Industrial Automation and Wireless IoT

M2M Research Series 2019

www.berginsight.com
Industrial Automation and Wireless IoT
Fourth Edition, 2019

by Fredrik Stålbrand
BERG INSIGHT RESEARCH TEAM ABOUT THE AUTHOR
Fredrik Stålbrand, M2M/IoT Analyst Fredrik Stålbrand is an IoT/M2M Analyst with
([email protected]) a Master’s degree in Industrial Engineering
and Management from Chalmers University
Johan Fagerberg, Principal Analyst of Technology. He joined Berg Insight in
([email protected]) 2016 and his areas of expertise include
cellular hardware, IoT platforms and IoT/M2M
applications in the industrial markets.
OFFICE
Viktoriagatan 3 ACKNOWLEDGEMENTS
S-411 25 Gothenburg Advantech, Altair Engineering, Belden,
Sweden Bosch, C3 IoT, Digi International, Device
Insight, Eurotech, Exosite, FreeWave
CUSTOMER SERVICE Technologies, Hitachi, IBM, InHand
Phone: (46) 31 711 30 91 Networks, INSYS Microelectronics, Maestro
E-mail: [email protected] Wireless Solutions, Moxa, NetModule,
Web: www.berginsight.com Newtrax Technologies, OleumTech, Opto 22,
Oracle, PTC, Relayr, Robustel Technologies,
SAP, Secomea, Sierra Wireless, Software AG,
Published in Sweden in January 2019 Telit, Wind River

The author wishes to thank everyone who

has assisted him with the report.

© Copyright 2019 Berg Insight,

All rights reserved
INDUSTRIAL AUTOMATION AND WIRELESS IOT INDEX

Index

Table of Contents
Table of Contents ......................................................................................................................... i
List of Figures .............................................................................................................................. v
Executive summary ..................................................................................................................... 1
1 The industrial automation industry ...................................................................................... 3
1.1 Introduction to industrial automation........................................................................... 3
1.2 Factory and process automation................................................................................. 4
1.3 Factory and process operations.................................................................................. 5
1.4 Industrial automation system overview ....................................................................... 6
1.5 Industrial automation evolution ................................................................................... 8
1.6 The industrial automation market ................................................................................ 9
1.7 Industrial automation market segments .................................................................... 11
1.7.1 Industrial software ............................................................................................... 12
1.7.2 Industrial control systems ................................................................................... 13
1.7.3 Automation equipment and instrumentation....................................................... 14
1.7.4 Industrial robots .................................................................................................. 14
2 Wireless IoT solutions in industrial automation ................................................................. 17
2.1 Wireless automation infrastructure ............................................................................ 17
2.1.1 Facilities segment................................................................................................ 19
2.1.2 Service segment.................................................................................................. 21
2.1.3 Network segment ................................................................................................ 22
2.2 Operations management ........................................................................................... 29
2.2.1 Production and process management ............................................................... 29
2.2.2 Business management........................................................................................ 30
2.3 Equipment management and regulatory compliance............................................... 30
2.3.1 Equipment diagnostics and maintenance planning ........................................... 31
2.3.2 Security and Safety ............................................................................................. 31
2.3.3 Regulatory compliance ....................................................................................... 32
2.4 Business models and project strategies ................................................................... 32

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3 Market forecasts and trends .............................................................................................. 35

3.1 Market analysis .......................................................................................................... 35
3.1.1 Installed base and unit shipments ...................................................................... 36
3.1.2 Wireless technologies ......................................................................................... 37
3.1.3 Regional markets ................................................................................................ 39
3.1.4 Major vendors...................................................................................................... 41
3.2 Market drivers and barriers........................................................................................ 44
3.2.1 Macroeconomic environment ............................................................................. 44
3.2.2 Regulatory environment ...................................................................................... 45
3.2.3 Competitive environment .................................................................................... 46
3.2.4 Technology environment .................................................................................... 47
3.3 Value chain analysis .................................................................................................. 48
3.3.1 Industrial communications and control industry players .................................... 48
3.3.2 Industrial automation industry players ................................................................ 53
3.3.3 Telecom industry players .................................................................................... 57
3.3.4 IoT platform and IT industry players ................................................................... 58
3.4 Future industry trends ............................................................................................... 61
4 Global automation vendors ............................................................................................... 65
4.1 ABB ............................................................................................................................ 65
4.2 Bosch ......................................................................................................................... 68
4.3 Emerson .................................................................................................................... 70
4.4 Endress+Hauser ....................................................................................................... 72
4.5 Fanuc ......................................................................................................................... 74
4.6 General Electric ......................................................................................................... 75
4.7 Hitachi ........................................................................................................................ 78
4.8 Honeywell .................................................................................................................. 80
4.9 Keyence ..................................................................................................................... 82
4.10 Kuka ........................................................................................................................... 83
4.11 Mitsubishi Electric ...................................................................................................... 85
4.12 Omron ........................................................................................................................ 86
4.13 Pepperl+Fuchs ......................................................................................................... 87
4.14 Rockwell Automation ................................................................................................. 89

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4.15 Schneider Electric...................................................................................................... 91

4.16 Siemens ..................................................................................................................... 93
4.17 Yaskawa Electric ........................................................................................................ 95
4.18 Yokogawa .................................................................................................................. 96
5 Device and software vendors ............................................................................................ 99
5.1 Industrial communications and control solution providers ....................................... 99
5.1.1 Acksys ................................................................................................................. 99
5.1.2 ADLINK Technology .......................................................................................... 100
5.1.3 Advantech ......................................................................................................... 102
5.1.4 Antaira Technologies......................................................................................... 104
5.1.5 Beckhoff Automation ......................................................................................... 105
5.1.6 Beijer Electronics Group ................................................................................... 105
5.1.7 Belden ............................................................................................................... 106
5.1.8 Cisco ................................................................................................................. 108
5.1.9 Contec ............................................................................................................... 110
5.1.10 Data-Linc ........................................................................................................... 112
5.1.11 Digi International ............................................................................................... 112
5.1.12 Eurotech ............................................................................................................ 114
5.1.13 FreeWave Technologies.................................................................................... 117
5.1.14 HMS Networks .................................................................................................. 118
5.1.15 InHand Networks ............................................................................................... 120
5.1.16 INSYS Microelectronics ..................................................................................... 121
5.1.17 Kontron S&T ...................................................................................................... 122
5.1.18 Lantronix ............................................................................................................ 124
5.1.19 Maestro Wireless Solutions ............................................................................... 125
5.1.20 MB Connect Line ............................................................................................... 126
5.1.21 MC Technologies .............................................................................................. 127
5.1.22 Moxa .................................................................................................................. 127
5.1.23 MultiTech Systems ............................................................................................ 129
5.1.24 National Instruments ......................................................................................... 130
5.1.25 NetModule ......................................................................................................... 132
5.1.26 Newtrax Technologies ....................................................................................... 133

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5.1.27 OleumTech ........................................................................................................ 134

5.1.28 Opto 22 .............................................................................................................. 135
5.1.29 Phoenix Contact ................................................................................................ 137
5.1.30 Red Lion Controls (Spectris) ............................................................................. 138
5.1.31 Robustel Technologies...................................................................................... 140
5.1.32 Secomea ........................................................................................................... 141
5.1.33 Sierra Wireless................................................................................................... 142
5.1.34 Steute ................................................................................................................ 145
5.1.35 Wago ................................................................................................................. 145
5.1.36 Weidmüller ........................................................................................................ 146
5.2 IIoT platform and software vendors ......................................................................... 147
5.2.1 Altair Engineering .............................................................................................. 148
5.2.2 C3 IoT ................................................................................................................ 150
5.2.3 Device Insight .................................................................................................... 152
5.2.4 Exosite ............................................................................................................... 154
5.2.5 FogHorn Systems ............................................................................................. 156
5.2.6 IBM .................................................................................................................... 157
5.2.7 Litmus Automation ............................................................................................ 160
5.2.8 Oracle ................................................................................................................ 161
5.2.9 PTC .................................................................................................................... 162
5.2.10 Relayr ................................................................................................................ 166
5.2.11 SAP .................................................................................................................... 167
5.2.12 Software AG ...................................................................................................... 170
5.2.13 Telit .................................................................................................................... 172
5.2.14 Uptake ............................................................................................................... 176
5.2.15 Wind River ......................................................................................................... 176
Glossary .................................................................................................................................. 179

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Index

List of Figures
Figure 1.1: Examples of industrial automation market verticals ................................................. 5
Figure 1.2: Examples of factory and process operations ........................................................... 6
Figure 1.3: Industrial automation system overview .................................................................... 7
Figure 1.4: Industrial automation market value (World 2008–2017)........................................... 9
Figure 1.5: Industrial automation market value by region (World 2017) .................................. 10
Figure 1.6: Business activities of key global automation vendors............................................ 12
Figure 1.7: Annual shipments of industrial robots (World 2008–2017) .................................... 15
Figure 1.8: Operational stock and density of industrial robots by region (World 2017) .......... 16
Figure 2.1: Overview of wireless IoT infrastructure in industrial automation ............................ 18
Figure 2.2: Examples of field, control and network devices ..................................................... 20
Figure 2.3: Example of service segment in a connected automation system .......................... 22
Figure 3.1: New connected nodes in industrial automation by technology (World 2018) ....... 36
Figure 3.2: Unit shipments and installed base by equipment category (World 2017–2023) ... 37
Figure 3.3: Unit shipments and installed base by technology (World 2017–2023).................. 38
Figure 3.4: Unit shipments and installed base by region (World 2017–2021) ......................... 40
Figure 3.5: Major vendors in the industrial communications market ....................................... 42
Figure 3.6: Key data for industrial communications and control solution providers ................ 49
Figure 3.7: M&As in the industrial communications sector (2011–2018) ................................. 51
Figure 3.8: Major industrial automation vendors ...................................................................... 52
Figure 3.9: Key data for companies active in industrial automation......................................... 54
Figure 3.10: M&As in the industrial automation sector (2015–2018)........................................ 55
Figure 3.11: Mobile operators by IoT subscriber base (World Q2-2017) ................................. 58
Figure 4.1: Endress+Hauser’s WirelessHART gateway and adapters .................................... 73
Figure 4.2: Example of a data acquisition solution using GE MDS devices ............................ 77
Figure 4.3: Simplified overview of the Kuka Connect platform................................................. 84
Figure 4.4: Mitsubishi’s iQ Platform .......................................................................................... 85
Figure 4.5: Pepperl+Fuchs’ WirelessHART products .............................................................. 88
Figure 4.6: Yokogawa’s gateways and wireless access point based on ISA100.11a .............. 96

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Figure 5.1: Acksys’ AirLink industrial Wi-Fi access point ....................................................... 100
Figure 5.2: Advantech’s WISE-3620 wireless IoT Wi-Fi network gateway.............................. 103
Figure 5.3: Example of an operation monitoring solution based on Contec’s devices ......... 111
Figure 5.4: Eurotech’s IoT architecture................................................................................... 115
Figure 5.5: National Instruments’ WSN gateway and measurement nodes .......................... 132
Figure 5.6: Opto 22’s Groov EPIC system .............................................................................. 136
Figure 5.7: Cellular remote connectivity to an RTU via the new TC CLOUD CLIENT ............ 138
Figure 5.8: IoT solutions in Altair’s SmartWorks suite ............................................................ 149
Figure 5.9: The FogHorn architecture..................................................................................... 156
Figure 5.10: The Watson IoT Platform .................................................................................... 159
Figure 5.11: PTC’s ThingWorx platform .................................................................................. 165

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INDUSTRIAL AUTOMATION AND WIRELESS IOT SUMMARY

Summary

Executive summary
Wireless technologies are integrated into a wide range of devices that can be used
throughout an automation system, from the supervisor level all the way to the control and
field levels. The devices can be broadly divided into two segments: automation equipment
and network equipment. In the automation equipment segment, high-volume product
categories featuring wireless communications capability include instrumentation such as
industrial sensors, as well as wireless I/O and field devices that connect to sensors, actuators
and machines. Important product categories within the network equipment segment are
wireless access points, gateways, routers and switches.

The adoption of wireless solutions in industrial environments is often a gradual process and
an initial deployment typically comprises clusters of wireless devices connected to an existing
wired network. Although wired networking solutions are still predominantly used for industrial
communications between sensors, controllers and systems, wireless solutions are widely
used as wire replacement in hard to reach or hazardous areas, on moving machine parts and
on portable equipment. Proprietary radio solutions have traditionally been used to support
these use cases and is still used in many applications today. Standardised wireless
technologies such as Wi-Fi, 802.15.4 and Bluetooth have advanced to become the leading
wireless technologies for industrial applications. Cellular technologies based on 5G could
expand the addressable market for wireless communications as it allows for deployments
where requirements related to bandwidth, latency or capacity cannot be fulfilled today.

Berg Insight estimates that annual shipments of wireless devices for industrial automation
applications including both network and automation equipment reached 4.6 million units
worldwide in 2018, accounting for approximately 6 percent of all new connected nodes.
Growing at a compound annual growth rate (CAGR) of 16.3 percent, annual shipments are
expected to reach 9.9 million in 2023. The installed base of wireless devices in industrial
automation applications is forecasted to grow from an estimated 21.3 million connections at
the end of 2018 to 50.3 million connected devices by 2023.

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Automation equipment such as wireless instrumentation is offered by many large automation

vendors as part of complete systems for automation of industrial processes, but also by
specialised providers. Emerson became the first company to market WirelessHART products
in 2008 and is today the largest provider of wireless instrumentation devices. The company
has an installed base of more than 42,000 wireless networks worldwide and serves many
leading players across various process industries. Major wireless instrumentation vendors
further include Yokogawa and Honeywell, which both provide field devices based on the
wireless technology ISA100.11a. Pepperl+Fuchs significantly strengthened its position in the
wireless field device market through the acquisition of MACTek in 2015, a provider of HART
protocol devices. Other major industrial automation vendors that provide wireless field
devices include ABB, Endress+Hauser, Schneider Electric and Siemens. Wireless I/O and
field devices are also offered by a diverse range of players that are primarily active in the
industrial communications and control markets.

Major providers of wired industrial network equipment also offer wireless solutions to enable
customers to monitor and control devices wirelessly in parts of the plant that are normally not
connected to the control room due to accessibility or wiring costs. These include Siemens,
Cisco, Belden, Moxa and Phoenix Contact, which all offer comprehensive portfolios of
industrial wireless devices such as routers, gateways and wireless access points. These
companies typically partner with large automation vendors as a go-to-market strategy. Cisco
has for example developed the Ethernet and IP-networking based architecture for industrial
Ethernet applications – Converged Plantwide Ethernet (CPwE) – together with Rockwell
Automation. Additional providers of industrial Wi-Fi devices are Acksys, Advantech, Antaira
Technologies, Beijer Electronics Group, Data-Linc, Hilscher, HMS Networks, INSYS
Microelectronics, MB Connect Line, MC Technologies, NetModule and Red Lion Controls.

Cellular and unlicensed ISM radio solutions are typically used for data acquisition and
backhaul communications in distributed automation applications. The largest provider of
cellular IoT gateways and routers in the industrial space include Sierra Wireless, followed by
Cradlepoint, Cisco, Digi International, InHand Networks, HMS Networks, Maestro Wireless,
GE’s industrial communications group GE MDS, Robustel Technologies, Advantech,
MultiTech Systems, NetModule and Eurotech. Major vendors of proprietary radio solutions
are GE MDS, FreeWave Technologies and Banner Engineering.

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Chapter 1

The industrial automation industry

1 The industrial automation industry

End users of automation solutions are present throughout a large number of industries,
ranging from electronics manufacturing to chemical refining. As a growing number of
manufacturing companies are today looking at digitalising their operations to drive further
productivity gains, the automation industry is investing heavily in the development of
solutions to help customers gather data from machines, design products faster and optimise
processes. The automation industry hosts a variety of different types of players. The product
and service portfolios range from complete integrated systems down to single hardware and
software components part of automation systems.

1.1 Introduction to industrial automation

Industrial automation is used to delegate human control functions to technical devices in
manufacturing, production processes and industrial processes in order to reduce cost and
increase productivity, quality and safety. Process and machine control started with the use of
pneumatic controllers in the 1920s. Pneumatic control systems were later replaced by hard
wired logic control systems. In the 1960s, electronic logic gates, timers and counters enabled
automatic systems to become smaller and more reliable while consuming less energy. It was
however still cumbersome to implement control logic changes and when microprocessors
and Programmable Logic Controllers (PLCs) became available in the 1970s, it was possible
to carry out control actions through programs instead of physical re-wiring. PLCs and the
closely related Programmable Automation Controller (PAC), Distributed Control System
devices (DCSs) and Remote Terminal Units (RTUs) are still widely used within industrial
automation. A PAC can be described as a more advanced PLC suitable for more complex
automation systems and has often larger memory capacity, a more open architecture and
provides better programming flexibility than a traditional PLC. It is also increasingly common
to use industrial PCs with built-in PLC functionality for control operations.

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Progress within control and monitoring solutions have had great impact on manufacturing
industries since the 1960s and today’s advancements within edge and cloud computing, as
well as communication technology are driving industrial automation even further. The price of
computing power are decreasing and the advancements in wireless and wired network
technology enables manufacturers to capture, visualise and analyse data in order to utilize
resources more effectively.

An automation system enables communication between PLCs, field devices, control devices
and control systems. The intelligence of these systems has traditionally been centralised, but
modern automation equipment enables local control and distributed intelligence for increased
flexibility, improved response times and lower requirement on central computing power.
There are still many applications where centralised solutions are the better choice, but
distributed intelligence, increased connectivity and better utilisation of captured data can be
important strategies in order to meet increasing demand for leaner manufacturing processes.

1.2 Factory and process automation

Industrial automation can be divided into two main segments: discrete manufacturing
automation (often called factory automation) and process automation. Factory automation is
the automation of operations in the manufacturing of individual items or batches of products.
Process automation is the automation of operations in the manufacturing of continuous
streams of products. Typical discrete manufacturing industries where parts and components
are manufactured and assembled to finished products are automotive, aerospace and
consumer electronics.

Typical process industries where a continuous process converts raw materials to finished
products include chemical, pulp and paper and oil and gas industries. Some of the
equipment and machines used in these verticals are shared while others are used exclusively
in one of the verticals. Industrial robots and CNC machines are for example typically
exclusively used in factory automation whereas instrumentation products such as flow and
temperature sensors are typically used in process automation.

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Figure 1.1: Examples of industrial automation market verticals

Factory automation industries Process automation industries

Aerospace and Defence Chemical
Automotive Drug and pharmaceutical
Computer Food and beverage
Consumer appliance Mining and metals
Consumer electronics Oil and gas
Industrial equipment Petrochemical
Heavy machinery Power generation
Medical device Pulp and paper
Semiconductor Water and wastewater

Source: Berg Insight

1.3 Factory and process operations

A manufacturing process begins with a starting material which is altered using chemical and
physical processes to make a more valuable product, or when multiple parts are assembled
into a new product. When automating a manufacturing process, it is usually broken down into
several simpler operations which individually are possible to automate. Important factory
operations add value and change the properties of the starting material throughout the
manufacturing process.

Examples of factory operations are metal casting, moulding, pressing, forging, bending,
drilling, milling, grinding, coating, welding, soldering, screwing and press fitting. Other main
factory operations which often are subject to automation are material handling, test activities
and control operations. Measuring, test and control operations are central within process
automation. Further examples of automated process operations are separation, filtration,
crystallization, blending and material changing operations such as altering of temperature or
pH.

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Figure 1.2: Examples of factory and process operations

Factory operations Process operations

Pressing Separation
Bending Filtration
Drilling Crystallization
Welding Blending
Soldering Altering temperature
Material handling Altering pH
Test and measuring activities Test and measuring activities
Control operations Control operations

Source: Berg Insight

1.4 Industrial automation system overview

An industrial automation system contains various systems and devices which are used on
different levels within the manufacturing process. The field level consisting of end devices
such as sensors and actuators are at the lowest level of an automation system and forms the
base for the controller device and process control levels, which are often referred to as the
control level. The enterprise and plant levels sit on top of the process control level and are
often referred to as the supervisor level. The number of devices is increasing in the lower
levels of an automation system and the amount of data is increasing in the higher levels.

The vast amount of devices and systems used in an automation system include business
systems such as Enterprise Resource Planning (ERP) systems, Product Life Management
(PLM) systems and Material Resource Planning (MRP) systems as well as specialised
automation and control systems such as Manufacturing Execution Systems (MES),
Manufacturing Operations Management (MOM) systems and Supervisory Control and Data
Acquisition (SCADA) systems. Typical devices used in automation systems include PCs,
Human Machine Interface (HMI) panels, industrial computers, control devices, robots, drives,
sensors, valves, relays, switches and networking equipment.

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Figure 1.3: Industrial automation system overview

The process control and control device levels constitute the control level in an industrial
automation system. This is where the automation programs are executed by PLCs, PACs,
DCSs and industrial PCs through SCADA and MES/MOM systems. The control layer has I/O
devices and gateways to be able to communicate with field devices via industrial protocols
and to the supervisor levels via IP. The control layer also contains Human Machine Interface
(HMI) terminals where operators monitor and control the automation process. The field level
contains devices such as actuators and sensors which communicate directly with PLCs, often
through industrial protocols.

At the plant level there are mainly standard computing devices with standard operating
systems such as Microsoft Windows, iOS and Android. These devices run various industrial
software applications for setting parameters, and visualising and managing the manufacturing
process. Furthermore, it is at the plant level where process and control systems interact with
enterprise level business systems such as ERP and MRP systems. Communications is most
often carried out through standard enterprise IP networks via Wi-Fi or Ethernet LAN
connections. Latency and reliability are not as important at the supervisor level compared to
at the control and field levels where most real time control processes are executed.

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Automation networks refer to the operations-, control- and field device networks which are
used in the lower levels of the automation pyramid. Automation networks can include a wide
range of technologies such as various industrial Ethernet protocols, specialised fieldbus
networks and wireless sensor networks. Communications in operation networks has
traditionally been represented with a top down approach where the higher level device is the
client and the lower level device acts as a server which responds to requests initiated by
higher level devices. In reality, automation systems are often more complex without firm
separation of levels and with a more flat hierarchy in terms of communications. This is further
emphasised by concepts such as IIoT, connected management, smart devices and industry
4.0 which rely on deeper integration between enterprise networks and automation networks
with IP addressable and Internet connected devices at all levels.

1.5 Industrial automation evolution

Today, many companies are deepening the integration between industrial automation
systems and enterprise applications to further improve efficiency throughout the value chain.
IT/OT convergence, connected factory, connected enterprise, Industrial Internet of Things,
Industry 4.0 and smart factories are all concepts that are part of the ongoing evolution of
industrial automation. Industrial automation systems have traditionally relied on hierarchic,
siloed communications between control and field devices using industrial protocols such as
Modbus, Profibus and Foundation Fieldbus. To complement or replace proprietary
technologies with IP based standards can make automation systems and related devices
more interoperable.

Increased interoperability and communications between devices, systems, services and

people in combination with technologies such as advanced sensors, smart devices, wireless
technologies, 3D printers, mobile devices and analytics solutions have the ability to improve
performance, flexibility and responsiveness throughout the value chain. In the smart factories
concept, machines and supply chains are even able to organise and coordinate themselves.
An increasing number of sensors, tags, miniaturized computers, transmitters and network
technology can for example enable unfinished products to send data to machines about what
is needed in order for them to be completed.

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1.6 The industrial automation market

Berg Insight estimates that the total market value for industrial automation solutions, including
automation equipment and industrial software, amounted to US$ 180 billion in 2017, up 3
percent from the previous year. Process and factory automation industries accounted for
about US$ 99 billion and US$ 81 billion respectively. Investments in factory automation
systems remained positive during the year and have continued into 2018. Global
manufacturing grew moderately, driven mainly by consumer-related industries such as
electronics and automotive. Process industries in commodity markets such as oil and gas,
metals and mining, recovered during late 2017 and into 2018 as raw material prices grew
from low levels. Investments made by these industries were primarily focused on service and
productivity improvements. Other process industries such as food and beverage and
pharmaceuticals continued to grow. The global industrial automation market is expected to
achieve mid-single digit growth in 2018 as market conditions have remained robust.

Figure 1.4: Industrial automation market value (World 2008–2017)

200 20%

180 15%
160 10%

Year-over-year growth
140
5%
120
US$ billion

0%
100
-5%
80
-10%
60

40 -15%

20 -20%

0 -25%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: Berg Insight

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The Asia-Pacific region is the largest geographical market for industrial automation products
worldwide and accounted for an estimated 40 percent of annual revenues in 2017. The EMEA
region and the Americas accounted for approximately 33 percent and 27 percent of annual
revenues respectively. The largest national markets comprise the US, Germany, Japan, China
and South Korea. In the past decade, China and South Korea have experienced the highest
growth rates, while markets such as Europe and Japan have seen moderate growth. North
America experienced substantial growth between 2010 and 2014, mainly driven by
investments from the oil and gas industry. The region has however been affected by lower
capital expenditures in the oil and gas industry in recent time, although the effect has to some
degree been offset by strong demand for factory automation solutions in the automotive and
electronics industries. The largest industry verticals within the total industrial automation
market are automotive, chemical, pharmaceutical, power and oil and gas. Automotive is the
dominant industry within factory automation, while pharmaceutical, chemical, power and oil
and gas are almost equally important industries within process automation.

Figure 1.5: Industrial automation market value by region (World 2017)

Americas
27%
Asia-Pacific
40%

EMEA
33%

Source: Berg Insight

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1.7 Industrial automation market segments

Berg Insight divides the industrial automation market into three segments: industrial software,
industrial control systems, automation equipment and instrumentation. Industrial robots is a
subsegment of the automation equipment and instrumentation market. The solution
categories are commonly used in both factory and process automation applications with the
exception of industrial robots, which are primarily employed in factory automation. Although
the global industrial automation market appears fragmented, market shares for a specific
solution is generally concentrated among a few manufacturers. Competition and price
pressure can be limited for many of the solution categories offered in a complete automation
system.

