Industrie 4.0 / Internet of Things Vendor Benchmark 2016 Comparison of Vendors for Germany I4.0 / IoT Vendor Report White Paper based on the Results of the I4.0 / IoT Vendor Benchmark 2016 for Deutsche Telekom AG Authors: Arnold Vogt, Dr. Henning Dransfeld, Dr. Michael Weiß and Holm Landrock
Preface Both Industrie 4.0 / Industry 4.0 and the Internet of Things address the same dynamics of change, i.e., the increasing connectivity and automation of devices, machines and products, but have a different focus. Industry 4.0 (I4.0) has a basic focus on the production process within a "smart factory", while the Internet of Things (IoT) focuses on the utilization phase of digitized and connected devices and products. Both terms have emerged during the last couple of years and have caused a real hype, but more important than such fashionable terms is the understanding of underlying change dynamics. I4.0 and the IoT represent the next steps of evolution towards autonomous processes, based on a long-term development which has started many years ago. Predecessors of I4.0 & IoT include M2M. M2M, i.e., machine-to-machine communications, started with the interconnection of individual devices and has reached a new level of maturity through the cloud-based collective interconnection of devices; not surprisingly, considering this long-term development, some companies have been intensively involved with these topics and have built up respective expertise, and Deutsche Telekom is one of these pioneers. Deutsche Telekom has many years of experience with key basic IoT technologies such as connectivity and cloud computing and also comprehensive competences regarding complex M2M/IoT integration projects for their customers. Based on these strengths, Deutsche Telekom was able to achieve an outstanding and excellent position within Experton Group s I4.0/IoT Vendor Benchmark 2016. Kassel, March 2016 Arnold Vogt Lead Advisor I4.0 & IoT Experton Group AG Page 2
Current Market Developments Key results of the first I4.0/IoT Vendor Benchmark 2016 in Germany include the following: I4.0 has a basic focus on the production process within a "smart factory", while the IoT focuses on the utilization phase of digitized and connected devices and products. The I4.0/IoT market is still in its infancy. Market segmentation is difficult, because solution vendors (HW & SW) and service providers (consulting houses & system integrators) strongly overlap; there are many partial solutions and demand for consulting is high. As of today, users are pursuing a bottom-up approach out of their respective lines of business (production, logistics, customer service) to look for full-service providers to digitize individual steps of their value chain. In the future, they will increasingly pursue strategic top-down approaches. Solution vendors and system integrators have built up partner networks to be able to offer complete solutions and position themselves as full-service providers. Many small IoT platforms have evolved, which are used by the vendors themselves in their role as full-service providers and/or are offered to other full-service providers. According to Experton Group estimates, hundreds of IoT platforms are already available today worldwide, and in 2016, additional renowned providers will enter this market, with a first consolidation wave to be expected as early as 2017. In the future, most vendors will act as full-service providers that implement customized solutions, based on standard platforms (rather than their own platforms). Experton Group AG Page 3
Overall Ranking: Deutsche Telekom s Position in the I4.0/IoT Vendor Benchmark 2016 Within the first edition of the I4.0/IoT Vendor Benchmark 2016, Deutsche Telekom was evaluated in the following five categories: IoT Platforms Industrial Big Data Analytics I4.0/IoT Consulting & System Integration Machine & Plant Engineering I4.0/IoT Consulting & System Integration Automotive Industry I4.0/IoT Consulting & System Integration Transportation & Logistics Deutsche Telekom provides an enormously broad I4.0/IoT portfolio and was even able to achieve a position in the leader quadrant of all of the five categories. Market Categories Industrie 4.0 / Internet of Things IoT Platforms I4.0/IoT Consulting & System Integration Machine & Plant Engineering I4.0/IoT Consulting & System Integration Automotive Sector I4.0/IoT Consulting & System Integration Transportation & Logistics Ranking Deutsche Telekom I4.0 Analytics Figure 1: Overall ranking of Deutsche Telekom within the individual market categories Source: Experton Group, 2015 Experton Group AG Page 4
Deutsche Telekom s broad IoT/I4.0 portfolio Deutsche Telekom designs, transforms and operates digital solutions based on its mission Digitization. Simply. Make it Happen. The vendor provides customers an easy entry into the digitization topic, based on a highly standardized approach, and supports them on their digital journey, from design to transformation and operations. Figure 2: Digital customer journey (Source: Deutsche Telekom) Design of IoT/I4.0 solutions Deutsche Telekom helps customers design new, more agile business processes and digital business models. These services are based on the vendor s broad industry-specific know-how and standardized starter and pilot packages, including preconfigured dashboards and integrated connectivity. Deutsche Telekom also provides IoT consulting packages to help customers develop digital business models or a digital strategy. Transformation and operations of IoT/I4.0 solutions In many cases, existing ICT landscapes must be restructured and migrated during the transformation to support, for instance, new online business models. Deutsche Telekom, as a long-term and trusted IoT and I4.0 partner, supports its customers during this transformation and operations phase. For example, through comprehensive integration and managed IoT services across the complete IoT stack, including specific hardware such as sensors or tracking devices. Depending on customers individual requirements such as regional focus or data criticality Deutsche Telekom s multi-iot service platform provides multiple standard technology and infrastructure settings to support their respective IoT solution. Experton Group AG Page 5
