Cellular Overview. Colin Geis April 2017

Transcription

1 Cellular Overview Colin Geis April 2017

2 In the Almost Interesting Category Born and raised in San Diego (I don t like the heat) Moved to Colorado for College Go RAMs (Colorado State) Go Buffalos (University of Colorado Denver) Telecom ran largest dial-up aggregation network in US from Married in 08 moved to Baltimore (I don t like the heat) Smart Grid/Utility Start-up acquired by Cooper Power Systems Networking Distributor Ran $18M biz 15 Moved to Nebraska (I don t like the heat) 17 Moving to Arkansas (I don t like the heat) 4/19/2017

3 Agenda M2M Market Size Red Lion s Cellular Business Addressable Industries Cellular Introduction IIoT Evolution 4/19/2017 3

4 Executive Summary Market Trends and Opportunities M2M terminals market ~$754M in 2017, with 16% CAGR projected for M2M terminals expected to exceed $1B in 2019 Competitor Moves and Positions HMS Networks acquired ewon (February 2016) Advantech acquired B+B SmartWorx (January 2016) Autodesk acquired SeeControls (August 2015) IoT PTC acquires ThingWorx (December 2013) IoT Cellular M2M Growth Driven by: Adoption of disparate assets in the field and remote site connectivity Emergence of scalable IIoT technologies which can reduce cost of business Increased edge computing to address data and security concerns Source: Berg Insight The Global M2M/IoT Terminal Market /19/2017 4

5 Addressable Industrial Markets Total Available Gateway Market Building Automation Automotive Other Machinery 4% 3% ITS 8% W/WW 12% 6% Energy Other Industries 28% 20% 19% Oil & Gas ~60% of addressable markets are remote industries (O&G, W/WW, Energy, ITS) ~6% Factory automation Highest expected growth rates: Energy, W/WW, O&G, Utilities Estimated $840M industrial M2M market size in 2020 Source: ARC Report Industrial Gateways-WW /19/2017 5

6 Red Lion s Focus Markets Core Markets represent Automotive Food & Beverage Alternative Energy Oil & Gas Growth markets Water & Wastewater Transportation Utilities Total Available Gateway Market Building Automation Other Machinery ITS 8% W/WW 12% 6% Automotive 4% 3% Other Industries 28% Energy 20% 19% Oil & Gas Source: ARC Report Industrial Gateways-WW /19/2017 6

7 Units (M) Revenue ($M) Cellular M2M Market Forecast $ $ $ % $876 $1,009 $1, Forecasted to grow from ~$550M in 2015 to $1.162B in % CAGR from 2015 to 2020 Estimating little price compression over the next 5 years Note: Chart data includes all M2M terminals (industrial & commercial) Source: Berg Insight The Global M2M/IoT Terminal Market /19/2017 7

8 Cellular Sales Revenue - Product Type $13,935,012 $2,443,267 Red Lion exits enterprise business Red Lion exits mobility business -21% $10,342,411 $363,929 Enterprise Mobility Industrial Automation $6,827,722 $8,004,573 $1,799,810 $7,818,647 $619,460 $8,003,400 $4,316,560 $726,898 $25,535 $2,614,637 $2,685,175 $3,739,134 $4,681,337 $4,324,412 $263,369 $2,094 $4,645,428 $18,595 $3,454,394 $65,194 $4,351,998 $232,553 $1,922,787 $2,569,630 $3,059,960 $998, /19/2017 8

9 Average Price Trends AMER Has a high share of 4G LTE routers Avg Sales Price is < 10% Above Avg Mkt Price Mkt Revenue Mkt Units Avg Mkt Price Avg RLC Price AMER $265M 950k $390 $420 APAC $140M 950k $194 $350 EMEA $130M 700k $334 $351 Note: Average market price is estimated based on market report and assumed competitors in each region. Source: Berg Insight The Global M2M/IoT Terminal Market /19/2017 9

10 Trivia Time How many Water Utilities in the United States? 4,000 urban providers 50,000 rural providers 54,000/25 sales people = 2,160 utilities EACH How many Energy Utilities in the United States? 3,000 Electric utilities 3,000/25 sales people = 100 utilities EACH How many Wind Turbines in the United States? 52,000 turbines 1000 utility-scale farms 1,000/25 sales people = 40 farms, each containing 52 turbines Source: Source: Source: 4/19/

11 Market Takeaways 1. Industrial cellular market is growing faster than any other business segment within Red Lion. 2. Red Lion s cellular pricing is not out of line. Premium pricing for premium features. 3. The industrial fixed asset cellular market is freaking HUGE. 4/19/