In the past, automation vendors typically focused on one type of control product or
instrument for either factory or process automation applications. The industry has in the last
decades experienced consolidation, driven by both horizontal and vertical integration
strategies among large suppliers, meaning that companies with focus on the process
automation market have expanded into the factory automation market and vice versa, while
also adding product lines across the industrial software, plant control and instrumentation
segments. A more recent trend among the large automation vendors have been to expand
their industrial software offerings, primarily through acquisitions. Several vendors are today
providing software suites comprising PLM and MES solutions along their industrial control
systems and instrumentation products.

Major industrial automation vendors such as Siemens, ABB and Schneider Electric have
today strong positions in both the factory and process automation markets, offering a wide
range of products across all major geographies. Other major players still derive the majority
of their sales from either the factory or process automation market. Within the process
automation market, Emerson, Yokogawa and Honeywell are major vendors. Emerson offers a
broad portfolio of DCSs and instrumentation solutions, while Yokogawa and Honeywell are
large suppliers of DCSs. Rockwell Automation, Mitsubishi Electric, Keyence and Omron are
major suppliers in the factory automation market. Additionally, the market is served by a
number of specialised industrial robot manufacturers including Kuka, Yaskawa Electric and
Fanuc.

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Figure 1.6: Business activities of key global automation vendors

Equipment and instrumentation Control systems

Company HMI /
Factory Process Robotics PLC DCS CNC
SCADA
ABB X X X X X X
Emerson X X X
Fanuc X X
Honeywell X
Keyence X
KUKA X
Mitsubishi X X X X
Omron X X
Rockwell X X X
Schneider X X X X X
Siemens X X X X X X
Yaskawa X X
Yokogawa X

Source: Berg Insight

1.7.1 Industrial software

The main industrial software suites comprise Enterprise Resource Planning (ERP) systems,
Product Life Management (PLM) systems as well as specialised automation and control
systems such as Manufacturing Execution Systems (MES). The ERP market is dominated by
major software companies such as SAP and Oracle, which together account for more than 60
percent of the global market. Major PLM vendors include Dassault Systems, Autodesk, SAP
and Oracle. Several automation vendors such as Siemens and Schneider Electric have
expanded into the PLM systems market and offer PLM systems as part of a total solution.
Other automation equipment manufacturers typically partner with third-party PLM vendors to

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provide integration between their PLM and automation systems. Notable examples include
Rockwell Automation, which recently partnered with the US-based PLM specialist PTC. PLM
software preferences among customers vary between industries. Siemens and Dassault
Systems hold for example a strong position in the automotive industry, while Autodesk is
widely used by building architects.

MES solutions are typically designed for a specific industry. These solutions function as a
bridge between the industrial control system and enterprise software such as ERP and PLM
systems. MES providers include major software companies such as SAP and Oracle, PLM
vendors such as Dassault Systems, as well as automation vendors and specialised providers.
In many cases, the MES software offered by automation vendors originate from acquisitions
of specialised vendors. Popular MES software include Emerson’s Syncade, Honeywell’s
Connected Plant, GE’s Predix MES, Schneider Electric’s Wonderware, Rockwell Automation’s
FactoryTalk and Siemens’ SIMATIC IT MES, which is part of the company’s PLM software
suite. Examples of specialist vendors include AspenTech, Werum IT Solutions and MPDV.

1.7.2 Industrial control systems

Industrial control systems encompass control devices, network equipment and software
employed for control of industrial processes. The most common type of industrial control
systems are SCADA/HMI systems. These systems use control devices such as PLCs, PACs,
DCS devices and CNCs that interface with the industrial equipment in the plant to monitor
processes and operations. Operator interfaces are provided through a SCADA application
running on a PC or an HMI terminal, which enable monitoring and issuing of instructions to
control devices in the system. SCADA/HMI systems facilitate fault detection, diagnostics, and
production and process optimisation. Major vendors of SCADA/HMI systems include
Siemens, ABB, Schneider Electric and Rockwell Automation.

PLCs and DCSs have traditionally been used for different tasks. PLCs control and monitor
machines and DCSs are more often used within process automation applications. The lines
between the device categories are however increasingly blurred as these control devices over
time have become more intelligent and powerful featuring built-in connectivity, processing
power and integrated safety functionality, enabling them to be used in more applications.

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However, few players have a strong position in both the PLC and DCS markets. Leading PLC
vendors include Siemens, Rockwell Automation, Mitsubishi Electric, Schneider Electric and
Omron. ABB strengthened its position in the PLC market through the acquisition of B&R
Automation in mid-2017. Major DCS players are ABB, Emerson, Yokogawa, Honeywell,
Siemens, Schneider Electric and Rockwell Automation. Leading CNC system providers
include Fanuc and Siemens.

1.7.3 Automation equipment and instrumentation

Automation equipment and instrumentation comprises a broad range of solutions that are
used for industrial control applications in machinery and plants. Major solution categories
include industrial sensors, motors and drives, relays and switches, machine vision and
industrial robots. The market for industrial robots is described in the next section. The most
numerous automation equipment segment is industrial sensors, which represents over 25
percent of all devices. The main industrial sensor providers include Emerson, Yokogawa,
ABB, Endress+Hauser, Schneider Electric, Balluff, Turck, Banner Engineering, Siemens and
Keyence.

Motors and drives are used to generate and control movement. Leading vendors include
ABB, Siemens, Mitsubishi Electric, Emerson, WEG and Rockwell Automation. Relays and
switches are used to open and close electric circuits in machines and process machinery.
Examples of leading suppliers of relays and switches include Schneider Electric, ABB,
Siemens, Socomec, Rockwell Automation, Omron and IDEC. Machine vision technology is
used to provide operational guidance to devices, as well as automatic inspection and
analysis, based on the capture and processing of images. Major machine vision system
providers include Cognex, Keyence and Omron.

1.7.4 Industrial robots

The ISO standard 8373 defines an industrial robot as an automatically controlled
reprogrammable multi-purpose manipulator which is programmable in three or more axes.
Industrial robots are primarily used in factory automation and its largest end user markets are
the automotive industry, the electrical and electronics industries, and the metal and
machinery industries. These markets accounted for more than 75 percent of the annual

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shipments of industrial robots in 2017. The market for industrial robots is very consolidated
and only four companies control a major part of the global market. The largest industrial robot
vendors include Fanuc, Yaskawa, ABB and Kuka. Several Chinese manufacturers have
established a position in the domestic market but remain small on a global scale. Annual
shipments of industrial robots have increased at a compound annual growth rate (CAGR) of
16 percent over the last ten years. In 2017, about 381,000 industrial robots were sold
worldwide, up 30 percent year-on-year.

Figure 1.7: Annual shipments of industrial robots (World 2008–2017)

381

294
254
Thousands of units

221

178
166 159

113 121

60

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: IFR

At the end of 2017, the operational stock of industrial robots amounted to 2.1 million units, up
15 percent from the previous year. The average service life of an industrial robot is roughly 12
years and the operational stock has grown by a CAGR of approximately 7 percent since 2008.
The Asia-Pacific region has the largest operational stock of industrial robots. The installed
base in the region has reached an estimated 1.2 million industrial robots, which represents 58
percent of the global installed base. Europe and the Americas accounts for an estimated 0.5
million and 0.3 million industrial robots respectively. Industrial robot density, which is defined

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as industrial robots per 10,000 manufacturing workers, is often used as a metric for the
penetration of factory automation technology. South Korea has the highest robot density in
the world with 710 industrial robots in operation per 10,000 manufacturing employees.
Singapore follows due to a very low number of employees in the manufacturing industry.
Germany and Japan have the third and fourth highest robot density with 322 units and 308
units respectively. Industrial robot density in the largest national industrial robot market –
China – amounted to 97 units in 2017.

Figure 1.8: Operational stock and density of industrial robots by region (World 2017)

1.4 120
1.2 106
1.2 100
91

Industrial robot density

1.0
75 80
Millions of units

0.8
60
0.6 0.5
40
0.4 0.3

0.2 20

0.0 0
Asia-Pacific Europe Americas

Source: IFR

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Chapter 2

Wireless IoT solutions in industrial

automation
2 Wireless IoT solutions in industrial automation

2.1 Wireless automation infrastructure

Industrial applications have used wireless communications for decades but have not yet
gained widespread adoption, primarily due to requirements related to reliability, as industrial
environments are characterised by harsh conditions that can disturb or interrupt wireless
transmissions. In factories, issues related to wireless communications can also be difficult to
troubleshoot, given the wide range of automation equipment on the modern factory floor.
Early use cases for wireless communications were control of moving material handling
equipment in warehouses, as well as remote data acquisition in process control applications.
Proprietary radio solutions have traditionally been used to support these use cases and is still
used in many applications today, primarily in the utilities and the oil and gas industries.
Standardised wireless technologies such as Wi-Fi, IEEE 802.15.4 and Bluetooth have
however advanced to become the leading wireless technologies for industrial applications.

An industrial automation system consists of a wide range of devices at different levels of the
manufacturing process, where a combination of wired and wireless communications
technologies is typically used. The wired network may be a standard IP-based network or an
industrial fieldbus network, where data from the devices is transferred via standardised or
vendor specific protocols. In some cases, a wired connection can be replaced by wireless
technologies. Generally, wireless technologies can be used throughout an automation
system, from the supervisor level all the way to the control and field levels, and offer a number
of advantages and disadvantages compared to wired communications technologies. Due to
costs related to cabling, installation and maintenance, wireless networks are typically cheaper
than wired networks. Wireless solutions are also easier and more economical to expand,

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since there is no need to install additional cabling. On the other hand, wireless solutions in
some cases do not meet the stringent requirements on reliability for industrial applications, as
wireless technologies are sensitive to interference. Network failure can have a substantial
effect on both productivity and safety. Nevertheless, wireless solutions can be used as wire
replacement in hard to reach or hazardous areas, on moving machine parts or on portable
equipment. It can also be used to connect remote edge devices to the enterprise or as
backhaul for connecting geographically dispersed plants. Moreover, wireless solutions are
often used for remote access applications, enabling maintenance and engineering access
and as point-to-point wire replacement in mobile HMI solutions between operator and
automation equipment.

Figure 2.1: Overview of wireless IoT infrastructure in industrial automation

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At a high level, the infrastructure for wireless IoT solutions in industrial automation can be
divided into three segments:

Facilities segment – There is a wide range of equipment in plants, factories and other
facilities which can connect using wireless technology including control units, field devices
and network devices.

Service segment – Integration platforms, cloud services and connectivity enable a wide
range of applications to access data from the equipment and facilities.

Network segment – Wireless wide area networks and local networks are employed by the
industrial automation system for data transmission. Network topologies can be point-to-point,
point-to-multipoint, mesh and hybrids. Wi-Fi, cellular, WirelessHART, ISA100, ZigBee and
Bluetooth are the most widely used technologies.

2.1.1 Facilities segment

Numerous facilities and devices are commonly controlled and monitored throughout an
industrial automation system. At the process control level, operators monitor and operate the
system using HMI panels and control stations which are connected to control devices which
in turn are connected to field devices. Actuators, valves, sensors, relays and switches, CNC
machines and industrial robots are examples of field level equipment which perform a wide
range of automated operations. All field equipment devices have their own specific needs
regarding monitoring and control. Control units are often connected to field devices and to
the service segment via network devices such as routers, gateways and modems. Data
integration between SCADA protocols, fieldbus, TCP/IP and serial communication is often
handled by the network devices but can also be executed directly in the control units.

An industrial automation system requires field data control units supporting data logging and
data communications. The control devices can carry out instructions as well as collect,
digitise and transmit sensor signals to a gateway or directly to the central site. The most
widely used control units are RTUs, PLCs, PACs and industrial PCs. Historically, RTUs were
used to collect and report data and PLCs were used to automatically perform a set of pre-
programmed instructions according to pre-designated states. Today, RTUs can to a large

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extent handle PLC duties and vice versa. RTUs that can execute logic processes locally are
sometimes referred to as smart RTUs.

Control units convert electronic signals from field devices such as sensors into transmittable
communication data. Control units often have wires running to the field devices and a cable
link to a communication interface such as a modem or router. The communication modem
can also be directly integrated with the control unit. Automation and control instructions are
usually stored locally in the control unit which minimises bandwidth and latency in the
system. These local instructions can be changed remotely from the process control centre.
Automation systems can rely on local control units to store collected field data and then send
that data periodically or when being polled by the control centre. This local storage capacity
is also used to archive information in times of communications failure.

Figure 2.2: Examples of field, control and network devices

Source: Omron, Moxa, Yokogawa, Westermo, Opto 22 and Siemens

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Field control units use open or proprietary industrial communication protocols to transmit
sensor data. Open systems allow communication between devices from different vendors
whereas proprietary systems are restricted to communication between devices from a single
vendor. There are hundreds of available industrial protocols. Among these, a number of both
open and originally proprietary protocols have emerged as de facto standards.

Fieldbus technology allows multiple simultaneously digital and analog connections to share
the same communication point in the controller unit as opposed to serial connections which
require that each connection has its own communication point. There are a number of
competing fieldbus standards such as for example Foundation Fieldbus, CIP, CAN,
LonWorks, Modbus and Profibus. Control units often support several fieldbus standards and
many of the popular standards contain extensions to support TCP/IP communications.
Industrial Ethernet networks are based on Ethernet and TCP/IP technology and can
complement or replace fieldbus protocols in industrial applications including automation
control applications. Compared to traditional Ethernet, Industrial Ethernet often requires more
robust hardware as well as specific requirements on node count flexibility, varieties of media
and real-time data traffic performance. Adoption of Industrial Ethernet is increasing and major
protocols include EtherNet/IP, PROFINET, Modbus TCP/IP, EtherCAT and POWERLINK.

2.1.2 Service segment

The service segment in a converged automation system includes a range of automation
applications as well as integration to enterprise applications and cloud services. Automation
applications include MOM, MES and SCADA solutions for detailed production scheduling,
maintenance, flow management, process visualisation, optimization and other control
applications. Features include a graphical user interface displaying an overview of the entire
control network, summaries of abnormally operating network points, alarm overview, trend
screens and information and control options of individual control units and field devices.
Enterprise applications include ERP and CRM software, as well as applications for analytics,
production planning and scheduling, MRP and customer order handling. In an environment
where automation and enterprise levels can share resources, there is often an integration
platform where all data from individual control units and field devices converge.

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An integration platform comprises firewalls, gateways, application servers and data

management solutions for providing a demilitarized zone, which enables a controlled way of
sharing data between the different levels of the company as well as with cloud services and
third parties. IoT platforms enable remote access to systems and devices, as well as a safe
way of sharing services and data with third parties such as customers, suppliers and
partners. Integration between automation systems, enterprise systems and cloud services
create new opportunities to collect and analyse data for the purpose of managing assets and
processes. The terms edge computing and fog computing are today often used to explain a
distributed model for analysing and acting on IoT data. The fog extends the cloud to be
closer to the things that produce and act on data. A fog node in a network can for example be
a switch, a router or an industrial controller.

Figure 2.3: Example of service segment in a connected automation system

2.1.3 Network segment

Requirements on wireless communications in industrial automation vary by application but
wireless solutions in general need to be very predictable and dependable regarding data
speed, range, latency, availability and accuracy. Data security and encryption are also critical
in industrial wireless applications to protect data from unauthorised access and hacking
attempts. Network failures can damage equipment, cause production downtime and
jeopardise personnel safety. Wireless networks can be connected in different topologies such
as point-to-point, star and mesh architectures. In a mesh network, all nodes can connect to

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each other and reconfigure around broken paths by making hops. As a result the network
can still operate even when a node breaks down or experience a connection failure. A
wireless industrial automation system most often contains a mix of network topologies and
communications standards and the selection depends on several factors including cost,
remoteness of facilities and equipment, required characteristics and availability of power
sources.

There are a wide range of wireless technologies used in industrial automation with different
characteristics and use cases. At a high level, wireless network technologies can be
categorised by range into Wireless Personal Area Networks (WPAN), Wireless Local Area
Networks (WLAN), Wireless Metropolitan Area Networks (WMAN) and Wireless Wide Area
Networks (WWAN). The most common wireless technologies in industrial automation include
cellular (WWAN), 802.11 Wi-Fi (WLAN), proprietary unlicensed ISM radio (WLAN & WMAN),
Bluetooth (WPAN) and 802.15.4 (WPAN) based protocols such as WirelessHART, ISA100a,
WIA-PA and ZigBee. Wi-Fi is used in some factory automation applications where Industrial
Ethernet has got a strong foothold. Bluetooth is common in point-to-point wire-replacement
solutions for communications between for example a mobile HMI and a field device or control
unit. 802.15.4-based network technologies are often used to connect wireless sensors and
instrumentation in process automation, where there are typically more tolerance for latency,
but high demands on low power consumption and high reliability. Cellular connectivity
including 2G, 3G and 4G are typically used for backhaul communications between plants,
connecting remote devices in long haul SCADA applications and for third party service
access to machinery and robots. Proprietary solutions in the unlicensed ISM 900 MHz and 2.4
GHz bands are often used in long haul SCADA applications. There are many other wireless
standards, protocols and technologies used in industrial automation besides the most
widespread solutions. Examples include satellite, Low Power Wide Area Networks (LPWAN),
WiMax, ABB’s WISA and a range of WPAN standards such as Z-Wave and EnOcean.

Cellular networks
Cellular networks are Wireless Wide Area Networks (WWAN) and provide nearly ubiquitous
voice and data connectivity for billions of people and devices worldwide. GSM/GPRS/EDGE
is the largest global 2G standard for mobile communications, available in almost every part of

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the world. The lesser CDMA standard is primarily confined to Asia-Pacific and North America.
WCDMA/HSPA that builds on GSM/GPRS/EDGE is the leading standard for third generation
(3G) mobile communication, covering the greater part of the world’s population. Alternative
technologies are EVDO that builds on CDMA and TD-SCDMA – a domestic 3G standard
developed in China. LTE has become the leading fourth generation global standard, adopted
by all leading players in markets that were previously divided between GSM/HSPA and
CDMA/EVDO such as in the US and Japan. 5G networks based on the recently released NR
radio specifications are being deployed in major cities across North America, Asia-Pacific and
Europe starting in late 2018.

LPWA networks
Low-Power Wide-Area Networking (LPWAN) is a Wireless Wide Area Network (WWAN)
technology optimised for low bit rates, minimal power consumption and long ranges. Created
for machine-to-machine (M2M) and Internet of Things (IoT) networks, LPWANs are able to
support a greater number of devices over a larger area. Furthermore, the networks operate at
a lower cost with greater power efficiency compared to traditional cellular networks. LPWANs
can be deployed in the licensed or unlicensed spectrum and include proprietary and open
standard options. The most prominent technologies for LPWAN include Long-Term Evolution
for Machines (LTE-M), Narrowband-IoT (NB-IoT), Sigfox and LoRa. LTE-M and NB-IoT are
3GPP standards that operate on the licensed spectrum. Both were included in the 3GPP
Release 13. LTE-M (formally CAT-M1) is designed to support low-cost hardware, longer
battery life and better coverage. It offers the highest bandwidth of any LPWAN technology.
NB-IoT provides improved indoor coverage, support of massive number of low-throughput
devices, low-delay sensitivity, ultra-low device cost, lower device power consumption and
optimised network architecture. The technology provides data rates of roughly 200 Kbps.
LTE-M and NB-IoT are based on LTE and can be implemented by mobile operators in their
existing 4G networks. In many cases, networks can be upgraded through a software update.
The process can however also be more complicated, depending on the existing network
infrastructure.

The proprietary Sigfox technology uses unlicensed frequency bands to transmit data over a
very narrow spectrum to and from connected objects. Designed for very low throughput, data
messages of up to 12 bytes in size can be sent up to 40 kilometers in open field and

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penetrate deeply into buildings or underground, with high reliability and very low power
consumption. The technology is developed by the M2M network operator Sigfox that is based
in France. LoRa networks operate in unlicensed sub-GHz frequency bands and can be
deployed at almost any location without the need for regulatory approval. The technology is
backed by the open, non-profit association LoRa Alliance that promotes its Long-Range WAN
(LoRaWAN) protocol. LoRa networks target key requirements of IoT communications such as
secure bi-directional communications, mobility and localisation services. LoRaWAN network
architecture is typically laid out in a star-topology in which gateways is a transparent bridge
relaying messages between end devices and a network server in the backend. Data rates
range from 0.3 kbps to 50 kbps. To maximize both battery life of the end-devices and overall
network capacity, the LoRaWAN network server is managing the data rate and RF output for
each end-device individually by means of an adaptive data rate (ADR) scheme. Security is
ensured by several layers of encryption on the network, application and device level.

Wi-Fi
IEEE 802.11 and its various extensions b/g/n or a/c are usually referred to as Wi-Fi and is a
set of standards for Wireless Local Area Networks (WLAN) that are developed and maintained
by the IEEE MAN/LAN Standards Committee. 802.11 b/g networks operate on the free 2.4
GHz band and have a maximum data speed of 54 Mbit/s and a range of roughly 100 meters
outdoors and about 30–40 meters indoors, the same range as 802.11a networks which
operate in the 5 GHz band. The 802.11n extension was released in 2009 and can operate in
the 2.4 GHz and 5 GHz bands and extends the range to about 70 meters indoors and 250
meters outdoors. 802.11n networks are also capable of real life data rates of around 300
Mbit/s. The 802.11ac implementation operates in the 5 GHz band and features increased data
throughput rates. The achievable range and data speed in Wi-Fi networks vary greatly
depending on the number of antennas, materials used in buildings and the number of walls
that are situated between the nodes. The range is also affected by the presence of other
wireless communications systems sharing the same radio band, for instance Bluetooth
devices and cordless telephones, as well as electronic devices that create electromagnetic
interference.

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The new low-power version of WLAN named 802.11ah was released in 2017. The standard
operates on the sub-gigahertz ISM frequency bands (868 MHz in Europe and 915 MHz in
North America). The Wi-Fi Alliance has introduced Wi-Fi HaLow as the designation for
products incorporating the 802.11ah technology. Wi-Fi HaLow offers longer range and lower
power connectivity to Wi-Fi certified products. Wi-Fi HaLow targets a variety of low-power
demanding use cases in several market verticals including smart home, connected car, digital
healthcare, industrial, retail, agriculture and smart cities. Standards in development include
802.11ax, also called High-Efficiency Wireless (HEW) and Wi-Fi 6. The technology is an
evolution of 802.11ac and is designed to operate in the already existing 2.4 GHz and 5 GHz
bands. 802.11ax can deliver up to 40 percent higher peak data rates for a single device. The
set of specifications are planned to be released in 2019.

Bluetooth
Bluetooth is a short-range, wireless personal area network (WPAN) connectivity standard
operating in the unlicensed ISM band at 2.4 GHz. The low power two-way communications
technology is designed to enable ad-hoc connectivity between devices. The Bluetooth
standard is managed by the Bluetooth Special Interest Group (SIG), which oversees the
development of the specification and manages the qualification program. The Bluetooth SIG
is a privately held not-for-profit trade association comprising more than 25,000 member
companies. The Bluetooth Core Specification 4.0, released in 2010, introduced Bluetooth Low
Energy which is part of all subsequent releases. Bluetooth Low Energy is often referred to as
Bluetooth LE or BLE and is intended for low latency and low power applications that need
infrequent communications of small amounts of data. The Bluetooth LE technology features
significantly faster setup time as well as very low peak, average and idle mode power
consumption to enable operation for several years on a coin-cell battery. Bluetooth LE can be
implemented in dual-mode or single-mode. In dual-mode implementations, Bluetooth LE is
integrated into a Classic Bluetooth controller with little cost increase. Single-mode Bluetooth
LE chipsets enable development of compact and low-cost wireless devices.

In 2016, Bluetooth SIG introduced a new architecture and supporting set of educational tools
that enables developers to quickly create Internet gateways for Bluetooth products. The
Bluetooth Internet gateway architecture and toolkit show developers and OEMs how to create

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a connection between Bluetooth and the cloud without the need for a smartphone or tablet to
serve as the go between. This architecture expands the potential functionality of the IoT by
giving anyone the ability to monitor and control fixed Bluetooth sensors from a remote
location. The new architecture enables IoT developers looking to create a hub for all the
sensors in a facility or to integrate gateway functionality into existing products.

Bluetooth 5 was announced in mid-2016 and is designed to provide secure communications

and improved error correction to enable more advanced IoT applications. To simplify
marketing, Bluetooth SIG has dropped the point number as well as the Smart brand that was
introduced with Bluetooth 4.0. The new Bluetooth 5 standard features double the speed and
quadruple the range compared to the previous standard. The update widens the indoor
range from about 10 meters to 40 meters and the outdoor range from 50 meters to 200
meters. The update further makes Bluetooth a more viable option to competing wireless
technologies such as Wi-Fi and 802.15.4-based protocols such as Zigbee. The Bluetooth 5
standard specification was released in December 2016 and devices with embedded
Bluetooth 5 connectivity were introduced on the market in mid-2017.

IEEE 802.15.4
The original version of the IEEE 802.15.4 standard was created in 2003 and specifies the
physical layers and media access control for low rate WPANs. The objectives for the standard
are low power requirements, low cost, low complexity and support for critical latency
applications. 802.15.4 supports mesh networking and operates in an unlicensed, international
frequency bands such as 2.4 GHz, 915MHz and 868 MHz band with 10 meter communication
range and data rates of 20 kbit/s, 40 kbit/s, 100 kbit/s and 250 kbit/s. The 802.15.4 standard
has become very popular for wireless sensor networks and instrumentation in process
automation and many of the most commonly deployed network technologies including
WirelessHART, ISA100a, ZigBee, WIA-PA and Thread are built on top of the 802.15.4
specifications. The 6LoWPAN (IPv6 over Low-Power Wireless Personal Area Networks)
working group has defined a format for transmission of IPv6 packets over 802.15.4 networks
which enables the use of IP technology. ISA100a and Thread are examples of protocols
which have included support for 6LoWPAN. ISA100.11a and WirelessHART have emerged as
the two most widely used technologies for wireless sensor networks in process automation. A

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committee worked for several years in order to converge the two standards but abandoned
its efforts in 2013 after failing to find a solution which was backwards compatible with both
standards.