End-to-end modules for IoT/I4.0 Deutsche Telekom s IoT/I4.0 offering has a modular structure and was designed as end-to-end service with centralized contract and service management across all components and partners, based on the one-stop shop principle. Figure 3: End-to-End Offer modular services for Iot/I 4.0 (Source: Deutsche Telekom) The degree of standardization of IoT/I4.0 solutions is increasing rapidly. Deutsche Telekom has already developed first standardized use cases: Condition monitoring: for instance, for the real-time check of devices and machines for remote maintenance purposes; Predictive maintenance: for instance, for automated real-time notification on whether and when repairs are required for devices and machines; Mobile asset management: for instance, for fleet management control or to receive connected real-time pictures of the current situation on parking and movement spaces to optimize driving and parking times. Strategic concepts: Deutsche Telekom s consulting packages have been designed to help customers develop digital business models and strategies, for instance, to build up decentralized production and logistics processes, provide point-of-sale solutions or ensure the fast, customized production of trend products. Experton Group AG Page 6
I4.0 and IoT Use Cases Today and Tomorrow Most customers pursue a I4.0/IoT bottom-up, rather than a top-down approach, with an interest on concrete use cases to optimize individual steps of the value chain (production, logistics or customer service). Experton Group has examined two aspects the question as to what a maturity model for I4.0/IoT use cases could look like, and where most current use cases would be positioned within this maturity model. A maturity model must be able to show long-term developments in individual development steps. An examination of current I4.0/IoT topics shows that these two terms are closely related to and interwoven with two other long-term developments: automation and interconnectivity. Therefore, the increasing automation, from measuring and control to the operations of autonomous systems, can be used as one dimension of a maturity model. Monitoring Monitoring & Control Automated Optimization Autonomous Systems Remote monitoring through operator and/or service staff (without remote control) Remote monitoring and control through operator and/or service staff (2- way communications) Increasingly automated remote monitoring and control to increase efficiency Self-learning systems are increasingly taking over operational, diagnostic, service and coordination tasks Degree of Automation (Driver: Digitization) Figure 4: Value creation through increasing automation towards integrated processes Source: Experton Group, 2015 Experton Group AG Page 7
Degree of Connectedness (Driver: Sensors Device Level Fleet Level Process Level The other dimension, increasing interconnectivity of machines, products and things could be used, from an individual to a collective level (e.g. in machine parks) towards completely networked and integrated processes. Process integration includes everything from purely vertical production or customer service processes to integration of all horizontal processes. Many-to-Many: Connecting machine data to processes allows for the integrated usage of machine data in various processes (ERP, PLM, CRM) and new areas of application One-to-Many: Digitized and networked machine parks allow for the collective usage of machine data to monitor, control and optimize all devices (swarm intelligence) One-to-One: Digitized and networked devices allow for the individual usage of machine data to monitor, control and optimize individual devices Figure 5: Value creation through increasing connectivity towards integrated processes Source: Experton Group, 2015 If you lay both dimensions on top of each other, you will have a maturity model for I4.0/IoT use cases that maps the increased value through increased automation and interconnectivity. Evolution goes from simple device monitoring on the individual device level (bottom left in the picture) to completely autonomous processes (top right). Experton Group AG Page 8
