Navigating the Digital Transformation. Kevin See Ph.D. Research Director

Transcription

1 Navigating the Digital Transformation Kevin See Ph.D. Research Director

2 Digital Transformation is a matter of survival Released poorly received DC-20, while rolling out a new film line Kodak has identified several untapped markets for CD-R, including Internet archiving, in which they will be used to download, store and archive massive content from the World Wide Web, said Larry Zimmer, worldwide general manager, CD/DVD products 'By 2008, Kodak will be the digital company I came here to run' - Kodak CEO Antonio Perez, Investor meeting Sept, 2005 Reference: nightowltrader.blogspot.com, Cleveland Plain Dealer,

3 Digital threatens to transform every conceivable arena Arena Past Future Security Cybersecurity IoT Security Transactions Centralized repository Blockchain Interfaces Decision-making Mobility Factories Ecosystems Buttons Spreadsheets Drivers People Dumb Voice and Gesture AI Autonomy Robots Smart Source: Lux Research 3

4 Four actions for the Digital Transformation 1. Know your toolbox 4

5 DARPA calls for IoT security IoT Security The current and projected widespread use of [IoT Devices] requires the exploration and development of new cybersecurity capabilities that are conducive to these devices limitations the goal of the Leveraging the Analog Domain for Security (LADS) program is to develop new cybersecurity capabilities by exploring the intersection of the analog and digital domains. -- Leveraging the Analog Domain for Security (LADS) Program, DARPA, September

6 IoT Security PFP Cybersecurity Physics-based approach for cyber threat detection Lux Take: Strong Positive Technology and differentiators: Physics-based approach to detecting cyber threats by analyzing the electrical patterns of processors Uses current and interference sensors to build a profile of a processor's typical electrical behavior, then uses machine learning to identify anomalies that might indicate a threat Strategy and markets: Ideal for IoT devices that can't support modern security software or are limited by memory / compute constraints Works with chipmakers to embed solution directly into boards (notable partnerships with Xilinx and ARM) Summary information Founded in 2010 Location United States Revenue $1.6M 6

7 Building blocks of blockchain Blockchain First successful deployment in Bitcoin Encrypted database on each device, which allows for large numbers of nodes to converge on a single consensus of the most up-to-date version of the data sets being recorded by the network Each block includes all the recent transactions, along with proof of work Creates a prohibitively high cost to attempt to rewrite or alter transaction history Numerous developers building blockchain solutions in other industries 7

8 Blockchain Filament Sensor devices with mesh networking capabilities Lux Take: Wait and See Technology and differentiators: Produces a small, rugged device that includes six sensors, 916 MHz and Bluetooth radios, USB ports, and proprietary peer-to-peer protocol stack built on blockchain Decentralized mesh architecture allows devices to communicate directly with one another, eliminating the need to connect to the Internet or central hub; protocols ensure device IDs, encrypted messaging, and smart contracts Strategy and markets: Working with a dozen pilot customers in manufacturing, mining, agriculture, and utilities notable pilot for pluggability and security of pharma manufacturing equipment into SCADA Summary information Founded in 2012 Location United States Revenue $200k 8

9 AI for all your needs AI Applications Domains Methods 9

10 Citrine Informatics Materials discovery service using datamining and machine learning techniques Technology and differentiators: Uses machine learning to analyze materials data for patterns; can select material candidates based on performance requirements, estimate additional performance parameters of known materials, or predict novel materials with desired properties Extracts data from public sources including papers, patents; claims 17 million composition/process/ property relationships in database Strategy and markets: Business model aims to use as much publicly usable materials data as possible, supplement with customers' proprietary data, and provide predictive analytics to reduce time and cost of materials design and selection AI Lux Take: Wait and See Summary information Founded in 2013 Location Revenue $500k United States 10

11 Four actions for the Digital Transformation 1. Know your toolbox 2. Establish a digital business model but recognize the challenge 11

12 Robots for hire Automata Technologies offers its product as a robot-as-a-service model with a monthly fee ranging from $500 to $750; the service comes with an EVA unit, the choreograph software, and includes maintenance and replacement of the robot; customers can expect 4,000 hours of continuous use before needing to replace it 12

13 Digital is turning traditional equipment models on their head Historically heavy users of SAP for operations and customers. Developed connected gas compressors, which stream to SAP IoT cloud. Experimenting with service / pay-per-use business models. Could sell usage data to gas chemicals providers or utilities. 13

14 New business models from the factory to the kitchen The company s software platform aims to interconnect homeowners and food products throughout the consumer cycle, from shopping, to storing, to preparing, and to eating Plans to generate revenue by charging a software-as-a-service (SaaS) fee directly to consumers in a business-to-consumer (B2C) model, and by charging a licensing fee to smart kitchen appliance manufacturers 14

