Smart, Connected Products Gain the Competitive Advantage
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1 A FROST & SULLIVAN EXECUTIVE SUMMARY Smart, Connected Products Gain the Competitive Advantage In Collaboration With: MANUFACTURING LEADERSHIP View the ondemand version of the ebroadcast:
2 The World Has Changed Dramatically Industry leaders from Athena, ThingWorx, a PTC Business and Frost & Sullivan explore how smart, connected products can help your organization gain a competitive advantage Robert Schlegel President Athena Controls, Incorporated Dan Murphy Vice President of Marketing ThingWorx, A PTC Business We have entered an era where people, businesses and social organizations are beginning to understand the profound impacts awareness, collaboration, and intelligence will bring. In the not too distant future, billions of individuals and businesses, with trillions of smart, communicating devices, will stretch the boundaries of today s business and social systems, changing the way we work, learn, entertain and innovate. Networks will integrate knowledge, people and things into systems that accelerate awareness, creativity, better decision making, and, ultimately, higher value solutions. --Dan Murphy, Vice President of ThingWorx, A PTC Business More specifically, when we talk about networks and systems creating a smarter future using intelligent technologies, we are talking about the cyber-physical industrial tools and systems connected to the internet that will help us create smart products, homes and cities. This quickly evolving Internet of Things will bring about new services and business models powered by intelligent things and tools, in-device applications, and real-time connectivity. Used wisely, the IoT will engender analyses and insights that will lead to smart enterprise applications, better service delivery systems and real competitive advantage for businesses. The Internet of Things has the potential to deliver greater value to customers, create new services, spur innovation, and help tear down the traditional walls within an organization to help better integrate the enterprise. Paul Tate Research Director & Executive Editor Manufacturing Leadership, Frost & Sullivan 2
3 MARKET OVERVIEW As Paul Tate, Research Director and Executive Editor, Frost & Sullivan, states, the adoption to the Internet of Things is well under way. In fact, IoT was an incredibly fastgrowing industry in 2014 and there will no doubt be a fast evolution of the Internet of Things in the near future. Smart devices have arrived in the automobile, medical, and consumer electronics industries and most other industries as well. IoT common factors include: Productivity increasingly through the cloud Intelligent software applications and systems Advanced analytical capabilities necessary to make sense of the data from these intelligent or smart products A numerical snapshot of the Internet of Things or IoT: Billion predicted Number Of Things Will Be Connected To The Internet By 20/20 A Trillion Dollar Estimated Global Economic Impact Of IoT By
4 CREATING A SMARTER FUTURE The true challenge for today s enterprise lies in harnessing the power of IoT to create smarter products and a smarter future. To create smart products, you need intelligent tools. These tools will require built-in sensors, RFID devices, GPS features, storage, and more. And these devices will require local applications and performance management alerts that will connect to data via the internet, cell, cloud or wii-fi. In the not too distant future, billions of individuals and businesses, with trillions of smart, communicating devices, will stretch the boundaries of today s business and social systems changing the way we work, learn, entertain and innovate. Dan Murphy Vice President of Marketing ThingWorx, A PTC Company Smart products require data, computational power, and analytical ability to provide information and create key insights. Most importantly, these smart products will bring about new business models. To compete, today s organization must accurately assess the challenges and opportunities creating smart products can herald. OPPORTUNITIES To create smart products, today s enterprise must: Move production to a new era of smart manufacturing by using intelligent tools and processes to maximize product potential, improve production and design engineering processes. Create connected products via embedded intelligence that can help your organization create more useful and more personalized products and services. Gather data to create more intelligent value chains utilize data from smart manufacturing, inventory, and logistics, to create real-time updates, better products and ultimately spur innovation. CHALLENGES In spite of the potential of IoT, many organizations must consider: How to deal with legacy investments such as current products, facilities, and costly equipment. One solution: Where possible, add on to existing equipment to enhance it with smarter features rather than rebuilding or reinvesting in new equipment. Where to begin? Frost & Sullivan Research Director and Executive Editor Paul Tate advises organizations to start small and build on what you already have first. Wherever possible, create products that solve problems for your customer. Beware of creating a smart product just for the sake of creating a product. Security concerns. It s increasingly important to be aware of evolving device and data standards, and security guidelines. It s almost always a good idea to build security into your products and services. 4
5 INNOVATING WITH IoT As Paul Tate noted, innovation doesn t have to be complex. The truth is, as there is more incoming data to manage, managing too much data can become difficult. The key is to move from Big Data to Smart Data and to have the analytical skills and tools available in your organization to do so. When it comes to innovation and smart technology, it s also important to encourage cross collaboration via teams and partnerships. Work towards smart innovations. Think about scalable productivity and expect more convergence between products, technologies and industries. And remember, when it comes to innovation, your biggest threat as an organization might be doing nothing. SMARTER PRODUCTS: REAL-WORLD EXAMPLES This e-broadcast provided two real-world examples of organizations using the internet of things to enhance their products, productivity and bottom line. Robert Schlegel, President, Athena Controls, Incorporated, a global producer of process control solutions, explained how upgrading their customer s legacy products with smart technology solutions has helped their organization gain a real competitive advantage. Using a ThingWorx platform, Athena Controls created new end-user solutions utilizing data accessed on a local network and offering customized solutions to many of their existing customers. They now offer applications that pull relevant data for specific customers as well as cloud solutions. Athena can track overall effectiveness and energy management through the technology that ThingWorx offers. 5
