Transcript of a discussion on how the complexity and novel architectural demands of IoT require a rethinking of the edge of nearly any enterprise.

1. Why Effective IoT Adoption is a Team Sport
Transcript of a discussion on how the complexity and novel architectural demands of
IoT require a rethinking of the edge of nearly any enterprise.
Listen to the podcast. Find it on iTunes. Get the mobile app. Download the
transcript. Sponsor: Hewlett Packard Enterprise.
Dana Gardner: Hello, and welcome to the next edition of the
BriefingsDirect Voice of the Customer podcast series. I'm Dana
Gardner, Principal Analyst at Interarbor Solutions, your host and
moderator for this ongoing discussion on digital transformation.
Stay with us now to learn how agile businesses are fending off
disruption -- in favor of innovation.
Gardner
Our next case study highlights how Internet of Things (IoT) adoption means more than
just scaling-up networks. The complexity and novel architectural demands of IoT require
a rethinking of the edge of nearly any enterprise. We'll now explore how implementing
IoT strategies is not a one-size-fits-all endeavor -- nor can it be bought off the shelf.
What’s more, those new to the computational hive and analytical edge attributes of IoT
are discovering that it takes a team approach.
To explain how many disparate threads of an effective IoT fabric come together, we're
joined by Tushar Halgali, Senior Manager in the Technology Strategy and Architecture
Practice at Deloitte Consulting in San Francisco.
Tushar Halgali: Dana, thanks for having me here.
Gardner: We're also here with Jeff Carlat, Senior Director of
Technology Solutions at Hewlett Packard Enterprise (HPE)
Strategic Alliances. Welcome, Jeff.
Jeff Carlat: Thanks. It’s nice to be here, Dana.
Halgali
Gardner: What are some of the top trends that are making organizations recognize the
importance of IoT? What’s making them examine the architectural implications?
Carlat: We're at the cusp of a very large movement of digitizing entire value chains.
Organizations have more and more things connected to the Internet. Look at your Nest
thermostats and the sensors that are on everything. The connectivity of that back to the

2. data center to do analytics in real-time is critical for businesses to reach the next level of
efficiencies -- and to maintain their competitiveness in the market.
Gardner: Tushar, this is a different type of network requirement set. We’re dealing with
varied data types, speeds, and volumes in places that we haven't seen before. What are
the obstacles that organizations face as they look at their current infrastructure and the
need to adapt?
Halgali: One of the really interesting things we've seen is that traditionally
organizations have been solving technology-related problems as all Information
Technology (IT)-related problems. There was this whole concept of machine to machine
(M2M) a while back. It connected machines to the Internet, but it was a very small
segment.
Now, we're trying to get machines to connect to the Internet and have them
communicate with each other. There are a lot of complexities involved. It's not just the IT
pieces, but having the operational technology (OT) connect to the IT world, too. It
creates a very complex ecosystem of components.
Gardner: Let’s parse out the differences between OT in the IT. How do you describe
those? Why should we understand and appreciate how different they are?
Carlat: When we think of OT, you think of long-standing
companies out there, Bosch, National Instruments (NI), and
many other companies that have been instrumenting sensors
for operations, shop floors, oil and gas, and with every pump
being sensed. The problem is that humans would have to
interact a lot around those sensors, to remediate or to
understand when something like a bearing on a pump has
failed.
Carlat
What's key here is that IT, those core data-center technologies that HPE is leading the
market in, has the ability of run analytics and to provide intelligence and insights from all
of that sensor data. When you can connect the OT devices with the IT -- whether in the
data center or delivering that IT to the edge, which we call the Intelligent Edge -- you
can actually do your insights, create your feedback, and provide corrective actions even
before things fail, rather than waiting.
Gardner: That failed ball bearing on some device isn't just alerting the shop floor of a
failure, it's additionally automating a process where the inventory is checked. If it’s not
there, the supply chain is checked, the order is put in place, it’s delivered and ready to
install before any kind of breakdown -- or did I oversimplify that?

