Smart and Sustainable World using Internet of Things (IoT) for Industrial Automation

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forbidden.  Audencia Nantes School of Management, France
Based on External doc. no.
Author Deepak Shivdutt KANDPAL Project IoT for Industrial Automation
Approver Dr. Jonathan SEDDON Doc. kind Thesis Status
Approved
Title MBA Thesis Resp. dept. IS Management Classification
Audencia Nantes School of
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TITLE PAGE
Smart & Sustainable World using
Internet of Things (IoT) for Industrial
Automation
Dr. Jonathan SEDDON
Submitted by Deepak Shivdutt KANDPAL
(MBA in Responsible Management 2014-2015)

Doc Kind Thesis Project ID IoT for Industrial Automation
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ACKNOWLEDGEMENTS
I wish to sincerely thank my supervisor Dr. Jonathan Seddon, for his guidance and support
during the tenure of this course, besides giving me the liberty to pursue my ideas.
I wish to express my sincere gratitude to Mr. Ratna Kanth Dittakavi, ABB & Mr. Swatej
Marathe, ALSTOM, who have been a source of constant inspiration and immense
encouragement throughout the MBA course.
I also wish to thank to my colleagues Dr. Sridhar Iyer and Mr. Vignesh Valavane and my
brother, Mr. Mahesh Kandpal, for their comments and suggestions during the concept
development of this dissertation subject.
Finally, I wish to express my words of appreciation for my wife Neena and my parents
Shivdutt and Beena, who have been my pillars of strength and sources of unlimited support
and encouragement.
Last but not the least, I thank my lovely daughter’s Drishti & Nishka, who showed a lot of
understanding, patience and supported their father in his long cherished desire and dream,
to pursue and complete the Master of Business Administration course in Responsible
Management.

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TABLE OF CONTENTS
TITLE PAGE.......................................................................................................................................................1
ACKNOWLEDGEMENTS....................................................................................................................................2
1.0 ABSTRACT..............................................................................................................................................5
2.0 INTRODUCTION .....................................................................................................................................6
2.1 INTERNET OF THINGS (IOT)..............................................................................................................................7
2.2 INDUSTRIAL AUTOMATION.............................................................................................................................14
3.0 LITERATURE REVIEW............................................................................................................................17
3.1 HISTORY OF IOT, SERVICES AND ARCHITECTURES...............................................................................................19
3.2 INTERNET OF EVERYTHING AND IOE VALUE INDEX ............................................................................................21
3.3 EVOLUTION OF HUMANS, INTERNET AND IOT..................................................................................................25
3.4 OVERCOMING IOT CHALLENGES USING METCALFE’S LAW....................................................................................28
3.5 INDUSTRIAL AUTOMATION INDUSTRY DEPLOYING IOT ........................................................................................31
3.6 BENEFITS OF INDUSTRIAL IOT........................................................................................................................37
3.7 IOT OR I²OT AS AUTOMATION INVESTMENT OPPORTUNITY................................................................................38
3.8 SECURITY & CREATING VALUE IN THE IOT WORLD.............................................................................................40
4.0 PURPOSE OF THE RESEARCH................................................................................................................42
4.1 RESEARCH OBJECTIVES ..................................................................................................................................42
4.2 RESEARCH QUESTIONS ..................................................................................................................................43
5.0 RESEARCH METHODOLOGY AND DESIGN ............................................................................................44
6.0 BUSINESS PLAN FOR IOT......................................................................................................................45
6.1 INDIA STRATEGY AND MARKETING ...................................................................................................................48
6.1.1 India Market Review .......................................................................................................................48
6.1.2 Target Market Segment Strategy....................................................................................................50
6.1.3 Competition and Buying Patterns ...................................................................................................51
6.2 INDIA VALUE CHAIN AND SALES.......................................................................................................................52
6.2.1 Competitive Advantage...................................................................................................................52
6.2.2 Sales Forecast..................................................................................................................................52
6.2.3 Milestones.......................................................................................................................................53
6.3 INDIA FINANCE AND ACCOUNTING...................................................................................................................53
6.3.1 Start-up Funding..............................................................................................................................54
6.3.2 Projected Profit and Loss.................................................................................................................55
6.4 MANAGEMENT AND TEAM.............................................................................................................................56
6.5 ASSUMPTIONS AND RISKS ..............................................................................................................................57
7.0 SUMMARY OF RESULTS AND ANALYSIS ...............................................................................................58
8.0 CONCLUSION .......................................................................................................................................68
9.0 LIMITATIONS AND FURTHER RESEARCH ..............................................................................................70
10.0 APPENDIX ........................................................................................................................................71
LEGAL PAGE ...................................................................................................................................................74
11.0 BIBLIOGRAPHY.................................................................................................................................75

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TABLE OF FIGURES
FIGURE 2-1: INTERNET OF EVERYTHING: IOT VISION 2020 (SOURCE: IDC) ............................................................................7
FIGURE 2-2: IOT VIEWED AS A NETWORK OF NETWORKS (SOURCE: CISCO IBSG) .....................................................................8
FIGURE 2-3: BILLIONS OF INTERNET-CONNECTED DEVICES (SOURCE: MIT TECHNOLOGY REVIEW)............................................10
FIGURE 2-4: THE DIGITAL UNIVERSE IN 2020 (SOURCE: IDC 2012)...................................................................................11
FIGURE 2-5: IOT VISION WITH HUGE ECONOMIC POTENTIAL (SOURCE: EIU).........................................................................12
FIGURE 2-6: M2M-MARKET SHARE WORLDWIDE 2013 (SOURCE: GSMA)........................................................................13
FIGURE 3-1: A SMART & SUSTAINABLE WORLD (SOURCE: LIBELIUM)..................................................................................18
FIGURE 3-2: FROM INTERNET TO IOT (SOURCE: SIEMENS) ................................................................................................20
FIGURE 3-3: IOT: INTELLIGENT SYSTEMS FRAMEWORK (SOURCE: INTEL)..............................................................................21
FIGURE 3-4: INTERNET OF EVERYTHING VALUE INDEX (SOURCE: CISCO)...............................................................................22
FIGURE 3-5: THE IOT WAS “BORN” BETWEEN 2008 & 2009 (SOURCE: CISCO IBSG)............................................................23
FIGURE 3-6: FIRMS IN COUNTRIES REALIZING IOE VALUE ..................................................................................................24
FIGURE 3-7: IT-DRIVEN INDUSTRIES REALIZING GREATEST IOE VALUE..................................................................................25
FIGURE 3-8: DIKW MODEL (SOURCE: CISCO) ................................................................................................................26
FIGURE 3-9: METCALFE’S LAW DEPICTING VALUE OF NETWORK=N²...................................................................................28
FIGURE 3-10: ZIGBEE PROTOCOL OSI MODEL................................................................................................................29
FIGURE 3-11: ZIGBEE NETWORK..................................................................................................................................30
FIGURE 3-12: IOT MATURITY MODEL (IOTMM) ............................................................................................................36
FIGURE 3-13: THE IT AND OT CONVERGENCE (SOURCE: SAP & OSISOFT) ..........................................................................41
FIGURE 6-1: PRODUCTS & SERVICES FOR IOT .................................................................................................................46
FIGURE 6-2: DST CLOUD OFFERING FOR IOT..................................................................................................................46
FIGURE 6-3: EMS SOLUTION FOR IOT BY DST................................................................................................................47
FIGURE 6-4: WMS SOLUTION FOR IOT BY DST ..............................................................................................................47
FIGURE 6-5: DCM SOLUTION FOR IOT BY DST ...............................................................................................................48
FIGURE 6-6: B2B SEGMENTATION DIMENSIONS..............................................................................................................50
FIGURE 6-7: MANAGEMENT TEAM & ORGANIZATIONAL STRUCTURE FOR IOT.......................................................................56
FIGURE 9-1: EMS SOLUTION WIRELESS ARCHITECTURE....................................................................................................73
FIGURE 9-2: WMS SOLUTION WIRELESS ARCHITECTURE ..................................................................................................73

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1.0 ABSTRACT
This research is on how Internet of Things (IoT) & Industrial Internet of Things (I²oT) is
bringing changes to the value chain and impacting Industrial Automation organizations to
make a smart and sustainable world which is connected using technologies like IPv6, Cloud
Computing, Fog Computing, Big Data and Big Data Analytics. The main focus is how these
responsible organizations are making their business plan for IoT for saving time, money and
supporting business intelligence efforts to have quality control, sustainable and green
practices, supply chain traceability and overall supply chain efficiency.
The aim of this study is to identify the different transitions required for triple bottom line i.e.,
People, Process and Technology using IoT in light of the Corporation 2020 mechanisms and
Sustainable Development for building a smart and interconnected world.
This empirical study is an exploratory research and has a qualitative approach with two
sources of data: semi-structured interviews that deliver the primary data, mainly opinions
from managers in different positions in the interviewed organizations. The interviewees are
mostly Product/Project Managers, Directors and CEOs. In addition, a second source of data
is from a survey answered by employees in the organizations, some of them in a position of
Project/Department Manager. To gather employees opinion, it is very important to identify
how the organization is engaging their employees in the IoT mission, vision and goals
through the various programs/projects as one of the major stakeholders.
The research findings: Almost, all the interviewed organizations are having or are willing to
have an IoT mission, vision and goals. However, not all organizations can afford
implementing the IoT Programs/Projects that require huge investments. Most of the
organizations are ready to get integrated with other organizations for open interoperability
standards, security and the development of common architectures so that these smart
machines are better than humans at accurately, consistently capturing and communicating
data which will enable organizations to pick up on inefficiencies faster.