15 Evolution of maintenance approaches Reactive Maintenance Fixing equipment when it fails Preventative Maintenance Performing routine maintenance in scheduled intervals (after a given number of hours or cycles) Predictive Maintenance Monitoring equipment and performing maintenance when there are forward indicators of failures 15

16 Predictive maintenance sounds great in theory Answers to the question: Would your organization be willing to allow your equipment providers to monitor your equipment remotely (over the Internet) in order to provide predictive maintenance services? 16

17 Four actions for the Digital Transformation 1. Know your toolbox 2. Establish a digital business model but recognize the challenge 3. Think about product and process 17

18 Following the signal the IoT framework Sense Collect Connect Store Analyze Act 18

19 Improvements across the value chain 19

20 PINC Solutions Real-time location system for supply chain intelligence Lux Take: Positive Technology and differentiators: Provides real-time location system with low-cost, offthe-shelf components for yard / warehouse management Patented methods for triangulation with cheap radio frequency identification (RFID) components claims order of magnitude improvements in location accuracy compared with similarly priced platforms Strategy and markets: Focuses on enterprises with large yards and warehouses most customers in food and beverage, automotive, and consumer goods Claims platform increases inbound / outbound velocity, improves asset utilization, eliminates manual yard checks, and reduces demurrage charges for idle trailers by 40% Summary information Founded in 2004 Location United States Revenue $12M 20

21 Case Study 1: PINC Solutions & Daimler Trucks (Saltillo, Mexico Manufacturing Plant) Overview Daimler uses PINC s yard management system (YMS) to improve visibility and performance at manufacturing sites Daimler tracks assembly process beginning when trailers with parts arrive through when the trucks are assembled and leave the site Connected Assets Trailers, Crates, Parts, Completed Trucks Use Cases Yard / Warehouse / Plant Optimization Employee Productivity Supply Chain Visibility 21

22 Following the signal Sense Collect Connect Store Analyze Act 22

23 Value for Daimler 99% trailer yard accuracy and a 50% reduction in trailer move time, reducing carrier detention fees by 50%. Manual spotters with written reports were replaced by the PINC platform. PINC claims that Daimler recognized return on investment (ROI) in 9 months at the Saltillo plant. An embedded RFID goes in the finished vehicle report, allowing Daimler to track through inventory and perform root cause analysis. Daimler has rolled the platform out to all 9 of its US and Mexico sites since the success at Saltillo. 23

24 Mesh Systems End-to-end solution for connecting assets to the cloud Lux Take: Positive Technology and differentiators: Integrates a complete solution (hardware, software, networking, hosting, back-end integration) to connect commercial and industrial assets to cloud intelligence service Heavily founded on Microsoft Azure tools claims competitive advantage in scalability without sacrificing performance or cost Strategy and markets: Works directly with OEMs to develop and manufacture products that are connected to the Internet, enabling new services and revenue streams Has deployed on wind turbines, streetlights, smart grid components, retail systems, beer kegs, and commercial coffee machines Summary information Founded in 2005 Location United States Revenue $7.2M 24

25 Case Study 2: Mesh Systems & BUNN Overview Mesh Systems has helped BUNN to deliver a line of connected coffee machines with an online service management portal. Leveraging Microsoft Azure Machine Learning tools, the platform predicts maintenance requirements before machines fail. Connected Assets Commercial Coffee Machines Use Cases Remote Diagnostics Predictive Maintenance 25

26 Following the signal Sense Collect Connect Store Analyze Act 26

27 Four actions for the Digital Transformation 1. Know your toolbox 2. Establish a digital business model but recognize the challenge 3. Think about product and process 4. Beware the hype! 27

28 More sensors = more data = more profits, right?!? More sensors Increased number of nodes to connect Improved analytics 28

29 Data is dead all aboard the AI hype train! Deep Blue Chess: 1996 Watson Jeopardy: 2011 AlphaGo GO: 2016 The challenge is that very few real world applications look anything like Chess, Jeopardy, or GO. In practice, neither Google nor Facebook have found a way to use their artificial intelligence superpowers to improve their core business In 2014, IBM put together a $100 M fund to help app development for Watson Everyone is giving away their algorithms for free 29

30 Beware the allure of the generalized solution Strategy 1: We are building a unified algorithmic architecture to achieve human-level intelligence in vision, language, and motor control. We have raised ~$70M in funding and are not constrained by publication, grant applications, or product development cycles. 30

31 Outlook Success in the Digital Transformation requires a close look at the products your company provides but also internally at the processes it uses Innovation = growth, and in Digital it moves fast While the upside is big so is the downside (see Kodak) 31

32 Kevin See Ph.D. Research Director Lux Research Inc. 100 Franklin Street, 8th Floor Boston, MA USA Phone: Fax: