How IoT is transforming

the industrial ecosystem

Market drivers, the changing industrial landscape and
strategic considerations

Start
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

IIoT: Industrial as an
IoT application
The Internet of Things (IoT) will affect broad portions of
the manufacturing process in large and significant ways.
–– Industrial Ethernet has been around since early 2000, but
products like field devices remain unconnected or provide
only one-way communication.
–– Industrial Internet of Things (IIoT) features two-way
communication: Data is fed up to controller level
(and to the Cloud in the future), but feedback is also
provided to devices.

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

A host of considerations
When—and how—to introduce IIoT into manufacturing environments is not a
one-size-fits-all endeavor.

Where are we now? Ecosystem review

Discover industry challenges driving Explore factors contributing to the
demand to implement IIoT solutions changing industrial ecosystem

Future & expansion Strategic considerations

Examine device- and connectivity-level Review relevant factors while
opportunities for introducing IIoT navigating the changing landscape

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

Technology development
Sensors are widely used in the manufacturing environment. But while their
use will become more widespread, the ability to connect and transmit more
data faster and with improved integrity will be the true enabler of IIoT.

90 90
Discrete control and visualization
80 80 Encoders
70 70 Industrial robots
60 60 Mobile assets
Motor controls
50 50
Motors, generators and turbines
40 40 Process control and instrumentation
30 30 Pumps and compressors
20 20 Sensors
Switchgear
10 10

2016: 99M IIoT 2021: 252M IIoT

devices shipped devices shipped

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

Improved data transmission

Connectivity protocols and frameworks enable customers to collect and
transfer more data quickly and accurately, from sensors up to the Cloud,
for data aggregation and analytics.
Examples include IO Link, quickly being introduced by sensor suppliers;
and OPC UA, supporting greater interoperability and more secure
information transmission to the Cloud.

Convergence of platforms
New IoT platforms have been introduced by players
from both operation technology (OT) and information
technology (IT) markets.
Platforms are key differentiators supporting data
consolidation and communication across multiple machines, facilities
and companies, creating connected organizations and supply chains.

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

IIoT demand drivers

Below are the key drivers for making IIoT a reality.

Connectivity, Standardization Business models Innovation

technology & security The industry is struggling & competitiveness
with challenges, including
& innovation The industry needs common
loss of engineering expertise
IIoT adoption can accelerate
standards to allow smart factory productivity rates, via
Industrial sectors such as because of a retiring workforce.
connected products, machines reduced unplanned downtime
energy are generating massive New business models arise as
and equipment from different and easier product customization,
amounts of data. Technology a result for machine builders,
manufacturers to interact increasing the level of competition.
for data capture and analysis supporting customers with IIoT-
seamlessly. With industrial use
opens up new opportunity for related services (e.g., remote
of the Cloud, security remains
optimization and monetization. monitoring and servicing).
the biggest concern.

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

Major ecosystem changes

Confusion is driving major changes in the industrial ecosystem.
–– Preference as to which team at a company should lead IIoT
projects is evenly split between engineering and IT.
–– Centrality of automation projects (i.e., DCS systems)
influences the decision-making process.

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

Ecosystem elements

Applications Building Platforms &

– Fixed assets blocks enablement
– Mobile assets products > products >

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

Applications
Fixed assets
Motors, generators & turbines Measurement instrumentation Process controllers Discrete controllers
ABB Mitsubishi Electric ABB Krohne ABB Rockwell Advantech Pro-face
Automation
Alstom Rockwell Azbil Magnetrol Emerson B&A Electric Rockwell Automation
Automation Schneider Electric
Danfoss Cameron Siemens Honeywell Beckhoff Schneider Electric
Schneider Electric Siemens
DEC Emerson Vega Metso Mitsubishi Electric Siemens
Siemens Yokogawa
Emerson Endress+Hauser Yokogawa Omron
Yaskawa
GE Honeywell

