The Industrial Internet Energy Conference – Houston, TX

By Mark Sen Gupta

Category:
Industry Trends

The Industrial Internet Energy Conference – Houston, TX
This week, ARC attended the first Industrial Internet Energy summit hosted by HP on its Houston campus. This one-day gathering of the Industrial Internet Consortium (IIC) (http://www.iiconsortium.org/) brought together thought leaders to explore how Industrial Internet is transforming various segments of the energy industries. The well-attended event

The energy industry has experienced tremendous challenges in the last decade. Many of the obstacles relate to safety, security, environment, and price sensitivity. Companies seek solutions to not only overcome these obstacles, but to improve and optimize production and reduce costs. Some are turning to the Industrial Internet; leveraging data and designing solutions such as Smart Power Grids and Digital Oil Fields to more accurately and efficiently generate power and more effectively monitor equipment remotely. Industrial Internet solutions show promise in re-energizing the industry. This type of disruption hasn’t been seen since the introduction of computerized automation in the 1960s and companies who fail to embrace the innovative changes will miss out on major opportunities for growth.

During the introduction given by Lynne Canavan, Senior Program Manager, we were given an overview of the IIC, which consists of 170 members in 26 countries. It is not a standards organization, however. Founded in March 2014, The IIC brings together the organizations and technologies necessary to accelerate growth of the Industrial Internet by identifying, assembling and promoting best practices. Membership includes small and large technology innovators, vertical market leaders, researchers, universities and governments.

Last week, the IIC announced the release of the IoT framework, which ARC discussed earlier. It also informed the audience that the IIC accelerates the creation of testbeds for the Industrial Internet and serves as the advisory body for testbed proposal activities for IIC members. It is the centralized group which collects testbed ideas from IIC member companies and provides the members with systematic yet flexible guidance for new testbed proposals. IIC testbeds are where the innovation and opportunities of the Industrial Internet – new technologies, new applications, new products, new services, and new processes – can be initiated, thought through, and tested to ascertain their usefulness and viability before coming to market.

Ed Wagner, Vice President - Sentient Science and Co-Chair of the IIC Energy Group, spoke first and summed up the Internet of Things as “The IoT is money.” His premise is that it’s here and now and pointed out that it is enabled by Consumer Internet.  One of the quests that the industry is looking to achieve is energy efficiency and a one percent improvement is huge.  Mr. Wagner also pointed out that an IoT strategy may not be called an “IoT Strategy,” but rather inventory strategy, supply chain strategy, revenue strategy, etc. The question to ask yourself is, “What are the drivers from a business standpoint?”

Dr. Tom Bradicich, Vice President, Server Engineering - Hewlett Packard, spoke on “The IoT - 3 of 7 Basic Principles.”  The first principle was the Big Analog Data problem, and he asked the audience, “What is your strategy?” Ninety percent of all data starts as an analog value and creates a larger volume of data than discrete data.  The second principle discussed was perpetual connectivity. The third principle centers on analysts and analytics. According to Dr. Badicich, Data Analysts are where the big money is now, and Analytics will follow. The key to any IoT strategy are the three A's of Big Data:  Acquisition, Analysis, and Action.  He gave a fourth principle as a bonus:  seamless connectivity between all the IoT tiers.

Dr. James Truchard, President, CEO, & Co-Founder - National Instruments, presented, “Getting Down to the Business of IoT in Energy.”  In it, he postulated that energy is central to our success.  He stated that the industry is entering in to era of data-intensive science.  The Industry is now moving to connected analytics, what is termed cyber-physical prescriptive analytics.  This will allow companies to become wiser about what they do.

One of the takeaways is that there are lots of things converging which will be quite disruptive to many industries.   Therefore, your company should play where it is an expert.  Dr. Truchard also stated that dark data (data hidden in isolated spreadsheets or documents, for example) could hold the key to innovation and disruption in your market. Because expertise from around the world is available to anyone anywhere, IoT is leveling the playing field.  It is also allowing companies to respond faster to a world that is changing faster and organizations that can’t keep up could cease to exist.

Brian Hollingshaus, Senior Manager for Duke Energy presented on “Industrial Internet in Action” detailing how Duke energy utilized current technology to address maintenance and operational costs across their 92 sites. To do this, Duke Energy set out to optimize preventive costs and repair costs by implementing an “intelligent maintenance” program.