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2.0 INTRODUCTION
It is not surprising today that IoT has become the next major bubble in the Information and
Communications Technology (ICT) industry as well as other industries like Industrial
Automation. This has led to major corporations like Google, Microsoft, Amazon, Oracle,
Cisco, Silicon Labs as well as Infosys, Accenture, Wipro, HCL, TCS to develop blue ocean
strategy { (Kim & Mauborgne 2004), (Chan Kim & Mauborgne 2009) } for catering different
types of customers. Not far behind are major industrial automation capital equipment
suppliers (such as GE, Honeywell, ABB, Emerson Process Management, Siemens,
Rockwell Automation, ALSTOM & Mitsubishi Electric) who will define a clear global strategy,
marketing and deployment for IoT. In the current context for Industrial Automation industry,
smart and sustainable solutions are required using IoT concepts and technology like Cloud
Computing { (Rawal 2011), (Jain & Gupta 2012), (Mastelic et al. 2015) } and Big Data {
(Banerjee et al. 2013), (Moorthy et al. 2015) } as there are various issues faced by Industrial
Automation suppliers and customers. The issues faced are not only limited to improving
performance and efficiency for customers but also reduce cost for suppliers by creating more
affordable system architectures which are responsive, effective and sustainable. Before we
try to understand how IoT will impact Industrial Automation industry to make smart and
sustainable cities, we need to understand the definition, the policies and technology
priorities. These were discussed in the seminar hosted by Qualcomm in London on 27th
January, 2015 as described in the IERC website events which is the European Research
Cluster on the IoT. There are many events like this which will bring focus on the policies in
most of the countries in European Union, India & USA.
The definition of, IoT (sometimes called Machine-to-Machine or M2M) is that it represents
the connectivity of objects (Ashton 2013) that are tagged and identified, so that these
objects—each with its own ‘fingerprint’—can communicate with one another. IoT was

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introduced by British technology pioneer Kevin Ashton in 1999 and popularized by testing at
the Massachusetts Institute of Technology in the early 2000’s.
Internet of Everything (IoE) industry based on IoT Vision 2020 by IDC as shown in Figure
2-1 below have researched and calculated 4 Billion connected people, $4 Trillion in revenue
opportunity, more than 25 Million apps and 25 Billion embedded & intelligent systems with
50 Trillion GBs of data. Andrew Saunders (2014) has described IoE using web-enabled
sensors embedded in physical objects for People-to-Machine (P2M) & People-to-People
(P2P) technologies. Based on Global e-Sustainability Initiative (GeSI) SMARTer 2020 report
as well as WWF Living Planet report, rising energy as well as water consumption for
enterprises like hospitals, residential buildings, malls & businesses need to be reduced by
50% by end of 2020 using M2M technology.
Figure 2-1: Internet of Everything: IoT Vision 2020 (Source: IDC)
2.1 INTERNET OF THINGS (IOT)
As described by Ovidiu Vermesan & Peter Friess (2013), IoT is a concept and a paradigm
that considers pervasive presence in the environment of a variety of things/objects through

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wireless and wired connections and unique addressing schemes. These things/objects are
able to interact with each other and cooperate with other things/objects to create new
applications/services and reach common goals. In this context, the research and
development challenges to create a smart world are enormous. A world where the real
(analog), digital and the virtual are converging to create smart environments that make
energy, transport, cities and many other areas more intelligent.
IoT refers to the interconnection of uniquely identifiable embedded computing-like devices
within the existing Internet infrastructure. Typically, IoT is expected to offer advanced
connectivity of devices, systems, and services that goes beyond M2M communications and
covers a variety of protocols, domains, and applications as shown in Figure 2-2 below as
researched by Cisco IBSG team.
Figure 2-2: IoT viewed as a network of networks (Source: Cisco IBSG)
One example is with, Environmental sensing projects, run by individuals and community
groups, can measure factors in the local environment such as water quality monitoring,
weather conditions, and pollution data. Another is Car parking, which is one of many
industries that can benefit from huge cost savings by automating their services with the help

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of IoT. Car parks have cameras, motion sensors and gates. Often these cameras have a
built in license plate recognition system. Finally, Connected buildings promise us a future
where the environment not only responds to our needs but also saves energy by turning off
lights and the heating down when the building is unoccupied.
The important topics covered by Vermesan & Friess for IoT which are issues, changes,
challenges and obstacles that need to be tackled by all stakeholders are listed below:
a) Research & Innovation
b) Market Deployment
c) Identification
d) Standardization
e) Semantics
f) Interoperability
g) Governance
h) Privacy
i) Security
These topics will be detailed in the Literature review as well as Research objectives and
questions sections based on the various academic articles, interviews, publications,
seminars and webinars. Siemens in its forecasts and facts (Karczewski 2014) has predicted
that by year 2020, 26 billion objects/devices will be connected through internet which is in
accordance with the business consultancy firm Gartner. By adding laptops, PCs, and
smartphones, which will number around 7 billion by 2020, Gartner arrives at 33 billion
objects/devices. This number is also foreseen by market research and consulting firm
International Data Corporation who have estimated that 32 billion objects/devices will be
connected to the Internet by 2020, and that these will produce 10% of all the data generated

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worldwide. A recent study by MIT Technology Review anticipates 28 billion Internet-
connected things as shown in Figure 2-3 below.
Figure 2-3: Billions of Internet-Connected Devices (Source: MIT Technology
Review)
Whether it's 26, 28, 32, or 33 billion – as the number of networked devices and sensors
increases, they will create an ever-growing, unprecedented flow of data which will have to be
collected, analyzed, and stored as shown in Figure 2-4 below.

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Figure 2-4: The Digital Universe in 2020 (Source: IDC 2012)
This will require huge investments and defining standards, security and integration of
organizations. Based on the study conducted by Booz & Company, an international strategy
consultancy which came out with 2013 “Global Information Technology Report”, by studying
the economic and social effects of digitization on a country’s gross domestic product (GDP)
showed a 10% increase in a country’s digitization rate leads to a 0.75 % higher GDP per
capita and a 1.02 % lower unemployment rate. "This wealth can either be concentrated in
the hands of a few, or it can create opportunities for billions of people," says Erik
Brynjolfsson, a professor of management and information systems at the Massachusetts
Institute of Technology (MIT). So, the IoT is thus a vision of the future with vast economic

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potential as shown in Figure 2-5 below. According to Gartner, it will generate an added value
of $1.9 trillion across a number of sectors by 2020 and IDC predicts earnings of $8.9 trillion.
Figure 2-5: IoT Vision with huge economic potential (Source: EIU)
Asian countries are playing a leading role for IoT M2M communication as can be seen in the
Figure 2-6 below with more than 50 million connections, according to the GSM Association,
the global trade group of GSM mobile network operators.

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Figure 2-6: M2M-Market Share Worldwide 2013 (Source: GSMA)
China is leading the Asian countries together with India as it is planning to invest 5 billion
RMB (about €606 million) in the IoT industry by 2015. China has set up the Chengdu
Internet of Things Technology Institute in Sichuan Province, which is developing a
"healthcare capsule" where the village residents will be able to step into a telephone-booth-
sized capsule and obtain a diagnosis and a prescription from a doctor located in a distant
hospital. Gartner expects manufacturing, healthcare, and insurance industries to profit the
most from the IoT because they will have a precise overview of their inventory and the intake
and depletion of raw materials and components at all times, and will be able to react quickly
to changes in the market and in customer preferences. Consulting company Deloitte &
Touche estimates that the smart home market which is connected to the Internet and
centrally controlled and monitored will have a sales volume of €4.1 billion by 2017 in Europe
alone.