3. End of Downtime
Carlat: That’s a fair representation. We're working closely with a company called
Flowserve. We’re building the telemetry within the pumps so that when a cavitation
happens or a bearing is starting to wear out, it will predict the mean time for failure and
alert them immediately. It's all truly connected. It will tell you when it’s going to fail. It
provides the access to fix it ahead of time, or as part of a scheduled maintenance plan,
rather than during downtime, because downtime in an oil production facility or any
business can cost millions of dollars.
Gardner: Tushar, are there any other examples you can think of to illustrate the power
and importance of OT and IT together?
Halgali: If our listeners ever get a chance to check out one of the keynote speakers
[at HPE Discover London 2016] on the Intelligent Edge, there's a good presentation by
PTC ThingWorx software, which is an IoT platform and the Edgeline servers in a
manufacturing facility. You have conveyor belts that need certain improvements, they're
constantly producing things, and they're part of the production facility. It’s all tied to the
revenue of the organization, and the minute it shuts down, there are problems.
Maintenance needs to be done on those machines, but you don’t want to do it too soon
because you're just spending money unnecessarily and it’s not efficient. You don’t want
it too late, because then there's downtime. So, you want to find the equilibrium between
the two.
IoT determines the right window for when that maintenance needs to be done. If there's
a valve problem, and something goes down quickly, sensors track the data and we
analyze the information. The minute that data goes off a certain baseline, it will tell you
about this problem -- and then it will say that there’s the potential in the future for a
major problem.
It will actually generate a work order, which then feeds from the OT systems into the IT
systems, and it’s all automatic. Then, when mechanics come in to try to solve these
problems, they can use augmented reality or virtual reality to look at the machine and
then fix the problem.
Solutions for
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4. It’s actually a closed-loop ecosystem that would not have happened in the M2M base.
It’s the next layer of maturity or advancement that IoT brings up.
Gardner: We can measure, we can analyze, and we can communicate. That gives us a
lot of power. We can move toward minimum viable operations, where we're not putting
parts in place when they're not needed, but we’re not going down either.
It reminds me of what happened on the financial side of businesses a decade or two
ago, where you wanted to have spend management. You couldn't do it until you knew
where all your money was, where all the bills had to be paid, but then doing so, you
could really manage things precisely. Those were back office apps, digital ledgers.
So, it’s a maturity coming to devices -- analog, digital, what have you, and it’s pretty
exciting. What's the impact here financially, Jeff?
Carlat: Well, huge. Right now, IDC predicts IoT to represent about a $1.4 trillion
opportunity by 2020. It's a huge opportunity, not only for incremental revenue for
businesses, but increased efficiencies, reducing cost, reducing downtime, reducing risk;
so, a tremendous benefit. Companies need to strongly consider a movement for
digitizing the value chains to remain competitive in the future.
Bigger and Better Data at the Edge
Gardner: Okay. We understand why it's important and we have a pretty good idea of
what you need to do. Now, how do you get there? Is this big data at the edge? I heard a
comment just the other day that there's no bigger data than edge data and IoT data.
We're going to have to manage scales here that we haven’t seen before.
Carlat: It’s an excellent point. Jet engines that are being used today are generating five
terabytes of data every time they land or take off. Imagine that for every plane, every
engine that’s flying in the sky, every day, every year. The amount of data is huge. This
brings me to the unique way that HPE is approaching this, and we truly believe we are
leaders in the data center now and are leaders within IT.
We're taking that design, that implementation, that knowledge, and we're designing
infrastructure, data center quality infrastructure, that’s put on the edge, ruggedized
compute or analytics, and providing the ability to do that analysis, the machine learning,
and doing it all locally, rather than sending all that data to the cloud for analytics.
Imagine how expensive that would be.
That's one approach we're taking on within HPE. But, it’s not just about HPE tackling
this. Customers are asking where to start. "This is overwhelming, this is complex. How
do we do this?" We're coming together to do advisory services, talking our customers
through this, hand-holding, building a journey for them to do that digitization according
to their plans and without disrupting their current environment.