Motor controls
Industrial robots Measurement instrumentation End-equipment
ABB Rockwell
Automation Fanuc Robotics Nachi ABB Krohne Gardner Denver Flowserve
Danfoss
Schneider Electric Kawasaki Staubli Azbil Magnetrol Atlas Copco KSB
Emerson Robotics
Siemens Toshiba Machine Cameron Siemens Grundfos Xylem
GE Kuka
WEG Yamaha Robotics Emerson Vega Ingersoll Rand Sullair
Mitsubishi Electric Mitsubishi
Yaskawa Electric Yaskawa Endress+Hauser Yokogawa Sulzer
Honeywell

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

Mobile assets

Service robots Heavy vehicles Virtual/Augmented reality Drones

ActiveLink Open Bionics Caterpillar Navistar APX Virtalis 3D Robotics Ehang
Adept Savioke Daimler Tata Autodesk Vuforia AEE Insitu
Aethon Siasun Ford Toyota Daqri Vuzix AeroVironment Parrot
Amazon Robotics Softbank John Deere Volvo HTE Vive Worldviz Ascending Precision Hawk
Technologies
Carbon Robotics Titan Medical MAN Truck & Bus Microsoft HoloLens Skycatch
CybAero
Fetch Robotics Yaskawa Yuneec
DJI
Locus

Beacons Automated guided vehicles

Bluvision Radius Networks Daifuku
Estimote Sensorberg Muratec
Kontakt.io Sensoro SSI Schaefer
Dematic
Terex

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

Building blocks
Hardware (chips & modules) Software (embedded OS) Connectivity (field networks) Partners (system integrators)
ARM NXP DDC-l QNX Bluetooth ZigBee Leidos Energy Prime Controls
Analog Devices Sierra Wireless ENEA Texas Instruments LoWPAN Z-Wave Intech Automated Technology
Group
Infineon Texas Instruments Green Hills Software Wind River Neon Wood Group Mustang
CG Controls
Intel Linux SigFox Maverick Technologies
Nexcom Mentor Graphics Wi-Fi

Sensors and actuators Cloud hosting Industrial Ethernet Change management services
Advantech Memsic SAP Oracle CC-Link IE Powerlink Accenture PWC
Bosch Sensirion Amazon Web Salesforce EtherCAT PROFINET Deloitte
Services
Honeywell TE ThingWorx Ethernet/IP Sercos
IBM
Infineon Texas
Instruments Microsoft
Libelium

Routers & gateways Development kits/SDKs Industrial Fieldbus Industrial-specific alliances

Adlink Intel Anaren Marvell ASI-Interface INTERBUS Manufacturing USA Industrie 4.0
Advantech Kontron Atmel Texas Instruments ControlNet IO Link Made in China 2025 Industrial Internet
Consortium
Cisco Multi-Tech Avnet VMware DeviceNet Link Asia IoT Alliance
Eurotech Sierra Eurotech FireWire Profi Bus
Hart USB

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

Platforms & enablement

Industrial platforms Analytics Interface (Virtual/Augmented reality)
ABB Huawei Azima APX Vuforia
Bosch IBM DLI Autodesk Vuzix
Cisco Jasper Microsoft N3N Visualize Daqri Worldviz
Emerson Predix KCF Technologies HTC Vive
Fujitsu Rockwell Automation Pruftechnik Microsoft HoloLens
GE RTI Senseye Virtalis
Hewlett-Packard Enterprise Schneider Electric
Hitachi Siemens
Honeywell ThingWorx
Hewlett-Packard

Cyber security
Software Hardware Services
Belden Symantec BAE Systems Radiflow Accenture Lockheed Martin
Lockheed Martin Trend Micro Belden SEL BAE Systems Siemens
Phoenix Contact Moxa Siemens Deloitte Yokogawa
Siemens Phoenix Contact

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

Rush to IIoT platforms

The growing conversation on IIoT potential is attracting many
new players to compete for a share of the market.