12 What the Cellular!? 4/19/

13 What is Cellular/M2M? Cellular M2M provides the ability to connect diverse devices and applications by enabling fixed assets, such as electric meters, or mobile assets to communicate. Cellular M2M is the best option to connect assets over great distances using already established, robust, and proven networks. Cellular technology is effective across varied industries because it's easy to integrate and cost effective to deploy. The world faces one of the toughest economic environments it's seen in generations, and the need for cellular M2M technology and its benefits has never been greater. Source: 4/19/

14 Cellular Use-Case Applications Two general uses for cellular: Data Collection Remote Access Data Collection: Remote Monitoring, Asset Tracking, Process Monitoring Remote Access: Remote Configuration, Remote Maintenance, SaaS Provider 4/19/

15 Remote Access Remote Access Remote Access solves the challenge of updating configuration files. Typically solves the problem of 1 engineer. Use-Cases: Remote Configuration, Remote Maintenance, SaaS Solutions (OEM) Target Markets: Factory Automation, Machine Builders, OEMs, others but limited Value is from selling a device to solve 1 person s problem. 4/19/

16 Data Collection Data Collection Data Collection solves the problem of connecting many devices, and is commonly associated with corporate-level business initiatives (waste reduction, business optimization, process visibility, etc.). Use-Cases: Remote Monitoring, Asset Tracking, Process Monitoring Target Markets: Factory Automation, Machine Builders, OEMs, Utilities, Oil/Gas, Water/Wastewater, Alternative Energy, etc. Value is from selling a unique portfolio of products to solve a complex communication problem. 4/19/

17 Product Attributes Market Attributes Remote Access vs Data Collection Remote Access Data Collection Competitors Many Few Problem Complexity Low High Sold to Engineer/Management Management Market Size Medium High Protocol Conversion Maybe Yes Event/Alarming No Yes Security Yes Yes Data Visualization Maybe Yes 4/19/

18 Red Lion s Value Statement Red Lion Controls, a division of a $2B global company, is a 42 year old, USA based manufacturer of industrial automation equipment. Our focus is on providing open connectivity / multi protocol supported products, thereby enabling the delivery and visualization of data, anytime / anywhere (onsite or remotely), over both wired and wireless networks. This agnostic approach allows our customers complete freedom & ease of use when accessing their data, and minimizes their engineering costs & time by eliminating the requirement to be exclusive to any single manufacturer, or data transport protocol. 4/19/

19 How the &#$% did we get here? 4/19/

20 Evolution to IIoT Past (closed-loop control) Reactive Labor intensive Late-Present (SCADA/M2M) Reactive Centralized monitoring Today/Future (IIoT) Scalable Proactive More tools Accessibility 4/19/

21 Factory Evolution: Isolated Machinery Closed-loop monitoring and control applications Pros: Easy to deploy Low-cost No-touch maintenance Cons: Local indication only Local alarming Limited intelligence 4/19/

22 Factory Evolution: M2M Generation 1 Local-loop monitoring and control applications Pros: Local communication Process-based visualization Low maintenance requirements Cons: Local alarming Limited intelligence 4/19/

23 Factory Evolution: Networked M2M Site monitoring and control applications Pros: Site-wide visualization Central data analysis Cons: Local indication only Local alarming Limited intelligence 4/19/

24 Factory Evolution: Web Accessible M2M Remote accessible site monitoring and control applications Pros: Site-wide visualization Central data analysis Cons: Local indication only Local alarming Limited intelligence 4/19/

25 Factory Evolution: Wired Enabled IIoT IIoT enabled monitoring and control applications Pros: Cloud-based visualization Powerful data analysis Expanded tools 4/19/

26 Factory Evolution: Cellular Enabled IIoT 4/19/

27 Remote Evolution: Dipstick Method Manual testing/monitoring Pros: Reliable? Cost-effective? Cons: Time intensive Not real-time Bread Runs Hard on equipment 4/19/

28 Remote Evolution: Isolated Machinery Closed-loop monitoring and control applications Pros: Easy to deploy Some intelligence Low-touch maintenance Cons: Local indication only Local alarming only 4/19/

29 Remote Evolution: M2M Generation 1 SCADA monitoring and control applications Pros: Centralized intelligence Remote Monitoring Remote Control Cons: Slow communication Limited access to data Control limited to comm. availability 4/19/

30 Remote Evolution: IIoT Enabled IIoT enabled monitoring and control applications Pros: Centralized intelligence Remote Monitoring Remote Control Powerful tools & analysis Control is independent of communication Cons: Increased expenses 4/19/

31 Remote Evolution: Isolated Machinery Closed-loop monitoring and control applications Pros: Easy to deploy Low-cost No-touch maintenance RTU Cons: Limited/no alarming Limited intelligence 4/19/

32 Remote Evolution: M2M Generation 1 SCADA monitoring and control applications Pros: More Low-cost No-touch maintenance RTU Cons: Limited/no alarming Limited intelligence 4/19/