5. Gardner: Tushar, when you have a small data center at the edge, you're going to eke
out some obvious efficiencies, but this portends unforeseen circumstances that could be
very positive. What can you do when you have this level of analytics, and you take it to
a macro level? You can begin to analyze things on an industry-level, and then have the
opportunity to drill down and find new patterns, new associations, perhaps even new
ways to design processes, factory floors, retail environments? What are we talking
about in terms of the potential for the analytics when we capture and manage this larger
amount of data?
Halgali: We've noted there are a lot of IoT use cases, and the value that generates so
far has been around cost optimization, efficiencies, risk management, and those kinds
of things. But by doing things on the edge, not only can you do all of those, you can
start getting into the higher-value areas, such as revenue growth and innovation.
A classic example is remote monitoring. Think of yourself as a healthcare provider who
would not be able to get into the business of managing people's health if they're all
located remotely. If we have certain devices in homes through sensors and everything,
you can start tracking their behaviors and their patterns. When they're taking medicine
and those kinds of things, and have all the information created through profiles of those
people. You have now distributed the power of taking care of all the constituents in your
base, without having to have them physically be in a hospital.
Gardner: Those feedback loops are not just one way where you can analyze, but you
can start to apply the results, the benefits of the analysis, right back into the edge.
Carlat: Health and life sciences are great examples of using IoT as a way of more
efficiently managing the hospital beds. It costs a lot of money to have people sit in a
hospital when they don't need to be there. To be able provide patient access remotely,
to be able monitor them, to be able to intervene on an as-needed basis, drives much
greater efficiencies.
We’ve talked a little bit about industrial IoT, we’ve talked a little bit about health and life
sciences, but this extends into retail and smart stores, too. We're doing a lot with Home
Depot to deliver the store of the future, bridging the digital with the brick-and-mortar
across 2,200 stores in North America.
It also has to do with the experience around campus and branch networks. At Levi’s
Stadium in Santa Clara, California, HPE built that out with indoor Global Positioning
System (GPS) and built out a mobile app that allows indoor wayfinding. It allows the
patrons visiting the game to have a totally new, immersive experience.
They found uploads and downloads of photos, and they found hotspots by mapping out
in the stadium. The hotspots had a great unobstructed view of the field, so there were a
lot of people there taking pictures. They installed a food stand nearby and they have
increased revenues because of strategic placement based on this IoT data. Levi’s
Stadium recognized $1 million in additional revenue in the first season and 10 times the
growth in the number of contacts that they have in their repository now.

6. Gardner: So, it's safe to say that edge computing and intelligence is a gift that will keep
giving, at levels organizations haven’t even conceived of yet.
Carlat: I believe it’s a necessity to stay competitive in the world of tomorrow.
Gardner: If your competitor does this, and you don't, that’s going to be a big question
mark for your customers to mull over.
While we are still on the subject of the edge technical capabilities, by being able to
analyze and not just pass along data, it seems to me it's also a big help when it comes
to compliance and security, which are big concerns.
Not only does security get mitigated by hardening or putting up a wall, probably the
safest bet is to be able to analyze when something is breached or something is going
wrong, and then to control or contain that. Tell me why the Edgeline approach of
analyzing data fast and on the edge can also be a big boost to security risk containment
and other compliance issues.
Carlat: We do a lot around asset tracking. Typically, you need to send someone out
there to remediate. By using Edgeline, using our sensor data, and using asset tagging,
you can ensure that the right person can be identified as the service person physically
at the pump to replace it, rather than just saying that they did it, writing on paper, and
actually being off doing something else. You have security, you have the appropriate
compliance levels with the right people fixing the right things in the right manner, and it's
all traceable and trackable.
Halgali: When you begin using edge devices, as well as geolocation services, you have
this ability to do fine-grained policy management and access control for not just the
people, but also devices. The surface area for IoT is so huge there are many ad-hoc
points into the network. By having a security layer, you can control that and edge
devices certainly help with that.
A classic example would be if you have a camera in a certain place. The camera is
taking constant feeds of things that are going on that are wrong or right; it’s constantly
recording the data. But the algorithms that have been fed into the edge device allow it to
capture things that are normal, so it can not only alert authorities at the right time, but
also store feed only for that. Why store days and day’s worth of images, when you can
pick only the ones that truly matter?
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IT Infrastructure

7. As Jeff said, it allows workplace restrictions and compliance, but also in an open area, it
allows you to track events that are specific.
In other cases, let’s say the mining industry or the oil and gas industry, where you have
workers that are going to be in very remote locations and it’s very hard to track each
one of them. When you have the ability to track the assets over time, if things go wrong,
then it’s easier to intervene and help out.
Carlat: Here is a great personal example. I went to my auto dealership and I pulled into
the garage. Immediately, I was greeted at my door by name, “Hello Mr. Carlat. Are you
in for your service?"
I thought, “How do you know I came in? Are you tracking me? How are you doing that?”
It turns out, they have Radio-frequency identification (RFID) tags. When you come in for
service, they apply these tags. As soon as you pull in, they provide a personalized
experience.
Also, it yields a net benefit of location tracking. They know exactly where my car is at all
stages. If I moved to a rental car that they have there, my profile is automatically
transferred over there. It starts their cycle time metrics, too, the traceability of how
they're doing on remediating whatever my service level may be. It's a whole new
experience. I'm now a lifetime-loyal customer of this auto dealer because of that
personalization; it’s all coming from implementation of IoT.
Gardner: The implications are vast; whether it’s user experience, operational efficiency,
risk reduction, or insights and analysis at different levels of an industry and even a
company.
It's very impressive stuff, when you can measure everything and you can gather as
much data as you want and then you can triage, and analyze that data and put the
metadata out to the cloud; so much is possible.
We've established why this is of interest. Now, let’s think a little bit about how you get
there for organizations that are thinking more about re-architecting their edge in order to
avail themselves of some of these benefits. What is it about the HPE and Deloitte
alliance that allows for a pathway to get on board and
start doing things in a proper order to make this happen
in the best fashion?
Transformation Journey, One Step at a Time
Halgali: Dana, anytime you do an IoT initiative, the key thing to realize that it should be
part of a major digital transformation initiative. Like any other transformation story, there
are the people, process, and the technology components of it. Jeff and I can talk about

