The Bottom Line for Enterprise IoT – Business Value from Ubiquitous Data

Analysts and forecasters are predicting extremely high market growth rates for the IoT and often they are referencing enterprise/industrial applications rather than consumer products. But how can these predicted growth levels be justified when for many years islands-of-automation and domain-specific integrated systems have already provided valuable tactical OT and IT solutions for enterprises? Whether SCADA, corporate IT applications or tactical M2M systems, these solutions have delivered a self-contained return-on-investment (RoI) from their operational benefits. So one may be tempted to ask, “How is enterprise IoT different and where is its RoI to justify these impressive growth forecasts?”

The business value of enterprise IoT is based on a premise that there is a huge amount of potential value in the data generated by existing systems (legacy sub-systems in IoT terms) and newly connected Things (sensor networks, brilliant machines, mobiles, gateways, etc.)… if only it can be unlocked through ubiquitous data availability for apps and analytics to extract new and actionable insights. Let’s look at some specific examples where new data accessibility can produce new value and good RoI:

For OEMs and system vendors the focus of the IoT will often be on enabling new products, new services, and an enhanced customer experience. The ability to generate in-operation data from products, access and analyze them remotely (by other devices, a Smartphone app, by a cloud service, etc.), and generate new insights into product performance, integrity, energy consumption, utilization, etc. gives vendors the ability to more closely align their offerings with their customers’ business needs and add new services (and thus new revenues) to their portfolio. The IoT can thus revolutionize the way a required business solution is delivered and dramatically increase user-friendliness, interoperability and the efficiency of post-sales customer service. At PrismTech we see many OEMs moving quickly from offering stand-alone products to selling connected systems and the valuable data they generate and services they enable. The quest for sustainable competitive advantage (and fear of falling behind) will fund OEM investment in the IoT and provide the RoI projections that executives require to fund new product and system development.

One such example is in power generation and distribution. In 2013 US utility giant Duke Energy formed the “Coalition of the Willing” (COW), a consortium of grid technology vendors focused on the promotion and adoption of an Open Architecture approach to standardizing the way grid-edge technologies are integrating together.

After successfully demonstrating in real-time how different grid devices could talk to each other and reducing the feedback control process from minutes to less than 10 seconds, the energy industry has really started to take notice. This work is also helping address the key issue of intermittent availability of supply when deploying renewables as part of an integrated generation system. Thus users and device OEMs are collaborating and using the IIoT to unlock new value from device data generation, connectivity and interoperability. From products to systems.

For End Users the focus will often be on operational efficiency and the potential for significant productivity gains and cost reduction. With operational assets (devices, machines, people, buildings, street furniture, etc.) producing more real-time data… and new apps, analytics and interoperability providing the ability to convert them into actionable insights and superior coordination, the scope for operational gains of many percentage points has been identified in industries as diverse as manufacturing, energy, transportation, healthcare, cities and critical infrastructure. Projected savings driven by superior energy efficiency, resource utilization, staff deployment, capital asset longevity and reduced cycle times will fund End User investment in the IoT and provide the RoI projections that executives require. Already the City of Nice and its residents are seeing real benefits from improved city mobility. By having real-time access to car park space availability data via mobile devices, drivers are taking much less time to park and parking income from reduced fraud is up by 35%. This in turn is helping improve traffic flow and has reduced congestion by 30%. Air pollution and noise levels have been reduced by 25%. In the future, better city management will see savings of between 20-80% in areas such as street lighting and waste management while improving overall environmental quality.

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Open Architecture IoT Solutions Will Bring Major Benefits to the Energy Industry

In Industrial Internet of Things (IIoT) application domains such as energy generation (including transmission and distribution), the co-ordination of operational systems (power plants, electrical power grids etc.) has traditionally been via back office centralized management infrastructure. Energy utility technologies and their data are often siloed, based on proprietary hardware from different vendors, and use many different communication protocols and telecommunication technologies to make the device data available to the centralized information systems.

Open Architecture IoT solutions offer the potential for the energy industry to move from single function and proprietary centralized managed systems to new multi-function distributed control systems. They can enable co-ordination between grid-edge technologies and with the centralized systems, improving grid efficiency, reducing integration costs, enabling vendors to improve their products and ultimately, customers to pay less for the electricity that they consume.

Traditional Grid Management Architecture
Traditional Grid Management Architecture

The next generation of energy grids will need to adopt new approaches for the integration of distributed grid-edge devices and equipment from many different manufacturers to realize operational benefits. Existing systems that were designed to support a small number of large generation facilities will be faced with the need to integrate an increasing number of Distributed Energy Resources (DERs) such as wind, solar and electricity storage into existing power generation and distribution networks.

In the current business climate, the power industry has recognized the need for change. Already in Europe the profits of the large power utilities who have invested heavily in fossil fuel plants are starting to fall. In fact, over the last five years, the top 20 utilities in Europe have lost half of their value (source: Many of their large customers are leaving the grid as they adopt renewable energy resources and become self sufficient. This has the effect of pushing up energy costs for the customers who stay and encourages more companies to become self sufficient. These major shifts are forcing the utilities to re-assess their business models, driving them to greatly increase investment in wind power, solar and distribution projects to connect renewables into their existing grids in an attempt to arrest the decline in their profits.

Open Architecture IoT Grid Management
Open Architecture IoT Grid Management

In the US the legal and commercial drivers for the adoption of renewables have not been as great up to this point. However, the US utilities have also recognized that things need to change.  In 2013 US utility giant Duke Energy formed the “Coalition of the Willing” (COW), a consortium of grid technology vendors focused on the promotion and adoption of an Open Architecture approach to standardizing the way grid-edge technologies are integrated together.

The consortium is made up of communications and grid control systems, electronics and software vendors. The initial COW member companies were limited to Duke Energy, Accenture Alstrom Grid, Ambient Corporation, Echelon, S&C Electric and Verizon.  After successfully demonstrating in real-time how different grid devices could talk to each other without the need to contact a remote centralized management system and reducing the feedback control process from minutes to less than 10 seconds, the energy industry started to really take notice. The responsiveness that Duke and its partners demonstrated can enable a system to react dynamically to changes such as a sudden drop in the wind powering a farm of turbines. The distributed management system can automatically and in real-time (within seconds) switch in battery backup storage to ensure that a smooth voltage supply is maintained. This is something that is much harder to achieve if the process of communicating with a centralized system takes minutes.

As a result, the consortium has quickly grown to over 25 companies, with new members including ABB, Cisco, Itron, PrismTech, Schweitzer and others.

All COW members must implement interoperable communication protocols that conform to open standards. These protocols must also conform to the Common Information Model (CIM) utility standard.  The protocols are used as the basis of a common communication backbone called the “Field Message Bus” which is used to connect edge-devices via standardized nodes deployed by Duke Energy. The core communication protocol that must be supported is the Object Management Group’s Data Distribution Service for Real-time Systems (DDS) standard. DDS implementations including PrismTech’s Vortex are being used by the consortium to provide a high performance, fault tolerant, secure, real-time interoperable data connectivity layer between edge-grids and centralized management systems. DDS can be used to unify co-ordination for the edge-grid devices while at the same time making important real-time data available to the centralized systems, as well as feeding centralized control decisions back down to the edge-grids

The ability to process data at the edge and share control decisions in real-time across device networks that were previously isolated from each other, is where the real value of the IIoT for the energy industry will be gained.  DDS as part on an Open Architecture for edge-grids is a key enabler of this capability.

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