A presentation explaining how Finnish industry looks at Industrial Internet, how it differs from the German Industrie 4.0. Players in the IoT game. Is the position of traditional industrial companies threatened by new comers like Google.

1. Finnish understanding regarding
Industrial Internet
27.5.2014
Industrie 4.0 & Industrial Internet Collaboration
Forum 2014 at Aachen
Heikki Ailisto, Research Professor
VTT Technical Research Centre of Finland

2. 2222/05/2014
Industrial internet is a part of “through
digitalization” – everything goes digital
Industrial internet means
systematically applying sensor,
communication and data
analysis technologies for
improving productivity and
creating new business.
All objects have
unique digital
identity.
All objects have
unique digital
identity.
Smart things have
connectivity.
Smart things have
connectivity.
Internet of Things
is a digital
representation of
the real world.
Internet of Things
is a digital
representation of
the real world.

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202020101990 - IndustryC
IndustryA
IndustryB
Fixed/wireless
connectivity
(heterogenous)
Silo1HVAC
Silo2Lighting
Silo3Accesscontrol
SiloX
Silos within one domain
and company (systems do
not share data), case FM.
Business domains in silos.
Waste of resources because
of duplicating systems, ICT.Facilitymngmt
What is new – remote monitoring and control has been here for
decades: Trend from M2M silos to IoT, or Industrial Internet
(but this is not the whole picture…)
Local smartness
Smart machines with
sensing and connectivity
Act:
Optimize
Control
Manage
Interoperability, connectivity, access
control, service discovery, privacy
(IoT platform)
Fixed/wireless
connectivity
(Internet)
App App App App
intelligent machines smart sensors
Unique ID for every object
Industrial internet broader benefits: Sharing information
between systems, within companies, and even between
domains; Metcalfe’s law V ~ N2,
advanced data analytics and DSS bring not only savings but
new business.
Enabling new business models, e.g. from sale to pay-by-use

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Affordable technology is here
Why is it happening now?
Computing power grows
Smart machines
Intelligent analytics, decision support systems
Big data
“Store everything” paradigm (dirty cheap GB)
Connectivity like newer before
Internet IPv6, no limit to nodes
IoT paradigm – connected objects
Low power communication
Identify and track everything (QR, RFID, GPS)
Sensing everything in real time
Extremely low cost and small
Connected
Advanced sensing
Bio-mimicing
People are ready for it
Competences
Average person has good
competences with digital services
and products.
Acceptance
People in all age groups use web,
smart phones, car computers at
home and on free time.
Digital natives, Y-generation, not
only accept, they expect!

5. 5
What does it mean: Views of industry leaders
Although these visions share a lot, they also have different emphasis and
focus.
Due to the nature of Finnish industry, i.e. investment-type machinery and
ICT, we tend to emphasize asset management type of approach.

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IoT field and players
Communication
hardware
Cisco, Ericsson,
Nokia, Huawei..
Communication
& connectivity service
Vodafone, KDDI,
TS, Elisa
IoT service
platform
Oracle, IBM, SAP, Axeda,
Tieto, CGI, Wapice, Oliotalo..
“The Actual
Business” Asset /
Brand
owner
System
integrators
Sensors
actuators, RFID
Actuator X Sensor X VTT Node RFID X
Security&privacy
Vertical
playersSchneiderGE
Asset
management
service
companies
OEM
system +
service
providers
Siemens
Intelligent assets (with sensors, actuators, ID, connectivity)
Many companies here want to become “vertical players”
Industrial
automation
Honeywell,
Siemens,
Rockwell
Metso
Automation, ..
Wild cards: Google
and Microsoft, Apple
Telcos, and others
too, want to expand
their role

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Challenges
Identifying and exploiting business benefit.
Finding win-win solutions in value networks vs.
fighting who owns the data, who can use it.
Building and deploying applications fully
leveraging data from multiple sources
Cyber security and privacy threats
Closed / fragmented / lock-in solutions
(vs. open internet-type solutions)
Installing and managing 50 B smart devices
Powering 1 T sensors

8. 8
The opportunity of Industrial
Internet for Finnish industry

9. 9
“Industrial Internet is not an opportunity
– it is a must!”
Finnish CEO

10. 10
Here’s what Google gets for its money:
A Product Master Who Beat Apple to the
Next Big Thing
Before co-founding Nest, CEO Tony Fadell
was best known for designing the iPod, ...
When Google announced yesterday its $3.2
billion cash purchase of Nest, the jokes flew. “If
your house is burning down you’ll now get
gmail ads for fire extinguishers,” Valleywag’s
Sam Bidd
What Google Really Gets Out of
Buying Nest for $3.2 Billion
BY MARCUS WOHLSEN, Wired Magazine
01.14.2014
Nest Learning Thermostat
The bottom line: The
second generation of the
energy-saving Nest
Learning Thermostat puts
this device even further
ahead of the (nearly
nonexistent) competition.Is this a threat or opportunity to established
companies?

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Finnish strengths
World class machinery industry in certain sectors,
technology-savvy, able to create new services.
ICT and electronics sector looking for new
business opportunities after the disruption of
Nokia.

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RDI activity
EU Horizon 2020: Cyber Physical Systems,
Internet of Things
ECSEL PPP: embedded systems, IoT,
smart systems, critical systems
Digile SHOK: IoT, D2I
FIMECC: S-STEP, S4Fleet
VTT Productivity with IoT
Tekes program on industrial internet (TBC)

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Module 4.1
Ismo Vessonen, Pirkka Tukeva
Global asset management
• CBM
• Remote operation,
monitoring
• Digital spare parts
Module 4.2.
Miimu Airaksinen
Intelligent infrastructures
• Smart lighting (Janne Aikio,
Marko Jurvansuu)
• Responsive buildings
Module 4.3
Anu Seisto
Digital society
• Interoperable services
• Digital infrastructure
Module 3. Information management and analysis, cyber security, Heli Helaakoski
Module 2. Connectivity, Pertti Raatikainen
Module 1. Networked sensors, Jukka Hast From real world phenomena to digital data
Program Lead, Heikki Ailisto
Business development, Petteri Alahuhta
Industrial internet is a VTT priority:
ProIoT program – 90 M€ RDI investment 2013-16

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Conclusion
Industrial internet is coming. It will disrupt most businesses and public
services during next 3 to 15 years.
All the major Finnish companies, whether machinery, process
or ICT have recognized this, at least verbally.
Finnish view emphasizes asset management
– as opposed tp manufacturing
Risks and threats
Talk does not lead to action
Major information security breaches (company level)
Opportunities
Improved competitiveness through offering productivity to customers
Open new business or take somebody else’s old one
What we should do
Prepare IoT/II strategy – think networks, can’t do it alone.
Analyze your services, products and processes. How does industrial internet
impact them? Is the game going to change? Should we change it?
Start early with experiments, learn from experience, also from setbacks.

15. 15
TECHNOLOGY FOR BUSINESS
Contact: Heikki Ailisto
heikki.ailisto AT vtt.fi
+358 40 555 0726