8. these three at a very high level when you begin talking about the process and the
business model.
Deloitte has a huge practice in the strategy and the process space. What we're looking
at is digital industrial value-chain transformation. Let’s look at something like a smart
factory.
What’s the value chain for an organization that's making heavy machinery, end-to-end,
all the way from R and D and planning, to procurement and development and shipment,
and after-sale repairs, the entire value chain? What does that look like in the new IoT
era? Then, decompose that into processes and use cases, and then identify which are
the most high-value use cases, quantifying them, because that’s important.
Identifying the use cases that will deliver immediate tangible value in the near term
provides the map of where to begin the IoT journey. If you can’t quantify concrete ROI,
then what’s the point of investing? That addresses the reason of what IoT can do for the
organization and why to leverage this capability. And then, it's about helping our clients
build out the business cases, so that they can justify the investments needed from the
shareholders and the board — and can start implementing.
At a very high level, what’s the transformation story? What's the impact on the business
model for the organization? Once you have those strategy questions answered, then
you get into the tactical aspects, which is how we execute on it.
From an execution standpoint, let’s look at enablement via technology. Once you have
identified which use-cases to implement, you can utilize the pre-integrated, pre-
configured IoT offerings that Deloitte and HPE have co-developed. These offerings
address use cases such as asset monitoring and maintenance (in oil and gas,
manufacturing, and smart cities), and intelligent spaces (in public venues such as malls,
retail stores, and stadiums), and digital workplaces (in office buildings). One must also
factor in organization, change and communication management as addressing cultural
shifts as one of the most challenging aspects of an IoT-enabled digital transformation.
Such a holistic approach helps our clients to think big, start small, and scale fast.
Gardner: Tushar just outlined a very nice on-ramp process. What about some places to
go for information or calls for action? Where should people get started as they learn
how to implement on the process that Tushar just described?
Solutions for
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IT Infrastructure

9. Carlat: We're working as one with Deloitte to deliver these transformations.
Customers with interest can come to either Deloitte or HPE. We at HPE have a strong
group of technology services consultants who can step in and help in partnership with
Deloitte as well.
So, come to either company. Any of our partner representatives can get all of this and
our websites are loaded with information. We're here to help. We're here to hold the
hand and lead our customers to digitize and achieve these promised efficiencies that
can be garnered from digital value chains.
Gardner: So the buzzwords to track or to follow to get into your organizations are
Internet of Things, Operational Technology, did I leave anything out?
Halgali: Digital Analytics, Edge Computing.
Gardner: I'm afraid we will have to leave it there. We've been exploring how IoT
adoption means more than just scaling up networks. The complexity and novel
architectural demands of IoT require a rethinking of the edge of nearly any enterprise.
And we’ve learned how to rationalize the many disparate parts to produce an effective
IoT fabric through a team approach. So thanks to our guests Tushar Halgal, Senior
Manager in the Technology Strategy and Architecture Practice at Deloitte Consulting,
and Jeff Carlat, Senior Director of Technology Solutions at HPE Strategic Alliances.
And a big thank you to our audience as well for joining us for this BriefingsDirect Voice
of the Customer digital transformation discussion.
I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for
this ongoing series of HPE-sponsored interviews. Thanks again for listening, and do
please come back next time.
Listen to the podcast. Find it on iTunes. Get the mobile app. Download the
transcript. Sponsor: Hewlett Packard Enterprise.
Transcript of a discussion on how the complexity and novel architectural demands of
IoT require a rethinking of the edge of nearly any enterprise. Copyright Interarbor
Solutions, LLC, 2005-2017. All rights reserved.
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