoFair17 https://t.co/oe2f28bT5I

Tue, 09:09: Our customers’ goals are not surprising… #AutoFair17 https://t.co/OvqraO5nsW

Tue, 09:12: Some of the proofs of concept failed, some of them worked—we learned. Amazing what happens when SME works with a da… https://t.co/nGQIy2v4Ym

Tue, 09:14: Schlumberger predicts…the oracle! #AutoFair17 https://t.co/eV0VXFiJcO

Tue, 09:15: We’ve been using it, and our customers have too. It works. #AutoFair17 https://t.co/opB8O4qc2P

Tue, 09:16: Here’s how to drill a well… #AutoFair17 https://t.co/GHQDrvBs6H

Tue, 09:18: We have had 10 companies evaluate this solution for many months and they agree it works and is very valuable.… https://t.co/l8mX5V7f3e

Tue, 09:19: No matter what we did, we kept running into this company called Rockwell Automation! #AutoFair17 https://t.co/XG3OIOPUJf

Tue, 09:20: We don’t call it a digital twin— we call it a digital avatar. We have an affinity with the color blue. #AutoFair17 https://t.co/lnFliImmP4

Tue, 09:22: We have a number of proof points… #AutoFair17 https://t.co/gxiCht8OIY

Tue, 09:59: #AutoFair17 Getting ready to resume Automation Perspectives— The whole enterprise of Rockwell Automation is so crit… https://t.co/LEdsyTW4bJ

Tue, 10:01: #AutoFair17 Our industry has a problem with workforce development… https://t.co/QLMndwEa0y

Tue, 10:02: #AutoFair17 Manpower’s Chris Layden talks about workforce… https://t.co/g5RN2H94w7

Tue, 10:03: #AutoFair17 We connect 4 people a minute to meaningful work in the USA. https://t.co/mEgPjG4nIu

Tue, 10:05: The structural changes in the labor market are here to stay! #AutoFair17 Technology is a force for speed of change. https://t.co/Vyg18vgcAX

Tue, 10:07: Big change from “job for life” to “career for me.” https://t.co/sOGoldoQgU

Tue, 10:09: #AutoFair2017 Skilled trades toughest to find. https://t.co/7bMpGuwNsE

Tue, 10:10: #AutoFair17 You can’t build a plant where there aren’t any workers. https://t.co/KocZWJpjVL

Tue, 10:11: 24% of manufacturing workers are over 55 #AutoFair17 https://t.co/VaoJnU2gmM

Tue, 10:12: #AutoFair17 Plateauing… https://t.co/YaqfGmDIzI

Tue, 10:13: #AutoFair17 Education needed is changing https://t.co/Pc1Pyqvez2

Tue, 10:15: #AutoFair17 We have to prioritize who we are training https://t.co/qPjO4wHGPr

Tue, 10:17: #AutoFair17 Introducing Blake to talk about the Academy of Advanced Manufacturing https://t.co/f2dJh8bKwd

Tue, 10:18: #AutoFair17 We chose Manpower because we like to partner with the leader in Workforce. We know the curriculum and t… https://t.co/AL9hsAE04k

Tue, 10:19: RT @m_littlefield: Skilled Trades toughest job to fill in US @manpower predicts 2.5MM jobs unfilled by 2025. Doesn’t even consider Digitali…

Tue, 10:19: RT @DJGreenfield: Good job @SchneiderElec! Glad to see you make this move. https://t.co/JHcuOXPHtg

Tue, 10:21: Hundreds of thousands of veterans are leaving the service with the basic skills they need for manufacturing.… https://t.co/ze9I1SvVJq

Tue, 10:23: #AutoFair17 We are ramping up rapidly to meet our goal. https://t.co/JvMtzEbouo

Tue, 10:25: But is 12 weeks enough?? https://t.co/iQtzCKwz7U

Tue, 10:25: RT @cmgonzalez85: The Recruitment Difficultly Index shows how hard it is to fill jobs across the U.S. The number one job missing is the ski…

Tue, 10:26: RT @AutomationFair: “It’s not what to train for; it’s about how skills & jobs are evolving within digital manufacturing & design.” #AutoFai…

Tue, 10:26: RT @AutomationFair: “No single company, organization or institution can solve this skills gap alone.” – @njneuman @manpower https://t.co/Jj…

Tue, 10:27: RT @AutomationFair: 75% of employers say new skills are required in the next 2 yrs, but many are not able to define them @ChrisLayden https…