WirelessHART was developed by the HART Communication Foundation for transmitting

HART messages wirelessly. WirelessHART technology provides a wireless protocol for
process measurement, control and asset management applications and is an IEC approved
standard since 2010. There are approximately 30 million HART devices installed in service
worldwide and WirelessHART is compatible with existing HART devices, tools and systems.
ISA100 – or ISA100.11a – is a multi-functional standard for industrial field networks. It was
developed by the International Society of Automation (ISA) with the intention to support
communication from various wired and wireless industrial protocols. ISA100 is based on
open standards and defines the protocol stack, system management, gateway and security
specifications for use over low-power and low-rate wireless networks. ISA100 does not
specify a protocol application layer or an interface to an existing protocol and can emulate
legacy protocols for any fieldbus protocol and is able to integrate with existing systems
including WirelessHART systems. ISA100.11a was approved as an IEC standard in
September 2014.

Thread is an IP-based wireless mesh networking protocol that was launched in July 2014.
The protocol has been built on top of the IEEE 802.15.4 standard using 6LoWPAN and is
designed to natively carry IPv6 traffic. Use of the Thread protocol is promoted by the Thread
Group, a non-profit organization founded by ARM, Haiku Home, NXP, Nest, Samsung, Silicon
Labs and Yale. In October 2014, Thread Group opened membership to new companies that
wanted to join the alliance and use the technology in their products. Today, the organisation
has over 400 members.

ZigBee is an open global standard enabling reliable, cost-effective, low-power, wirelessly

networked monitoring and control products. The standard offers ultra-low power
consumption and mesh network support. In December 2016, the alliance announced that
eight member companies achieved certification for 20 silicon platforms which form the basis
for Zigbee 3.0 products. Zigbee 3.0 (from 2017 referred to as Zigbee) is based on the IEEE

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802.15.4 standard and operates on the 2.4 GHz frequency band. The main advancement in
Zigbee 3.0 is that several previously separate application profiles are unified under the one
and same standard. The Zigbee Alliance is collaborating with other industry groups including
the EnOcean Alliance and the Thread Group to fulfill its vision for the IoT. The EnOcean
Alliance and the Zigbee Alliance will work together to combine the EnOcean Equipment
Profiles (EEPs) already widely adopted in the sub-one GHz frequency band with the Zigbee
3.0 solution in the worldwide 2.4 GHz frequency band. In 2016, the Zigbee Alliance also
announced that it is working with the Thread Group to bring the Zigbee application catalogue
to the Thread network. The WIA-PA standard targets wireless solutions in process automation
and was developed by the Chinese Industrial Wireless Alliance (CIWA). WIA-PA was accepted
as the IEC62601 standard in 2009. In 2015, CIWA also published the WIA-FA IEC62948
standard. WIA-FA is based on the IEEE 802.11 Physical Layer and is specifically developed
for high-speed measuring-, monitoring- and control applications in factory automation. WIA-
PA and WIA-FA devices are currently only available in China.

2.2 Operations management

Operations management applications aim at improving operational efficiency throughout an
industry’s value chain, ranging from the supply chain and manufacturing operations to
business management. Applications differ between the various levels within automation and
include production and process optimisation at the control and field levels and business
optimisation at the enterprise level.

2.2.1 Production and process management

Wireless solutions can provide connectivity where normal cabling is difficult, hazardous or
costly. Examples include measurement in moving parts or in high temperature environments.
Compared to wired solutions, wireless communications can present lower deployment costs,
improved performance, increased flexibility and scalability. A wireless connection doesn’t
require expensive cabling and doesn’t need to follow a plant’s processing or manufacturing
lines. A wireless solution also makes it much easier to remove and add connected nodes to
the automation system. Wireless technology also enables efficient and flexible mobile HMI
solutions. Wireless connectivity enables more connected nodes, which can increase the

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quality of data in an automation system which further enables improved optimisation and
responsiveness at the control level. In addition, wireless technology makes it easier to set up
guest access if a third party needs access to process or machine data. Furthermore, network
service and maintenance costs are often lower for wireless networks compared to wired
networks.

WLAN and WWAN connectivity in the backbone link of an automation system enables
companies to monitor and operate the system from anywhere within a facility or remotely,
which can be useful in hard to reach or temporary facilities. Furthermore, wireless
connectivity can provide a backup if the normal backbone LAN communications fails. Cellular
technology can be especially practical and economically beneficial to use when connecting
portable or temporary workstations and field devices located at the edge of a network.

2.2.2 Business management

The increased number of nodes in automation systems results in a better overview of entire
plants and processes. Large quantities of data can be processed and analysed in near real-
time by operations and enterprise systems to make better and faster decisions. With an
improved visibility of manufacturing processes, the workflow can be optimised to increase
production throughput. The increased amount of data makes effective analytics important in
order to produce actionable information. Furthermore, cloud services and IoT platforms offer
a controlled way of sharing services and data with third parties such as customers, suppliers
and partners. The connected enterprise is emerging as a blueprint for corporate
management, based on the vision that every asset and product should be directly linked to
the enterprise network, feeding data in real-time to relevant IT-systems. Increased
interoperability and communications between devices, systems, services and people have
the ability to improve performance, flexibility and responsiveness throughout the value chain.

2.3 Equipment management and regulatory compliance

Equipment diagnostics, maintenance planning and security applications are core
components of industrial automation solutions. Telemetry and SCADA solutions are used for
management of many types of equipment and key functionalities include remote monitoring
of equipment condition. Furthermore, the increased data volume in connected automation

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solutions in combination with analytics solutions can enable advanced solutions for predictive
and even prescriptive maintenance. Manufacturers of industrial machinery and robots have
started to offer remote monitoring solutions as part of service agreements.

2.3.1 Equipment diagnostics and maintenance planning

Equipment diagnostics and maintenance planning can be facilitated by connected solutions
that enable critical parameters to be monitored in real-time from a central control station. This
is crucial for the operator in order to prevent or minimise downtime and failure. Connected
PLCs and field devices continuously report equipment status to the control station and alarms
can be sent when necessary. Furthermore, the increased data volume in connected
automation solutions in combination with analytics solutions can enable advanced solutions
for predictive and even prescriptive maintenance. Predictive maintenance enables equipment
condition-based maintenance instead of using scheduled maintenance. Remote product
management makes it possible for equipment manufacturers to for instance perform
inspections and maintenance as part of service agreements. Cellular connectivity enables
service operators to connect with the machines independently without having to interfere with
their customers’ networks. Furthermore, the connection enables the service partner to
perform remote and predictive maintenance of sold equipment as well as minimise downtime
in case of machine failure. Continuous monitoring enables errors to be detected and
addressed as soon as possible in order to avoid further damage. The connection can also be
used for maintenance monitoring by the process and production operators and in-house
service personnel. Remote product management solutions are an integral part of the total
product design and cloud services enable equipment vendors or third-party service operators
to monitor and manage entire fleets of machines effectively. Manufacturing companies often
depend on uninterrupted maintenance and equipment vendors’ ability to deliver connected
services can therefore be important when choosing vendor.

2.3.2 Security and Safety

The automation process industry can be hazardous and dangerous and the nature of the
products can make facilities targets for both theft and terrorism. Automated SCADA
applications can help control dangerous processes and also minimise the amount of
potential harmful manual labour. Using remote monitoring technology within an automated
process enables quick detection of potentially dangerous changes in parameters such as

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temperature and pressure. Wireless sensors and control devices also minimise the need to
have personnel working in hazardous or dangerous environments. In addition, wireless
sensors can be used to track personnel in a plant. Safety stations such as eyewash stations
can be equipped with wireless sensors that send alarms when activated in order to minimise
injuries.

2.3.3 Regulatory compliance

Regulatory compliance and reporting is an application area driven by legislation and
requirements from authorities. Some verticals such as oil and gas, power and chemical
industries are heavily impacted by international, as well as country- and region-specific
regulations regarding security and permits. For example, oil and gas producing countries
have regulations for almost every process in the value chain including well construction, well
plugging, tanks, and waste and spills handling. Energy production and chemical process
plants can have legally required equipment and sensors for monitoring potentially risky
operations.

2.4 Business models and project strategies

An automation system is highly complex, combining a wide range of technology and service
elements. A complete industrial automation solution typically involves hardware vendors,
industrial communications technology providers, automation specialists, software vendors
and system integrators. The various vertical industries that use automation systems all have
specific needs. An industrial automation project requires careful planning and clearly defined
goals. One strategy is to take full control over every aspect of the system development,
relying heavily on internal resources for the creation of a tailor-made solution. Another is to
implement a turnkey solution from a third party. In between there is the option of using a
combination of packaged and customised system components. The in-house approach is
generally preferred by larger enterprises with substantial resources and the ability to exercise
buying-power when purchasing equipment or services. Medium-sized and smaller
enterprises for their part generally deploy turnkey solutions, supplied by system providers
and VARs. In all cases there is a concern about the risk of becoming too reliant on a single
supplier.

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Wireless device vendors targeting industrial automation often specialise in parts of the value
chain. One example is network infrastructure equipment vendors that generally have an
international market focus and offer products for a range of applications. These players often
have an array of distribution channels, ranging from direct sales to indirect sales via smaller
solution providers and system integrators. There are also many resellers that work in
partnership with solution providers on local markets. This mode of operation is likely to
become more common as the industry continues to consolidate. Many SCADA and
automation systems are completely customer-defined and system integrators have an
important role in implementing and integrating sensors, field and control networks and
automation software with enterprise IT systems. Machine builders and industrial robot
vendors which embed connectivity for remote service applications can choose to include
data communications cost in the price of the equipment or in the service agreement.

Connected automation solutions also opens up the possibility for entirely new business
models. Industrial automation solution vendors with connected and integrated systems can
for example offer their solutions on a productivity basis instead of capital financing models
based on the price for equipment and services. Such business models could enable solution
vendors to increase their addressable market. Connected automation solutions also enable
equipment vendors to collect large amounts of data about their products which can be used
for further product development and innovation as well as improvement of service and
business models.

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Chapter 3

Market forecasts and trends

3 Market forecasts and trends

3.1 Market analysis

The convergence between operational technology and information technology is accelerating
as a growing number of manufacturing companies are running pilot projects or implementing
industrial IoT solutions. While industrial IoT is still an early adopter market, major automation
vendors are investing heavily in the development of software platforms to support use cases
surrounding predictive maintenance and digital twins. The trend has resulted in a shift away
from Fieldbus technologies that traditionally have been used for industrial networking to
industrial Ethernet technologies, which play a key role in enabling these solutions. Although
wired networking solutions are still predominantly used for industrial communications
between sensors, controllers and systems, wireless solutions have gained a strong foothold
in a number of applications.

In factory automation, wireless solutions are widely used to control cranes and automated
guided vehicles (AGVs) in material handling applications. Devices featuring wireless
connectivity are also employed in remote access solutions for remote programming and
servicing of industrial equipment. In process automation, wireless technologies are
increasingly used to connect instruments, enabling plant operators to monitor and optimise
processes, while also ensuring worker safety in hazardous areas. Tank and silo monitoring
comprise another large application area in this segment. Across both factory and process
automation industries, wireless solutions are used for wire replacement in parts of the plant
that are hard to reach or uneconomical to connect through wired installations. The adoption
of wireless solutions in industrial environments is often a gradual process and an initial
deployment typically consists of clusters of wireless devices connected to an existing wired
network. Emerging cellular technologies based on 5G could expand the addressable market
for wireless communications even further as it allows for deployments where the bandwidth
requirements cannot be fulfilled today.

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Figure 3.1: New connected nodes in industrial automation by technology (World 2018)

Industrial
Ethernet
42%

Fieldbus
52%

Wireless
6%

Source: Berg Insight

3.1.1 Installed base and unit shipments

Berg Insight estimates that annual shipments of wireless devices for industrial automation
applications reached 4.6 million units worldwide in 2018, accounting for approximately 6
percent of all new nodes. Growing at a compound annual growth rate (CAGR) of 16.3
percent, annual shipments are expected to reach 9.9 million in 2023. The number of installed
wireless devices in industrial automation applications is forecasted to grow at a CAGR of 18.8
percent from 21.3 million connections at the end of 2018 to 50.3 million connected devices by
2023. Automation equipment comprises the largest category both in terms of unit shipments
and installed base and primarily include industrial sensors, as well as wireless I/O and field
devices that connect to sensors, actuators and machines. Other automation equipment
featuring embedded wireless connectivity include programmable controllers, RTUs, operator
terminals, industrial PCs, switchgear, machinery and industrial robots. Automation equipment
accounted for 3.2 million of annual shipments of wireless devices in 2018 and annual
shipments are expected to reach 7.0 million in 2023. Shipments of wireless network
equipment including wireless gateways, routers, switches and access points amounted to 1.4
million in 2018. Growing at a CAGR of 14.6 percent, shipments are forecasted to reach 2.9
million in 2023.

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Figure 3.2: Unit shipments and installed base by equipment category (World 2017–2023)

Thousand units 2017 2018 2019 2020 2021 2022 2023

Device shipments
Automation equipment 2,680 3,200 3,790 4,470 5,230 6,090 7,040
Network equipment 1,240 1,440 1,660 1,910 2,190 2,500 2,850

Total 3,920 4,640 5,450 6,380 7,430 8,590 9,890

Installed base
Automation equipment 10,930 13,580 16,690 20,330 24,550 29,410 34,980
Network equipment 6,680 7,670 8,810 10,130 11,630 13,350 15,300

Total 17,610 21,250 25,500 30,460 36,180 42,760 50,280

Source: Berg Insight

3.1.2 Wireless technologies

Devices connected by 802.15.4-based technologies primarily include field devices that are
widely used for remote monitoring applications in process industries such as the utilities, oil
and gas, chemical and petrochemical industries. These field devices commonly communicate
via the 802.15.4-based protocols WirelessHART and ISA100.11a at the field level to a gateway
that acts as an interface between the field network and a system using Ethernet or serial
communications to host applications such as plant asset management and SCADA tools.
Shipments of 802.15.4 enabled devices amounted to 0.8 million units in 2018 and is
forecasted to reach 1.8 million units in 2023. Bluetooth technology is commonly used to
connect devices to peripherals but also instrumentation such as sensors and actuators.
Similar to Wi-Fi, the use of Bluetooth technology in industrial applications benefits from the
large installed base of compatible mobile devices. Shipments of devices with Bluetooth
connectivity accounted for 0.5 million units in 2018 and is forecasted to reach 1.1 million units
in 2023.

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Figure 3.3: Unit shipments and installed base by technology (World 2017–2023)

Thousand units 2017 2018 2019 2020 2021 2022 2023

Device shipments
802.15.4 670 800 950 1,120 1,310 1,520 1,760
Bluetooth 400 480 570 670 780 910 1,060
Wi-Fi 1,760 2,060 2,410 2,810 3,260 3,750 4,310
Cellular 520 610 710 830 960 1,100 1,260
Other 580 690 810 960 1,120 1,300 1,500

Total 3,920 4,640 5,450 6,380 7,430 8,590 9,890

Installed base
802.15.4 2,730 3,380 4,130 5,020 6,050 7,230 8,590
Bluetooth 1,090 1,510 1,990 2,550 3,200 3,930 4,770
Wi-Fi 9,050 10,600 12,410 14,530 16,970 19,780 22,990
Cellular 2,340 2,820 3,370 4,000 4,740 5,580 6,530
Other 2,390 2,950 3,590 4,350 5,230 6,240 7,390

Total 17,610 21,250 25,500 30,460 36,180 42,760 50,280

Source: Berg Insight

Shipments of automation and network equipment featuring Wi-Fi connectivity for industrial
applications are expected to grow from 2.1 million units in 2018 to reach 4.3 million units in
2023. Today, Wi-Fi is the most widely used wireless technology in industrial automation and
provides a clear path for system designers to move their industrial applications from wired to
wireless. Although reliability remains a challenge, the availability of compatible devices and
networks have enabled Wi-Fi to gain a strong foothold in industrial environments. Berg Insight

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expects that the trend of converging operations technology and Ethernet-based enterprise IT
equipment to enable Wi-Fi to remain the leading wireless technology.

Shipments of cellular devices are forecasted to grow from 0.6 million units in 2018 to 1.3
million units in 2023. Cellular devices are commonly used for backhaul communications,
remote access and monitoring applications, as well as failover applications when machines
lose their primary connection. Moreover, private LTE networks have been deployed by
utilities, mining and oil and gas companies. Volumes of cellular devices deployed in private
mobile networks are however so far low. Shipments of devices featuring other wireless
technologies accounted for 0.7 million units in 2018 and primarily include proprietary radio
solutions in the unlicensed ISM 900 MHz and 2.4 GHz bands, but also satellite, WiMax,
LPWAN and non-802.15.4 WPAN technologies. LPWAN technologies such as LoRa, SigFox
and Ingenu could potentially achieve a significant market position in certain long-range
process automation applications.

3.1.3 Regional markets

There are major differences in the adoption of wireless solutions in industrial automation
between countries and regions. The specialization and diversity of manufacturing industries
throughout the world each present their own inherent abilities and barriers relating to the
uptake of technology. Influencing factors include level of automation, existing network
infrastructure, production methods, plant size, type of ownership and technical competency
level of the workforce. On a global scale, early adopters of wireless technologies have mainly
comprised large utilities, oil and gas, and chemical companies, although companies that are
active across various end markets have gradually adopted wireless solutions in parts of their
network infrastructure. The most advanced market for wireless solutions in industrial
automation is today Europe with annual shipments of 1.6 million units in 2018, which
accounts for 33 percent of total shipments. Important markets in the region comprises
Germany, Italy, France and the UK. The region has highly developed process and factory
industries, along with high IT maturity. The market is however more fragmented than the
North American and Asia-Pacific regions and to a higher degree characterised by small- to
medium sized companies that sometimes lack the capabilities to integrate wireless solutions.

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Figure 3.4: Unit shipments and installed base by region (World 2017–2021)

Thousand units 2017 2018 2019 2020 2021 2022 2023

Device shipments
Europe 1,350 1,550 1,800 2,010 2,300 2,580 2,970
North America 1,220 1,440 1,640 1,820 2,000 2,230 2,570
Asia-Pacific 1,120 1,370 1,690 2,110 2,600 3,180 3,660
Rest of World 240 280 330 450 520 600 690

Total 3,920 4,640 5,450 6,380 7,430 8,590 9,890

Installed base
Europe 6,690 7,860 9,220 10,710 12,420 14,310 16,480
North America 5,990 7,080 8,320 9,670 11,140 12,750 14,620
Asia-Pacific 4,050 5,190 6,590 8,320 10,460 13,060 15,990
Rest of World 880 1,110 1,370 1,740 2,170 2,650 3,190

Total 17,610 21,250 25,500 30,460 36,180 42,760 50,280

Source: Berg Insight

North America is the second largest market and accounted for 31 percent of the total
shipments in 2018. The US is one of the most advanced market for wireless solutions in
industrial automation and at the forefront in the adoption of industrial technology. Annual
shipments are forecasted to reach 2.6 million in 2023, representing 26 percent of total
shipments. The Asia-Pacific region is the third largest market in terms of annual shipments,
accounting for 30 percent of total shipments in 2018. The region has a large manufacturing
industry, which will become increasingly automated and connected in the coming years. Berg
Insight expects that the Asia-Pacific region will become the largest market for wireless
solutions in industrial automation and that shipments will reach 3.7 million units by 2023.

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Growth is driven by strong uptake in China, as well as in advanced industrial automation

markets such as Japan and South Korea. The uptake of wireless technology in emerging
markets follow adoption patterns linked to the level of automation and degree of IT maturity.
Brazil is the largest market in Latin America, while South Africa and Turkey are significant
markets in the Middle East and Africa region. Annual shipments in the Rest of World region
are forecasted to grow from 0.3 million in 2018 to 0.7 million in 2023.

3.1.4 Major vendors

Wireless technologies are integrated into a broad range of devices used for automation of
industrial processes. The devices can be broadly divided into two segments: automation
equipment and network equipment. In the automation equipment segment, product
categories that are shipped in high volumes incorporating wireless communications
capabilities include instrumentation such as industrial sensors, as well as wireless I/O and
field devices that connect to sensors, actuators and machines. These products are offered by
many large automation vendors as part of complete systems for process optimisation, but
also by specialised providers. Most of the major automation vendors partner with network
equipment vendors to offer solutions for control and supervisory-level networks.

Emerson became the first company to market WirelessHART products in 2008 and is today
the largest provider of wireless instrumentation devices. The company has an installed base
of more than 42,000 wireless networks worldwide and serves many leading players across
various process industries. Major wireless instrumentation vendors further include Yokogawa
and Honeywell, which both provide field devices based on the wireless technology
ISA100.11a. Pepperl+Fuchs, which specialises in electrical explosion protection and sensor
technology, significantly strengthened its position in the wireless field device market through
the acquisition of MACTek in 2015, a provider of HART protocol devices. Other major
industrial automation vendors that provide wireless field devices include ABB,
Endress+Hauser, Schneider Electric and Siemens. Wireless I/O and field devices are also
offered by a diverse range of players that are primarily active in the industrial communications
and control markets. These include for example Advantech, Banner Engineering, Belden,
Data-Linc, National Instruments, OleumTech, Phoenix Contact, Wago and Weidmüller.

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Figure 3.5: Major vendors in the industrial communications market

Source: Berg Insight

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Although few providers of industrial PCs and programmable controllers offer devices
featuring embedded wireless connectivity as standard, a number of vendors provide USB-to-
wireless adapters, as well as devices with mini PCIe slots, making it possible to add wireless
capability by inserting a wireless module. Dedicated industrial PC and PAC vendors with
wireless offerings include Advantech, ADLINK Technology, Beckhoff Automation, Contec,
Kontron S&T and Opto 22. Shipment volumes of wireless devices within this segment is
however low.

Major providers of wired industrial network equipment also offer wireless solutions to enable
customers to monitor and control devices wirelessly in parts of the plant that are normally not
connected to the control room due to accessibility or wiring costs. These include Siemens,
Cisco, Belden, Moxa and Phoenix Contact, which all offer comprehensive portfolios of
industrial wireless devices such as routers, gateways and wireless access points along their
wired solutions. Apart from Siemens, these companies typically partner with large automation
vendors as a go-to-market strategy. Cisco has for example developed the Ethernet and IP-
networking based architecture for industrial Ethernet applications – Converged Plantwide
Ethernet (CPwE) – together with Rockwell Automation, but also partner with Emerson, Fanuc,
GE, Honeywell and Schneider Electric. Additional providers of industrial Wi-Fi devices include
small to mid-size vendors such as Acksys, Advantech, Antaira Technologies, Beijer
Electronics Group, Data-Linc, Hilscher, HMS Networks, INSYS Microelectronics, MB Connect
Line, MC Technologies, NetModule and Red Lion Controls that is part of Spectris.

Cellular and unlicensed ISM radio solutions are typically used for data acquisition and
backhaul communications in distributed automation applications. The largest provider of
cellular IoT gateways and routers in the industrial space is Sierra Wireless, followed by
Cradlepoint, Cisco, Digi International, InHand Networks, HMS Networks, Maestro Wireless,
GE’s industrial communications group GE MDS, Robustel Technologies, Advantech,
MultiTech Systems, NetModule and Eurotech. Major vendors of proprietary radio solutions
are GE MDS, FreeWave Technologies, Data-Linc and Banner Engineering.

A number of vendors offer solutions that include an important software component. Examples
include remote access solutions for remote programming and servicing of industrial
equipment, as well as protocol translation solutions for connecting legacy equipment.

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Remote access specialists include HMS Networks’ eWON business, Secomea and the
Belden subsidiary ProSoft Technology. The latter is also an important provider of protocol
translation solutions, along with IoT gateway vendors such as Advantech, Beijer Electronics
Group, Eurotech, HMS Networks, Moxa, Phoenix Contact and Red Lion Controls.

3.2 Market drivers and barriers

There are numerous drivers and barriers that influence the developments on the market for
wireless solutions in industrial automation. Macroeconomic factors such as the general
economic climate, international trade, commodity prices and availability of labour have a
major impact on factory and process industries and their propensity to adopt new
technologies. Regulations affect a number of areas directly related to the use of industrial IoT
solutions. The level of competition in the industrial sector is also influencing the demand and
intense competition creates pressure to improve productivity. Technology development is an
additional factor influencing market developments.

3.2.1 Macroeconomic environment

The market for wireless solutions in industrial automation is affected by macroeconomic
factors as the industrial automation market is closely correlated with industrial production.
Although the industrial sector today contributes to a decreasing share of global gross
domestic product, it is highly sensitive to interest rates, consumer demand and energy prices.
Notably, macroeconomic factors turned against many industries during the economic crisis of
2008 and caused the industrial automation market to decline after many years of growth,
leading to a slowdown in the adoption of new technology. While capital expenditures in many
key automation end markets have experienced slow recovery since the crisis, structural
trends such as demographic changes, rising labour costs and focus on digitalization are
contributing to a more favourable market environment for automation companies.

The price of energy also influences the automation industry as energy costs can account for a
major share of the total production costs. In high energy sectors, lowering energy costs
comprise a key objective in the drive for productivity gains. Low energy prices can on the
other hand make energy efficiency less important from an economic perspective.

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Additionally, the utilities sector is a key market for many automation vendors and is highly
influenced by the price of oil. Following the crash in oil prices during the economic crisis of
2008, prices returned to more than US$ 100 a barrel in 2011. Since reaching a peak of US$
107 a barrel in 2014, oil prices sharply dropped over the next two years. The price of Brent
crude fell to US$_28. Oil prices have recovered and hovered around US$ 50–70 a barrel
during 2017–2018. Many oil and gas companies are still experiencing difficulties, affecting
their willingness to invest in new capacity.