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The following top 10 benefits of IoT as defined by Microsoft Corporation below will be used
to build the business plan & strategy for new and existing organizations:
1. Start with your things. (Line-of-business assets and the data they produce, your
Cloud Services, and your Business intelligence tools)
2. Get more out of your existing assets. (Employees and Customers)
3. Make small changes, see a big impact.
4. Improve efficiency.
5. Connect any asset.
6. Enable innovation.
7. Increase agility.
8. Build the ability to scale.
9. Transform your business.
10. Choose an enterprise-proven IoT partner.
2.2 INDUSTRIAL AUTOMATION
Industrial Automation equipment suppliers have been thriving for more than 55 years now
with customers from both Process Automation and Power Automation plants. Current
Industrial Automation systems architecture for Programmable Logic Controller (PLC),
Supervisory Controlled and Data Acquisition (SCADA), Manufacturing Execution System
(MES) and Distributed Control System (DCS) require Ethernet communication at each level.
A commonly used architecture model to define Manufacturing Operations Management is
the five level Purdue Reference Model (PRM), which later formed the basis for the ISA-95
standard. The model is typically expressed as:
 Level 5 - Business Systems

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 Level 4 - Plant Level (ERP, MRP, and MES)
 Level 3 - Operation Unit Level
 Level 2 - Machine/Process Automation Level
 Level 1 - Controller Level
 Level 0 - Sensor/Actuator Level
Existing automation systems generally reflect this architecture with software running on
general purpose computers at levels 2, 3, 4, and 5. Levels 2, 3 and 4 typically have
database and communications interfaces that buffer and synchronize information between
each level in addition to associated HMI and user interfaces.
Early minicomputers were used in the control of industrial processes since the beginning of
the 1960s. The IBM 1800, for example, was an early computer that had input/output
hardware to gather process signals in a plant for conversion from field contact levels (for
digital points) and analog signals to the digital domain.
The DCS was introduced in 1975. Both Honeywell and Japanese electrical engineering firm
Yokogawa introduced their own independently produced DCSs at roughly the same time,
with the TDC 2000 and CENTUM systems, respectively. US-based Bristol also introduced
their UCS 3000 universal controller in 1975. In 1980, Bailey (now part of ABB) introduced the
NETWORK 90 system. Also in 1980, Fischer & Porter Company (now also part of ABB)
introduced DCI-4000 (DCI stands for Distributed Control Instrumentation).
The DCS comprise of many real time ‘Intelligent’ devices, Systems (nodes) and Process
Controllers that seamlessly interact with each other based on standardized communication
protocols. These protocols are implemented over standard Ethernet based networks and
Wireless networks. The DCS provides precise protection, monitoring, measurement and
control of their process equipment and systems with a very high degree of system reliability
and availability. The last decade has seen a huge convergence of Digital communication;

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Internet based technologies and Pervasive systems in the DCS domain. More recently,
advanced Network Security concepts are also being employed in DCS, largely because of
the very high stakes associated with using them in Process and Power Plants. Thus,
Ethernet communication has become the high speed and pervasive technology used by
industrial automation protocols and business systems. More controllers are supporting
multiple Ethernet ports to interact directly with industrial and business networks that exist
throughout industrial plants.
The Industrial Internet of Things (IIoT or I²oT) is becoming a reality with sensors and
actuators embedded in physical objects - from roadways to pacemakers - and are linked
through wired and wireless networks, leveraging the Internet Protocol (IP). Industrial
controllers are starting to follow this trend by providing data refinement, local historians,
analytics, and advanced control at the source end devices. Modern controllers are
communicating with all levels of systems using the “IP plumbing” that is pervasive in
manufacturing plants, including capabilities to send email, ftp files, and serving up
webpages. Open communications is being supported using XML, SOAP, SNMP, and OPC
Unified Architecture (UA).
Thus, IoT and Industrial Automation industries have gained prominence with advances in
Cloud Computing & Big Data technologies in recent years where it will be investigated how
IoT will contribute to a smart and sustainable world using industrial automation using these
technologies largely in India, European Union & USA. The focus will be on how IoT will be
implemented using industrial automation using these technologies in retrofit and new cities
to make them smart as well as how the triple bottom line i.e. People, Planet and Profit will be
used to make it sustainable. Although, the main focus will be on European Union, the study
will examine the effects and comparisons of the various aspects (wherever applicable) of the
above in Asia Pacific (Australia & Singapore), USA and BRICS countries i.e. Brazil, Russia,
India, China and Republic of South Africa as well.

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3.0 LITERATURE REVIEW
Based on the historical perspective as detailed briefly in the introduction of IoT/IIoT or I²oT
and Industrial Automation, this section will review the ideas of various researchers and
authors of academic articles, interviews, publications, seminars and webinars to understand
the convergence of business processes, customer experience and human behaviour for
Information Technology (IT) and Operation Technology (OT) so as to create value in the
organization as well as for the stakeholders. This will also give the opportunity to probe
further into the ideas as well as provide more insight to develop research objectives and
questions. To have a smart and sustainable world as shown in Figure 3-1 below where
everything is smart needs to have a mission and vision for the following applications:
 Air Pollution
 Forest Fire Detection
 Intelligent Shopping
 Quality of Shipment Conditions
 Smart Lighting
 Smart Parking
 Smart Roads
 Smartphones Detection
 Structural Health
 Traffic Congestion
 Vehicle Auto-diagnosis
 Waste Management
 Water Leakages
 Water Quality
 Wine Quality Enhancing

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Figure 3-1: A Smart & Sustainable World (Source: Libelium)

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There are many articles on IoT like “Industrial automation industry exploring and
implementing IoT” by Bill Lydon which describes how IBM started its Smart Planet initiative
in 2008 and the same year, the non-profit IP for Smart Objects (IPSO) Alliance was started
with more than 50 members from technology, communications, and energy companies to
promote the IP for "smart object" communications. The dissertation will mainly draw from
many of these articles, structure them and analyse the results in these articles.
Further, how the renewable technologies which ensure the triple bottom line or 3P’s i.e.,
People, Planet and Profit along with Cloud Computing from major players like Google,
Microsoft, Oracle & Amazon and Data Management with Big Data (Saunders 2014) will
show the importance of Responsible Management practices like Corporate Social
Responsibility (CSR) (Microsoft 2015) and Sustainable Development (Gutterman et al. 2014)
for the future. We will also look how the various policies and rules will be changed by the
European Union to accommodate IoT as well as the other countries as mentioned previously
as described by Vermesan & Friess (2014).
3.1 HISTORY OF IOT, SERVICES AND ARCHITECTURES
The Siemens Future Forum presented at Hannover Messe 2014 by Guido Stephan where
he has described IoT and Services based on the various approaches towards evolution of
internet, market pull or technology push, hierarchical communication or vertical
communication, data centric development or information centric development and various
research examples and projects like Internet of Things Architecture (IoT-A) and ICeWater.
Guido has described how Internet has evolved from year 1969 to 2020 from ARPANET
(Research Networks), Email, Websites, Social Media, E-Commerce to Smart City and Smart
Grid i.e., Internet / Web of Things as shown in Figure 3-2 below. The market pull is leading
to cross-domain integration with new business models, efficient information sourcing and
process optimization for big data which is supported by technology push where very cheap

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sensors will allow ubiquitous web access to smallest field devices. This will lead to integrated
flexible M2M communication and networked embedded DCS.
Figure 3-2: From Internet to IoT (Source: Siemens)
The future communication will be vertical rather than horizontal considering it will be
seamless across domains with unified access and service oriented architecture (SOA) which
will be IP/Web based like Highway Addressable Remote Transducer Protocol (HART) IP &
Profinet DP/PA rather than diverse, specific communication protocols like HART,
WirelessHART, Profibus DP/PA and Foundation Fieldbus to name a few. This vertical
communication architecture applies also to Smart Grid solutions for Power Plants. Thus,
Guido Stephan highlights that IoT will bring about changes in the business models as well as
system architectures currently followed, will be developed in the future to be data centric,
information centric or a hybrid of both depending on the technology and industry application
as intelligent systems framework as shown in Figure 3-3 below.

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Figure 3-3: IoT: Intelligent Systems Framework (Source: Intel)
In addition to what Guido and Siemens has provided as a view of the IoT future for system
architectures for the industrial automation DCS, in my viewpoint, Cloud Computing and Big
Data will break the hierarchical communication followed as of today to a single-layered
communication which is IP/Web based so that each node as well as field device can
communicate seamlessly and integrate into any 3rd
Party Systems. This will lead to
disruption or integration of many organizations specifically capital equipment suppliers of
PLC and DCS.
3.2 INTERNET OF EVERYTHING AND IOE VALUE INDEX
The articles by Dave Evans (2011) from Cisco Internet Business Solutions Group (IBSG) &
Joseph Bradley et al (2013) on the how IoT is changing everything and the IoE Value Index
which can be assessed using the tool at http://ioeassessment.cisco.com/explore/full as well
as shown in Figure 3-4 below.

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Figure 3-4: Internet of Everything Value Index (Source: Cisco)
Dave Evans conveys that Internet has already created a huge impact on education,
communication, business, science, government, and humanity so it is one of the most
important and powerful creations in all of human history. There are many IoT projects in
progress that promise to close the gap between poor and rich, improve distribution of the
world’s resources to those who need them most, and help us understand our planet so we
can be more proactive and less reactive. There are several barriers that exist which threaten
to slow IoT development, including the transition to IPv6, having a common set of standards,
and developing energy sources for millions—even billions—of minute sensors.
In January 2009, a team of researchers in China studied Internet routing data in six-month
intervals, from December 2001 to December 2006. Similar to the properties of Moore’s Law,
their findings showed that the Internet doubles in size every 5.32 years. Using this figure in

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combination with the number of devices connected to the Internet in 2003 (500 million, as
determined by Forrester Research), and the world population according to the U.S. Census
Bureau, Cisco IBSG estimated the number of connected devices per person. Cisco IBSG
estimates IoT was “born” sometime between 2008 and 2009 as shown in Figure 3-5 below.
Figure 3-5: The IoT was “born” between 2008 & 2009 (Source: Cisco IBSG)
Thus, as per Cisco IBSG estimates there will be 50 billion connected devices by year 2020
considering the factor of 6.58 connected devices per person. This is just an approximation
as of today which can change drastically to a higher value as more devices are connecting
to internet everyday as cows, water pipes, people, and even shoes, trees, and animals
become connected to IoT, the world has the potential to become a better place based on the
initiatives and advances, such as Cisco’s Planetary Skin, HP’s central nervous system for
the earth (CeNSE), and smart dust. As depicted in Figure 2-2, IoT can be viewed as network
of individual networks like Home, Education, Transport, Energy, Business, Earth and many
Others where each network is connected together with added security, analytics and
management.