Mr. Hollingshaus identified a shifting paradigm where technology reduces the cost of maintenance. The company achieved improved condition-based monitoring with technology in the form of remote, automated monitoring and diagnostics of plant equipment. The company noticed that eighty percent of an analyst's time was consumed collecting data. He noted that the solution required more instrumentation, data collection, management, integration, and presentation; advanced analytics and diagnostic/prognostic modelling; interoperability and communication of systems, apps, and devices; heightened network performance and security. In particular, Mr. Hollingshaus highlighted that the instrumentation needed is more than what Process Control needs and that wireless technologies are key in reducing implementation costs.   One of the largest challenges in the implementation is proper data visualization and presentation in a single platform.

A panel discussion on Operationalizing IoT ended the morning session.  The panel consisted of Dr. Truchard; Amir Husain, CEO of SparkCognition; Ed Abbo, President & CTO of C3 Energy; Laurent Clerc, Vice President Information Technology of CGG; Mr. Hollingshaus;  and moderated by Dr. Bradicich.

There were many topics discussed, however, there was some key advice given. Dr. Truchard highlighted the need for standards. Mr. Husain advised to invest in your network to support the devices, and to think about how to pass competition.  To this end, it’s important to leverage the disruption. He pointed out that companies not dedicated to the status quo can jump ahead, and highlighted the fact that opportunities caused by this type of disruption are rare. Mr. Clerc emphasized that it’s important to understand your business model, and even more important to understand your value to the customer. Mr. Abbo highlighted the importance of getting the C-Level personnel involved because of the organizational influence needed to affect the necessary change. Mr. Hollingshaus encouraged the audience to be resilient, because our industries are not categorically progressive in thought and there will be resistance to the changes.

On the topic of security, two concepts stood out. One was the concept of a digital twin model to detect differences between reality and expected responses. Another was the use of cognitive detection for anomalies.

Chris LeBlanc, Vice President Sales and Marketing for Lime Instruments, gave a presentation on what his company is doing with respect to hydraulic fracturing titled, “Oil & Gas: The Digital Oil Field.” His premise was the concept of the Digital Oil Field is basically IoT. In a case similar to the one at Duke Energy, there has been a move to predictive equipment maintenance for engines, transmissions, and pumps instead of schedule-based. Also, IoT is being used to make fleet management more optimum.

Mr. LeBlanc posed an interesting question as well. The problem with the Digital Oil Field to date is what has been done with the data. Why is finance more interested in data than operations?

Chris Van Dyke, Associate Partner, Business Analytics and Strategy for IBM, presented on “Exploring IoT through Big Data and Insights.” Some interesting statistics presented were: 2.5 quintillion bytes of data are created daily; 91% of new software was built for cloud in 2014; and there is an average of 2.8 connected devices per knowledge worker.  Mr. Van Dyke’s main point was that organizations need to act smarter, improve their vertical and horizontal integration, craft new business models, and build new ecosystems.  He also premised that IoT has been happening for years in the form of connected sensors into a historian, but the data is siloed.  He highlighted the fact that IBM will invest $3 billion over the next for years for IoT growth.

Steve Jennis, Sr. VP Corporate Development for PrismTech presented “The Industrial Internet vs. SCADA and M2M - What's different, what's new and what you need to know.” Mr. Jennis stated that IoT high-performance distributed systems are not new, and that finance has been very good at data analytics for some time.  So what is driving IIoT? According to Mr. Jennis, cost is driving it.  Things cost less (sensors), more money is being poured into IoT, there is ubiquitous Internet connectivity (which is almost free), there is a high adoption rate of mobile devices (If you consider BYOD, it’s free to the company).  Given this, it’s not about technology, about affordability.

Mr. Jennis is expecting these technologies will come from suppliers and embedded in their offerings as a way to differentiate their products from competitors through offering related services. ARC believes the same.  Because the capability will be there, the question becomes, "How do we use it?"

The goal of IoT is ubiquitous data availability. To achieve that, the industry must address one cost major cost; the cost of legacy system integration. Mr. Jennis expects that business lives will change just like social lives have because of Facebook, Instagram, etc.  He also made an interesting observation about security by stating that we all accept a certain level of insecurity, i.e. Internet banking security.

Conclusion:

  • IoT is not a technology, it’s an enabler.

  • In the industrial setting, better maintenance seems to be the low hanging fruit.

  • IoT is about money.

  • Industry is entering in to era of data-intensive science.

  • IoT is a disruptive inflection point for companies and those who embrace it, will excel.

  • Security is a manageable issue.

  • What is your strategy?  Who on your executive board is championing it?


 

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