The adoption of wireless solutions in industrial automation is growing faster than the
automation industry and regional adoption patterns are linked to certain economic factors
such as the level of IT maturity and penetration of other automation technologies. An
upcoming macroeconomic challenge for the industry is skill shortage. There are a lot of
legacy solutions within industrial communications which requires specialised knowledge. In
order to integrate OT and IT solutions, trained personnel with knowledge within both
industrial automation communications and IT are needed. New connected and converged
solutions will furthermore require a new set of skills to be operated and companies and
governments need to develop strategies to ensure the availability of skilled professionals.

3.2.2 Regulatory environment

A number of industrial automation verticals are heavily impacted by regulations. These
include in particular the oil and gas, power generation and distribution and chemical
industries. For example, the large number of regulations and standards within the oil and gas
industry has a positive effect on the use of wireless solutions which can help stakeholders to
comply with regulations and security programs. There are also many government-initiated
projects to introduce mandatory equipment for remote monitoring and control of energy
production, distribution and consumption across the globe. Energy production and chemical
process plants can also have legally required equipment and sensors for monitoring
potentially risky operations.

There are today many government initiatives and programs that are designed to promote the
adoption of automation technology. EU launched its Factories of the Future (FoF) research
program back in 2008. The program subsequently renewed in 2014 to last until 2020. FoF

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sets a vision and outlines routes towards high added value manufacturing technologies for
the factories of the future, which will be clean, highly performing, environmentally friendly and
socially sustainable. In Germany, the government promotes its Industry 4.0 concept which
highlights the role of the IoT, data and services in driving the fourth industrial revolution. The
Chinese industrial IoT market is strongly influenced by centralised planning by the national
government. In 2015, as part of its "Made in China 2025" strategy, China presented the
Internet Plus initiative which aims to drive development of modern manufacturing solutions
through applying and integrating smart technologies such as mobile connectivity, cloud
computing, big data and IoT solutions with traditional manufacturing technologies.

3.2.3 Competitive environment

Factory and process automation is an essential part of most manufacturing activities and a
growing number of manufacturing companies are today either engaged in digitalising their
operations to drive further productivity gains. Market pressure to reduce costs and improve
efficiency is widely regarded as the strongest driver for adoption of automation solutions. The
drive towards higher efficiency also implies that more and more information must be shared
in ever larger groups of people for better coordination of activities. Implementation of new
technology however demands significant resources which are often unavailable in smaller
enterprises.

A large part of manufacturing activities is performed by small to mid-sized companies

commonly lacking both the experience and resources required to transform their businesses
using new technology. Moreover, many of these enterprises operate in industries
characterised by intense competition where even minor operational efficiency gains can have
crucial influence. A combination of limited IT know-how and general undercapitalisation is
one of the most formidable barriers against the adoption of wireless solutions. Especially in
highly competitive industries such as automotive, electronics, oil & gas, chemicals and water
and waste water, larger players will in general be more resilient due to the capacity to adapt
to changing market conditions. Industrial automation is one area that improves economies of
scale in manufacturing intense industries.

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3.2.4 Technology environment

The technology environment for wireless solutions in industrial automation is evolving rapidly.
Key components – all the way from chipsets and microprocessors to modems and battery
technology – consistently deliver better performance at lower prices. At the same time
enterprises get increasingly sophisticated IT infrastructure, capable of processing ever larger
amounts of data to deliver valuable and meaningful information to managers. An increasing
number of nodes in industrial automation networks are becoming IP addressable and data
collected from remote and local automation systems is yet another source of input for
ubiquitous enterprise IT systems that now span virtually all business activities. New
communications and IT technology enable the capture and visualisation of executable data
which is central for the overall effectiveness of a plant.

Security is a challenge introduced by the evolving technology environment. The increased

number of IP addressable nodes and the use of wireless solutions in industrial automation
can increase the risk for cyberattacks which can lead to interrupted production as well as
safety hazards. Solution vendors and end-users need to address security elements such as
authentication, privacy and data integrity already at the design level of an Industrial IoT
solution. Furthermore, the wide range of available wireless technologies and standards can
make it challenging to navigate the market. It’s important to strike the right balance between
the risk of adopting unproven and non-futureproof standards and the possible early benefits
of wireless connectivity. Wi-Fi and Bluetooth are the most widespread wireless technologies
in factory automation while cellular is more often used for backbone communications and
remote monitoring. The increasing popularity of Ethernet-based networks in factory
automation is one of the key reasons for the popularity of Wi-Fi in such applications and
cellular network availability is an important factor for adopting cellular technology for remote
and dispersed network nodes. A growing number of companies have chosen to install private
LTE networks, often in remote areas, so that full coverage is achieved. The introduction of 5G
cellular technologies broadens the addressable market for cellular technology as cellular
networks can be deployed in places where bandwidth requirements cannot be fulfilled today.
Several automotive OEMs have for example showed interest in using 5G networks in their
factories to connect their automation equipment.

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3.3 Value chain analysis

The value chain for wireless solutions in industrial automation spans multiple industries. Key
industry players come from backgrounds such as industrial equipment, instrumentation,
embedded systems and networking. Telecom companies along with IoT platform and IT
vendors also play an instrumental role for bringing wireless solutions to market, providing
network infrastructure components, communications services, platform services and IT
expertise. For IT and telecom companies, wireless solutions in industrial automation
generates new business opportunities in a number of product and service segments.
Industrial network equipment and solution providers see the potential for expansion and
strengthening of their product portfolio, whereas automation equipment vendors can add
wireless instrumentation to address new use cases. There has been a consolidation trend
among industrial technology vendors in the past years. M&A activities have included both
vertical acquisitions where for example automation companies acquire networking specialists
in order to expand their offering as well as transactions where companies buy similar
businesses to gain market share. During 2019, there will be opportunities for financially
strong players to make acquisitions that complement or extend their businesses and the
consolidation trend in the industry is likely to continue.

3.3.1 Industrial communications and control industry players

Many of the leading providers of wireless solutions within industrial automation are industrial
network and control equipment vendors. These companies specialise in providing
communications and control devices for demanding industrial applications and have included
wireless products in their portfolio to complement their offering of wired equipment. The
largest industrial communications and control solution vendors offering wireless devices have
several thousand employees and include Cisco, Belden, Phoenix Contact, Advantech,
National Instruments, Wago, S&T, Beckhoff Automation and Weidmüller. These companies
are active worldwide and also hold important positions in their respective domestic markets
Germany, Taiwan and the US that are home to a wide range of manufacturing companies.
Mid-sized industrial networking and control specialists include Sierra Wireless, ADLINK
Technology, Moxa, Contec, Digi International, Beijer Electronics and HMS Networks. These
companies typically specialise in specific product categories, while smaller players may focus
on products for specific market segments.

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Figure 3.6: Key data for industrial communications and control solution providers

Company Turnover1 Employees Headquarters

Cisco US$ 49,300 m 74,200 USA
Belden US$ 2,380 m 8,800 USA
Phoenix Contact US$ 2,380 m 16,500 Germany
Advantech US$ 1,370 m 7,300 Taiwan
National Instruments US$ 1,290 m 7,400 USA
Wago US$ 930 m 8,100 Germany
S&T (Kontron) US$ 960 m 3,900 Germany
Beckhoff Automation US$ 880 m 3,900 Germany
Weidmüller US$ 800 m 4,700 Germany
Sierra Wireless US$ 690 m 1,400 Canada
ADLINK Technology US$ 340 m 1,200 Taiwan
Moxa 2
US$ 300 m 1,000 Taiwan
Contec US$ 220 m 600 Japan
Digi International US$ 180 m 550 USA
Beijer Electronics US$ 140 m 700 Sweden
HMS Networks US$ 130 m 490 Sweden
MultiTech Systems2 US$ 75 m 250 USA
Eurotech US$ 65 m 300 Italy
Lantronix US$ 45 m 130 USA
Steute 2
US$ 43 m 300 Germany
Hilscher2 US$ 35 m 260 Germany
InHand Networks US$ 33 m 280 China
Robustel Technologies US$ 20 m 150 China
NetModule US$ 17 m 60 Germany
Acksys US$ 7 m 20 France
1
Financial year ended 2017/18 Approximate annual revenues
2

Source: Berg Insight

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There have been a number of M&A activities among the wireless solution providers and
industrial network specialists in recent years. In 2011, Red Lion acquired Sixnet that provides
machine-to-machine solutions to industrial customers. In the same month, B+B SmartWorx
acquired Quatech, an industrial networking company. B+B SmartWorx purchased the
industrial cellular router manufacturer Conel and the media converter provider IMC Networks
in the following year. The company was later acquired by the major industrial PC maker
Advantech in early 2016 for close to US$ 100 million. B+B SmartWorx today operates as
Advantech B+B SmartWorx and leads Advantech’s Intelligent Networking Business Sector. In
January 2012, Siemens acquired RuggedCom, a supplier of industrial communications
products.

HMS Networks has made a number of acquisitions in recent years. The company acquired
the CAN-based communications technology vendor IXXAT in early 2013. HMS Networks
further purchased the remote access router manufacturer eWON and the embedded control
and M2M communications specialist Beck IPC in 2016 and 2018 respectively. In 2014, Belden
acquired the protocol conversion solution vendor ProSoft Technology and Tripwire, a
provider of signal transmission solutions for mission-critical applications. In early 2015, Bosch
added gateway software and IoT middleware to its portfolio through the purchase of ProSyst.
Pepperl+Fuchs strengthened its position in the WirelessHART market during the same year
by acquiring MACTek, a provider of HART protocol devices. ADLINK Technology acquired
PrismTech in late 2015, thereby strengthening its software and systems capabilities, as well
as its industrial IoT market reach. In the following year, PTC acquired Kepware, including
KEPServer EX, a communications platform for industrial automation. Following years of flat
revenue growth, the embedded systems manufacturer Kontron was acquired by the IT
systems supplier S&T in mid-2017. The deal was enabled by a capital increase in S&T by
Ennoconn, a subsidiary of Taiwan-based Foxconn Technology. In December 2017, the
leading cellular IoT module vendor Sierra Wireless acquired Numerex, a provider of IoT
solutions for applications such as remote tank and asset monitoring. The engineering
software vendor Altair Engineering picked up CANDI Controls in May 2018, thereby adding
gateway technology to its IoT platform. Recent acquisitions include Kontron S&T’s acquisition
of the open source networking software specialist Inocybe, as well as Advantech’s purchase
of Omron Nohgata.

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Figure 3.7: M&As in the industrial communications sector (2011–2018)

Company Acquisition target Date

Red Lion Sixnet October 2011
B+B SmartWorx Quatech October 2011
Siemens RuggedCom January 2012
B+B SmartWorx Conel March 2012
B+B SmartWorx IMC Networks June 2012
HMS Networks IXXAT January 2013
Advantech GPEG November 2013
Belden ProSoft Technology June 2014
Belden Tripwire December 2014
Bosch ProSyst February 2015
Pepperl+Fuchs MACTek September 2015
ADLINK Technology PrismTech December 2015
Advantech B+B SmartWorx January 2016
HMS Networks eWon February 2016
Weidmüller Bosch Rexroth Monitoring Systems November 2016
PTC Kepware December 2016
Phoenix Contact Etherwan System April 2017
S&T Deutschland Kontron (merger) August 2017
Phoenix Contact Perle Systems September 2017
Sierra Wireless Numerex December 2017
Altair Engineering CANDI Controls May 2018
HMS Networks Beck IPC July 2018
Aquamonix Eaton’s ELPRO business July 2018
Kontron S&T Inocybe August 2018
Advantech Omron Nohgata October 2018

Source: Berg Insight

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Figure 3.8: Major industrial automation vendors

Source: Berg Insight

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3.3.2 Industrial automation industry players

Every major supplier in the automation industry has today an industrial IoT initiative, including
their own cloud-based solutions for monitoring and managing connected assets. Many of the
solutions have been announced during the last two years. All major vendors are now
investing heavily in the development of their respective software platforms. Examples include
ABB’s ABB Ability, Bosch’s Bosch IoT Suite, Emerson’s Plantweb, Fanuc’s FIELD system,
GE’s Predix, Hitachi’s Lumada, Honeywell’s Connected Plant, Kuka’s Kuka Connect,
Mitsubishi Electric’s iQ Platform, Omron’s i-BELT, Rockwell Automation’s Connected
Enterprise, Schneider Electric’s EcoStruxure and Siemens’ MindSphere. These initiatives are
aimed at helping customers collect data from machines, optimise processes further through
analytics and create digital models of their products, plants and facilities.

To better address customers’ needs when digitalising their operations, several major
automation players have pursued vertical integration strategies, acquiring specialist
companies in the engineering software market. Examples include Siemens and Schneider
Electric. By integrating data from connected automation equipment with design and
engineering software, companies can create digital twins and simulations of their plants that
change as conditions in the plants change. The shift to a product mix characterised by a
higher degree of software-based products also enable automation vendors to employ
subscription-based pricing models.

Industrial Ethernet technologies play a key role in enabling industrial IoT solutions and
several large automation vendors also provide industrial network equipment, including
wireless solutions. Siemens is one of few vendors that offer networking solutions for field,
control and supervisory networks. The company has a broad industrial wireless portfolio that
encompass Wi-Fi, cellular, WiMax and WirelessHART solutions. Several companies with a
strong position in the process automation market offer WirelessHART and ISA100.11a field
devices for applications such as remote tank monitoring and process optimisation. These
include ABB, Emerson, Endress+Hauser, Honeywell, Peperl+Fuhchs, Schneider Electric and
Yokogawa. Suppliers such as ABB and GE with large power divisions also have businesses
that specialise in industrial communications for distributed automation applications, where
cellular and proprietary radio solutions are often employed.

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Figure 3.9: Key data for companies active in industrial automation

Company Turnover1 Employees Headquarters

General Electric US$ 122,100 m 313,000 USA
Siemens US$ 96,500 m 372,000 Germany
Bosch US$ 84,500 m 401,000 Germany
Hitachi US$ 80,300 m 304,000 Japan
Honeywell US$ 40,500 m 131,000 USA
Mitsubishi Electric US$ 38,000 m 142,000 Japan
ABB US$ 34,300 m 135,000 Switzerland
Schneider Electric US$ 26,800 m 142,000 France
Emerson US$ 15,300 m 77,000 USA
Omron US$ 7,400 m 36,200 Japan
Fortive US$ 6,700 m 26,000 USA
Fanuc US$ 6,200 m 7,000 Japan
Rockwell Automation US$ 6,300 m 22,000 USA
Keyence US$ 4,500 m 6,600 Japan
Amatek US$ 4,300 m 16,900 USA
Yokogawa US$ 3,500 m 18,300 Japan
Kuka US$ 3,800 m 14,200 Germany
Yaskawa Electric US$ 3,800 m 12,400 Japan
Festo US$ 3,400 m 20,100 Germany
Endress+Hauser US$ 2,400 m 13,300 Switzerland
IMI US$ 2,200 m 10,600 UK
Spectris US$ 1,900 m 8,700 UK
MKS Instruments US$ 1,900 m 4,900 USA
Sick US$ 1,600 m 8,800 Germany
Pepperl+Fuchs US$ 700 m 6,000 Germany
1
Financial year ended 2017/18

Source: Berg Insight

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Figure 3.10: M&As in the industrial automation sector (2015–2018)

Company Acquisition target Date

Omron Adept Technology September 2015
General Electric Alstom’s power and grid business November 2015
Siemens CD Adapco January 2016
Yokogawa KBC Advanced Technologies February 2016
Yaskawa Electric Doolim Robotics March 2016
Honeywell Intelligrated July 2016
General Electric Wise.io November 2016
General Electric Bit Stew Systems November 2016
Siemens Mentor Graphics November 2016
Midea Group Kuka January 2017
ABB B&R Automation April 2017
Honeywell NextNine June 2017
Omron Sentech July 2017
General Electric Baker Hughes July 2017
Omron Microscan Systems August 2017
Kuka Device Insight October 2017
Schneider Electric IGE+XAO Group November 2017
Mitsubishi Electric Powerex November 2017
Rockwell Automation Odos Imaging December 2017
Kuka Visual Components January 2018
Schneider Electric Aveva March 2018
Mitsubishi Electric ASTES4 August 2018
Siemens Mendix August 2018
ABB GE Industrial Solutions September 2018
Emerson GE Intelligent Platforms October 2018

Source: Berg Insight

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The on-going consolidation trend within the industrial automation sector has remained at a
high level in the last three years. Strategies of the major automation vendors continue to
involve acquisitions and targets range from small technology-focused companies and
companies with complementary products to direct competitors. Omron added robotics
technology to its portfolio through the US$ 200 million acquisition of Adept Technology in late
2015. The company further strengthened its machine vision offering through the purchase of
Sentech and Microscan Systems in 2017. GE has both acquired and divested major
businesses in recent time. In November 2015, the company completed the US$ 16.9 billion
acquisition of Alstom’s power and grid business. Following the acquisition, GE’s Intelligent
Platform business was merged with Alstom’s Power Automation and Controls unit to form GE
Automation and Controls. In October 2018, the company however announced that it will sell
the Intelligent Platforms business to Emerson. GE has also announced plans to sell its stake
in Baker Hughes that the company purchased in mid-2017. Other major deals include the
divestment of its Industrial Solutions business to ABB in September 2018.

Siemens significantly expanded its software business by acquiring CD Adapco in early 2016
and Mentor Graphics in November the same year. The company further purchased the low-
code development platform provider Mendix in mid-2018 to accelerate the rollout of its IIoT
operating system MindSphere. In February 2016, Yokogawa acquired KBC Advanced
Technologies, a provider of software and consultancy services to the oil and gas industry.
Yaskawa Electric acquired Doolim Robotics in March the same year, thereby expanding its
portfolio with robotic coating and sealing systems. Honeywell has made a number of
acquisitions of small companies with activities in the industrial automation market in recent
time. These include the material handling specialist Intelligrated and NextNine, a provider of
security management software for industrial and critical infrastructure. In January 2017, the
China-based consumer appliance manufacturer Midea Group completed the acquisition of
the industrial robot maker Kuka. As part of Midea Group, Kuka is now expanding rapidly on
the Chinese market. The company has also acquired a majority stake in the IoT platform
vendor Device Insight. ABB significantly strengthened its position in the factory automation
market through the acquisition of B&R Automation in April 2017. Similar to Siemens, France-
based Schneider Electric has focused on expanding its industrial software offering in recent
time. In late 2017, the company acquired IGE+XAO Group, a provider of CAD, PLM and

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simulation software. In the following year, Schneider Electric merged its industrial software
business with Aveva, a UK-based provider of engineering and industrial software. Most
recently, Emerson acquired GE’s Intelligent Platforms unit, thereby adding key factory
automation products to its portfolio.

3.3.3 Telecom industry players

Industrial automation is one of the primary application areas for wireless IoT technology. For
this reason industrial automation is an important market for telecom vendors offering IoT
modules and devices, as well as the wireless IoT business of mobile operators. The way that
mobile operators approach the industrial automation market is influenced by their general
strategies for business services and wireless IoT. All of the leading international mobile
operator groups worldwide have launched strategic initiatives related to IoT and connected
devices over the past years.

China Mobile is the world’s largest provider of cellular IoT connectivity. At the end of Q2-2017,
the operator reported 150 million IoT subscribers and a year-on-year growth rate of 88
percent. Vodafone ranked second with 59 million IoT subscribers and a yearly growth rate of
43 percent. China Unicom captured the third spot with 50 million, surpassing AT&T at 35.7
million. China Telecom grew at an exceptional 250 percent year-on-year to reach 28 million
cellular IoT subscribers in the period. Deutsche Telecom, Softbank/Sprint, Verizon and
Telefónica currently had in the range of 15–20 million cellular IoT subscribers, which are
growing at yearly rates of 15–30 percent. Telenor was the last player in the top ten with
approximately 12 million cellular IoT subscribers. With an aggregate base of 407 million
connections in mid-2017, the top ten mobile operators had a combined global market share
of 76 percent.

IoT managed service providers have a unique position in the IoT ecosystem through their
capability to aggregate multiple cellular networks on a unified platform. Some companies
operate as VARs or MVNOs, whereas others have more comprehensive portfolios of
packaged end-to-end solutions and system integration capabilities targeted at specific
segments. Aeris and KORE have consolidated their positions as leading players on the North
American market with international reach having 10.0 million and 8.5 million IoT subscribers

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respectively. They are now among the top 20 communications providers worldwide in the IoT
market. In Europe, Wireless Logic has the largest installed base of 2.3 million. Sierra Wireless
established a European cellular IoT connectivity business through the acquisitions of
Maingate and MobiquiThings and gained a foothold in North America when it acquired
Numerex in December 2017. Other major players in this category include Eseye, Arkessa,
Cubic Telecom and Stream Technologies. The latter was acquired by Arm in June 2018.
Altogether the leading IoT managed service providers have more than 25 million connections
under management.

Figure 3.11: Mobile operators by IoT subscriber base (World Q2-2017)

Operator IoT subscribers YoY Growth

China Mobile 150,000,000 88 %
Vodafone 59,000,000 43 %
China Unicom 50,000,000 78 %
AT&T 35,700,000 23 %
China Telecom 28,000,000 250 %
Deutsche Telekom 20,000,000 33 %
Softbank/Sprint 19,600,000 23 %
Verizon 17,500,000 19 %
Telefónica 15,000,000 15 %
Telenor 12,000,000 26 %

Source: Berg Insight estimates and operator data

3.3.4 IoT platform and IT industry players

The increasing convergence between information technology and operational technology has
led many software vendors to deepen their reach into the industrial market. By introducing
solutions for data collection from connected devices, industrial software vendors can extend
the lifecycle of their legacy products and create new bundles to sell to their existing customer

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base. These companies have developed offerings that typically have a specific focus on a set
of capabilities, often tied to their core businesses. For example, PTC’s ThingWorx platform
complements its product lifecycle management (PLM) and computer-aided design (CAD)
software portfolios and enables customers to develop digital twins of their products, while
SAP’s Leonardo IoT platform allows its customers to integrate device data into their SAP
S/4HANA ERP system. Apart from industrial software vendors, the IoT platform market has
attracted major companies from the broader IT sector, along with a host of start-ups, often
funded by venture capital firms, as well as incumbents from the IT, telecommunications and
industrial sectors.

There is a wide range of software platforms available, intended to reduce the cost and
development time for IoT solutions by providing standardised components that enterprises
can build upon. Software platforms typically run on cloud infrastructure or in enterprise data
centres. These solutions include various application environments and IT systems that
provide functions such as device management, data management, business logic, APIs and
user interfaces, as well as integration with other enterprise IT systems. IoT platforms are built
to abstract a lot of common functions away from the specific application logic, thereby
reducing the time and cost of developing and maintaining IoT solutions. Device management
services enable provisioning of devices and remote management of software running on
devices. Application enablement platforms comprise a set of services that can be re-used
across industries and common IoT use cases. These solutions are designed to simplify and
accelerate the development of IoT solutions and provide developers with tools and APIs to
connect devices, collect data from devices and web-based services, manage and normalise
data, create rules and triggering events and run analytics.

The industrial IoT platform market is fragmented and populated by a host of start-ups, as well
as major companies from the IT and industrial sectors. Major industrial software vendors have
entered the IoT platform market primarily through acquisitions. PTC spent roughly US$ 550
million between 2013 and 2016 to acquire a total of five companies with activities in IoT and
augmented reality (AR). Through these acquisitions, the company has gained an early lead in
the industrial IoT platform market and its IoT business generated annual revenues of US$ 124
million in its financial year ending in September 2018. PTC also entered a partnership with

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Rockwell Automation in mid-2018. As part of the deal, Rockwell Automation made a US$ 1
billion equity investment in PTC, representing an 8 percent ownership interest in the
company. SAP’s offering comprises Leonardo, a portfolio of IoT, machine learning and
analytics solutions built on the SAP Cloud Platform. The platform is used by major industrial
automation vendors such as Pepperl+Fuchs and Endress+Hauser, which both also have
collaboration agreements with SAP to provide industrial IoT solutions. SAP’s main competitor
in the ERP software market, Oracle, provides the PaaS Oracle Cloud IoT Service but primarily
focuses on providing its pre-packaged solutions for monitoring, production monitoring, fleet
monitoring, connected worker and service monitoring for connected assets in the SaaS layer.
Moreover, Software AG’s Cumulocity IoT business has also built a strong position in the
industrial sector and its platform has been selected by Siemens to complement its IoT
operating system MindSphere. The company is also part of the ADAMOS strategic alliance of
machinery and plant engineering firms and powers the ADAMOS IIoT platform. Additional
industrial software vendors with activities in the IoT platform market include Altair Engineering
that is best known for its computer-aided engineering (CAE) software suite HyperWorks. The
company offers the SmartWorks suite of IoT solutions that were obtained in the acquisitions
of the IoT platform provider Carriots and CANDI Controls, a provider of gateway technology.

Small and mid-sized companies that target the industrial market include C3 IoT, Device
Insight, Exosite, FogHorn Systems, Litmus Automation, Relayr, Uptake and Wind River. These
companies typically specialise in a specific technologies or segments of the market. C3 IoT
for example specialises in data management and analytics and holds a strong position in the
utilities market. The company’s customer base includes major energy companies such as
Engie, Royal Dutch Shell and American Electric Power. Wind River, which leverages Telit’s
foundational IoT technology in its Helix Device Cloud, holds a strong position in the chipset
manufacturing segment. Device Insight is majority owned by the industrial robot manufacturer
KUKA, while Exosite holds a partnership with the major manufacturer of motion and control
technologies Parker Hannifin and powers Parker Hannifin’s Voice of the Machine IoT
platform. The Germany-based IIoT platform provider Relayr was recently acquired by Hartford
Steam Boiler, a subsidiary of the major reinsurance company Munich Re. Through the
acquisition, Munich Re aims to create new business models for the IIoT market, offering not
only technology but also risk management, data analysis and financial instruments. Start-ups

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that specialise in edge computing and analytics include Litmus Automation, Uptake and
FogHorn Systems. The latter has attracted notable investors such as GE, Intel, Dell,
Honeywell, Yokogawa, Bosch and Saudi Aramco Energy Ventures.