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The IoE value index report which is the calculation of the Net Present Value (NPV) of firms
for 10 year period from 2013-2022 shows that firms in developed countries like Germany
and France are currently realizing the most IoE value. Germany and France combined value
at stake is around $146.9 Billion but the emerging countries like BRICS are not far behind
with Brazil, China and India combined value at stake being $226.5 Billion as shown in Figure
3-6 below. US Firms only have the largest value at stake being $472.9 Billion.
Figure 3-6: Firms in Countries realizing IoE Value
Also, IT-driven industries like high tech / telecoms are realizing the greatest share of the IoE
value followed by Financial services, Services and Healthcare / Life sciences as shown in
Figure 3-7 below but Manufacturing and Energy which represent the Industrial Automation
industry have combined value at stake being $279.4 Billion are not far behind. Services
industry has the only largest value at stake being $276.9 Billion.

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Figure 3-7: IT-Driven Industries realizing greatest IoE Value
3.3 EVOLUTION OF HUMANS, INTERNET AND IOT
As we have seen in Figure 3-2, Internet or Web has been through four stages of evolution or
development where IoT is considered as the first real evolution of the Internet—a leap that
will lead to revolutionary applications that have the potential to dramatically improve the way
people live, learn, work, and entertain themselves. Already, IoT has made the Internet
sensory (temperature, pressure, vibration, light, moisture, stress), allowing us to become
more proactive and less reactive. Also, Internet is expanding into places that until now have
been unreachable like patients are ingesting Internet devices into their own bodies to help
doctors diagnose and determine the causes of certain diseases and extremely small sensors
can be placed on plants, animals, and geologic features, and connected to the Internet. At
the other end of the spectrum, the Internet is going into space through Cisco’s Internet
Routing in Space (IRIS) program.

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We as humans evolve because we communicate as can be seen from the Data, Information,
Knowledge, and Wisdom (DIKW) model shown in Figure 3-8 below where the benefit to
humanity becomes more important as we go to the top of the pyramid.
Figure 3-8: DIKW Model (Source: Cisco)
Humans process data which is the raw material that is processed into information. Individual
data by itself is not very useful, but volumes of it can identify trends and patterns. This and
other sources of information come together to form knowledge. In the simplest sense,
knowledge is information of which someone is aware. Wisdom is then born from knowledge
plus experience. While knowledge changes over time, wisdom is timeless, and it all begins
with the acquisition of data. Thus, for Humans there is a direct correlation between the input
(data) and output (wisdom). The more data that is created, the more knowledge and wisdom
people can obtain. IoT dramatically increases the amount of data available for us to process.
This, coupled with the Internet’s ability to communicate this data, will enable people to
advance even further. Thus, IoT has become critical for human progression as the planet’s
population continues to increase, making people to become stewards of the earth and its
resources. In addition, people desire to live healthy, fulfilling, and comfortable lives for
themselves, their families, and those they care about. By combining the ability of the next
evolution of the Internet (IoT) to sense, collect, transmit, analyze, and distribute data on a
massive scale with the way people process information, humanity will have the knowledge

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and wisdom it needs not only to survive, but to thrive in the coming months, years, decades,
and centuries.
One of the areas where IoT can make a significant difference is in closing the poverty gap.
Dr. C.K. Prahalad { (Prahalad & Hammond 2002), (Prahalad 2005) & (Prahalad 2012) }
provides some mind-boggling statics comparing Dharavi (the poorest neighborhood in
Mumbai) to Warden Road (the better side of the city just blocks away). The amount people
from Dharavi paying for municipal-grade water is $1.12 per cubic meter as compared to
$0.03 for residents of Warden Road so the injustice is clear: the poor people of Mumbai pay
37 times more for water (a basic human necessity). The main source of the disparity is the
higher cost of delivering utility services to poorer neighborhoods because of infrastructure
inefficiencies, problems such as leaks, and theft. According to an article in The Wall Street
Journal, “Seven years ago, more than 50 percent of the power distributed by North Delhi
Power Ltd. wasn't paid for by customers. A key challenge for power companies is reducing
theft by India's poor.” IoT, because of its ubiquitous sensors and connected systems, will
provide authorities with more information and control in order to identify and fix these
problems. This will allow utilities to operate more profitably, giving them extra incentive to
improve infrastructures in poorer neighborhoods. More efficiency will also allow for lower
prices, which, in turn, will encourage those taking services for free to become paying
customers at the Bottom of Pyramid (BoP).
As depicted in the Digital Agenda EU (Commission 2013), IoT can provide better quality of
life for the surging number of elderly people as the world’s population is aging. There are
approximately 1 Billion people age 65 and older who will be classified as having reached
“non-working age” by the middle of the century. For example, imagine a small, wearable
device that can detect a person’s vital signs and send an alert to a healthcare professional
when a certain threshold has been reached, or sense when a person has fallen down and
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There are several barriers and challenges for IoT that have the potential to slow its
development of which the four major ones are deployment of IPv6, power or energy for the
sensors, agreement on standards and cyber security. IEEE is just one of the organizations
working to solve these challenges by ensuring that IPv6 packets can be routed across
different network types. While barriers and challenges exist, they are not insurmountable and
given the benefits of IoT, these issues will get worked out soon. This effort will require
businesses, governments, standards organizations, and academia to work together toward a
common goal. Thus, in conclusion, IoT truly represents the evolution of internet so to gain
acceptance among the general populace, service providers and others it must deliver
applications that bring tangible value to peoples’ lives using the DIKW Model.
3.4 OVERCOMING IOT CHALLENGES USING METCALFE’S LAW
Silicon Laboratories Inc. is bringing IoT to life by overcoming the challenges for connecting
Intelligent Nodes using Metcalfe’s Law as shown in Figure 3-9 below.
Figure 3-9: Metcalfe’s Law depicting Value of Network=N²
According to Metcalfe’s Law, the value of a network is equal to the square of the number of
devices connected to it. At the edge of the IoT are the appliances and equipment
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GHz, Wi-Fi or power line communications (PLC) connectivity to provide a robust bidirectional
communications link with relatively long range, low latency for fast responsiveness, low
power and a sufficient data rate to aggregate information from many connected devices.
This infrastructure also serves as the gateway to the Internet and enables remote monitoring
and control of devices by other networks, utility companies and end users. The majority of
connected devices in the IoT are nodes located at the so-called “last inch” of the network.
These nodes contain microcontrollers (MCUs), wireless devices, sensors and actuators that
provide the brains, eyes and fingers of the IoT.
The ZigBee is an open global wireless protocol standard that addresses the needs of low-
cost, low-power networks that connect IoT devices such as home automation; (automating
functions like opening doors, garage openers, water sprinklers, etc.); environment control
like temperature; controlling traffic; and other IoT devices and not just home automation. The
range is around 10 to 100 meters and a ZigBee network can support 1000's of end devices.
Technically speaking the ZigBee standard operates on IEEE 802.15.4 (physical and MAC
layers) physical radio specification and operates in unlicensed bands 2.4GHZ, 900MHZ and
868MHZ as shown in Figure 3-10 below.
Figure 3-10: ZigBee Protocol OSI Model
The ZigBee components are Coordinator, Router and End device which are connected in a
mesh or a star network as shown in Figure 3-11 below. The coordinator which is installed
first as well as the routers which join the ZigBee network next are always up and the end

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devices (bulbs, thermostats, etc.) that join later are usually battery operated can stay up or
down.
Figure 3-11: ZigBee Network
The ZigBee protocol has been created and ratified by member companies belonging to the
ZigBee alliance (http://www.zigbee.org/zigbeealliance/our-members/) consisting of more
than 300 leading semiconductor manufacturers; technology companies; service providers;
and OEMs. ZigBee being an open standard, the adoption will be slow and vendors add their
own special tweaks. XBee is a special kind of ZigBee manufactured by Digi International
(Refer www.digi.com). The benefits to the users is through:
 Higher Efficiency
 Proactive Usage
 Proactive Maintenance
 Single Control Interface
 Ease-of-Use
Thus, IoT enables electronic component suppliers, software vendors, OEMs and service
providers to focus on their core competencies and leverage the strengths of partnership to
create compelling applications for consumers using ZigBee, 6LoWPAN and Sub-GHz
protocols. Thus, employing a mesh topology is ideal for many IoT applications as Bluetooth