Tue, 10:29: And they want to blow up this enterprise— for what? For the money! No. This enterprise is critical for the future o… https://t.co/XuqiBT85I2

Tue, 10:30: https://t.co/HxsBQynTtG via @youtube #AutoFair17 Here’s the short version…

Tue, 10:31: RT @m_littlefield: Blake Moret driving force of @ROKcareers & @manpower Academy of Advanced Manufacturing. 12 week prgm & vet grads guarant…

Tue, 10:32: Joe Allie asks for all the veterans in the audience to stand. Then he introduces the “plank holders” of the Academy. https://t.co/leDZLjfqQI

Tue, 10:32: RT @AutomationFair: “Every one of the veterans who finish this program, will have a job.” – Blake Moret https://t.co/8gW9TXLekk https://t.c…

Tue, 10:33: RT @pdpuess: Couldn’t be more proud @ROKAutomation Academy of Advanced Manufacturing high tech training for our returning vets! #AutoFair1…

Tue, 10:35: Scott Bingham, Travis Tolbert, Leandre Davis, Christopher Allison…some of the first graduates. #AutoFair17 https://t.co/cQLMXDpvG2

Tue, 10:39: Typical day is hands on supported by theory— very intensive — Scott Bingham #AutoFair17 https://t.co/7eKzlWEjcI

Tue, 10:40: RT @AutomationFair: We couldn’t be more proud of these grads! https://t.co/CtOhl5lAhE

Tue, 10:41: RT @mchlguilfoyle: #AutoFair17 panel with 4 of 14 grads from first class of Academy of #advancedmanufacturing. Transitioning #veterans to w…

Tue, 10:50: RT @ManpowerGroup: #Veterans have the work ethic and real world experience that hiring managers want. We’ve partnered with @ROKAutomation t…

Tue, 10:54: Travis Tolbert just accepted a position with a paper company as a process optimization specialist. #autofair17

Tue, 10:56: Scott Bingham also accepted a position. Leandre Davis and Christopher Allison are in the final stages of interviewi… https://t.co/6dyTuNs7X3

Tue, 11:04: RT @m_littlefield: Looks like it based on the job offers coming in! https://t.co/mh0KoALe9z

Tue, 11:06: #AutoFair17 John McDermott winds it all up. https://t.co/7UvLtNQCW0

Tue, 11:12: #AutoFair17 Diversity and Inclusion Forum on Thursday

If you like this kind of reporting and analysis, subscribe to the INSIDER. It is the only magazine in the industry with no advertising and no slant. Visit www.spitzerandboyes.com/insider to subscribe.

Rajabahadur V. Arcot on the Battle for OT/IT Dominance

Insiderlogo3This would have been the October article from Rajabahadur V. Arcot

The Battle for OT / IT dominance

By Rajabahadur V. Arcot

The future holds the promise of the dawn of a new industrial era and the convergence of Operational Technology and Information Technology will hugely impact manufacturing companies. In order to differentiate the existing from the emerging systems & solutions and to highlight the importance of OT and IT convergence, new acronyms are getting coined. What we call as automation systems, DCS, PLC, SCADA and such others and enterprise solutions which include ERP, SCM, CRM, EAM and similar others are labeled respectively as Operational Technology (OT) & Information Technology (IT). According to numerous survey reports that appear periodically, many of the manufacturing companies are looking forward to benefit for OT / IT convergence and are highly optimistic that it will make them truly real-time information driven organizations and secure their future in the emerging industrial era- Industry 4.0.

Production and business operations of manufacturing companies have always been driven by information both from the shop-floor and top-floor. Initially, they deployed instruments to generate shop-floor information and top-floor transactional information was mostly generated offline. Manufacturing companies’ ability to create value to their shareholders, while ensuring customer satisfaction in the emerging era of manufacturing, depends on their ability to tightly couple the operations of all their value chain partners comprising of numerous part / sub-assembly / raw material suppliers, design associates, service providers and such others. It will become extremely important for them to ensure that, on one hand, all their production and business decisions are based on holistic and integrated real-time information and, on the other that they work collaboratively.