Companies from the broader IT and telecommunications sector with activities in the industrial
IoT platform market include Arm, Cisco, Ericsson, Gemalto, HPE, IBM, Samsung, Sierra
Wireless and Telit. Additionally, the major cloud service providers Amazon, Microsoft and
Google have in recent time expanded their portfolios of cloud-based IoT services both
through acquisitions and in-house development. These vendors focus primarily on providing
cloud infrastructure as a service (IaaS) but have made inroads into the industrial IoT market
by adding more services such as device management and analytics to upsell customers and
thereby increase margins that are today under pressure as the traditional cloud compute
services are being commoditised. In turn, this will likely lead to the commoditisation of certain
services currently offered by vendors in the IoT platform market. For example, Microsoft has
announced that it will open source its Azure IoT Edge service, which contains infrastructure
and modules to create IoT gateway solutions. However, the major cloud service providers
focus primarily on providing horizontal offerings that scale to a large number of devices.
Additionally, the services offered by these companies today generally require more
investment in product development and system integration compared to IoT platforms offered
by specialised vendors.

3.4 Future industry trends

The industrial IoT market is complex and influenced by multiple mega-trends across the
broader IT, telecommunications and industrial sectors. IT/OT convergence, the connected
enterprise, the Industrial Internet of Things, Industry 4.0 and smart factories are all concepts
which are part of the ongoing evolution of industrial automation. Increased interoperability
and communication between devices, systems, services and people in combination with
technologies such as advanced sensors, smart devices, wireless technologies, 3D printing,
mobile devices, wearable technology and big data solutions have the ability to improve
performance, flexibility and responsiveness throughout the enterprise value chain.

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The development of wireless network technology is continuously increasing the number of

possible use cases. LTE cellular networks address the growth in demand for data hungry
remote applications such as video monitoring as well as spur innovation of new applications.
The emerging cellular technologies based on 5G will open up entirely new use cases for
wireless solutions as well as enable cellular to be a competitive technology in applications
where it currently isn’t suitable. New LPWAN technology enables connecting non real time
critical remote nodes which previously weren’t economically viable to connect. New versions
of 802.11.x Wi-Fi enable wireless solutions in an increasing number of control and safety
applications. Evolvement of the currently available as well as development of entirely new
802.15.4 based standards in combination with emerging energy harvesting technology
enable an ever-increasing number of sensor and field devices to connect to enterprise and
automation networks. As a result of these developments, more and more information
generated by automation equipment will be used by an ever-greater diversity of applications.

Berg Insight’s short-term outlook for wireless solutions in industrial automation is positive. It’s
an emerging market and there is still a long way to go before the technology becomes
adopted by all the potential beneficiaries. When implemented properly, wireless solutions can
be an effective tool to interconnect plants and systems and help improve operational
efficiency. Among many of the stakeholders in the value chain there is now an awareness of
the benefits with wireless technology but even so decision-making and implementation can
take considerable time. At all times, business processes and enterprise IT systems must be in
place to support wireless solutions. A significant part of the market value will be generated by
IT infrastructure required for managing new information flows.

Berg Insight’s long-term vision for wireless solutions in industrial automation is a clearer
division of tasks between the different roles in the value chain that enables free flow of data
between equipment and applications. Network control nodes, sensors and field devices will
increasingly feature integrated wireless communications capabilities. A wirelessly connected
device should be capable of uploading data to an online repository from where the
information is available to any application permitted by the system operator. Some solution
providers will increasingly focus on hardware and in a likely scenario some of these vendors
will eventually become absorbed by larger players in the sector. Others will focus completely

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on software, developing applications enabled by telemetry data. Established software

developers will also be able to enhance their existing applications with new features enabled
by the availability of real-time data and two-way communications.

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Chapter 4

Global automation vendors

4 Global automation vendors

The consolidation of the automation industry has resulted in the rise of large automation
vendors with global presence and activities in both the factory and process automation
markets. Notable events in recent time include ABB’s acquisition of the factory automation
specialist B&R Automation and Emerson’s failed bid to acquire Rockwell Automation in 2017,
as well as Schneider Electric’s reverse takeover of the industrial software provider Aveva in
early 2018. Industrial automation players are now investing heavily in the development of
software platforms to help customers gather data from machines, design products faster and
optimise processes.

4.1 ABB
ABB is a global leader in power and automation technologies, serving the utilities, industrial,
transport and infrastructure markets. The company was formed in 1988 through the merger
between Asea and BBC Brown Boveri. Headquartered in Switzerland, ABB has about 135,000
employees worldwide and is listed on the Zurich, Stockholm and New York Stock Exchanges.
In 2017, annual revenues amounted to US$ 34.3 billion, up 1 percent year-on-year. The
company is organised into four divisions: Electrification Products, Robotics and Motion,
Industrial Automation and Power Grids. These divisions accounted for 32 percent, 20 percent,
20 percent and 27 percent of total revenues respectively in 2017. In December 2018, ABB
announced that it will sell its Power Grids division to Hitachi for US$ 11 billion. The transaction
is expected to close in the first half of 2020.

ABB serves factories all around the world, from discrete to process industries and has been
focusing on digitalisation in the automation industries for many years. In March 2017, ABB
commercially launched ABB Ability, combining the company’s entire portfolio of digital
solutions and services. Digital offerings provided by ABB Ability include performance
management solutions for asset-intensive industries, control systems for process industries,
remote monitoring services for robots, motors and machinery, and control systems for

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buildings, electric-vehicle charging networks and offshore platforms. Additionally, the

company entered into a strategic partnership with Microsoft and selected Microsoft Azure as
its preferred cloud platform. A strategic collaboration was also formed with IBM in April 2017
with focus on artificial intelligence and machine learning. ABB Ability now includes more than
210 industrial Internet solutions.

ABB has in recent time performed a number of strategic acquisitions in the industrial
automation market. Its venture capital unit ABB Technology Ventures that was set up in 2009
also invests in start-ups across a range of sectors including robotics, drones, IIoT, machine
learning, cybersecurity and distributed energy. In early 2015, ABB acquired Viola Systems, a
Finnish specialist in solutions for remote data monitoring, visualization and control using
wireless communications. In July 2017, ABB strengthened its position in the factory
automation market by acquiring the Austrian-based machine control specialist B&R
Automation that provides open-architecture solutions for machine and factory automation.
Other notable deals include the US$ 2.6 billion purchase of GE Industrial Solutions in July
2018, which strengthens ABB’s position in electrification. Portfolio companies of ABB
Technology Ventures include for example Grabit, Vicarious, Clearpath Robotics and Element
Analytics.

Product portfolio
Through its Industrial Automation, and Robotics and Motion businesses, ABB is able to offer
complete measurement, analytics and control solutions for both process and discrete
industries. The Industrial Automation division provides integrated control products, systems
and service offerings, which are available as separately sold products or as part of a total
automation, electrification and instrumentation system. The company’s measurement
solutions that leverage wireless communications include temperature, pressure, level, flow
and density sensors, which can improve the visibility of processes. The wireless
instrumentation solutions feature WirelessHART communications to connect to the
automation network via gateways. The offering also comprises wireless adapters that can be
fitted on existing HART devices. The devices can be managed from a central location using
the System 800xA Engineering Workplace. The Industrial Automation division also offers a
range of wireless devices, modems and other hardware from third-party providers for use with
ABB’s 800xA DCSs.

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The Robotics and Motion division offers a wide range of products and services including
engines, generators, drives, PLCs and industrial robots. The division also provides a full
range of life-cycle services, from product and system maintenance to system design,
including energy appraisals and preventive maintenance services. The industrial robots come
ready to be connected to Ability Connected Services, wirelessly or wired, enabling predictive
and proactive support. The Ability Connected Services suite consists of five services:
Condition Monitoring and Diagnostics, Backup Management, Remote Access, Fleet
Assessment and Asset Optimisation. The services can be tailored to specific needs via the
company’s Robot Care service agreements. The Ability Connected Services are delivered
through the MyRobot web application. ABB has also developed a condition monitoring
solution for low-voltage motors, based on sensors that transmit data using Bluetooth
technology. The Smart Sensor can be applied to almost any low-voltage motor, whether new
or already in use, to provide actionable information on a motor’s condition to avoid
unexpected breakdowns and optimise performance.

Additional wireless products are provided by businesses within the company’s Power Grids
and Electrification Products divisions. Examples of product families include Tropos wireless
broadband IP mesh networks from the ABB Wireless business in the Power Grids division
and the Arctic family of wireless devices that was obtained in the acquisition of Viola Systems
that is now part of the Electrification Products division.

Business strategy
The acquisition of B&R Automation closed ABB’s historic gap in machine and factory
automation, enabling the company to provide technology and software to customers across
both process and discrete industries. The offerings are sold mainly through ABB’s direct
sales force in combination with third-party channel partners such as distributors, system
integrators, machine builders and OEMs. ABB has an installed base of more than 70 million
connected devices and over 70,000 control systems. The vast majority of the connected
devices comprise the company’s Intelligent Motion solutions. The company has invested
heavily in digital services and solutions in recent time, resulting in the launch of its integrated
industrial Internet platform ABB Abilty in late 2016. Customers using ABB Ability solutions
include for example Shell, CenterPoint Energy, Con Edison, BASF, Royal Caribbean, Cargill,
Volvo and BMW. Moreover, roughly 7,000 industrial robots at more than 750 customer sites

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are connected to the ABB Ability Connected Services platform. ABB began connecting its
robots to advanced services already in 2007 and has delivered about 40,000 industrial robots
with embedded connectivity to date. The installed base of industrial robots amounts to more
than 400,000 units. ABB’s wireless solutions serve customers in numerous areas including
power generation, power transmission and distribution, as well as customers in mining, oil
and gas, transportation and public infrastructure. The Asia, Middle East and Africa region is
the company’s largest market, accounting for 37 percent of annual revenues in 2017,
followed by Europe and the Americas, which accounted for 35 percent and 28 percent
respectively.

4.2 Bosch
Bosch is a multinational engineering and electronics company headquartered in Germany.
The group comprises Robert Bosch and its roughly 440 subsidiaries and regional companies
in 60 countries. Bosch has over 400,000 employees worldwide and generated annual
revenues of € 78.0 billion (US$ 84.5 billion) in 2017, up 7 percent year-on-year. Its operations
are divided into four business sectors: Mobility Solutions, Industrial Technology, Consumer
Goods, and Energy and Building Technology. These business sectors accounted for 61
percent, 9 percent, 24 percent and 7 percent respectively.

The business sector Industrial Technology includes the Drive and Control Technology
Division, which is operated by the subsidiary Bosch Rexroth. Bosch Rexroth employs over
30,500 people and annual revenues amounted to € 5.5 billion (US$ 6.0 billion) in 2017. In
addition, numerous software projects with focus on Industry 4.0 were consolidated into an
independent business unit – Bosch Connected Industry – in the Industrial Technology
business sector in early 2018. Other businesses include the group’s software and systems
unit – Bosch Software Innovations (SI) – that designs, develops and operates IoT and
enterprise software and systems solutions worldwide. Bosch SI was established in 2008 and
acquired Innovations Software Technology during the same year. Since then, Bosch SI has
expanded its portfolio through the acquisitions of the enterprise software vendor Inubit and
the IoT middleware specialist ProSyst Software in 2011 and 2015 respectively. Its applications
relate particularly to mobility, energy, manufacturing and buildings.

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Product portfolio
The Drive and Control Technology division within the Industrial Technology business sector
plays a leading role in Bosch’s connected industry offering. Bosch Rexroth specialises in
drive and control technology and is one of the world’s largest suppliers in this field. It offers
hydraulics, electric drives, controls, gear technology and linear motion technology for factory
automation, machinery applications and engineering and mobile applications. Bosch’s IoT
platform, Bosch IoT Suite, was launched by Bosch SI in 2013. The IaaS business Bosch IoT
Cloud was subsequently introduced in 2016 to provide cloud services to the Bosch Group as
well as external customers. The Bosch IoT Suite is an integrated set of microservices that are
designed to connect and manage devices as well as provide tools to build sophisticated IoT
applications. Featured middleware capabilities encompass device management, access
management, software roll-out and updates, data analysis as well as integration with third-
party systems and services. Customers can use any combination of the IoT services to
develop and implement a desired solution. The Bosch IoT Suite is explicitly designed to
support open and standards-based approaches to integrate with other domain specific
services.

Business strategy
Bosch is both a provider and a user of connected manufacturing solutions. Bosch Rexroth
employs a dual strategy, which involves operating both as a technology provider, offering
products for the Bosch Group and external customers, and as a solution and service provider
delivering consulting, implementation, training and support. As an automation partner, Bosch
Rexroth works closely with several automotive and machine-tool manufacturers to provide
tailored system solutions and services. In its own factories, Bosch wants to become a leading
user, with a focus on reducing costs, increasing quality, and meeting delivery commitments.
The group’s software house, Bosch SI, is today involved in more than 250 IoT projects in
market segments including manufacturing, mobility, energy, smart homes and buildings,
smart cities as well as agriculture. The Bosch IoT Suite currently manages more than 8.5
million connected sensors, devices and machines. Bosch SI provides a flexible and
adaptable pricing model with progressive price plans that are based on the number of
connected devices, active users, transactions or data volume. Special price plans are also
available for testing and prototyping. The company is working with an ecosystem of partners

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including system integrators, solution providers, OEMs and chipset vendors. Examples
include HCL Technologies, Infosys, TATA Consultancy Services, Tech Mahindra, Adesso,
Amdocs, T-Systems, Virtimo, Oracle, PTC, Vodafone, Intel, Marvell, MediaTek, NXP
Semiconductors, STMicroelectronics and Texas Instruments.

4.3 Emerson
Emerson has evolved from a regional manufacturer to a global diversified player with
activities in a wide range of industrial, commercial and consumer markets. Headquartered in
the US, Emerson employs roughly 76,500 people worldwide and operates approximately 200
manufacturing facilities. The company is listed on the New York Stock Exchange. Yearly sales
in the financial year ending in September 2017 amounted to US$ 15.3 billion, up 5 percent
year-on-year. Emerson has three business segments: Automation Solutions, as well as
Climate Technologies and Tools & Home Products, which together make up the Commercial
& Residential Solutions business. The Automation Solutions business accounted for 62
percent of yearly sales in fiscal 2017, while the Commercial & Residential Solutions business
accounted for the remainder.

In mid-2016, Emerson decided to reposition its strategic portfolio, which resulted in the
divestment of two businesses. The sale of the network power systems business to the private
equity firm Platinum Equity and a group of co-investors was completed in December 2016.
The motors, drives and electric power generation business was sold to the Japanese motor
manufacturer Nidec in February 2017. The divestments allow Emerson to focus on its high-
growth businesses. Additionally, the company completed the acquisition of Pentair’s valves
and controls business in April 2017. Notable acquisitions in 2017–2018 furthermore include
the purchase of the US-based software company Paradigm, the German industrial
manufacturer Aventics and GE’s Industrial Platforms business. The Intelligent Platforms
business provides PLCs along with a range of other devices and has 650 employees
worldwide and annual sales of US$ 210 million. During 2017, Emerson also attempted to
acquire Rockwell Automation but withdrew its US$ 29 billion bid following a rejection from
Rockwell’s board of directors.

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Product portfolio
The Automation Solutions business provides integrated solutions and products, including
measurement and analytical instrumentation, industrial valves and equipment and process
control systems. Moreover, Emerson offers an extensive wireless product portfolio, which
includes transmitters, gateways and application solutions. The wireless product portfolio can
be divided into two categories: wireless field networks and wireless plant networks. The
company’s wireless field networks are based on the WirelessHART standard, while Emerson
uses rugged wireless access points from Cisco to provide Wi-Fi coverage in its wireless plant
networks. The low-powered WirelessHART technology enables the use of battery-powered
devices that can operate for many years on the same battery. In contrast, the wireless plant
networks provide high bandwidth, flexibility and expansion capabilities for business and
operational applications. Wireless field devices include the Rosemount Wireless Transmitters
that take input from a variety of non-powered switch types such as pressure, flow and level
switches. The Emerson Wireless Field Link functions as an antenna for the wireless field
network and is built to be used in conjunction with a network manager or gateway. Emerson
provides three gateways for connecting WirelessHART devices with control systems and data
applications. Two of them use wired connectivity for control system communications, while
the third is built on the Cisco AIRONET 1550 access point and provides Wi-Fi connectivity for
control system communications. In some cases, the company also utilises satellite and
cellular technology for gateway communications.

PlantWeb is Emerson’s digital plant architecture that uses predictive intelligence to improve
plant performance and enables improved throughput, availability and quality as well as
reduced conversion costs. PlantWeb optimizes plant performance by leveraging digital
intelligence, connecting plants with a plantwide network, controlling processes and
optimizing assets. Emerson’s wireless products and solutions extend PlantWeb’s functionality
into hard to reach areas.

Business strategy
Emerson primarily sells its products through a large direct sales force and also has
thousands of field engineers working directly with customers. The direct sales are
complemented with a network of independent sales representatives and distributors. Key

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markets served by the Automation Solutions business include oil and gas, refining,
chemicals, power generation, pharmaceuticals, food and beverages, and pulp and paper.
Customers include many leading players across various process industries including Shell,
Chevron, Pemex, Saudi Aramco, BASF, DowDuPont and Bayer. Emerson is one of the
world’s largest vendors of wireless field devices and the leading vendor of WirelessHART
devices. In Q4-2018, the company had an installed base of more than 42,000 wireless
networks worldwide. North America is the main market for the company’s automation
solutions and accounted for 44 percent of annual sales, followed by Asia and Europe, which
accounted for 23 percent and 20 percent respectively.

4.4 Endress+Hauser
Endress+Hauser is a major supplier of products, solutions and services for industrial process
measurement and automation. Its core expertise lies in the fields of process instrumentation
and laboratory analysis. Founded in 1953, the privately-held company is based in Switzerland
and has about 13,300 employees worldwide. Endress+Hauser has 136 subsidiaries across
47 countries and production facilities in Europe, Asia, the Americas and Africa. Annual sales
amounted to € 2.2 billion in 2017, up 5 percent from the previous year. In the process
automation market, the company provides solutions for flow, level, pressure and temperature
management, process analysis and data management. The company also offers network
design, implementation, system integration, factory acceptance test, training and support.

In June 2018, Endress+Hauser announced that it will intensify its cooperation with SAP in the
development of IIoT applications for the process industry. The goal is to fully integrate the
company’s field instruments with SAP Leonardo, and as digital twins into the SAP Cloud
Platform. The companies intend to work closer together in the development of joint solutions,
sales and customer implementations.

Product portfolio
The product portfolio includes a broad range of measuring instruments and field network
components that communicate via industrial protocols such as HART, WirelessHART,
Profibus, FOUNDATION Fieldbus, Modbus or Ethernet. The WirelessHART devices are

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particularly suitable for monitoring applications, as well as measurements on moving, rotating

or temporary equipment. The devices are integrated into a system via a gateway with
Ethernet or serial connections. The WirelessHART Adapter SWA70 is an interface module that
is powered either by a battery pack or power supply units and can be used for wireless
transmission of 4–20 mA and HART signals from connected field devices to a WirelessHART
gateway. If required, the field device can be powered by the adapter’s built-in battery.

Figure 4.1: Endress+Hauser’s WirelessHART gateway and adapters

Source: Endress+Hauser

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The Fieldgate SWG70 gateway acts as an interface between the WirelessHART network and a
system using Ethernet or serial communications to host applications such as plant asset
management and SCADA tools. The gateway is designed for mounting in explosion
hazardous areas and has an intrinsically safe antenna port. An integral or remote antenna can
be mounted according to the needs of the application. Data from connected devices can be
accessed via the web-based asset information management platform W@M Portal, which
enables data monitoring and proactive maintenance of the monitored assets. An on-premise
version is also available, called W@M Enterprise. Additional software products include the
application Analytics for analysis of real-time and historic data.

Business strategy
Endress+Hauser’s instruments enable customers to operate their plants economically and
safely. The measurement devices are sold both through direct sales channels and select
representatives worldwide. The company has a dense network of its own sales centres in
over 50 countries and roughly half of the workforce are involved in sales. Professional
services are offered alongside the products to integrate the devices into a variety of control
systems. Endress+Hauser can also develop and install complete automation systems. The
company has a strong position in the process automation market and serve customers in a
wide variety of industries including chemical, petrochemical, food and beverage, oil and gas,
water and wastewater, power and energy, as well as life sciences. Typical applications for
Endress+Hauser’s wireless adapters and gateways include process optimisation, tank and
silo monitoring, inventory control and condition monitoring of equipment. The company’s
installed base of both wired and wireless devices amounts to close to 50 million units.

4.5 Fanuc
Fanuc is one of the world’s largest industrial robot makers. Apart from robotics, the company
specialises in factory automation products and CNC controls. Founded in 1972, Fanuc is
headquartered in Japan and listed on the Tokyo Stock Exchange. In the financial year ending
in March 2018, the company generated net sales of JPY 727 billion (US$ 6.2 billion), up 35
percent from the previous year. The operations are divided into four divisions: Factory
Automation, Robot, Robomachine and Service. These divisions accounted for 31 percent, 31

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percent, 26 percent and 12 percent of the total revenues respectively. Fanuc has over 263
offices worldwide, supporting customers in 108 countries. The global workforce amounts to
more than 7,000 employees.

The industrial robots line includes a wide range of robots for diverse applications and
industries. Fanuc’s robotics controllers offer functionality to connect robots and remote
computers over an Ethernet network to transfer robot programs, monitor operations, collect
production data and troubleshoot robots. The FIELD system (Fanuc Intelligent Edge Link and
Drive system), an open software platform, was launched during 2017. The system can run on
on-premise servers and is designed to connect various equipment at manufacturing sites for
improving productivity. Fanuc also collaborates with the Japan-based start-up Preferred
Networks in the field of AI. In November 2017, Fanuc’s accumulated unit sales of industrial
robots surpassed 500,000 units. Annual production capacity of industrial robots range about
80,000 units. In addition, Fanuc has sold about 4 million CNC controls. The company’s main
market is Asia that accounted for 45 percent of annual revenues in fiscal 2018, followed by
the Americas and Europe, which accounted for 20 percent and 15 percent respectively.

4.6 General Electric

General Electric (GE) is a diversified industrial and financial services company.
Headquartered in the US, the company has operations in 120 countries and employs about
313,000 people worldwide. Annual revenues in 2017 amounted to roughly US$ 122.2 billion.
The company’s operating segments include Power, Renewable Energy, Oil & Gas, Aviation,
Healthcare, Transportation, Lighting and Capital. Following years of poor capital allocation
characterised by a number of large acquisitions at high valuations, GE has taken steps to
strengthen its balance sheet by reducing debt and further shrinking GE Capital. The company
has announced that it will spin off its Healthcare business in 2019 and sell its stake in Baker
Hughes over the next two or three years. GE has also made two recent divestments of
businesses that are active in the industrial market. The Industrial Solutions business, which
sells electrification solutions, was sold to ABB in September 2018. GE furthermore
announced in October 2018 the divestment of the Intelligent Platforms business to Emerson.

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The automation market is today primarily served by the Grid Solutions business that is part of
GE’s Power operating segment and GE Digital. In December 2018, GE announced plans to
establish a new, independent company focused on building a comprehensive IIoT software
portfolio. The new organisation aims to bring together GE Digital’s IIoT solutions including the
Predix platform, Asset Performance Management, Historian, HMI/SCADA, Manufacturing
Execution Systems, Operations Performance Management, and the GE Power Digital and
Grid Software Solutions businesses. The new IIoT-focused company will start with US$ 1.2
billion in annual revenues and an existing industrial customer base.

Product portfolio
GE Grid Solutions offers a broad range of integrated hardware and software solutions for
industries including utilities, oil and gas, petrochemicals, mining, water, heavy industrial and
telecommunications. The business’ industrial communications group – GE MDS – can
provide complete solutions for industrial communications including wireless routers and
modems, cellular routers and gateways, hardened optical networks, multiplexers, broadband
powerline solutions, and Ethernet switches and converters. Its wireless devices can
accommodate an extensive range of industrial protocols and carry serial and IP traffic, as well
as analog and digital I/O signals connected directly to field devices and sensors. The
industrial wireless portfolio comprises solutions for both unlicensed and licensed narrowband
communications, as well as industrial 2G, 3G and 4G LTE cellular routers and gateways.

Wireless unlicensed solutions include the MDS WiYZ data acquisition and networking
platform that combines wireless connectivity for sensors, I/Os, instruments and meters with
comprehensive network infrastructure solutions for IP/Ethernet and serial, machine-to-
machine and backhaul communication to host systems and devices. The system is built
around the WiYZ Gateway and WiYZ Remote devices. The WiYZ Gateway supports up to 4
wireless connectivity options for bridging communications between mesh, cellular, WiFi and
MDS wireless. The WiYZ Remote devices accommodate a range of analogue and digital I/Os
for connecting remote field devices and sensors. The ISA100.11a standard for mesh network
communications is used between the remotes and the gateway.

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Figure 4.2: Example of a data acquisition solution using GE MDS devices

Source: GE

GE Digital announced the Predix platform in mid-2015 and the platform became commercially
available for external customers in 2016. The Predix Platform is a distributed application and
services platform for building, deploying and operating digital industrial solutions. The
platform consists of two complementary software stacks – one for edge computing and one
for cloud computing. These work together to optimise the workload execution using a variety
of deployment options: on an intelligent connected asset, controller, gateway, edge server or
in the cloud. Predix Connectivity offers end-to-end communications between Predix Edge
devices and Predix Cloud over various access networks including fixed line, cellular and
satellite.