Schneider
HP EcoStruxure
Siemens ABB
Universal IoT
Advantech MindSphere Ability
Wise-PAAS Yokogawa E+H SupplyCare
PTC Platform for Connected Cloud Platform
ThingWorx Industrial Enterprise
Oracle KUKA Emerson Plantweb Mitsubishi Electric
Microsoft Azure IoT Cloud Service Connect Fuji Electric FA-IT Open Platform

2015 2016 2017

SAP Bosch IoT Suite
HANA Hitachi
SEW Sm@rt Factory Lumada Honeywell IBM Watson IoT
GE Sentience Platform Connected
Predix Manufacturing
Telit Beckhoff
deviceWISE TwinCAT
National Instruments
Big Analog Data
Fanuc
FIELD

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

Disruptive entrants
New solutions could drive disruption in the industrial market.

IIoT platform Security

Huawei Fortinet
Key player in IoT connectivity management Solves IIoT security challenges for “headless” OT devices
platforms with broadening capabilities as well as traditional IT assets

Machine learning Virtual reality

SpaceTime ESI Group
Provides situational intelligence to process industries by Industrial-grade immersive VR solution facilitates decision-
analyzing data across assets, operational functions and making process of global interdisciplinary teams
enterprise resources

IIoT operating systems Augmented reality

Ubuntu ThingWorx
Operating system offers open environment for developers in Enables augmented reality experiences for field support
their language of choice, complete with downloadable snaps for services as well as engineering and design
quicker/cheaper path to market

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

Partnerships, mergers & acquisitions

The complex IIoT supply chain necessitates an ecosystem of partnerships.
Partnerships are necessary between: Besides forming partnerships, firms are also actively
a) IT companies supporting cloud platforms acquiring software vendors, introducing new elements or
and analytics; and augmenting existing parts to their own smart manufacturing
b) OT companies providing portfolio. Such firms include GE Digital, Honeywell and
deep-domain knowledge and hardware utilized by Siemens, in digitalization as well as in technologies
manufacturers. supporting cloud platforms and data analytics.

OT IT OT and / or IT

Automation
component
> Automation
solutions
Machine
> builders/OEMs IT
> infrastructure > Connectivity > Cyber security > IoT
platforms
> Industrial
software
System
> integrators > Applications > Customers

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

Challenges in
IIoT adoption
Industry change is required for full IIoT
adoption to take place.
Despite IIoT’s growing sophistication in processing power,
software and platforms, the broader understanding and
acceptance of IIoT within the industrial culture remains elusive.
The goal: to move manufacturers toward wider implementation.
For traditional players, fears of placing data in the Cloud must
be addressed, given the rampant and pervasive cyber security
threats of today.

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

The road ahead to IIoT

IIoT is a story in the making, and many uncertainties remain.

Many manufacturing Is 5G an 5G’s ability to provide

companies remain hesitant to opportunity high reliability, ultra-low latency
place confidential data on a for Industrial? connectivity, strong security and
remote Cloud. Where is the availability should create and drive
IoT platforms are evolving by offering Edge Cloud going? significant new market opportunity for
or Fog analytics, where data is collected and mission-critical applications as well.
processed at the edge of the network, 5G will enable IoT support in more pervasive
allowing companies to retain data in-house as applications and uses cases, at much greater
an alternative or in addition to a volumes, and eventually at lower cost points
cloud-based solution.
than traditional cellular technologies.
Cloud/Edge analytics used for
manufacturing operations is set
to double by 2020.

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

What lies ahead?

IoT expansion will continue with new technologies
and growth in the IoT base.
By 2030, the installed base of IoT devices including newer technologies
like LoRa, Sigfox, NB-IoT and 5G will exceed 120 billion.
–– Analytics provided through platforms are key to taking full
advantage of massive data transmission, set to double in volume
to 50% on average yearly for the next 15 years.
–– Ethernet is continuing to influence fixed assets and will grow to
reach more than 100 million in shipments by 2021.
–– Automation products supporting connectivity to the Cloud will
expand at more than 60% CAGR during the next five years.