33 Wellhead Monitoring RTU 4/19/2017

34 Cellular Takeaways 1. Red Lion s biggest value is in data collection applications. 2. Not every cellular device is a competitor. 3. Regardless of application, customers are moving towards IIoT. Source: 4/19/

35 What is IIoT? 4/19/

36 What is the IIoT? IIoT is the decoupling of data from traditional applications. This means that data is NO LONGER used only for control loops. The data that is generated is used for control, remote monitoring, predictive maintenance, or any number of applications. The Cloud is a common aggregation, analytics, and visualization point for this data due to the scalability, security and accessibility. 4/19/

37 Red Lion s Value to IIoT Red Lion s focus 4/19/

38 Gather Input Data Creation Inputs can be anything from PLCs/RTUs to IO modules or sensors directly. HMIs Graphite Edge & Core Controllers Data Station Plus, Mod Controller, E3 IO, IPM RTUs, Sensors 4/19/

39 Edge Integration Red Lion s RAM (wired & cellular) devices communicate via TCP/IP, Modbus, DNP3, or directly to sensors via IO to connect the input devices. Our integrated RAMQTT client seamlessly connects input device data upstream (to IIoT Platforms). Our powerful Event Engine allows for local event processing (control), alarming, notification, etc. 4/19/

40 Aggregate and Analyze The collection of IIoT Platforms that we connect to are constantly growing. We ve selected a diverse collection of platforms to meet industrial customer needs. Platforms can be broken into 3 groups: IaaS (Build from ground up) - Long PaaS (Develop applications) - Medium SaaS (Buy finished solutions) - Short Platform Functions: Device Management Data Analysis Data Storage Data Historian Data Dashboard Applications Activity Alarming Many more Source: 4/19/

41 IIoT Takeaways 1. Red Lion s value to the IIoT is more than cellular! 2. Red Lion has integrated to the most IIoT platforms in the industry! 3. Not all platforms are the same and likely require an SI for deployment. 4/19/

42 Market Applications 4/19/

43 Electric Utility Cap Bank Monitoring Many renewable energy resources, such as solar and wind, utilize dc to ac converters for electrical grid interconnections. During the dc to ac conversion, an inverter produces harmonics due to switching and non-ideal power factor. Typically, a utility installs a capacitor bank on a distribution system for voltage and VAR support, these capacitors also provide harmonic isolation and power factor correction that are perfect for interconnecting renewable energy resources. Sources in Notes Section 4/19/

44 Electric Utility Substation Monitoring Utilities are looking for ways to address regulatory issues that will improve the reliability of electric power delivery while reducing costs. Utilities are actively monitoring equipment status for failures, physical security and power quality at substations. Identify and correct transformer/circuit overloads and phase imbalance Eliminate truck rolls to read load at substations Record fault current events (Leading indicator of failures) Source in Notes Section 4/19/

45 Electric Utility Smart Grid An electricity supply network that uses digital communications technology to detect and react to local changes in usage. Video: Smart Grid Applications: Demand Response Demand Management Distribution Monitoring New generation sources Microgrids Wind/Solar/Hydro Storage Solutions Source in Notes Section 4/19/

46 Electric Utility Advanced Metering Infrastructure (AMI) Advanced metering infrastructure (AMI) is an integrated system of smart meters, communications networks, and data management systems that enables two-way communication between utilities and customers. Allows utility to generate the appropriate amount of power. Source in Notes Section 4/19/

47 Electric Utility Demand Response Demand response provides an opportunity for consumers to play a significant role in the operation of the electric grid by reducing or shifting their electricity usage during peak periods in response to time-based rates or other forms of financial incentives. Demand response programs are being used by some electric system planners and operators as resource options for balancing supply and demand. Such programs can lower the cost of electricity in wholesale markets, and in turn, lead to lower retail rates. Sources in Notes Section 4/19/

48 Water Utility Advance Meter Infrastructure (AMI) Advanced Meter Infrastructure (AMI) is different from Advanced Meter Reading (AMR). AMR polls the meter for a reading and provides one way communication. AMI provides a two-way communication channel that can both read a meter and even actuate a shut-off valve. Water companies lose up to 30% of their treated water due to broken/leaking pipes. 4/19/

49 Wind Turbine Monitoring Bruel & Kjaer Vibro (Spectris OpCo) creates vibration monitoring technology for use on turbines. They monitor 7,000 turbines, and are looking for a solution to connect to their device and transmit the data back to a central monitoring location. 4/19/

50 Factory Automation - IIoT Production Efficiency Optimization of Manufacturing Waste Reduction Quality Control Predictive Maintenance Energy Efficiency Condition Monitoring 4/19/

51 Key take aways 4/19/

52 For more information 20 Willow Springs Circle York, PA USA +1 (717) /19/