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is limited to just seven devices on a network and Wi-Fi to 32. It is better to use Silicon Labs
EmberZNet PRO protocol stack provides a ZigBee-compliant software solution for IoT
applications as it can be extended to interconnect 100’s or potentially 1000’s of devices on a
single network.
Real innovation will occur in software technology where ZigBee standard profiles, such as
ZigBee Smart Energy, ZigBee Home Automation, ZigBee Building Automation and ZigBee
Light Link, provide interoperable platforms that simplify the development of IoT applications
for smart homes and commercial buildings, intelligent lighting control systems, smart meters
and in-home energy monitoring systems. This is possible with Interoperability through
Standard Protocols, Achieving Ultra-Low Power Efficiency, Accelerated Software &
Application Design and finally, Faster Time-to-Market for IoT Applications.
The IoT will continue to open new markets and drive new applications and opportunities for
OEMs and application developers across all industries. IoT has become a tangible reality
with commercially successful deployments in several markets, including connected home
and green energy applications. What many OEMs and their suppliers want to know is when
the IoT is going to grow out of its infancy and achieve the critical mass necessary to become
a 10 M+ unit market. With the availability of the fundamental technologies, products,
software and tools necessary to create efficient, ultra-low power devices for the last inch, it is
clear the answer is now.
3.5 INDUSTRIAL AUTOMATION INDUSTRY DEPLOYING IOT
In the article by Bill Lydon, he has described how Industrial Automation industry is exploring
and implementing the IoT Vision which is a massively instrumented world of intelligent
sensors (analog and digital) and actuators (analog and digital) communicating using IP to
improve performance and efficiency. Industrial automation has a history of adopting
commercial technology as it becomes mainstream, and applying IoT technologies to improve
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IoT applied to Industrial Automation will use this technology to streamline, collapse, and
create system architectures that are more affordable, responsive, and effective. The goal is
to have frictionless communications and interaction from manufacturing field input/output
(I/O), including sensors, actuators, analyzers, drives, vision, video, and robotics, for
increased manufacturing performance and flexibility. This revolution will drive intelligence to
the edge of the system with the ultimate goal of all industrial devices supporting IP, including
field I/O. Wireless IP devices, including smartphones, tablets, and sensors, are already
being used in manufacturing. The wireless sensor I/O open standards like WirelessHART,
ISA100, and WIA-PA are all IP devices supporting the latest IPv6 standards, which leverage
larger address spaces and improved cybersecurity standards.
The following research questions were asked by Bill Lydon to the executive leaders working
for the Industrial Automation suppliers namely:
1) What is your functional definition of the IoT?
2) How will Industrial Automation systems change to achieve the goals of the IoT?
3) What products (hardware/software) do you deliver today that are components for
users to deploy the IoT?
4) What products (hardware/software) will you be delivering in the next 1 year that are
components for users to deploy the IoT?
These questions become quite significant considering the issues like Cyber Security which
require ISASecure EDSA (Embedded Device Security Assurance) certification and “safety
integrity level” certification (ISO/IEC 61508) as well as the Competitive Risks like adopting
these technologies before they are proven and not adopting them when they are stable and
before competitors use the technologies to outperform them in the marketplace.
Professor Detlef Zühlke, Ph.D., Scientific Director at Innovative Factory Systems at the
German Research Center for Artificial Intelligence discussed the Smart Factory initiative at
the Hannover Messe 2014 where he described the need for standards, including physical,

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mechanical, pneumatic, and communication, to accomplish more efficiency and functionality
to achieve Industry 4.0. The standards that support these concepts, including OPC UA,
WSDL, EDDL, and IEC 61499 need flexible horizontal and vertical communications between
controllers, field devices, and enterprise systems.
OPC UA provides secure communications using established computer industry standards,
including IP and Web services, to allow the multitudes of devices to gather and convert
remote data into useful information to make intelligent decisions. The IoT with OPC UA
provides a unique opportunity to leverage volumes of sensor data in applications to improve
operations and efficiency in a wide range of applications.
PLCopen provides the technology to make the information in the controller accessible in a
harmonized way. This means that communication on the factory floor is becoming possible
“out-of-the-box”. PLCopen even provides machine-to-machine communication, as well as
machine-to-cloud communication, connecting the controller to the world and the world to the
controller.
Thus, PLCopen and OPC Foundation have together developed PLCopen IEC 61131-3
function blocks that incorporate OPC UA as Integrated Web Services as shown below.
The answers to these research questions by the executive leaders can be summarized as
follows:

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1) The core characteristics of IoT are:
 Devices need to be intelligent.
 There needs to be an infrastructure that supports the devices.
 Analytics and optimization are the third component.
 The distribution of information is another key element.
 There needs to be an organization to consume the information produced.
The above can be summarized as intelligent devices with seamless interoperability
capable of acting in a collaborative fashion to achieve business benefit in a cost-
effective way. Thus, IoT is really pulling together the major buzzwords and trends
used today:
 devices produce data
 which needs to be stored (big data)
 on some type of infrastructure (cloud computing)
 with analytics using the data (analytics/data mining)
 and distributing the information (mobility)
Industrial Automation impact will be that it will propagate the concept of stand-alone
subsystems as part of a larger mesh.
2) The Industrial Internet or the IoT is the infrastructure connecting previously
unconnected industrial machines, devices, and sensors, such as packaging
machinery, semiconductor photolithography tools, robots, motors, photoelectric
sensors, and numerous other industrial objects. It drives customer value through
connectivity across machines, data, insights, people, and business operations using
ERP systems. The IoT enablers create value through the combination of one or more
of the following:

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 Improved Asset Performance
 New Service Models
 Higher Customer Intimacy
The pervasive nature of the IoT allows more devices to be "configured for purpose"
on the fly and then communicate, not only centrally, but to each other to improve
efficiency, reduce cost, and improve safety. IoT will essentially complete the full
supply chain. When fully leveraged, IoT could mean better inventory management,
pulled production instead of pushed production, accurate activity-based costing, and
automatically adjusted logistics that adapt to changes in the manufacturing layer (and
vice versa). The Industrial Automation impact is seeing the move from separate or
distinct MES/SCADA systems to direct integration with ERP systems and automation
networks will use data to self-configure, self-regulate, and suggest efficiency
improvements. ERP systems today have flexible/configurable web-enabled screens
that process the information, including ERP for production information, enterprise
asset management for maintenance, data vault for business intelligence, and
analytics. Once the data is collected from the machine sensors, it is important to use
pre-configuration tools, such as OPC, to classify the information. Having that data
and the resulting live visibility directly in the ERP can improve everything from real-
time scheduling and error handling to alerting and reporting. With today's real-time
orders, including just-in-time, Kanban, and Lean, ERP must stay in perfect
communication with the shop floor. Many of the decisions an operator currently
makes will soon be made by the machine themselves, freeing the operator to focus
on improving the efficiency of the system, addressing things like energy usage,
security, safety, and process tuning. Additionally, industrial operators will morph into
a cross between industrial engineers, computing experts, and data scientists.
Thus, IoT with IP-enabled manufacturing automation architecture with built-in Web server
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sensors/actuators with embedded processors, eliminating the need for middle-level software
that is cumbersome, expensive, and difficult to maintain. This will be achieved in three
phases namely horizontal or M2M communication, vertical communication and last phase of
analysis of data for production efficiencies. IoT will help us to keep focus in the challenging
world of the convergence of Information Technology and Industrial Automation for global
competition, fast-changing consumer tastes and increased profitability.
Similar to the Software Engineering Institute (SEI) Capability Maturity Model (CMM), IoT will
follow the IoT Maturity Model (IoTMM) as shown in Figure 3-12 below for the
Programs/Projects from Primitive phase to Optimized phase for both software development
and people development processes to reach converged technology and unified intelligent
solutions.
Figure 3-12: IoT Maturity Model (IoTMM)

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3.6 BENEFITS OF INDUSTRIAL IOT
The article by Herman Storey (2013) on IIoT or I²oT which dwells into the following questions
for industrial applications space rather than consumer applications and products for which
IoT is already much in news. These important questions are:
1) Should Industrial users embrace IP networking?
2) Is it necessary or even beneficial?
3) Why, Why Not, What & How?
Smart devices should be able to communicate with each other or with human interfaces
anywhere on the planet—thus driving improvements in productivity. I²oT must give priority to
security, robustness, and timeliness requirements of automation networks while providing for
remote access as a secondary requirement. In the Automation World, I²oT represents the
opportunity for partial convergence of industrial automation communication on a grand scale
by allowing improvements in functionality, security, flexibility, ease of use, and cost savings.
In the long run, it will be beneficial for vendors as well as users but in the short run, it is
disruptive technology requiring changes to organizational structure, resources and
leadership which needs to be adaptive as it will cross organizational lines and blur
distinctions between foundations. I²oT does not have a home yet with the Industrial
Automation World.
The model for I²oT are Essential Elements, Applications and IPv6. Multiple interfaces are
necessary to support all of them considering the future of industrial communications
technology. Switching and routing, common sense of time (event tagging & security),
architecture (ISA 100.15 gives models & terminology), common network management (ISA
100.20), common security management and specifications & profiles to support compliance
certification. Technology migration should be plug and play not plug and pray so the
technology solutions we create must be easy, flexible and powerful as mentioned by Rick
Bullota. “If market forces do eventually drive this convergence, it is safe to assume that it will