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

Finding a place in the

new landscape
For key market players, navigating the changing industrial
landscape can prove challenging. Companies can consider
the following to find their place:
–– Variation in IIoT adoption, depending on vertical sector
–– Importance of partnerships
–– Company fit in platform strategy

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

IIoT adoption varies

The roadmap to IIoT adoption is as complex and Position of each vertical relative to its
diverse as its users. IIoT evolution phase
Connect Collect Compute Create
Adoption of the IIoT will vary. It will depend on the openness of each
vertical in embracing IIoT technologies; and on individual industry
knowledge, conservatism, access to capital and integration challenges.
Analysis is complex in IIoT because industrial coverage is broad and Manufacturing
intersects with multiple vertical markets, resulting in incredibly diverse
sets of end-customers, compared to verticals in the IoT universe.
Ramifications of adoption in IIoT are much greater than in consumer- Energy
centric IoT applications. IIoT factors of production are much larger while
also covering critical spheres of human activity, where failure of systems
is not an option.
The roadmap to IIoT adoption will be dictated by a manufacturer’s own Maritime

needs and customers. A direct relationship and impact can be measured

by a manufacturer’s adoption of—or failure to adopt—IIoT.

Agriculture

Chemicals

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

Partnering with the competition:

cooperation vs. coopetition
Competitors can also be partners in a new paradigm.
A more complex marketplace necessitates acknowledgement and appreciation of new
competition through partnerships, or a cooperation vs. coopetition strategy. Coopetition
is the cooperation that occurs between competing companies—a business strategy using
insights from game theory on when it is better for rival companies to work together.
–– Partnerships are crucial, as automation vendors lack experience in cloud services,
while cloud service providers lack relationships or knowledge of the industrial sector.
–– “New business models and revenue streams are becoming online through
the convergence of IT and OT solutions, and broad expertise necessary to the
development of ecosystems to support these services will be critical. Expect to
see ongoing activity in 2018 as vendors look to augment and fortify partnership
arrangements.” - Alex West, IHS Markit Principal Analyst, Manufacturing Technology

Platform space is converging: Where do you fit?

–– Partnership-led approaches to IoT platform development will continue to
intensify competition in the IIoT space.

PREVIOUS NEXT
Introduction Where are we now? Ecosystem overview Future & expansion Strategic considerations Find out more

Industrial IoT research

Designed for companies looking to expand or establish a foothold in the Industrial IoT
Industrial IoT package
Research supporting this ebook is sourced from the following products:
–– Smart Manufacturing Intelligence Service – analysis and –– IoT Devices & Connectivity Intelligence Service – analysis of
commentary on the latest news and developments around the devices and connectivity technologies used for the IoT
the “factory of the future” –– Industrial Robots Report – highly detailed market analysis of
–– Industrial Communications Intelligence Service – robot systems used in manufacturing and production
examination of industrial automation networking adoption –– Industrial Cybersecurity Report – detailed view of the world
and trends market for industrial cybersecurity hardware, software and
–– MEMS & Sensors Intelligence Service – coverage of the services
MEMS and sensors market, including analysis of leading and –– Service Robots & Drones Report – examination of professional
potential applications using the technology and consumer service robots as well as the drones market,
–– Cellular IoT Intelligence Service – perspectives and insights including trend analysis across 16 key industries
into machine-to-machine (M2M) communications

For more information: technology.ihs.com

Click here to learn more about our IoT research
Follow the conversation: @IHSMarkitTech
IoT ECO AMERICAS APAC
T +1 844 301 7334 T +604 291 3600
E [email protected] E [email protected]
EMEA
T +44 1344 328 300
E [email protected]
PREVIOUS
Copyright (c) 2018. All rights reserved