6 Innovation doesn t have to be complex. Paul Tate Research Director and Executive Editor Frost & Sullivan Athena Controls is also pursuing profitable partnerships. For example, a food producer shares temperature data with packagers to create an optimal product and optimal packaging. Athena also continues to partner with original equipment manufacturers (OEMs) to create additional revenue streams and improve product performance. So, smarter technology and its applications are truly helping this organization offer value-added services that make a real business difference. A NEW PRODUCT CONTINUUM As the world moves to smart, connected products, companies like ThingWorx provide a platform for the rapid development of user-friendly applications as manufacturers bring products to market--even as the Internet of Things has changed the definition of what a product is or was. The following chart illustrates how products are now much more than physical, and shows the continuum of a new product world made possible by the IoT: Physical Product: physical components Smart Product: product incorporates software, sensors, electronics, enhanced UI Smart, Connected Product: Product has wired or wireless connectivity to exchange data remotely and to enable additional capabilities outside actual physical product Product System: Smart, connected product integrates into a system, usually/in same industry, to optimize product and performance System of Systems: Smart, connected product is coordinated across other product systems, outside traditional partners, suppliers, industry to optimize product and system performance 6
7 SMARTER BUSINESS ThingWorx also provided several real world applications of its smart technology to major organizations such as General Electric, Elekta, JoyGlobal and others that help us to understand the potential of IoT in reducing costs, decreasing field visits, enhancing productivity and, most significantly, helping to create new revenue streams and greater value for very differing organizations. We provide further details about two distinct applications of business success powered in part by ThingWorx here: 1. Diebold, a $2.9B provider of integrated self-service delivery and security systems, including ATMs, reduced its average problem resolution time from 3 hours to mere minutes; had 17% of total issues resolved remotely without a field service visit and had overall Opteva ATM downtime reduced by 15%-significant cost benefits. Customer satisfaction also increased. 2. All Traffic Solutions, a leading manufacturer of signs used by police departments and local governments to help understand and manage traffic, benefited from new services it was able to offer existing and potential customers as a result of an innovative solution called the TraffiCloud that was engineered by ThingWorx. Expanding beyond the signage business, All Traffic Solutions now collects data about speeding and feeds it into a database thereby cutting costs and expanding their business model. All Traffic also benefits from advanced data mining capabilities it can offer customers. 7
8 All of these success stories show that, by taking information beyond the physical device and changing the game (Dan Murphy, Vice President of Marketing, ThingWorx) organizations can expand their business models and benefit greatly. All Traffic s transformation in particular provides a distinct example of how innovation and smarter products are made possible by the Internet of Things. FINAL SUMMARY Rarely has the potential for true competitive advantage been so achievable for the manufacturing industry as it is today with the increasing adoption of connectivity, advanced analytics and embedded intelligence in the creation of smarter, more useful products. In production environments, in end-user applications, and throughout the entire manufacturing value chain, Internet of Things (IoT) technologies and analytical tools are beginning to have a deeply transformational impact on how manufacturing companies innovate, design, develop, produce, deliver, monitor and service both their current and future products, continually adding more value for both the product developer and the end customer along the way. Such smart products also open up valuable new opportunities to use the information they gather to help create powerful new service offerings that can provide rich additional revenue streams, exceptional levels of customer engagement, and help fuel the introduction of disruptive new business models that can take manufacturing companies into new areas of opportunity in the years ahead. 8
9 Perhaps most importantly, what this ebroadcast clearly demonstrated is that these IoTdriven competitive transformations are already underway across multiple industry sectors. The front-line insights from IoT adopter Athena Controls, and the multiple caseuses cited by PTC, are testament to the current competitive power of smart product developments. The so-called smart product revolution is not a future state. It s fast becoming an increasingly essential element of today s business world. About Athena Controls Since 1965, Athena has been a recognized leader in the design and manufacture of digital and analog temperature and process control instrumentation for a wide range of industries and applications including chemical, food, HVAC, medical device, packaging, pharmaceutical, plastics, refrigeration, semiconductor, vacuum furnace. Athena Controls provides a broad range of custom modular temperature/process control boards, power controllers, staging controllers, hot runner controllers, digital controllers, analog controllers, and temperature sensors designed to meet today s demanding temperature and process control applications. Athena s customer-driven approach to solving simple to more complex temperature and process control problems is the hallmark of the company. About ThingWorx, A PTC Business ThingWorx is the first IoT platform designed to build and run the applications of the connected world. ThingWorx reduces the time, cost, and risk required to build innovative applications for smart, connected products. [By ]taking information beyond the physical device and changing the game, organizations can expand their business models and benefit greatly. Dan Murphy Vice President of Marketing ThingWorx, A PTC Company ThingWorx enables companies to cost-effectively build value from their smart, connected products and deliver end-to-end Internet of Things (IoT) solutions. With ThingWorx you can rapidly build and run connected applications to capture the business opportunities offered by the emerging pervasiveness of smart Things. The ThingWorx IoT Platform provides a complete application design, runtime, and intelligence environment. 9
10 ABOUT FROST & SULLIVAN Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company s Growth Partnership Service provides the CEO and the CEO s Growth Team with disciplined research and best practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. Learn more at DISCLAIMER This Executive Summary discusses key insights and excerpts from a live presentation and discussion by Frost & Sullivan, Athena Controls, Inc. and ThingWorx, A PTC Company, on March 26, This summary presents industry insights, best practices, and case studies discussed by the presenters, in the context of the live presentation and l discussion. For more details, visit Frost & Sullivan is not responsible for the loss of original context or the accuracy of the information presented by the participating companies. 10
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