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happen very slowly and chaotically under market conditions.” Lead organization is required
as many organizations are involved and no organization is well positioned to take lead.
As Daniel Drolet, Executive Vice President of PCN Technology Inc. has considered I²oT as
two ends of spectrum with one end as Industrial Automation & Control with other end as
consumer or human interface. This he has highlighted by stating “Don’t miss the <big
space> in the middle” as well as “Society cannot simply shut down to replace legacy
infrastructure with new IP based communication infrastructure.” To have a successful IoT or
I²oT, the focus should be on the interconnectivity of the two ends of the spectrum by
enabling intelligent infrastructure for the continuum in the middle for managed migrations to
Industrial Internet within industrial systems, energy, oil & gas, transportation, and other
industries. Thus, building a positive outcome will need a lead organization or a consortium of
organizations for a successful effort.
3.7 IOT OR I²OT AS AUTOMATION INVESTMENT OPPORTUNITY
There is big money backing I²oT, Big Data and Industrie 4.0 (Industry 4.0) as these are
considered automation investment opportunities (Kowal 2014) to ensure that the systems
are updated with intelligent manufacturing efforts. Stingy Capital budgets have prevented
widespread adoption of important functions of I²oT such as predictive maintenance,
networked safety, energy monitoring and advanced diagnostics. So, the IoT or Industry 4.0
strategy is to pick a secure data acquisition cloud service to manage global operations from
a centralized engineering department for performing predictive maintenance, energy
management, and overall equipment effectiveness (OEE) across all lines and all plants
everywhere by using standards like ISA/IEC-62443 (formerly ISA-99) for automation system
security and ISA TR.88.00.02 (PackML) which can help even beyond packaging like for all
manufacturing state models, modes, and tag names. Thus, the key concepts for I²oT are:
 Internet Protocol technologies are quickly moving to Industrial applications.

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 The IoT offers many potential benefits for industrial users but only in the right
contexts.
 A careful and purposeful approach can make adoption more practical and avoid
many pitfalls.
Executives see transformational impact of IoT as devices become smarter and more
integrated to expand manufacturing efficiency. IT and OT convergence will drive IoT
adoption which is a reality today as billions of devices are already connected through IoT
with the challenge being lower overall costs and data security. In the 2014 IoT World Forum
in Chicago on October 14-16, Rockwell Automation Chairman and CEO Keith Nosbusch
said “Only a few of the most progressive manufacturers have truly been able to bridge the
IT/OT gap.” Schneider Electric Chief Technology Officer Pascal Brosset cited the example of
MMG Mining, which increased mining capacity by 20% and added $1 billion to the
company’s bottom line just through instrumenting every asset in the mine. Brosset said “One
thing our customers expect is to make it cheaper. To me, that’s one thing we don’t talk
enough about. When you take the price down, then growth is exponential. By getting the
data, you constantly monitor performance of every asset.”
The potential benefits of deploying the I²oT for manufacturers as described by Tom Mariano
(2015) are:
 Introducing equipment data tracking, remote equipment service, and predictive failure
analysis can improve product reliability and minimize downtime.
 Acting on this information in real-time can boost customer’s return on investment
(ROI) through productivity and quality gains.
 Automating the operation of equipment can result in lower customer labor costs and
increased manufacturing throughput.
 Leveraging the knowledge gained from 24/7 connectivity can ultimately increase
long-term market share through product performance improvements.

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This is a proactive approach for enabling intelligent manufacturing solutions by using web-
enabled sensors embedded in physical objects to gather, track, and analyze data in the
cloud, then acting on that information.
3.8 SECURITY & CREATING VALUE IN THE IOT WORLD
Security in the IoT World is extremely important as quoted by Travis Hessman (2013) ‘When
everything is online, security is everyone’s job’. In the connected world of manufacturing and
industrial automation, there have been many structured and targeted attacks lately like
stuxnet in June 2010 and car hacking of self-driven cars. These attacks have related
technical issues, financial issues and social issues which are risks in the IoT World. Mild
attacks on an unprotected connected control system costs $40 to $80 billion each year
which escalates to a higher value when their operations are targeted. By 2020, these attacks
will lead to chaos and even loss of lives as billions of devices will be connected to Internet so
all organizations rather than only security organizations should work together as integrated
teams. Cyber underground has pumped $3 billion into the attack capability while security
firms are only pumping millions into new antivirus and firewall programs which shows the
huge gap and the necessity for ensuring security is part of everyone’s business including
engineers, designers, planners and operations. This calls for a new cybersecurity plan which
is shared between huge online MES, industrial automation and security organizations for
rethinking safety in the IoT World. Thus, security is a very important requirement for a smart
and sustainable world using IoT for Industrial Automation.
During a recent webinar by SAP and OSIsoft on July 24, 2015 announcing their shared
interests for creating value for customers by a complete IoT software offering for both
business and industrial processes using SAP HANA Cloud Platform and Big Data Platform
with Hadoop (HDFS) plus SPARK Cluster Manager. This value is created by the IT and OT
convergence as shown in Figure 3-13 below where the strategy, architecture, security,

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governance and hardware need to be reimagined from business processes, customer
experience and human behavior viewpoints.
Figure 3-13: The IT and OT Convergence (Source: SAP & OSIsoft)
I²oT technologies are creating value by improving:
 Asset Health & Uptime
 Operating & Production Performance
 Safety & Risk Management
 Logistics Optimization
 Worker Experience
 Business Process Improvement
Thus, the IoT mission and vision to ensure sustainable development and support triple
bottom line needs to combine the different transitions of business and technology with the
corporate transition as defined by Allen White, Vice President, Tellus Institute together with
Pavan Sukhdev, Yale University called the Corporation 2020. The four clear mechanisms by
which this corporate redesign can be achieved are:

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 Disclosing corporate externalities like Carbon Emissions;
 Putting taxes on resources extraction like natural water and mining;
 Enacting limits to financial leverage &
 Making advertising accountable.
Thus, the new industrial automation corporation getting transformed by IoT to have a smart
and sustainable world should have the following goals:
 Harness private interests to serve the public interest.
 Accrue fair returns for shareholders, but not at the expense of the legitimate interests
of other stakeholders.
 Operate sustainably, meeting the needs of the present generation without
compromising the ability of future generations to meet their needs.
 Distribute their wealth equitably among those who contribute to its creation.
 Governed in a manner that is participatory, transparent, ethical, and accountable.
 Human capital is the key so never infringe on the right of natural persons to govern
themselves, nor infringe on other universal human rights.
4.0 PURPOSE OF THE RESEARCH
The main purpose of this research is to use IoT for Industrial Automation equipment
suppliers to enable things to be connected anytime, anyplace, with anything and anyone
ideally using any path/network and any service.
4.1 RESEARCH OBJECTIVES
The research objectives of this dissertation/thesis are threefold:

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 The first objective of this research is to provide information to organizations and
entrepreneurs interested in implementing a new business plan by using IoT for
Industrial Automation in India, Australia and France. This research will allow them to
avoid potential problems faced by various stakeholders.
 The second objective is define the business plan by using IoT vision and IoT
applications that can be improved with sensing and control using industrial automation,
including health care, traffic control, vehicle safety, energy use, agriculture, and
manufacturing. This vision includes coupling massive sensing and control with big data
and analytics to accomplish advanced levels of optimization and efficiency in European
Union, Asia Pacific (Australia & Singapore), USA and BRICS countries i.e. Brazil,
Russia, India, China and Republic of South Africa.
 The third objective is to give valuable advice to managers in India, Australia and France
who want to improve the industrial automation business plan and strategy in their
organizations using IoT technologies like Cloud/Fog Computing, Big Data/Analytics.
4.2 RESEARCH QUESTIONS
The core research question is:
 How is smart and sustainable world possible with Internet of Things (IoT) vision and
applications?
Other queries that need to be addressed in line with the core question:
 How to explore and implement IoT for Industrial Automation industry using Amazon,
Google, Microsoft & Oracle products?
 What are the policies and technology changes required so that the triple bottom line
(TBL) is maintained and sustainability achieved?
 What are the policies and technology changes required so that the triple bottom line
(TBL) is maintained and sustainability achieved?