Business strategy
GE’s restructuring plans involves increased focus on the company’s aviation, power and
renewable energy businesses, while divesting some of its businesses with activities in the
automation market. The strategy marks a new direction for GE, which was one of the first
industrial companies to consider the industrial Internet as a key strategic area. Annual
revenues generated by GE Digital amounted to US$ 4.0 billion in 2017, up 12 percent from
the previous year. The revenues are derived from the sales of software developed in-house,
including the Predix platform, and associated hardware and software. The company primarily
focuses on its existing client base and expects Predix product revenues to double in 2018,

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reaching approximately US$ 1 billion. GE mainly targets existing customers in the energy,
aviation and oil & gas market verticals, and leverages its partners to pursue opportunities
beyond its core markets. The Predix platform is also used internally by a number of GE
businesses. In Q4-2017, more than 300,000 assets were managed using the Predix platform.
External customers include for example Boeing, ConocoPhillips, Exelon, Joy Global, Maersk,
Pitney Bowes, Saudi Electricity Company, Schindler, Toshiba and Xcel Energy. The Predix
platform now includes over 200 industrial applications and is supported by a community of
over 33,000 developers. GE Digital is collaborating with leading system integrators,
technology vendors, ISVs, telecom operators and resellers to create and market solutions
based on the Predix platform. Some examples of GE’s nearly 1,000 partners include Apple,
AT&T, Accenture, Capgemini, Cisco, Cognizant, Deloitte, Ericsson, Ernst & Young, HPE,
Infosys, Intel, Microsoft, Pitney Bowes, Pivotal, PwC, Softbank, Tech Mahindra and Wipro.
The company’s industrial communications business, which is part of the Power operating
segment, has delivered its solutions to companies in a variety of markets including energy, oil
and gas, mining, water and wastewater, and transportation. The business has an installed
base of more than 1.5 million wireless devices worldwide.

4.7 Hitachi
Hitachi is a global industrial group with headquarters in Tokyo and business locations in 68
countries. Founded in 1910, the group comprises close to 900 consolidated subsidiaries and
employs more than 300,000 people. Hitachi divides its operations into seven business
segments: Information and Telecommunication Systems, Social Infrastructure and Industrial
Systems, Electronic Systems and Equipment, Construction Machinery, High Functional
Materials and Components, Automotive Systems, and Smart Life and Ecofriendly Systems.
The company is listed on the Tokyo Stock Exchange and annual revenues amounted to
JPY_9.4 trillion (US$ 80.3 billion) in the financial year ending in March 2018. In 2015, Hitachi
made a series of acquisitions that formed the foundation of its video intelligence, analytics
and data management offerings. These include the purchases of Pentaho, oXya and
Pantascene.

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Hitachi is investing heavily in research and development of IoT-optimised solutions and

services across key market segments such as transportation, energy, manufacturing and
Lumada (the company’s IoT platform). Lumada is delivered by Hitachi Vantara, a new
company that was formed in September 2017 through the combination of Hitachi Data
Systems, Hitachi Insight Group, Pentaho and operations from other group companies. Hitachi
Vantara has deep expertise in both the OT and IT fields and specialises in data-driven
solutions for commercial and industrial enterprises.

Product portfolio
Hitachi’s IoT platform Lumada incorporates Hitachi’s expertise in operational technology (OT)
and information technology (IT) and combines data orchestration, streaming analytics,
content intelligence, simulation models and other Hitachi software technologies. The platform
serves as the core foundation on which all of Hitachi’s IoT solutions are built and is intended
to enable the creation of IoT business ecosystems. Other Hitachi businesses with activities in
the automation market include Hitachi Industrial Equipment Systems that is part of Hitachi’s
Social Infrastructure and Industrial Systems business segment. The business provides a
range of industrial automation equipment such as motors, pumps, inverters, AC servos,
industrial controllers, transformers, switches and breakers. Industrial controllers include PLCs
and PACs. The company’s HX series of PACs feature both PLC and industrial PC functions
and support industrial protocols such as EtherCAT, Profibus, Modbus and DeviceNet.

Business strategy
Hitachi views Lumada as the foundation of its digital solutions business, which has rapidly
grown to become a central pillar of the company’s operations. Annual revenues generated by
the Lumada operations exceeded JPY 1 trillion (US$ 8.6 billion) for the first time in fiscal 2017
and amounted to JPY 1.1 trillion (US$ 9.2 billion) in fiscal 2018. Key market segments for the
company’s IoT solutions include energy, transportation and manufacturing. The smart
manufacturing solutions help customers in various discrete manufacturing industries to
increase production efficiency, automate production and develop reliable quality skills.
Examples of solutions include manufacturing site visualisation, predictive equipment failure
detection systems, debottlenecking support and production planning optimisation. Individual
solutions are provided to customers primarily through Lumada SI, which today account for
the majority of revenues generated by Lumada operations. Solutions are also provided

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through group companies such as Hitachi Industrial Equipment Systems by bundling

products and systems. The company’s growth strategy involves more collaboration with
partners to increase its B2B2B sales, as well as expand offerings in the business domain
starting with ERP solutions.

4.8 Honeywell
Honeywell is a diversified technology and manufacturing company that provides a variety of
commercial and consumer products and services. The company is headquartered the US
and has 131,000 employees across roughly 1,300 sites in 70 countries. Honeywell is listed on
the New York Stock Exchange and generated annual revenues of US$ 40.5 billion in 2017, up
3 percent from the previous year. Honeywell manages its business operations through three
operating segments: Aerospace, Home and Building Technologies (HBT), Performance
Materials and Technologies (PMT), and Safety and Productivity Solutions (SPS). These
segments accounted for 36 percent, 24 percent, 26 percent and 14 percent of annual sales
respectively.

Honeywell’s strategy to become a software-industrial company has resulted in increased

focus on products and services that facilitate the connected aircraft, home, building and
factory. The company’s Connected Plant initiative is led by the Honeywell Process Solutions
(HPS) business that is part of the PMT operating segment. Moreover, a broad range of
sensing and wireless solutions are provided by the Sensing and Internet of Things (SIoT)
business, which is part of the SPS operating segment. The SIoT business offers more than
50,000 products ranging from snap action, limit, toggle and pressure switches to position,
speed and airflow sensors. The HPS and SIoT businesses have 12,500 and 700 employees
respectively.

In May 2017, Honeywell launched a new investment fund that invests in early-stage and high-
growth technology companies that are strategically aligned to the company’s portfolio and
software capabilities. The initial fund size is approximately US$ 100 million. The main areas of
interest include IoT, software and analytics, materials science and advanced manufacturing.
Investments have so far been made in FogHorn Systems, Element Analytics and Soft
Robotics.

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Product portfolio
HPS offers a broad range of automation, measurement and control solutions, as well as
advanced software applications to process industries. Industrial wireless solutions are sold
under the OneWireless brand and include Honeywell’s distributed control system, wireless
field instruments, wireless network components and facility management applications. The
company also provides engineering services such as consulting, design, installation,
commissioning and support to help customers implement wireless solutions in their
operations. The industrial wireless portfolio is divided into three categories: I/O devices,
mobility and OneWireless network. I/O devices include the FlexLine Radar tank gauging
system, wireless transmitters, as well as the OneWireless Adapters that enable customers to
transmit data from their HART devices to a wireless control system based on ISA100.11a. The
OneWireless network is made up of wireless access points, device managers and controllers.
HPS is an advocate of IP technologies and the ISA100.11a wireless standard and
OneWireless solutions enable one network for Wi-Fi, ISA100.11a and Ethernet devices, as
well as easy integration with a wide range of interfaces such as Modbus, OPC UA, HART,
WirelessHART, Experion CDA, GCI and Honeywell Enraf. HPS in addition provides a range
software solutions to help users make better decisions so that safety, reliability and efficiency
can be improved. An example includes Honeywell Pulse, an app that enables users to
visualise plant data and information in near real-time.

Additional wireless products include the Limitless series of switches and sensors provided by
the Honeywell’s SIoT business. The solutions are based on 802.15.4 point-to-point
communications and can be configured to allow for up to fourteen devices to communicate
with one receiver module. The series include switches, sensors, monitors and receivers. The
wireless signal is received by either a panel-mountable receiver or an industrial DIN-rail
module that converts it to an output. Outputs can be LEDs, buzzers or electrical signals. The
capability also exists to provide CAN, ProfiBus, EhterNet/IP and standard Ethernet
communications. The Limitless devices can be used in a wide range of scenarios such as in
CNC machines, material handling, lifts, conveyors and specialty machines.

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Business strategy
Honeywell’s HPS business is a major provider of automation control, instrumentation,
advanced software for the oil and gas, refining, pulp and paper, industrial power generation,
chemicals, life sciences, metals, minerals and mining industries. In 2017, HPS accounted for
US$ 4.8 billion of the total revenues, up 3 percent from the previous year. The company is
one of the largest manufacturers of DCSs, as well as one of the leading providers of
ISA100.11a devices. HPS’ initiative in the IIoT space, called Connected Plant, combines the
company’s industrial expertise, software and digital technologies to make customers’
operations more reliable, profitable and secure. The business works closely with Honeywell
UOP in the refining, petrochemical and gas processing industries. Honeywell has for example
launched the Process Reliability Advisor, a software-based service that feeds data through
Honeywell’s UOP process and fault models to provide key performance information and
process recommendations. The US is the company’s largest market and accounted for 56
percent of the total revenues in 2017, followed by Europe that accounted for 26 percent.

4.9 Keyence
Keyence develops and manufactures sensors, machine vision systems, measuring
instruments, barcode readers and other factory automation sensor products. The company
was founded in 1974 and is based in Japan. Keyence is listed on the Tokyo Stock Exchange
and generated annual revenues of JPY 527 billion (US$ 4.5 billion) in the financial year
ending in March 2018, up 28 percent year-on-year. Revenues derived from international
markets accounted for 53 percent of the total revenues. The workforce comprises over 6,600
employees across more than 200 offices in 45 countries. The product portfolio includes
sensor products used a range of applications including presence/absence and part
differentiation, as well as shape, flow, pressure, temperature and level measurements. In
addition to its broad range of instrumentation products, the company provides professional
services to advise its customers’ in their automation projects. The customer base includes
today over 250,000 customers in roughly 100 countries worldwide.

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4.10 Kuka
Kuka is a manufacturing company that provides industrial robots and solutions for factory
automation. The company is a subsidiary of the Chinese electrical appliance manufacturer
Midea Group that completed the purchase of a 95 percent stake in Kuka in January 2017.
Founded in 1898, Kuka is headquartered in Germany and has subsidiaries in more than 30
countries. The total workforce amounts to about 14,200 employees. Annual sales in 2017
reached € 3.5 billion (US$ 3.8 billion), up 18 percent in year-on-year. The company has three
divisions: Robotics, Systems and Swisslog. These divisions accounted for 35 percent, 45
percent and 22 percent of the total sales in 2017 respectively. The Robotics division produces
industrial robots together with controllers and software. The Systems division offers complete
tailor-made solutions for automating manufacturing processes. The Swisslog division
comprises the businesses Healthcare Solutions and Warehouse and Distribution Solutions.

Kuka recognised the potential of networked and open automation systems back in the 1990s
and introduced its first web-capable industrial robot in 1998. Kuka has increased its
investments in digitisation and IoT in the past years to further the development of networked
automation systems, human-robot collaboration and its existing robot series. The company
has also made a number of acquisitions in the space. In late 2017, Kuka acquired the Finnish
company Visual Components that specialises in software solutions for 3D simulation in
factory planning. The company purchased a majority stake in the Germany-based IoT
platform provider Device Insight during the same year. Moreover, Kuka collaborates with
Huawei in the area of smart manufacturing and 5G. The partnership between the companies
was formed in 2016.

The product portfolio comprises customised automation solutions ranging from industrial
robots to complete production lines. The industrial robots include a wide range of models
with different payload capacities and reaches for various industries and applications. To
further address the emerging IIoT market, Kuka has launched the Kuka Marketplace that
allows customers to purchase new products and access user guides and videos for
additional information. The first products available for purchase are Kuka Connect and Kuka
College Training courses. Kuka Connect is a cloud-based software platform that provides
user access and analytics functionality. The platform is built on open standards and leverages

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the edge computing device fogNode from the US-based start-up Nebbolio Technologies,
which enables the transfer of robot data to the cloud. Kuka Connect services are offered in
two tiers: Kuka Connect Lite and Kuka Connect Plus. The Lite version is free and provide
users with access to asset management features, while the Plus version includes full access
to features such as real-time notifications and reporting tools.

Figure 4.3: Simplified overview of the Kuka Connect platform

Source: Kuka

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Kuka’s industrial robots are utilised in a diverse range of industries including the appliance,
automotive, aerospace, consumer goods, logistics, food, pharmaceutical, medical, foundry
and plastic industries. Annual production volume of industrial robots exceeds 15,000 units
and the company’s installed base has reached more than 150,000 units.

4.11 Mitsubishi Electric

Mitsubishi Electric is a global supplier of factory automation systems, automotive equipment,
switchgear as well as communications and transportation systems. Headquartered in Tokyo,
the company was founded in 1921 and has today more than 142,000 employees. The
company is listed on the Tokyo Stock Exchange. Annual revenues amounted to JPY 4.4
trillion (US$_38.0 billion) in the financial year ending in March 2017. Mitsubishi Electric has six
business segments: Energy and Electric Systems, Industrial Automation Systems, Information
and Communication Systems, Electronic Devices, Home Appliances and Others. The
Industrial Automation Systems unit comprised the company’s largest business segment in
fiscal 2017 and accounted for JPY 1.4 trillion (US$ 12.4 billion). The business segment
includes the Factory Automation Systems business and the Automotive Equipment business.

Figure 4.4: Mitsubishi’s iQ Platform

Source: Mitsubishi Electric

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Mitsubishi’s Factory Automation Systems business offers a wide range of products, services
and solutions including controllers, drive control devices, visualisation solutions, power
distribution controllers, motors, and mechatronics products such as electrical-discharge and
laser-processing machines, as well as industrial robots. The company has launched the e-
F@ctory concept to support customers in utilizing advanced technology to directly link the
shop floor to an IT system. The iQ Platform is the enabling hardware for the concept and
consists of a multi CPU base unit that communicates with PLCs, CNCs, industrial robots and
HMI systems. The platform is compatible with a wide variety of protocols, such as the open
CC-Link IE architecture. Mitsubishi’s automation products are widely used across industries
such as transportation, power, buildings, waste and shipping, but also internally in the
company’s own manufacturing facilities. The annual production volume of PLC CPUs
amounts to almost 2.0 million units. The company has launched the e-F@ctory Alliance
program to ensure compatibility and ease of implementation of third-party hardware and
software with the company’s own solutions. Mitsubishi is also part of the Edgecross
Consortium that promotes edge computing and IoT.

4.12 Omron
Omron is a Japan-based manufacturer of control equipment, factory automation systems,
electronic components, automotive electronics, ticket vending machines and medical
equipment. Founded in 1933, the company is headquartered in Japan and employs about
36,000 people worldwide. Omron is listed on the Tokyo Stock Exchange. In the financial year
ending in March 2018, yearly sales amounted to JPY 860 billion (US$ 7.4 billion). The
company has six business segments: Industrial Automation; Electronic and Mechanical
Components; Automotive Electronic Components; Social Systems, Solution and Service;
Healthcare; and Other. The Industrial Automation segment is the largest business and
accounted for JPY 396 billion (US$ 3.4 billion) in fiscal 2018, up 20 percent from the previous
year. In 2017, Omron acquired the industrial camera maker Sentech, as well as Microscan
Systems that develops a variety of code readers.

Omron’s Industrial Automation business provides a range of equipment and devices

including industrial sensors, automation systems, servo motors and drivers, switches, relays
and industrial robots. Automation systems include programmable controllers such as

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industrial PCs, PLCs and terminals that support machine control, as well as network and
software products to support data exchange with host systems. During 2017, the company
launched the i-BELT IoT service platform to accelerate data gathering at manufacturing sites
through the integration of control and information systems. The platform consists of three
major services: data collection and accumulation; data visibility and analysis; and device
control. Omron focuses on developing partnerships through organisations such as
Edgecross in order to integrate devices from other manufacturers into the i-BELT system.

Automation systems account for roughly half of the Industrial Automation business’ annual
revenues and the company is the market leader in the control equipment segment in its
domestic market. Although Japan comprises Omron’s main market, the company is active
worldwide and has a diverse customer base in factory automation markets. Omron has
established 17 automation centers and PoC labs across the US, China and other areas to
assist customers through manufacturing site visits and co-creation.

4.13 Pepperl+Fuchs
Pepperl+Fuchs specialises in electrical explosion protection and sensor technology.
Headquartered in Germany, the privately-held company employs about 6,000 people
worldwide. In 2017, yearly sales amounted to € 630 million (US$ 683 million). Pepperl+Fuchs
offers a wide range of products and solutions for process and factory automation including
fieldbus infrastructure, remote I/O systems, industrial monitors and HMI solutions, industrial
sensors, software, as well as customised control system solutions, support and services. In
July 2018, the company announced that it will strengthen its cooperation with SAP with focus
on IoT solutions for the process industry. The cooperation centres on two areas: condition
monitoring and predictive maintenance for production plants, as well as IoT solutions for
product logistics in continuous processes.

In 2015, Pepperl+Fuchs strengthened its position in the WirelessHART market by acquiring

MACTek, a vendor of HART protocol devices. Through the acquisition, the company
expanded its portfolio with MACTek’s family of HART modems, which includes wireless
access solutions designed for hazardous areas, as well as Bluetooth-enabled technologies.

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Product portfolio
Pepperl+Fuchs offers several modules for connecting sensors to control systems through
wireless networks. These include WirelessHART-based gateways, adapters, temperature
converters, and accessories such as antennas. The WirelessHART Gateway sets up the
communications paths and determines when and over which channel the individual devices
within the mesh network communicate with each other. Additionally, it serves as the interface
between the mesh network and the plant’s process control or asset management system.
The gateway provides the connection to the control system with an Ethernet and RS-485
interface, which can transfer data via the HART or Modbus protocols. The WirelessHART
adapter can upgrade a conventional HART or 4–20 mA field device with a WirelessHART
interface. The adapter is battery operated and can also power the connected field device. The
2-channel WirelessHART Temperature Converter is designed to connect resistance
temperature detectors or thermocouples and provide temperature values through a
WirelessHART network. The battery powered temperature converter acts as a router within
the mesh network and is designed to be used in hazardous areas.

Figure 4.5: Pepperl+Fuchs’ WirelessHART products

Source: Pepperl+Fuchs

The company also offers the Wireless Inductive System (WIS) for connecting sensor
components on moveable machine parts. The system enables wireless power transfer and
wireless communications for sensors on moveable machine parts. Inductive, capacitive,

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optical or ultrasonic sensors can be connected. Additional wireless solutions include the
SmartBridge device, as well as the Viator HART modems, which are available in a Bluetooth
version designed specifically for use in hazardous locations. The SmartBridge device
transfers data wirelessly via Bluetooth to standard smartphones or tablets without the need
for additional interface cabling or changes at the PLC. Sensor parameters can be controlled
and displayed using a mobile application where the user can view and modify different
parameters.

Business strategy
Pepperl+Fuchs serves customers in both factory and process automation industries through
a global sales and support organisation with presence in more than 30 countries. Specialising
in hazardous location protection, the company’s largest market is however the process
automation market and customers include some of the world’s largest process industry
companies. The WirelessHART devices are used to monitor a range of assets including
rotating machines, tanks and pipelines, as well as pumps and filters. Other typical
applications comprise diagnosing valves and heat exchanges, calibrating field devices and
controlling valves and other digital outputs. Clients include system integrators, end users and
major industrial automation companies such as Rockwell Automation and ABB.

4.14 Rockwell Automation

Rockwell Automation is a global provider of industrial automation and information solutions.
Headquartered in the US, the company employs about 22,000 people and is listed on the
New York Stock Exchange. In the financial year ending in September 2018, annual revenues
amounted to US$ 6.7 billion, up 5 percent from the previous year. Rockwell Automation has
two operating segments: Architecture and Software and Control Products and Solutions.
These segments accounted for 46 percent and 54 percent of annual sales respectively. The
Architecture & Software segment contains all of the hardware, software and communications
components of the company’s integrated control and information architecture. The Control
Products & Solutions segment includes intelligent motor control and industrial control
products, as well as professional services that comprise total life-cycle support including
technical support and repair, asset management, maintenance, and safety and network

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consulting. Rockwell Automation’s solutions are delivered under the brands Rockwell
Automation, Allen-Bradley and Rockwell Software.

In June 2018, Rockwell Automation entered into a strategic partnership with the industrial
software vendor PTC. The partnership includes technical collaboration across the
organisations, meaning that the companies will align their respective smart factory
technologies and combine PTC’s ThingWorx IoT platform with Rockwell Automation’s
FactoryTalk MES, FactoryTalk Analytics and Industrial Automation platforms. As part of the
deal, Rockwell Automation made a US$ 1 billion equity investment in PTC, representing an
ownership interest of about 8 percent in PTC.

Product portfolio
Rockwell Automation’s offering can be divided into three core components: integrated
architecture, intelligent motor control, and solutions and services. The integrated control and
information architecture solutions are built around the Logix platform and support discrete,
process, batch, safety, motion and power control on the same hardware platform with the
same software programming environment. Intelligent motor control solutions enhance the
availability, efficiency and safe operation of customers’ plant assets. The solutions can be
integrated seamlessly with the Logix architecture. In addition, the company supports its
customers through the entire lifecycle of their automation investment.

The product portfolio comprises a broad range of hardware products including controllers,
operator interface devices, I/O devices, communications and networking products and
industrial computers. Software products include configuration and visualisation software used
to operate and supervise control platforms, advanced process control software and
manufacturing execution systems that enable customers to improve manufacturing
productivity and meet regulatory requirements. The company has in the past years marketed
The Connected Enterprise concept that entails converged plant-level and enterprise
networks, securely connecting people, processes and technologies. The concept is
developed together with Cisco and uses open industry standards and secure IP-based
Ethernet network infrastructure as the foundation for both IT and OT. Industrial network
solutions offered by the company include switches, routers, security appliances, gateway

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devices and linking technologies. Wireless products include the Allen-Bradly branded Stratix
5100 Wi-Fi access point that provides connectivity in hard-to-wire and remote areas. The
device offers pre-programmed default configuration for priority handling of EtherNet/IP to help
provide easy setup for industrial applications.

Business strategy
Rockwell Automation aims for a technology leadership position in industrial automation and
markets its products, solutions and services through both resellers and a direct sales force.
Major end markets served include food and beverage, transportation, oil and gas, metals,
mining, home and personal care, pulp and paper and life sciences. The company has a
strong partnership with Cisco and use Cisco technologies in its Stratix line of industrial
network products. The companies have worked for many years to address the complexities of
securely converging IT and OT operations. Rockwell Automation’s recent deal with PTC
enables the company to provide integrated solutions, achieving greater system
interoperability for customers. In fiscal 2018, sales to customers in the US accounted for 54
percent of total revenues. The largest international markets are China, Canada, Mexico, Italy,
the UK, Germany and Brazil.

4.15 Schneider Electric

Schneider Electric is a global specialist in energy management and automation with
operations in more than 100 countries. The company is headquartered in France and has
over 160,000 employees. Schneider Electric is listed on the Euronext Paris Stock Exchange.
In 2017, annual revenues grew by 1 percent to reach € 24.7 billion (US$ 26.8 billion). The
company is organised in four businesses: Low Voltage (Building), Medium Voltage
(Infrastructure), Industrial Automation (Industry) and Secure Power (IT). The Industrial
Automation business accounted for € 5.8 billion (US$ 6.3 billion) in 2017, up 6 percent year-
on-year.

The Industrial Automation’s business scope includes process, hybrid and discrete
automation, providing comprehensive products and solutions for the automation and control
of machines, manufacturing plants and industrial sites. In January 2014, Schneider Electric

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completed the £ 3.4 billion (US$ 5.2 billion) acquisition of Invensys, which at the time was one
of the largest industrial automation companies in the world with 16,800 employees and
annual revenues of £ 1.8 billion (US$ 2.8 billion). The deal allowed Schneider Electric to enter
the process automation market, especially in distributed control systems and instrumentation
with the Foxboro brand, as well as in safety systems under the Triconex brand. The
acquisition also enabled Schneider Electric to strengthen its portfolio in industrial software
with Wonderware for manufacturing operations management, SimSci for modelling and
simulation and Avantis for asset management. More recent deals include the € 188 million
(US$ 204 million) acquisition of the engineering software specialist IGE+XAO Group in
November 2017 and the reverse takeover of the industrial software maker Aveva in March
2018.

Product portfolio
Schneider Electric’s offering ranges from the Foxboro Evo DCSs and Triconex safety systems
to the Modicon PLCs and PACs, and HMI operating panels. The product portfolio comprises
a wide variety of devices, including discrete sensors, motion systems, push buttons,
signalling solutions, frequency converters and motor starters. The company also provides a
range of software solutions for the design, operation and maintenance of industrial
processes. These include the modelling software SimSci, the supervisory control system
Wonderware and the asset management solution Avantis. Additionally, Schneider Electric has
developed EcoStruxure, a suite of tools and services to help customers implement IoT
solutions. The platform comprises more than 20 services. Examples include the EcoStruxure
Asset Advisor and the EcoStruxure Resource Advisor.

The company’s networking products include the ConneXium line of Ethernet devices
including switches, gateways, cables, wireless access points and antennas specifically
designed and tested for automation networks and industrial environments. OptiM2M is
Schneider Electric’s M2M remote monitoring solution that analyses machine data. The
solution includes a cellular modem, antenna, cables for RS-232 and RS-485 architectures, an
embedded SIM card with worldwide subscription and a dedicated web portal. The solution
targets machine builders that offer stand-alone industrial machines requiring remote
monitoring. Schneider also provides wireless instrumentation solutions under the Accutech

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brand. The Accutech portfolio include the BR10 and BR20 base radios, as well as pressure
measurement field devices. The base radios provide communications to a maximum of 100
field units. Collected data is transferred to the SCADA network or directly to a host via serial
Modbus. Both process data from the field units and control commands to the field units are
handled by the devices.