The fact that manufacturing operations have become more complex & competitive pressures have increased and the realization that their success depends entirely on becoming truly information driven, make industrial firms demand not only real-time data from the production and business operations, suppliers, customers, and such others, but also want them integrated and analyzed so as to derive holistic information. The recent rapid technological developments such as those relating to internet of things, artificial intelligence, machine learning, big data analytics, cloud computing, & Internet Protocol version 6 (IPv6), and OT & IT convergence, make it possible for multiple sources of data to be connected and large amount of data from them to be collected and analyzed holistically on a common platform.

Until now, manufacturing companies invested in OT to manage production floor operations while ensuring plant’s safe, efficient, and automated functioning and IT comprising of Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Customer Relationship Management (CRM), Supplier Relationship Management (SRM), Product Design Management (PDM), Manufacturing Execution Systems (MES), and such others to assist enterprise level decision making. Often automation systems and enterprise solutions are procured from best-of-the-class suppliers and their integration required significant investments in terms of costs and time.
Information collection & their display and control of important production operations became integral part of manufacturing companies many decades ago. Suppliers of automation systems, such as Honeywell, Yokogawa, and Rockwell, realizing the power of computer and communication technologies, as they evolved, in data collection, transmission, and processing capabilities responded to the needs of the manufacturing industries and introduced of programmable logic controllers, distributed control systems, safety instrumented systems, electronic transmitters, and similar others that extensively rely on computer and communication technologies. Later they developed communication protocols that further enhanced the role of automation systems. Some of the leading suppliers of enterprise solutions are SAP, Oracle, and IBM and they also leveraged the power of computer and communication technologies.

Automation systems and enterprise solutions evolved separately at different points of time and respectively addressed the informational needs of plant floor and top floor. The business models of the suppliers of automation systems and enterprise solutions differ significantly and their offerings are designed and engineered to meet different functional and operational needs. Even the way automation systems and enterprise solutions are specified, budgeted, and procured differ fundamentally. While, in the case of OT their safe operation and availability are most important, in the case of IT data confidentiality is more important than system availability.

A new breed of companies, such as Apple, Microsoft, Alphabet, IBM, and Cisco Systems, which in recent years have emerged as the leading technology firms of the world, have strong competencies in technologies associated with Internet of Things, artificial intelligence, machine learning, big data analytics, and cloud computing. Seeing tremendous growth and monetization opportunities, leading technology firms are making large investments and establishing new centers of excellence to develop and demonstrate their competencies. They are emerging as strong challengers to the traditional OT and IT suppliers and often are seen taking initiatives to emerge as dominant players the in OT / IT domain. They have already started offering OT/IT platforms / infrastructure such as Azure (Microsoft), Watson (IBM), Alexa (Amazon), DeepMind (Alphabet), and such others.
Who will succeed and emerge as leading suppliers, what will the architecture of their offerings and the open standards they will follow are questions that await answers. May be, mega mergers and acquisitions are the way-out and probably are in the making; or we may have to watch for the success of collaboration agreements, such as the one between ABB and IBM. Yet another way out may be for the push to come from the end users. One such example is the ExxonMobil Research and Engineering Company’s forward looking initiative. It has entered into an agreement with Lockheed Martin to serve as a system integrator in the early stage development of new architecture for the next-generation open and secure automation systems for process industries. They intend sharing the details of the new architecture resulting from their efforts with OT players. Interesting developments and mind games are on and it is difficult to predict how it will play out and who will emerge winners.


Rajabahadur V. Arcot is an Independent Industry Analyst / Columnist and Business Consultant with around 40 years of senior managerial experience. He has held C-level executive positions in leading companies, such as Honeywell, Thermax, Bells Controls an affiliate of Foxboro / Invensys, Electronics Corporation of India Limited and Instrumentation Limited. Until recently, he was responsible for ARC Advisory Group’s business operations in India. He writes industry and technology trend articles, market research reports, case studies, white papers, and automation & manufacturing IT insights. He is the representative in India for Spitzer and Boyes LLC.

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Honeywell pitches a change-up at HUG

Vimal Kapur and Jason Urso (now returned to his duties as Chief Technology Officer) laid down a challenge for other vendors today by stating that the control system was going to the cloud– it is inevitable, Urso said, and is already happening with some SCADA functionality. This will lead to what they boldly called, “The Last Migration.” All the large automation companies have been operating on a business model that uses upgrades and migrations to keep money flowing from their customers. This, it is obvious, is something Honeywell wants to change. What this will lead to is a software-based control schema in which hardware is subordinated to the software, both in the field controller and in what used to be the DCS– which will be moving to the cloud…

More on this soon.