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5.0 RESEARCH METHODOLOGY AND DESIGN
In order to conduct the study and bring the elements of answers to the problem, a qualitative
approach was adopted. The choice is justified by the nature of our work which consists in
analysing the mission and vision of IoT and evaluation of the effects of this on Industrial
Automation strategy, investments, processes, policies, architectures, standards and
organization stakeholders and to try to develop a business plan to help organizations to have
a clear view of this field yet not really understood by all.
We have two sources of data, primary one from interviews of top managers and a
questionnaire with 10 questions undertook by many company managers or employees.
Indeed, the primary data gathered from semi-structured interviews using a sample
composed of global MNC organizations.
The managers interviewed about their organization IoT strategy or initiatives are either
company’s CEO, director/head of Engineering or R&D departments or in charge of CSR.
The interviews were recorded with the participants’ authorization, and they also agreed to be
cited in the research report. The funnelling technique was used to guide the interview.
These interviews were conducted out of the manager office, usually in a cafeteria to have
them speak openly and freely.
These interviews are extremely important to figure out the policy and the decision making
process in this field, according to Saunders, Lewis and Thornhill (2009, p. 320) ‘the order of
questions may also be varied depending on the flow of the conversation and may vary from
interview to interview’.
In the meanwhile, interaction is very important in fact managers may not be aware of the
latest IoT new approaches. Besides, interviews reveal more the human touch as far as the
research is more focused on the IoT policy related to stakeholders rather than focusing only
on wireless technologies, cyber security, carbon footprint or virtualization.
The interview questions were divided into five categories:

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 Category A: IoT Mission, Vision & Goals
 Category B: IoT Sustainable Development Solutions
 Category C: IoT Product & Service Life Cycle Management
 Category D: IoT Organization Governance, Processes & Policies
 Category E: IoT Human Capital & Investments
In addition, a secondary source of data using a small-scale survey. This survey’s data
source is there to complete the analysis due the technical aspect of the research topic.
The survey was completed on surveymonkey.com of about 10 questions some of them very
technical. Therefore it was difficult to ask them those technical questions during interviews.
In general this task takes time to complete and the participants have limited time to dedicate
to the interviews and depending on the position of the interviewee in their department they
may not have straightaway the answers.
Finally, in the discussion of the findings we use the qualitative data to help us understand the
patterns in the quantitative analysis.
6.0 BUSINESS PLAN FOR IOT
Deem Sensing Technologies (DST) Private Limited, India (Nambiar 2015) formed a new
department in 2013 for Automation Systems, MES and System Integration Solutions to be
recognized as an emerging market leader for new IoT Products and Services in Industrial
Automation industry together with DNK Technologies & Solutions Pty Ltd, Australia (Kandpal
2015) & outsource company iPAC Automation, India (Sanap 2015) through value proposition
of providing good quality, on-time delivery and cost reduction to our Customers by offering
Cloud Solutions for EMS (Energy Management System), WMS (Water Management
System) and DCM (Data Centre Monitoring) as shown in Figure 6-1 below.

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Figure 6-1: Products & Services for IoT
This Business Venture will be providing Private/Hybrid Cloud for these three main solutions
namely EMS, WMS and DCM as shown in Figure 6-2 below.
Figure 6-2: DST Cloud Offering for IoT
These three solutions are detailed as shown in Figure 6-3, Figure 6-4 and Figure 6-5 below.

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Figure 6-3: EMS Solution for IoT by DST
Figure 6-4: WMS Solution for IoT by DST

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Figure 6-5: DCM Solution for IoT by DST
6.1 INDIA STRATEGY AND MARKETING
6.1.1 INDIA MARKET REVIEW
IoT already being recognized as the next emerging field in IT for India. Indian Government is
working on taking the right steps to encourage this industry.
The key areas for India to use the IoT are the following:
a) Transport: Huge unsaturated market mainly in private transport-buses, cars, taxi’s
both for comfort and for safety i.e. GPS tracking systems, anti-theft solutions etc. So
far this market is highly unsaturated and if these devices are introduced at an
affordable prize it has huge volume which can be tapped.
b) Buildings & Homes: Flats, plots (upper middle class i.e. houses between 40-60
Lakhs) are potential market which can be affordable for this segments and will add
value to their living conditions. This market segment is the upwardly mobile segment
and hence offers an immediate potential as customers.

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c) SMEs: Auto manufacturing, pharmaceuticals etc.: revolute supply chain management
by networking machinery, sensors and control systems together which aims to reach
the JIT inventories (Honda, Big C), automated manufacturing, forward and backward
integration, optimize resources in order to increase the capacity and strengthen firm’s
competitive advantage
d) Healthcare: Hospitals, clinics, doctors working in rural and urban areas. This is a
hugely promising segment with a lot of rural areas which need to be covered. Here IoT
can bring value in helping healthcare to reach the rural area effectively and at
affordable cost. The government may also help in this segment through policies and
procedures in the future. One such example is the Industry-academia collaboration in
Bangalore-Robert Bosch Centre for Cyber Physical Systems at IISc (health indicators
of individuals, which are stored and controlled on their own devices also and not just
central data servers)-some applications
 Bluetooth sensors to track hand hygiene habits of medical staff in St John’s
Hospital in Bangalore,
 Sensor networks to help irrigation efficiency for Indian farmers
 Motion tracking in post-operative therapy for Narayana Hrudayalaya patients
e) Government Projects: Infrastructure: monitor and control the operations of
infrastructure such as: bridges, high way, railways track then increase the system’s
supply efficiency and reduce risk. IoT devices can be used in scheduling repair and
maintenance activities by coordinating tasks between infrastructure providers and
users. This is a huge market with the government having declared that building
infrastructure is one of the key priorities. Thus the government is in the process of
simplifying the procedures to facilitate industry participation in the nationwide
infrastructure projects. Further to this the government has announced the project for
building 100 smart cities in India and hence this will generate a huge market for IoT in
the near future.

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6.1.2 TARGET MARKET SEGMENT STRATEGY
The business venture aim is to approach 3 main markets: healthcare, energy management
and public service. As mentioned by David Wilan in B2B Market Segmentation (Figure 6-6),
Circle Research White Paper, the target market can be segmented based on: company
features; buying or usage behaviors; needs, preferences and desired relationship and the
attitudes.
Figure 6-6: B2B Segmentation Dimensions
1. Company Features: we focus on the segment of these companies with the
characteristics as following: SME with revenue from 1 million to 3 million USD and total
employees around 200 people in sectors: healthcare, energy management and public
service, located in Bangalore
2. Buying or Usage Behaviors: firms need a package management system includes
technologic devices and implementing support for internal development. The company
choose the suppliers based on the reputation of the suppliers and quality of products
and service; attitude to decision: high-involvement products thus need long time
consideration and complex decision making

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3. Needs, Preferences and Desired Relationship: products which are price sensitivity
will be provided in full package with devices and technology support; promoted by
direct sale and through business relationship
4. Attitudes:
 Business criticality of the product or service: high important
 Desired relationship: partnership
 Level of expertise and knowledge: high
 Level of inertia and loyalty: high
6.1.3 COMPETITION AND BUYING PATTERNS
Analysis of the competitors shows that most of them are competing in highly specialized
areas and are small software based. Hence we will have an edge as we are integrated
(manufacturing, hardware, service, maintenance) and in more diversified products
Other factors which will boost this Industry:
 Hardware Electronic Manufacturing to get big boost from India (Make in India
campaign) since presently a high % is being imported-some projections:
 India’s National Policy on Electronics (NPE) aims at investing about US$ 100 billion in
the electronics industry by 2020 (chip design and embedded software will be one major
area)
 Indian Government initiatives in forming guidelines for this Industry considering its
potential
 Indian Government initiative of 100 smart cities will also propel this industry
 Bangalore is the hub of IT and start ups
 Electronic manufacturing also strong in Bangalore.
 Can be a base for South India
Main Competitors: Sensegiz, GetActive, ConnectM, Altizon Systems, Connovate
Technologies, Cariq, Entrib Shopworx, Teewe and Lifeplot (Mapping)

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6.2 INDIA VALUE CHAIN AND SALES
6.2.1 COMPETITIVE ADVANTAGE
The MD/CEO has its own manufacturing unit in this industry for 9 years in Bangalore and is
well connected in this industry (vendors, big organizations etc.). Also, MD is well connected
and well versed with the bureaucracy in this industry and other players (builders, government
officials, industry leaders) in state of Karnataka and Kerala.
The Director has 25 years of experience and is well connected in this industry; well versed in
writing tenders for this industry both for government and private industry; Also an expert in IoT
Place: Bangalore is suited to cover both Karnataka, TN and Kerala
Good relations with all the vendors who manufacture exclusively for this industry and are
difficult to have access to. Partnership with some of the important vendors.
Very few players have entered and market is huge and unsaturated (right time to enter)
Some of the investment needed for any such start-ups is avoided by using office spaces
already available with the founders (one in Bangalore and one in Mumbai) and strategic
collaborations with some of the manufacturers
Finally, IoT contains multiple products and several combination of business from
manufacturing to installing to service/maintenance and hence need a multi departmental
infrastructure which is inherently hard to have within one roof for a startup. This is overcome
because of the many collaborations and access to skill sets which the founders/top
management has. This gives it a competitive edge over other startups.
6.2.2 SALES FORECAST
Sales projection for the first 4 years of the business will be showed in the table below. The low
sale in Year 1 due to the small amount of customers because the company has just launched,
however, sale expectation will be double in the following year due to the increase of sale men
and marketing activities. Year 3 and Year 4 are expected to be double and triple for the reason

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that the growth of sale team and new products launched as well as company’s good
reputation.
6.2.2.1 TABLE: SALES FORECAST
Sales : k$ Year 1 Year 2 Year 3 Year 4
EMS 200 400 640 800
WMS 60 180 360 360
DCM 84 240 384 480
Total Sales 344 820 1,384 1,640
Direct Cost of Sales Year 1 Year 2 Year 3 Year 4
EMS 100 200 320 400
WMS 20 60 120 120
DCM 42 120 192 240
Subtotal Direct Cost of Sales 162 380 632 760
6.2.3 MILESTONES
The milestones for IoT Business Plan is as shown in the table below.
6.2.3.1 TABLE: MILESTONES
Milestone Start Date End Date Budget Manager Department
NDA Collaboration 1/6/15 30/6/15 $0 Deepak Services
Outsourcing 1/7/15 20/7/15 $0 Deepak Services
Totals $0
6.3 INDIA FINANCE AND ACCOUNTING
This is a very crucial part of the Business Plan for IoT as the start-up funding is key for
success.

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6.3.1 START-UP FUNDING
At the beginning, the company fact with some issue like less customers, small market share.
The expenses will be higher than the revenue because the sales cannot make up the loss.
By spending more money into marketing and sales force, the company increases the sales
number, expands the market share in the next year, so the expenses increase more in first
year but the loss are less and we make a little profit. Continuing with this strategy, we will
expand the market and increase the revenue in next two years. In first year, we will receive $
4,000,000 to invest in Private/Hybrid Cloud system. This action will ensure DST takes
advantage in the market that will grow up to $ 14.4 trillion by end of 2022. Besides this
gradual investment every year for the next 3 years in order to install the new product
development.
6.3.1.1 TABLE: CAPEX
Cash Flow Year 1 Year 2 Year 3 Year 4
Beginning Cash $50,000 $3,963,450 $10,080,250 $10,279,650
Gross Margin $182,000 $440,000 $752,000 $880,000
Expenses $(261,550) $(320,200) $(543,600) $(589,000)
Investment $4,000,000 $2,000,000 $2,000,000 $2,000,000
Capital Expense $(7,000) $(3,000) $(9,000) $(1,000)
Change in Cash $3,963,450 $6,080,250 $8,279,650 $10,569,650
Ending Balance $3,963,450 $6,080,250 $8,279,650 $10,569,650
Capital expenses
Employee Workstations (PP) $7,000 $3,000 $9,000 $1,000
Prototype Expenses $0 $0 $0 $0
Cumulative CAPEX $7,000 $10,000 $19,000 $20,000

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Depreciation
Depreciation Charge $2,333 $3,333 $6,333 $4,333
6.3.2 PROJECTED PROFIT AND LOSS
Although, the total cost of sales increase year by year but the Gross Margin keep high
because all of expense we spend for sale team in order to find new customers, expand the
market and sell more projects. The sale number increase faster than the cost of sale, so we
have the efficient sale team and we are going the correct strategy. Now we move to the
expenses, all expenses increase year by year but the percentage is not appropriate. As a
service company, we spent dominant to G&A and engineering expense instead of marketing
and sale. In short term, we can handle this situation but in long term, when the company
bigger the management team become bigger and slower, so it is not good for a company to
keep its position in the market. Our company decided to follow this strategy in the short term
and we will change strategy in order to suitable the market and keep our position and
growth.
6.3.2.1 TABLE: PROFIT AND LOSS
Year 1 Year 2 Year 3 Year 4
Sales $344,000 $820,000 $1,384,000 $1,640,000
Direct Cost of Sales $162,000 $380,000 $632,000 $760,000
Other Costs of Sales $0 $0 $0 $0
Total Cost of Sales $162,000 $380,000 $632,000 $760,000
Gross Margin $182,000 $440,000 $752,000 $880,000
Gross Margin % 52.91% 53.66% 54.34% 53.66%
Expenses
Engineering $82,300 $109,200 $181,600 $201,800

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Marketing $60,750 $44,000 $76,800 $68,400
Sales $28,700 $65,000 $131,600 $154,800
G&A $89,800 $102,000 $153,600 $164,000
Other $0 $0 $0 $0
Total Operating Expenses $261,550 $320,200 $543,600 $589,000
EBITDA $(79,550) $119,800 $208,400 $291,000
Depreciation $2,333 $3,333 $6,333 $4,333
Net Profit (EBIT) $(81,883) $116,467 $202,067 $286,667
Net Profit/Sales (23.80)% 14.20% 14.60% 17.48%
6.4 MANAGEMENT AND TEAM
The Management team and Organizational structure is as shown in Figure 6-7 with the
staffing plan as well as salary projections as given below.
Figure 6-7: Management Team & Organizational Structure for IoT
Managing Director & CEO - Jeeja NT &
C.K. Manoharan
Head - Sales and Business
Development
Resident Director - Services
Head -
Applications
Engineering
2 Advisory
Council
Members for
IoT

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Staffing Plan Projected (Year on Year):
Salary Plan Projected (Year on Year):
6.5 ASSUMPTIONS AND RISKS
The following general assumptions and risks have been considered for preparing this
business plan for IoT:
a. Market of IoT (Machina Research data cited at the TiE panel) in India by 2020
expected to be: $10-12 Billion (Rough Order of Estimate).
b. Internet of Everything (IoE) industry in predicted to be a USD 14.4 Trillion market by
end of 2022 using Sensors for H2M & H2H technologies.
c. India’s National Policy on Electronics (NPE) aims at investing about US$ 100 billion
in the electronics industry by 2020, so for IoT hardware more Electronics
Manufacturing Clusters (EMC) will be key as well as speedy implementations and
clearances by Indian Government.

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d. Indian environment with extreme temperatures, high levels of humidity and dust,
erratic power supply and spotty telecom coverage which is a critical risk that need to
be mitigated with CAPA.
e. Wireless surveillance devices can easily be sabotaged and tampered with by
disgruntled employees so this high security risk need to be reduced with CAPA.
The detailed risk assessment will be done based on the Risk Management Impact &
Likelihood.
7.0 SUMMARY OF RESULTS AND ANALYSIS
The semi-structured interviews were done for organizations with following profiles:
Sector Organization
Name
Description Interviewee Number of
Employees
Industrial
Automation
ABB R&D Product
Manager
140400
Transport ALSTOM Engineering Domain
Manager
65000
Information
Technology &
Services
Pitney Bowes Information
Technology
Executive
Assistant
10827
Data analysis of the results was done based on findings of interviews and the survey in
comparison with the literature review and research objectives/questions for these five
categories as shown below:
Category A: IoT Mission, Vision & Goals
Question 1: Who is in charge of the IoT business plan & strategy for defining mission, vision
and goals & what programs are running in your organization?
Based on the survey responses and the interviews, more than 60% people said that CEO or
MD or the Innovation team together with Technology & IT team define the business plan &
strategy as well as various programs running in the organization.

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Question 2: What are the key standards, technologies and architecture models to reach your
IoT and Sustainable Development goals?
Based on the survey responses and the interviews, more than 90% people said that Cloud
Computing with Data Centers and Big Data with Hadoop databases are the key technologies
with MongoDB open database and IPv6 with ZigBee protocols and architectures following
these main focus technologies. These technologies are helping organizations in achieving
their IoT as well as Business and Sustainable Development goals based on CSR policies.

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Category B: IoT Sustainable Development Solutions
Question 3: What is your most pressing reason for your business to adopt IoT and
Sustainable Development solutions?
Based on the survey responses and the interviews, more than 70% people said that the
most pressing reasons were technology changes, cost reduction for energy, growth in IT
infrastructure and data growth for the business or organization to adopt IoT and Sustainable
Development solutions. This was debated by one interviewee who mentioned Shareholder
Pressure to be the topmost.

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Question 4: What solutions do you deliver today or plan to deliver that are sustainable to
deploy the IoT?
Based on the survey responses and the interviews, more than 50% people said Energy
Saving solutions are sustainable to deploy the IoT. But, this was debated by some
interviewees who were of the opinion or bias that energy savings were already delivered by
them so they need to be more efficient and cost reducing.

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Category C: IoT Product & Service Life Cycle Management
Question 5: What Products similar to Energy Management Systems, Water Management
Systems and Data Center Monitoring using Cloud or Fog Computing & Big Data do you
deliver today or plan to deliver for IoT?
Based on the survey responses and the interviews, more than 60% people said SAP
solution together with the MES or DCS using Cloud or Fog Computing & Big Data will be
delivered for IoT.

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Question 6: What Service Life Cycle Management support do you deliver today or plan to
deliver for IoT?
Based on the survey responses and the interviews, more than 90% people said that they
would like to retain the current SLC Management but would enhance it with remote
monitoring and engineering.

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Category D: IoT Organization Governance, Processes & Policies
Question 7: What changes in the organization are you experiencing or foresee for
governance, processes and policies to support IoT?
Based on the survey responses and the interviews, more than 75% people said that they will
see new vertical/structure in the organization to support IoT with policies on data collection
using BYOD (Bring Your Own Device).

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Question 8: As an organization are you willing to go out-of-box to form partnerships with
small open organizations rather than only using IoT Products from Google, Amazon,
Microsoft and Oracle?
Based on the survey responses and the interviews, more than 95% people said “Yes” which
shows their intent to integrate and team up with different organizations.

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