Degree of Connectedness (Driver: Sensors Device Level Fleet Level Process Level Process Monitoring Process Monitoring & Control Automated Process Optimization Autonomous Processes Fleet Monitoring Fleet Monitoring & Control Automated Fleet Optimization Autonomous Fleet Device Monitoring Device Monitoring & Control Automated Device Optimization Autonomous Devices Degree of Automation (Driver: Digitization) Figure 6: Maturity model for I4.0/IoT use cases Source:Experton Group, 2015 In a next step, a variety of use cases that are currently discussed within the I4.0/IoT context was collected to determine their current maturity level. As a result, we discern that all use cases are still in an early maturity stage and practically all have to do with device monitoring. The use cases of Deutsche Telekom illustrated in the figure below condition monitoring, predictive maintenance and mobile asset management represent the next evolutionary step within the maturity model. While Deutsche Telekom has obviously made good progress with the standardization of more complex I4.0/IoT use cases, there is also no doubt that the largest part of the development curve is still ahead of us. Evolution towards autonomous processes will still take some more time. Experton Group AG Page 9
Figure 7: Evolution of I4.0/IoT use cases of Deutsche Telekom Source: Experton Group, 2015 Experton Group AG Page 10
APPENDIX Experton I4.0 / IoT Vendor Benchmark 2016 This is Experton Group s first benchmark that analyzes the German I4.0/IoT market, based on six categories. The results gained on relevant vendors were published within a comprehensive study, including key trends and respective Market Insight quadrants for the individual categories. The I4.0/IoT Vendor Benchmark is the result of intensive market observation, which helps us to compare user requirements with comprehensive vendor portfolios, which are analyzed and evaluated accordingly. These analyses are based on the "Experton Group Market Insight" methodology developed by Experton Group. This validated and internationally acknowledged methodology serves as basis for the evaluation and positioning of the individual vendors. The charts for the individual quadrants contain the output of our analysis with respect to the portfolio attractiveness and the competitive strength of the benchmarked vendors. Figure 8: Relevant analysis and evaluation aspects Each subcategory is further differentiated by various elements. For each vendor, a detailed scoring based on 10 key and additional secondary criteria is provided for each product category. Altogether, about 100 items are analyzed. These criteria are weighted, based on the respective product category, resulting in an assessment of the individual offering s Experton Group AG Page 11
attractiveness ( portfolio attractiveness ) and the strength of the individual vendor ( competitive strength ). Figure 9: Benchmarked providers within the consulting & system integration category machine & plant engineering Experton Group AG Page 12
Figure 10: Benchmarked providers within the consulting & system integration category automotive sector Figure 11: Benchmarked providers within the consulting & system integration category transportation & logistics Experton Group AG Page 13
Figure 12: Benchmarked IoT platform providers Figure 13: Benchmarked vendors of industrial big data analytics Experton Group AG Page 14
About Deutsche Telekom Deutsche Telekom is one of the world's leading integrated telecommunications companies, with some 156 million mobile customers, 29 million fixed-network lines, and more than 18 million broadband lines. The group provides fixed-network/broadband, mobile communications, Internet, and IPTV products and services for consumers, and information and communication technology (ICT) solutions for business and corporate customers. Deutsche Telekom has presences in more than 50 countries. With a staff of some 225,200 employees throughout the world, the company generated revenue of 69.2 billion Euros in the 2015 financial year, about 64 percent of it outside Germany. For Deutsche Telekom, the business customer segment in Europe is a strategic area of growth. Together with T-Systems, Deutsche Telekom s daughter company for the large accounts segment, Deutsche Telekom provides small and medium businesses as well as multinational corporations ICT solutions for an increasingly complex digital world. The core offering comprises cloud-based services, M2M and security solutions, additional mobile and fixed-line communications products, solutions for virtual collaboration and IT platforms, which serve as basis for customers digital business models. About T-Systems T-Systems is one of the world s leading providers of information and communications technology (ICT). T-Systems offers a range of integrated solutions for business customers, based on global fixed-line and mobile offerings, highly secure data centers, a unique cloud ecosystem consisting of standardized platforms and global partnerships, combined with highest security levels upon the customer s request in compliance with strict German privacy regulations. With a footprint in more than 20 countries, 46,000 employees, and external revenues of 7.1 billion Euros (2015), T-Systems acts a digital transformation partner for their customers. The portfolio comprises traditional cloud-based services, tailored infrastructure, platforms and software from the cloud as well as innovation projects for the business fields of Experton Group AG Page 15
the future, such as big data, the Internet of Things, machine-to-machine (M2M) communication or Industrie 4.0. About Experton Group Experton Group is a leading IT research, advisory and consulting company. The company has 30 experienced analysts in Europe who support mid-sized and large organizations with their IT strategic planning and implementation. In Germany, Experton Group has offices in Munich and Kassel. Additional information on our research can be found under: http://experton-group.de http://blog.experton-group.de/ https://twitter.com/expertongroup Experton Group AG Page 16