Business strategy
Schneider Electric has a strong position in both the factory and process markets. The broad
portfolio enables the company to serve almost all segments of the industrial market including
the refining, petrochemical and oil and gas industries, mines, cement plants, water and
wastewater industry, the food processing industry and material handling and packaging
machines. Customers range from end users, distributors, engineering firms and system
integrators to OEMs and panel builders. Schneider Electric has increased its focus on
software and IIoT in recent time through the development of its EcoStruxure platform. The
acquisition of Aveva further strengthens the company’s software capabilities. To date, the
EcoStruxure platform has been deployed at more than 480,000 sites and assets under
management amount to over 1.6 million. The Asia-Pacific region is the company’s largest
market and accounted for 28 percent of the total revenues in 2017, followed by North America
and Western Europe, which both accounted for 27 percent respectively.

4.16 Siemens
Siemens is a global company focused on the areas of electrification, automation and
digitalisation. The company is based in Germany and has around 372,000 employees in more
than 200 countries. Siemens is listed on the Frankfurt Stock Exchange and generated annual
revenues of € 91.3 billion (US$ 105.9 billion) in the fiscal year ending in September 2018, up 6
percent year-over-year. The company’s businesses are bundled into seven divisions: Power
and Gas, Energy Management, Building Technologies, Mobility, Digital Factory, Process
Industries and Drives, and Financial Services. Healthineers and Siemens Gamesa Renewable
Energy are moreover separately managed businesses.

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Siemens is one of the leading providers in the industrial automation market, which is served
by the company’s Digital Factory, and Process Industries and Drives divisions. These
divisions accounted for € 12.9 billion (US$ 15.0 billion) and € 8.8 billion (US$ 10.3 billion) of
annual revenues respectively. The Digital Factory division offers products and solutions used
in manufacturing industries, complemented by product lifecycle and data-driven services. The
Process Industries and Drives division provides solutions for moving, measuring, controlling
and optimising all kinds of mass flows. A core development area within both divisions
comprises MindSphere – Siemens’ cloud-based operating system for IIoT.

Product portfolio
Siemens’ automation portfolio spans a wide variety of solutions and ranges from integrated
drives and programmable controllers to PLM and manufacturing operations management
software. The company also offers the cloud-based IIoT platform MindSphere. The platform
runs on AWS and Microsoft Azure cloud infrastructure and includes end-to-end solutions for
connecting devices, storing data and developing and running applications. Numerous field
protocols are supported, along with a wide range of hardware connectivity agents to bridge
the gap for other protocols. In addition, the MindConnect API enables programming of
custom connectivity agents. Integrations are also available with multiple data systems
including historian databases, ERP, MES and SCADA systems. The company’s industrial
communications offering encompasses solutions from local sensor connectivity to plantwide
data acquisition and transmission. The components for wireless communications comprise
robust devices for indoor and outdoor applications. Products include the SCALANCE series
of wireless LAN devices, the SITRANS series of WirelessHART devices, the Ruggedcom
branded industrial WiMax and cellular telecontrol devices as well as industrial cellular
modems and routers for IP-based networks.

Business strategy
Siemens positions itself as a leading provider of industrial automation products, solutions and
services. Through its Digital Factory and Process Industries and Drives divisions, the
company serves a wide variety of end markets within the factory and process industries.
Siemens has rapidly expanded its offering for IIoT installations, which includes a growing
portfolio of MindSphere applications. The company has also created the MindSphere Partner

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Program to build an ecosystem which today includes over 160 MindSphere partners. In mid-
2018, the MindSphere platform had more than 1 million connected devices under
management. In the industrial networking space, Siemens promotes the use of Industrial
Ethernet, with the PROFINET protocol at the field level and OPC-UA at the control and
operator level. The company strengthened its position in the industrial wireless market
through the acquisition of RuggedCom in 2012 and is today one of the world’s leading
vendors of wireless industrial communications solutions. The combined portfolio of
SCALANCE and RuggedCom networking products are used for distributed automation
applications in a wide range of industries including power, oil and gas, chemical and discrete
manufacturing.

4.17 Yaskawa Electric

Yaskawa Electric is a Japanese manufacturer of motion control products and industrial robots
for industrial automation. The company is listed on the Tokyo and Fukuoka Stock Exchanges
and was founded in 1915. The global headquarters are located in Kitakyushu. In the financial
year ending in February 2018, annual revenues amounted to JPY 449 billion (US$ 3.8 billion),
up 14 percent from the previous year. The business is divided into four segments: Motion
Control, Robotics, System Engineering and Other. These segments accounted for 47 percent,
36 percent, 12 percent and 4 percent respectively of the total revenues in 2018. The Motion
Control segment broadly consists of two product lines: AC servo drives and AC drives. The
Robotics segment provides the Motoman series of industrial robots. Yaskawa employs
12,400 people across 29 countries.

Yaskawa’s Motoman series of industrial robots are used for a wide range of applications,
including welding, assembly, coating, dispensing and packaging, as well as material
handling, cutting and removal. A range of robot controllers and PLC integration solutions are
offered for programming and control. Yaskawa’s main markets comprise electronics-related
industries such as semiconductor and component manufacturing, followed by machinery-
related industries. Approximately 70 percent of annual revenues are derived from international
markets. The Motoman industrial robots are primarily used in the manufacturing of cars,
semiconductors and LCDs. In mid-2018, the company’s installed base of industrial robots
reached 400,000 units globally.

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4.18 Yokogawa
Yokogawa is a leading provider of industrial automation, test and measurement solutions.
Global headquarters are located in Japan and the company is listed on the Tokyo Stock
Exchange. Annual revenues in the financial year ending in March 2018 were JPY 407 billion
(US$ 3.5 billion), up 4 percent year-on-year. The company is divided into three businesses:
Industrial Automation and Control, Test and Measurement, and Aviation and Other. The
Industrial Automation and Control business is the largest and accounted for 89 percent of the
total revenues in fiscal 2018, followed by the Test and Measurement, and Aviation and Other
businesses that accounted for 5 percent each. The company has 18,300 employees and 112
subsidiaries in 59 countries worldwide. In 2016, Yokogawa acquired KBC Advanced
Technologies, a provider of consulting services and software for oil and gas facilities.

Figure 4.6: Yokogawa’s gateways and wireless access point based on ISA100.11a

Source: Yokogawa

Yokogawa’s Industrial Automation and Control business provides sensors, analysers,

distributed control systems, controllers, SCADA systems, safety instrumented systems, as
well as software and services that support production management. The company has long
been involved in the measurement field and is one of the largest providers of industrial field
devices based on the wireless technology ISA100.11a. The product line Field Wireless
include a wide range of ISA100 devices including multi-function modules, communications

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modules, pressure sensors, temperature transmitters, gateways, access points, wireless

adaptors and media converters. The devices can integrate into any ISA100 compliant network
and enable customers to install a wireless system for process measurements in cases where
a wired system is too difficult or uneconomical to implement.

Yokogawa is a leading provider of DCSs and field instrumentation products for companies
active in process industries. In the coming years, the company aims to gradually transform its
business model from selling products and services to a recurring business model.
Yokogawa’s most important market verticals are oil and gas, refineries, petrochemical,
chemical and power. Customers include major companies such as BP, Air Liquid and Pfizer.
Japan and the rest of Asia are the largest markets and account for 32 percent and 28 percent
of total revenues respectively. Middle East is the third largest region followed by Europe and
North America accounting for 11 percent, 8 percent and 8 percent of total revenues
respectively.

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Chapter 5

Device and software vendors

5 Device and software vendors

The vendor landscape for industrial devices and software is highly diverse. Product and
service portfolios range from complete integrated systems down to single hardware
components and software products. Many of the industrial communications and control
solution vendors partner with one or several large automation providers as a go-to-market
strategy. Most vendors also focus on gearing their solutions to system integrators, given the
important role of such actors in the industrial market.

5.1 Industrial communications and control solution providers

Industrial communications and control solutions are provided by large automation vendors,
network infrastructure providers and dedicated vendors. The latter typically specialise in a
specific type of component or solution that is used for industrial communications. Major
product categories within this market include industrial PCs and programmable controllers,
I/O systems, network infrastructure equipment and IoT gateways. The range of devices are
typically complementary, although there has been a trend towards greater convergence in
recent time due to developments in processing and software capabilities of embedded
systems.

5.1.1 Acksys
Acksys designs and manufactures rugged data communications equipment for the industrial
markets. The company has specialised in wireless communications based on Wi-Fi
technology since 2004 and initially focused on developing high-performance communications
controller boards for military, aeronautical and telecoms applications. Founded in 1984, the
privately-held company is based in France and has about 20 employees. In 2017, annual
revenues reached € 6 million (US$ 7 million), of which more than 50 percent is derived from
international markets. The product portfolio comprises Wi-Fi solutions, cellular routers, serial
gateways, converters, serial boards and software. Wi-Fi solutions include point-to-point

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wireless bridges, switches and access points. The WaveNet-Ex is the company’s most
ruggedized Wi-Fi access point, designed for industrial applications in explosive environments
such as chemical plants, refineries and power stations. The industrial cellular router AirBox
LTE allows for remote and secure access to devices connected to the router. It features
cellular connectivity and dual-band Wi-Fi, as well as Ethernet ports and GPIOs.

Figure 5.1: Acksys’ AirLink industrial Wi-Fi access point

Source: Acksys

Acksys has a broad customer base in the industrial automation, oil and gas, and mining
equipment markets. The industrial market is the company’s second largest market after
transportation and accounts for about 45 percent of total sales. Other significant end user
segments include military and aeronautics. Examples of customers in the industrial market
include ABB, Atlas Copco, Caterpillar, Nestlé, Omron, Otis, Renault, Schlumberger,
Schneider Electric, Siemens and SPIE.

5.1.2 ADLINK Technology

ADLINK Technology was founded in 1995 and is a provider of embedded computing
products and services. The company has its headquarters in Taiwan and has more than
1,800 employees across offices in Asia, Europe and North America. ADLINK’s operations are
divided into five main areas: IoT solutions and technology; embedded platforms and

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modules; networking, communication and public; design and manufacturing; and healthcare.
In 2017, the company generated annual revenues of TWD 10.7 billion (US$ 337 million), up
11 percent year-on-year. In Q4-2015, ADLINK acquired PrismTech, a US-based provider of
software platforms for distributed systems. PrismTech was rebranded into ADLINK’s IoT
Solutions and Technology Group in November 2017 and now provides professional services
along with connectivity and IIoT solutions bundled with ADLINK’s IoT gateways.

Product portfolio
The portfolio is divided into four product lines: boards, systems, peripherals, and software
and services. The systems line of products includes ADLINK’s series of industrial PCs, IoT
gateways, panel PCs and monitors, industrial fieldbus devices and machine vision systems.
The MXE series of industrial PCs comprise x86-based devices with diverse I/O interfaces to
meet requirements of various industrial applications. The devices can be delivered in rugged
versions with extended operating temperatures of -40˚C to +85˚C and support wireless
connectivity through dual mPCI slots and an USIM slot, making it possible to connect the
device using a wireless module. Supported wireless options range from 4G LTE and LoRa to
Wi-Fi and Bluetooth. The MXE-210 functions both as a gateway and embedded controller to
bridge the gap between operations technology and information technology data
interchanges. The device is compliant with a wide range of protocols such as Modbus,
EtherCAT, DDS, MQTT and CANOpen. Remote data access and analysis functionality is
available via ADLINK’s SEMA cloud. The portfolio further includes data connectivity and IIoT
platform solutions such as Vortex Edge, Vortex DDS and Spectra, which were obtained in the
PrismTech acquisition.

Business strategy
ADLINK’s strategy is to provide building blocks for IoT deployments in the industrial
automation, communications, medical, defence, transportation and infotainment industries.
The IoT solutions and technology segment and the embedded platforms and modules
segment, which both address the industrial market, represented revenues of TWD 2.2 billion
(US$ 71 million) and TWD 3.9 billion (US$ 125 million) respectively in 2017. ADLINK is active
worldwide with sales in the Asia-Pacific region, North America and EMEA. In 2017, the Asia-
Pacific region accounted for 40 percent of the revenues, followed by North America at 39
percent and EMEA at 19 percent. China was the single largest market in Asia, with close to 33

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percent of the sales in this region, equivalent to 13 percent of the global sales. ADLINK is a
member of the Intel IoT Solutions Alliance that promotes interoperable solutions designed to
accelerate the deployment of intelligent devices and end-to-end analytics. The company has
also partnered with Nvidia to develop industrial AI platforms for edge computing applications.

5.1.3 Advantech
Founded in 1983, Advantech is a Taiwan-based provider of embedded systems and
automation products. The company offers comprehensive system integration, hardware,
software, customer-centric design services and global logistics support. Advantech employs
roughly 7,300 employees in 21 countries. Since 1999, the company is listed on the Taiwan
Stock Exchange. Annual sales in 2017 amounted to TWD 43.4 billion (US$ 1.4 billion), up 6
percent year-on-year. The company’s business is structured into four units: Industrial IoT
Group, Embedded IoT Group, Networks and Communications Group and Service IoT Group.
In November 2015, Advantech acquired B+B SmartWorx, previously known as B&B
Electronics, which specialises in products that deliver connectivity at the edge of networks in
remote and demanding environments. As part of Advantech’s Industrial IoT Group, B+B
SmartWorx operates as Advantech B+B SmartWorx and leads Advantech’s new Intelligent
Networking Business sector in developing smart networking products.

Advantech’s Embedded IoT Group provides integrated IoT solutions including sensor nodes,
gateways, Edge Intelligent Servers (EIS), the WISE-PaaS IoT software platform, as well as
third-party cloud services. Following internal software consolidation and architecture
development, the IoT platform was commercially launched in 2016. The Industrial IoT Group
is responsible for sales and implementation of IIoT products and solutions in the areas of
factory automation, energy and environment, transportation and industrial networking.

Product portfolio
Advantech provides a broad range of hardware and software solutions for industrial
automation. The product portfolio ranges from embedded PCs, automation controllers, I/O
modules and HMIs to RTUs, industrial Ethernet switches, gateways, routers and data
acquisition devices. The company’s industrial wireless solutions cover access points and
client bridges, wireless Ethernet bridges, wireless sensing modules, as well as routers and

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gateways. The AirborneM2M line of access points enables easy access to equipment data or
resources from Wi-Fi enabled devices. The products also have the capability to be switched
from an access point to a client and supports both single or dual serial ports or a single
Ethernet port. Advantech’s remote I/O and wireless sensing modules include WLAN, 3G, NB-
IoT and LPWA devices designed for industrial applications. The WISE-4220 series of modules
leverage Wi-Fi and feature an internal sensor for collecting and logging environmental data
that can be wirelessly transmitted via a gateway to a server or cloud applications using the
MQTT protocol or RESTful web services. The Wireless IoT Network Gateways WISE-3310 and
WISE-3620 can be used to access and manage the sensor nodes. Advantech also provides a
range of cellular IoT routers and gateways under the B+B SmartWorx brand.

Figure 5.2: Advantech’s WISE-3620 wireless IoT Wi-Fi network gateway

Source: Advantech

One of the company’s main software offerings for the industrial market is the WISE-PaaS
industrial IoT cloud platform that provides services to integrate devices and web-based
services in industrial IoT solutions. The Remote Device Monitoring and Management Services
(RMM) is one of the core components that is aimed at remote monitoring and management of
IoT devices. Additional software offerings include the web-based SCADA/HMI solution
WebAccess.

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Business strategy
Advantech is a leading provider of industrial PCs and embedded systems. The company
began addressing the M2M/IoT market in 2010 and views IoT as an expansion opportunity for
its legacy businesses. Complementary software services such as the WISE-PaaS IoT platform
has been introduced in recent time to drive hardware sales and assist partners to develop
cloud-based IIoT solutions. Advantech has also launched the WISE-PaaS Alliance, an IoT
partner program that aims to help partners solve IoT application challenges and take those
applications to market. There are four major offerings in the program: Diverse Software
Solution, Eco-System Partner Collaboration, Marketing & Business Engagement and
Comprehensive Developer Services. Program members leverage the Advantech marketing
platform to generate product awareness and engage with local salespeople for sales leads
and opportunities. Examples of program partners include Symtek and Mitsui Bussan
Electronics. Advantech sells its solutions through a global network of distributors. The
company’s main market is Asia, which accounted for 50 percent of total revenues in 2017,
followed by North America and Europe that accounted for 30 percent and 16 percent
respectively. Annual revenues derived from the sales of industrial PCs amounted to TWD 9.0
billion (US$ 284 million), while sales of embedded boards accounted for TWD 18.6 billion
(US$ 587 million). Annual shipments of industrial PCs amounted to approximately 470,000
units.

5.1.4 Antaira Technologies

Antaira Technologies develops and manufactures industrial networking products. Founded in
2005, the company is headquartered in the US with additional offices in Asia and Europe. Its
product lines range from industrial Ethernet switches, industrial wireless devices, Ethernet
media converters and serial communication devices. In total, Antaira has more than 100
employees. The company’s industrial wireless products include access points, routers and
converters. The line of wireless routers allows users to implement encrypted VPN tunnels and
other basic Wi-Fi routing capabilities for remote harsh environment applications. Additionally,
Antaira provides industrial devices from Sena Technologies, including serial device servers,
Bluetooth wireless converters and modules, and Zigbee wireless modules and adapters for
industrial and enterprise applications. The company targets a wide range of market verticals
including industrial automation, medical, oil and gas, power, security, transportation and

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utilities. The US is the company’s largest market and customers include system integrators
and industrial companies such as ABB, Chevron, GE, Honeywell, Schlumberger and
Siemens.

5.1.5 Beckhoff Automation

Beckhoff Automation is a global provider of open automation systems based on advanced
PC control technology. Its product range covers industrial PCs, I/O and Fieldbus
components, drive technology, and automation software. Founded in 1980, the company is
headquartered in Germany and has about 3,900 employees worldwide. The central divisions
of Beckhoff, such as development, production, administration, distribution, marketing,
support and service are located at the headquarters. Its growing presence in international
market is taking place through local subsidiaries, which now amount to more than 35 branch
offices worldwide. The company is privately held and annual revenues amounted to € 810
million (US$ 878 million) in 2017, up 19 percent year-on-year.

The company’s line of industrial PC solutions includes control cabinet PCs, panel PCs,
control panels, industrial motherboards and embedded PCs. In order to provide cost-effective
wireless solutions to machine builders and manufacturers, the company provides the CU8890
USB to WLAN adapter, which enable wireless integration of industrial PCs into an Ethernet
network. The controller supports WLAN based on the 802.11 standard and can be used as an
access point or client in combination with the company’s industrial PCs. Other wireless
products include the KM6551 wireless data exchange terminal. Through cooperation with
partners, Beckhoff is represented in more than 75 countries. The company has in recent
years focused on densifying its footprint to increase its proximity to customers.

5.1.6 Beijer Electronics Group

Beijer Electronics Group was founded in 1981 and is based in Sweden. The group provides
hardware and software solutions for industrial automation and data communications via its
subsidiaries Beijer Electronics, Westermo and Korenix. Beijer Electronics Group’s main
product offering can be divided into two technology areas: visualisation and data
communications. The Beijer Electronics business provides operator panels, protocol
converters, IoT gateways, edge controllers, control systems, motors and drives, frequency

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inverters, I/O modules, power supplies and automation software. The businesses Westermo
and Korenix offer a range of networking solutions, including switches, routers, gateways and
modems intended for industrial applications. The two companies were acquired in 2008 and
2010 respectively. Beijer Electronics Group is present in 17 countries and has approximately
700 employees. Annual revenues amounted to SEK 1.2 billion (US$ 141 million) in 2017.

Westermo offers communications infrastructure products for control and monitoring systems
used in mission critical applications. Products include a wide range of Ethernet switches,
routers, modems and converters. Wireless solutions include Wi-Fi access points as well as
industrial cellular routers and modems built for harsh environments. Korenix provides
industrial networking and computing solutions including wireless solutions, switches, network
embedded computers, PoE interface cards and I/O products. The JetWave Series consists of
a wide range of industrial WLAN and cellular devices such as Wi-Fi access points/bridges and
3G/LTE wireless IP gateways for applications in industrial automation, electricity
transmission/distribution and railway.

Beijer Electronics Group’s primary focus is direct sales to OEMs and system integrators. A
network of distributors and brand label partners complement the direct sales efforts. Europe
is Beijer Electronics Group’s largest market and accounted for 59 percent of the revenues in
2017, followed by Asia and North America which each made up 19 percent of total revenues.
Westermo generated annual revenues of SEK 461 million (US$ 54 million) during the year.
Key segments include rail transportation, energy, marine, mining and process industry.
Korenix’s revenues in 2017 amounted to SEK 104 million (US$ 12 million). The largest
segments were surveillance, followed by transportation, infrastructure and utilities. Examples
of major clients include Bombardier, Progress Rail Locomotive, Toshiba, ABB, Swarco,
Energotest and Lufkin Automation.

5.1.7 Belden
Belden is a manufacturer of networking, connectivity and cable products. The company is
headquartered in Missouri and employs roughly 8,800 people worldwide. In addition to its
facilities in the US, Belden has manufacturing and other operating facilities in Brazil, Canada,
China, Japan, Mexico and St. Kitts, as well as in various countries in Europe. The company is

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listed on the New York Stock Exchange and generated annual revenues of US$ 2.4 billion in
2017, up 1 percent year-on-year. Belden operates its business under two segments:
Enterprise Solutions and Industrial Solutions. The Industrial Solutions business provides high
performance networking components and machine connectivity products. Industrial products
include physical network and fieldbus infrastructure components and on-machine
connectivity systems customised to end user and OEM needs. The products are marketed
under the brands Belden, Hirschmann, Lumberg Automation, GarrettCom and ProSoft
Technology.

Product portfolio
Belden offers a comprehensive line of industrial cabling, connectivity and networking devices
for data communications in industrial environments. Wireless products include access points,
WLAN controllers, gateways, routers, antennas, network management solutions and planning
software for applications with high demands on flexibility and network availability. The access
points and clients in the Hirschmann OpenBAT series support the 802.11 transmission
standard and have public spot and VPN gateway as options. Each access point has one or
two wireless modules, Gigabit Ethernet ports, as well as a serial and USB port. HiLCOS is the
software version for Hirschmann’s industrial WLAN devices. It can be used to set up WAN
connections and hardware encrypted VPN tunnels.

Belden’s range of industrial routers and gateways are purpose-built for industrial applications
where hardened, industrial-grade solutions are required to deliver high-performance routing,
while ensuring network security. The devices are marketed under the Hirschmann,
GarretCom and Prosoft Technology brands and can be delivered with a rich set of interfaces
such as serial, USB, digital I/Os and an integrated GPS module. Industrial cellular routers
marketed under the Hirschmann brand include both 3G and 4G LTE devices that feature dual
SIM slots for carrier redundancy and two Ethernet ports. The cellular GarrettCom devices in
the Magnum DX940 series can be configured with up to six Ethernet ports and four serial
ports. The Prosoft Technology subsidiary specialises in solutions that enable heterogenous
automation control equipment to share information and transfer critical control data through
wired and wireless connectivity. Belden provides a number of different tools for device
management, enabling users to monitor, configure and update devices remotely.

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Business strategy
Belden targets customers in market verticals such as discrete manufacturing, process
facilities, transportation and energy. The Industrial Solutions business accounted for sales of
US$ 1,032 million in 2017. The products are sold directly to industrial equipment OEMs and
through a network of industrial distributors, value-added resellers and system integrators.
Important partners include major industrial companies such as Rockwell Automation and
Schneider Electric. During 2017, approximately 47 percent of Belden’s sales were to
customers outside the US. Customers include ABB, AVAD Industrial, Boss Automation, GE,
General Motors, Procter & Gamble, Rockwell Automation and ThyssenKrupp.

5.1.8 Cisco
Cisco is a global technology company that provides IP based networking products and
services related to the communications and IT industry. Headquartered in California, the
company was founded in 1984 and employs 72,900 people across 400 offices worldwide. In
the financial year ending in July 2018, annual revenues amounted to US$ 49.3 billion, up 3
percent from the previous year. Cisco’s products and technologies are grouped into four
categories including Infrastructure Platforms, Applications, Security and Other Products. In
addition to its product offerings, Cisco provides a broad range of service offerings including
technical support and professional services. The company is increasingly delivering its
technology and services to customers as complete solutions within cloud, video, mobility,
security, collaboration and analytics.

In the automation market, Cisco has a strategic alliance with Rockwell Automation. The
companies have jointly developed the Ethernet and IP-networking based architecture for
industrial Ethernet applications – Converged Plantwide Ethernet (CPwE) – to help
manufacturers integrate or upgrade their industrial automation and control system networks
to standard Ethernet and IP networking technologies. The architecture is built on design
guidelines from the Cisco Ethernet-to-the-Factory solution and the Rockwell Automation
Integrated Architecture.

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Product portfolio
Cisco’s Connected Factory portfolio comprises network architectures, technologies and
services for industrial markets. The Connected Factory portfolio includes the Cisco Industrial
Ethernet portfolio of switches, which feature ruggedized design and support for industrial
protocols such as EtherNet/IP, Profinet and CC-link. The company also offers a variety of
Cisco Catalyst access switching and WLAN solutions that support industrial automation
applications. The Connected Factory portfolio comprises four solutions: Factory Automation,
Factory Wireless, Factory Security and Factory Energy Management. The Factory Automation
solution integrates automation and enterprise systems onto a standards-based IP-network,
while the Factory Security suite addresses the security risks of automation systems. The
Factory Wireless solution builds on the CPwE architecture and comprises a unified and
secure wireless plant infrastructure for mission-critical applications. Cisco’s wireless products
include access points, WLAN controllers and routers. The routers feature Ethernet and serial
interfaces, which can be used with Raw Socket, protocol translation, and IOx applications to
provide connections to local RTUs for SCADA transport and RTU management. Devices in
the 809 and 829 series also offer capabilities to extend the connectivity to include LPWA
access using the Cisco Interface Module for LoRaWAN. In a Connected Factory solution,
Cisco provides the plant infrastructure capabilities for networking, wireless, security, physical
video, computing and communications.

Business strategy
Cisco is one of the world’s largest vendors of industrial network infrastructure equipment.
Over the last few years, the company has been focusing on transforming its business, moving
from selling individual products and services to selling products and services integrated into
architectures and solutions such as the Connected Factory. In addition to Rockwell
Automation, Cisco partners with many large automation vendors including Emerson, Fanuc,
GE, Honeywell and Schneider Electric. The company’s Infrastructure Platforms product
category, which include a wide variety of switching, routing and data center products,
accounted for revenues of US$ 28.3 billion in fiscal 2018. Examples of customers in the
manufacturing space include Daimler, Emerald, Harley-Davidson, General Motors, Lordan
and Stanley Black & Decker. Cisco’s largest geographical market is the Americas which
accounted for 59 percent of the annual revenues in 2018, followed by the EMEA region and

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Asia-Pacific, which accounted for 25 percent and 16 percent respectively. Cisco has field
sales offices in 95 countries, and the company sells its products and services both directly
and through a variety of channel partners such as system integrators, service providers,
resellers and distributors.

5.1.9 Contec
Contec is a Japan-based supplier of industrial PCs and industrial automation solutions. The
company offers an extensive line of industrial computers and software, as well as data
acquisition, control and measurement devices. Headquartered in Komaki, the company was
established in 1975 and employs close to 600 people worldwide. Contec’s global presence
consists of multiple R&D, manufacturing, sales and procurement sites in the US, China and
Taiwan. Additional sales offices can be found in Singapore, South Korea and the
Netherlands. The company is listed on the Tokyo Stock Exchange since 2007. In 2017,
annual sales reached JPY 25.5 billion (US$ 218 million), up 9 percent from the previous year.
The company divides its product portfolio into three categories: industrial and embedded
computing, data acquisition, measurement and control, as well as industrial LAN and
wireless.

Contec’s Conprosys product line is central to the company’s offering for the automation
markets and comprises M2M controllers, M2M gateways, PACs, software and the Conprosys
Cloud Data Service. The M2M controllers are available as a stand-alone and integrated device
as well as an expandable and configurable version that allows users to add a variety of I/O
modules. Both versions can be delivered with 3G connectivity. The M2M gateways enable
users to collect data from PLC controlled equipment for remote monitoring and analytics
applications. The devices are compatible with PLCs and Modbus equipment from various
vendors including Mitsubishi Electric, Omron and JTEKT. Similar to the controllers, the
gateways are available in a WWAN version with 3G connectivity. The PACs come in EtherCAT
and Modbus models with a pre-installed CODESYS runtime engine and support for OPC UA.
Contec’s Conprosys Cloud Data Service is a data collection and storage service for
transferring data from sensors and controllers to a cloud server. The service is however today
only supported in Japan.

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Figure 5.3: Example of an operation monitoring solution based on Contec’s devices

Source: Contec

Contec provides IoT solutions targeting a variety of areas, including factory automation, social
infrastructure and energy. A common use case in the industrial automation sector is data
analysis and preventive maintenance, through the collection of real-time data on the
operational status of equipment in various locations. The company’s remote monitoring
system is integrated in more than 20,000 solar power stations and infrastructure equipment.
The products are primarily sold through the company’s distribution network across the Asia-
Pacific region, North America and Europe. Examples of customers are Volkswagen, Iwasaki
Electric, Mitsuboshi Diamond Industrial and Yuasa.

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5.1.10 Data-Linc
Data-Linc was founded in 1988 and is based in the US. The company designs and
manufactures wireless and wired data communications solutions for remote SCADA and
plant-floor automation systems. Data-Linc has about 20 employees and offers a broad range
of wireless serial and Ethernet devices for PLC, PC and RTU communications. Products
include Serial and Ethernet wireless modems as well as Wireless I/Os such as gateways,
extenders and bridging devices. A majority of the devices utilise license free 900 MHz or 2.4
GHz radio technology or 802.11 WLAN technology. The solutions are used for a wide range
of applications, including water/wastewater, oil and gas, power, material handling and other
industrial automation and instrumentation applications. Data-Linc has an in-direct sales
strategy and the company’s channel partners include more than 300 distributors, system
integrators and resellers worldwide. Additionally, the company partners with many major
industrial automation vendors such as Rockwell Automation, Fanuc, Omron, Schneider
Electric, Siemens and National Instruments.

5.1.11 Digi International

Digi International was founded in 1985 and is a leading provider of IoT connectivity products
and services. Headquartered in the US, the company employs more than 550 people and has
16 regional sales offices and engineering facilities located throughout North America, Europe
and Asia. In the financial year ending in September 2018, annual revenues amounted to
US$_228 million, up 26 percent from the previous year. The company provides a broad range
of embedded and external networking products, solutions and services to vertical markets
such as energy, fleet management, transportation, healthcare, industrial automation, retail
and smart cities. In recent time, the company has completed a number of acquisitions within
the temperature monitoring segment to expand its SmartSense by Digi offering, previously
known as Digi Smart Solutions, that was formed through the acquisition of Bluenica
Corporation in October 2015. Acquisitions in 2016–2017 include the US-based companies
FreshTemp, SMART Temps and Temp Alert.

In January 2018, Digi International acquired US-based Accelerated Concepts for US$ 17
million. Founded in 2006, Accelerated Concepts specialises in 4G LTE networking
equipment. The acquisition complements Digi International’s existing cellular product line

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with compact and low-cost LTE routers and network appliances. The company has kept the
Accelerated Concepts brand.

Product portfolio
The hardware portfolio is divided into four product categories: cellular routers and gateways,
RF, embedded and network products. The Digi range of programmable cellular gateways and
routers are divided into two main series branded TransPort and Connect that are available in
both commercial and industrial versions. The company focuses solely on 3G and 4G LTE
devices. Digi TransPort WR21 is the most popular product in Digi International’s product
range. It has 2 Ethernet ports and provides primary and backup wireless connectivity over
LTE and HSPA+ networks. Apart from the ConnectPort X4 family of LTE and HSPA+ cellular
gateways, the Connect series also includes battery-powered gateways such as the Connect
Sensor+. The RF products are small box or module products that utilise wireless protocols
such as ZigBee, Wi-Fi and other RF technologies. The solutions are suitable for industrial
environments, where deploying a wired network is not possible either because of cost or
impracticality. Embedded products include systems on module and single-board computers
are designed and developed with small footprints, low power consumption and software,
making them ideal for industrial device manufacturers. Digi International also provides
chipsets from companies such as Freescale and Ember. The network product category
consists of console servers, serial servers and USB solutions. The Digi Remote Manager
enables users to centrally manage, monitor, configure and update connected devices. In
conjunction with a gateway, the RF products can also be connected to the Digi Remote
Manager, enabling remote management and customisation.

Business strategy
Digi International markets its products through a global network of distributors, system
integrators and value-added resellers as well as directly to OEMs. Direct sales accounted for
roughly 49 percent of total revenues in fiscal 2018, while sales through indirect channels
accounted for 51 percent. The company has over 200 global distribution partners. Important
distributors include for example Synnex, Arrow Electronics, Mouser Electronics, Novotech
and Digi-Key. The products are also used by large mobile network operators such as AT&T,
Sprint and Verizon. The recently acquired Accelerated Concepts business has a strong

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relationship with AT&T. The largest geographical market is North America which accounted
for 72 percent of total revenues in fiscal 2018, followed by EMEA and Asia which represented
17 percent and 9 percent respectively. Hardware product revenues and service revenues
accounted for US$ 191 million and US$ 37 million of the total revenues respectively.
Embedded systems on module and single board computers account for the largest share of
the product revenues, followed by cellular routers and gateways, RF solutions and network
products. Target markets are retail, transportation and critical infrastructure applications,
where the latter includes industrial, government, energy and telecom applications. Examples
of customers in the industrial sector include Atek and OleumTech, which provide wireless
solutions aimed at the oil and gas market. Digi International has sold over 100 million wired
and wireless devices to date.

5.1.12 Eurotech
Eurotech is an Italy-based technology company that specialises in embedded computing
platforms and sub-systems. The company was founded in 1992 and has 300 employees
across Europe, North America and Asia. Eurotech is listed on the Borsa Italiana Stock
Exchange and generated annual revenues of €_60 million (US$ 65 million) in 2017. The
company’s product portfolio comprises industrial embedded hardware such as gateways,
servers, control systems and boards, as well as high-performance computing systems and
software solutions.

Product portfolio
The Everyware Device Cloud (EDC) is an end-to-end solution that includes purpose-built
hardware, connectivity, as well as device management and application enablement services
so that actionable data can be delivered from the field to downstream applications and
business processes, dashboards and reports. EDC comprises Eurotech’s industrial-grade
hardware solutions including embedded boards, IoT gateways, the Everyware Software
Framework, the Everyware Device Cloud Client and the Everyware Cloud IoT platform.
Eurotech’s IoT gateways are suitable for connecting sensors, actuators, meters and devices
to enterprise applications. The company offers two series of IoT gateways: ReliaGATE and
DynaGATE. Devices in the ReliaGATE series are mainly intended for industrial use cases,
while the DynaGATE series is designed for applications in the transportation sector.

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Eurotech’s devices run the Everyware Software Framework (ESF), which is a Java OSGi
software framework for IoT gateways, which features full remote device management through
its integration with Everyware Cloud. ESF adds advanced security, diagnostics, provisioning
and remote access, and supports protocols such as Modbus, S7 and OPC-UA. Eurotech is
also flexible to adapt both hardware and software according to customer specific
requirements. The Everyware Device Cloud Client provides secure and reliable data
transmission between edge nodes and the cloud using the MQTT protocol.

Figure 5.4: Eurotech’s IoT architecture

Source: Eurotech

The Everyware Cloud IoT platform is a cloud-based platform that enables customers to
connect, configure and manage devices during their entire lifecycle. The platform features
tools for device management, data management, user management, as well as real-time data
analysis and rules creation. The platform uses MQTT as the default transport protocol for
device connectivity. The device management capabilities enable users to dynamically control

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and configure the app that runs on the field device. The data management features include
data stream filtering, continuous queries, aggregation and correlation between devices and
event pattern recognition. Data from third-party services and applications can also be
integrated through readily available application adapters. Additionally, Eurotech partners with
the IoT managed service provider Arkessa to offer connectivity management services via the
Everyware Cloud platform. The integration between the Everyware Cloud platform and
Arkessa’s connectivity management platform gives customers a single point of management
for their connected devices. The platform functionality can be accessed via a web-based
console but is also exposed through REST APIs. Everyware Cloud is available as a service
hosted in public or private cloud environments. Customers can also use the Everyware Server
for on-premise deployments.

Business strategy
Eurotech’s IoT strategy is centred around the ability to provide a complete IoT stack that
includes hardware, embedded software and middleware. Eurotech employs an open and
standards-based approach to IoT and is deeply involved in the Eclipse IoT community, which
the company cofounded together with partners in 2012. Much focus is given to providing
solutions that reduce time-to-market and total cost of ownership for customers. The company
has a longstanding partnership with the open source software provider Red Hat and
integrates Red Hat’s middleware technologies in its embedded software and IoT platform
offerings. In addition, Eurotech entered a partnership with VMware in 2017 to add VMware’s
technology to its IoT gateways and edge controllers. The company’s presence is strongest in
the industrial manufacturing, transportation, medical, energy and defence sectors. Solutions
are sold both directly to OEMs, as well as via system integrators, VARs and distributors.
Primarily, a direct sales model is employed in the transportation sector, but the company also
sells the ESF platform to third-party IoT gateway manufacturers that integrate the solution in
their devices. In Q1-2018, Eurotech partnered with AAEON Technology Europe, which is now
integrating Eurotech’s ESF in its Industry 4.0 Gateways. In 2017, key geographical markets
were the US that accounted for 42 percent of total revenues, followed by Japan and Europe,
which represented 40 percent and 16 percent respectively.

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5.1.13 FreeWave Technologies

FreeWave Technologies was founded in 1993 and is based in the US. The company is
privately held and specializes in secure wireless M2M and IIoT networking solutions for
transmission of mission critical data via licensed and license-free spread spectrum radios.
The company’s largest market verticals are oil and gas, military, agriculture, utilities, smart
grid and smart cities. The company has a global presence and the most important
geographical markets are the US, Canada, Australia, Saudi Arabia and some Latin American
countries. The company has over 100 employees in its operations in North America, Latin
America and Asia.

Product portfolio
FreeWave Technologies offers a broad range of wireless M2M devices that are divided into
product families and platforms such as ZumIQ, ZumLink, WaveContact, WavePro and FGR2,
targeting different applications and user requirements. The products are offered in a wide
variety of radio models with flexible interface options and are able to operate over different
protocols including RS-232, RS-485 and TCP/IP. The WaveContact series provides a modular
wireless system for sensor connectivity and remote control in challenging environments. The
system comprises wireless gateways, I/Os, pressure sensors and modular endpoints. The
WC20i modular endpoints can connect and power sensors, and can be configured with
different interfaces including HART, analog, digital and Modbus. The WC30i-PSI modular
pressure sensors can be used together with the WC45WCi gateway, which stores all sensor
data in Modbus format and manages outbound communications.

In 2016, the company introduced the WavePro WP201 Shorthaul High-Speed Wireless
Access Point, the first in a series of Sensor-2-Server (S2S) solutions. The access point
features dual-band Wi-Fi radios and comes with an IP67-rated chassis. The company’s S2S
access layer solution focuses on delivering access points that allow sensor data and
information to be analysed, acted upon and transmitted securely from anywhere in the
industrial IoT network. S2S is centered on four critical pillars of IoT networking including data
collection, protection, transport and control. Apart from the WavePro series, S2S solutions
include the Zumlink network appliances, along with the ZumIQ Application Environment,
which allows for development and deployment of third-party applications on edge devices.

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FreeWave also provides system design, on-site training services, support services, as well as
diagnostics and configuration tools.

Business strategy
FreeWave offers its products through reseller channels, VARs and OEMs. All products are
developed, assembled and tested in the US. FreeWave’s M2M devices are used for a wide
range of applications including remote monitoring and control of wellheads, tank levels,
distribution automation, SCADA and substation automation. The company has been targeting
the oil and gas industry for more than ten years and it has become the largest vertical market.
FreeWave has an installed base of more than 1.0 million wireless IoT devices and has
shipped devices to over 5,000 customers worldwide. The US is the largest market and all of
the 30 largest oil and gas producers in the country use wireless IoT networking solutions from
FreeWave Technologies. Freewave also targets other IIoT verticals and the company has
successfully deployed solutions for government and defense contractors, agriculture
equipment manufacturers and utility operators in both electric power and water/wastewater.
Examples of customers and partners include ExxonMobil, Boeing and BP.

5.1.14 HMS Networks

HMS Networks is an independent supplier of products for industrial communications and IIoT
applications. Founded in 1988, the company is headquartered in Sweden and has
technology centers in Germany, Belgium and Spain. Branch offices in 14 key markets are
responsible for sales, marketing and local support. HMS Networks employs more than 540
people and the company is listed on the NASDAQ Stockholm Stock Exchange. Annual
revenues in 2017 amounted to SEK 1,183 million (US$ 133 million), up 24 percent year-on-
year. The company markets network interface cards and gateways for linking different
networks under the Anybus and IXXAT brands, along with products for remote monitoring
and control using the eWON brand. The main part of HMS Networks’ cellular router and
gateway business originates from the acquisition of the Belgian remote access industrial
communications specialist eWON in Q1-2016. The company furthermore acquired Spain-
based Intesis Software in mid-2016, a provider of communications gateway solutions for
building automation applications. Another recent acquisition is the purchase of the German
embedded control and M2M communications specialist Beck IPC for € 5 million (US$ 6
million) in July 2018.

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Product portfolio
Industrial networking products and solutions are marketed under the Anybus, IXXAT and
eWON brands. The Anybus product family includes embedded, gateway and wireless
solutions, such as WLAN access points and wireless connectors, enabling wireless access to
devices and machines over Bluetooth and WLAN. The range of products offered under the
eWON brand include industrial remote access routers, industrial gateways and a cloud VPN
connectivity software platform for industrial automation applications. The solutions connect
industrial machines to the Internet and enable remote access and monitoring for applications
such as remote maintenance, predictive maintenance, remote services, asset management,
remote metering and multi-site building management. HMS’ main cellular industrial
communications devices marketed under the eWON brand comprise the Cosy and Flexy
router series as well as the Netbiter gateways. Devices in the Flexy family include functionality
for web-based configuration and built-in scripting tools for customisation. The gateways are
also compatible with the cloud VPN connectivity backoffice solution Talk2M, which enables
users to manage and connect to their machines remotely. eWON Netbiter is a pre-packaged
solution that enables users to monitor, control and supervise the performance and operation
of remote equipment and installations via Ethernet, GSM, GPRS and 3G networks. The eWON
Netbiter solution consists of the eWON Netbiter cellular communications gateways and
device management services via Netbiter Argos or PTC’s ThingWorx. Under the IXXAT brand,
HMS Networks offers connectivity solutions for embedded control, energy and automotive
testing. IXXAT technology is widely used for communications between components within
machines and includes standardised software and hardware, as well as customised OEM
solutions.

Business strategy
Factory automation is HMS Networks’ most important market. The company is also present in
verticals such as building and process automation, power and energy as well as
transportation and infrastructure. The largest geographical market is the EMEA region,
accounting for 61 percent of total revenues in 2017, followed by the Americas and Asia, which
accounted for 21 percent and 17 percent respectively. HMS Networks’ customers range from
large automation vendors to manufacturers of devices and machines, as well as system
integrators and end users. The sales models vary depending on the customer, market and

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product line. In addition to its direct sales channel, the company sells its solutions through a
network of around 300 distributors across 50 countries. Revenues generated from direct sales
and sales via distributors accounted for 70 percent and 30 percent respectively in 2017. HMS
has in total more than 4 million wired and wireless installations at companies such as
Siemens, Rockwell Automation, Schneider Electric, Sony, Panasonic, ABB and Hitachi. The
eWON products are predominantly marketed and sold through distributors and target
customers are system integrators, machine builders and OEMs. The largest customer
segment is currently machine builders and OEMs and clients include ABB Robotics, Proseal
UK and DISA Industries.

5.1.15 InHand Networks

InHand Networks is a publicly listed company in China that specialises in wireless
communications solutions for IIoT applications. Founded in 2001, the company has today
close to 300 employees, of which roughly 100 people are engaged in R&D activities. InHand
Networks’ products and solutions include industrial routers, gateways, modems and Ethernet
switches. Annual revenues in 2017 reached CNY 229 million (US$ 33 million), up 58 percent
year-on-year. In addition to its headquarters in China, the company has operations in the US
and Germany. InHand Networks also works with distributors across Europe, Asia Pacific,
Middle East and Africa.

The company’s cellular devices are to a significant extent designed for industrial applications.
The 2G, 3G and 4G LTE modems are compact, lightweight and ruggedized units that operate
in wide temperature ranges. Similarly, the 3G gateway InGateway601 is a compact device
measuring only 45x90x80mm with an operating temperature of -20 ˚C to +70 ˚C. The
InRouter series of cellular routers includes both 3G and 4G LTE products with between one
and five Ethernet ports and optional Wi-Fi on select models. The routers support
programming in Python and come with an integrated firewall and VPN protocols. The
company’s modems are low cost devices, while the routers and gateways are considerably
more expensive with prices of up to several hundred US dollars. The web-based device
management platform InHand Device Network includes functionality for remote management
and monitoring of InHand Networks’ routers and gateways as well as third-party devices.

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InHand Networks’ solutions are used for applications such as smart grid, industrial
automation, smart vending, self-service terminals, intelligent transportation and digital
signage. Both direct and indirect sales channels are used. Customers include major industrial
companies such as Siemens, ABB, Schneider Electric, SKF, GE and Rockwell Automation.
InHand Networks is a Rockwell Automation Encompass Product Partner and part of
Schneider Electric’s Collaborative Automation Partner Program. The main market is China,
followed by Europe and North America. The company has in recent time increased
investments in its international subsidiaries to expand its presence overseas, primarily in
Germany and the US. Moreover, cloud-based solutions will become an increasingly important
part of the company’s product strategy in the coming years. InHand Networks has already
introduced integrated solutions for powerline monitoring in the energy sector. Integrations
with major third-party device management platforms such as Microsoft Azure and AWS IoT
has also been added. The InRouter900 series of industrial routers were certified for Microsoft
Azure IoT in mid-2017.

5.1.16 INSYS Microelectronics

INSYS Microelectronics specialises in industrial communications, security and test systems.
Founded in 1992, the company has about 120 employees and is headquartered in Germany
with additional offices in Czech Republic and the UK. The operations are divided into three
divisions: INSYS icom, INSYS locks and INSYS test. The INSYS icom division develops
industrial data communications systems for applications ranging from factory automation to
environmental monitoring. The product portfolio comprises modems, routers and gateways in
LAN, VDSL/ADSL and cellular versions, Ethernet switches, embedded modules, as well as
connectivity services and VPN solutions.

The company’s range of cellular routers and gateways feature LTE, HSPA and GPRS
connectivity for remote access to industrial automation equipment. The routers and gateways
are ruggedized to withstand harsh environments and run the operating system icom OS. The
integrated Linux environment icom SmartBox allows users to execute scripts and programs
directly on the devices based on containers. INSYS icom provides software packages to
support industrial multi-protocol environments. Supported protocols include for example
MQTT, Modbus, S7, CODESYS and OPC UA. Cloud connectors to popular cloud services

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such as Microsoft Azure and AWS IoT are also available. The INSYS icom Monitoring App
enables remote monitoring of the company’s IMON fault monitors, Siemens LOGO and S7
controls and Modbus TCP/RTU devices. Additionally, INSYS icom’s routers and gateways
can be integrated with the company’s VPN service. The icom Connectivity Suite is a managed
service for VPN and SIM management, which enables functionality such as advanced group
management, connection control and network monitoring. Besides these standard solutions,
INSYS icom is also a solution partner in custom projects and the company can provide end-
to-end solutions including hardware, software and applications accompanied by support
services.

INSYS icom supplies solutions to companies in various industries including energy, industrial
automation, utilities, infrastructure and transportation. The company also targets system
integrators and automation specialists. INSYS icom currently has 70 sales and distribution
partners worldwide and has reached an installed base of millions of devices including both
wired and wireless solutions.

5.1.17 Kontron S&T

Kontron S&T is a leading provider of embedded computing technology and part of the
technology group S&T. The company offers a combined portfolio of secure hardware,
middleware and services for IoT and Industry 4.0 applications. The IT systems supplier S&T
took a 30 percent ownership stake in Kontron in 2016, following a capital increase in the
company by Ennoconn, a subsidiary of Taiwan-based Foxconn Technology. Kontron and
S&T’s subsidiary S&T Deutschland Holding agreed to a merger in the following year and the
combined company was named Kontron S&T. Foxconn Technology, via Ennoconn, is today
the largest shareholder in the parent company S&T with a 22 percent ownership stake.
Headquartered in Austria, S&T has about 4,000 employees in more than 25 countries
worldwide. The company is listed on the Frankfurt Stock Exchange and generated annual
revenues of € 882 million (US$ 956 million) in 2017. The operations are divided into three
strategic business areas: IT Services, IoT Solutions and Embedded Systems. These
businesses accounted for 44 percent, 36 percent and 20 percent respectively of the revenues
in 2017. S&T has made two additional acquisitions during 2018. These include the Canadian
software company Inocybe and Exceet Electronics’ entities in Germany, Austria and
Switzerland.

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Product portfolio
Kontron S&T offers a wide range of industrial computer platforms with various performance
capacities, designed for challenging environments. The product portfolio includes embedded
box PCs, industrial servers, HMIs, computer-on-modules, motherboards and single board
computers. The company’s Intel-based line of industrial PCs are suited for gateway
applications to gather and pre-filter telemetry and sensor data from the field and provide it to
more powerful on-premise industrial servers or cloud servers for further data processing. The
KBox A-203 is one of the first Kontron S&T products that is Microsoft Azure certified and has
two serial ports for local data collection from sensors and machines, as well as an optional
fieldbus port such as Profibus. The device can also be delivered with support for cellular
technologies such as 4G LTE, 3G and 2G, and in the future LoRa. The computer-on-modules,
single board computers and embedded motherboards allow for more flexibility and provide a
quick start for custom products, using standards, common carrier boards and standardised
software products. Kontron S&T’s industrial servers are designed for use in industrial
applications that require high computing power and data availability such as high-end image
processing and SCADA/MES applications. Embedded cloud servers are also offered for
increased computing and storage performance for IIoT projects.

Business strategy
The merger between S&T’s German subsidiary and Kontron enables S&T to offer holistic
solutions in the areas of embedded computing, IoT and Industry 4.0. S&T complements
Kontron’s hardware expertise with broad capabilities in IT ranging from cloud computing to
analytics. Following the merger, a variety of joint initiatives, primarily in production and
development, have been launched and implemented by S&T, Kontron S&T, Ennoconn and
Foxconn. Additionally, S&T maintains a strong partnership with Microsoft and resells many
Microsoft products, including services from the Azure portfolio. The company’s IoT solutions
segment was created through the combination of Kontron’s business area of Industry and
S&T’s Appliances Security and Appliances Smart Energy businesses. Key focus areas are
today Industry 4.0 and edge computing. The segment’s products are primarily used in the
vertical markets of industrial automation, infotainment, medical and smart energy. S&T’s
largest geographical markets are the US and Germany, which both accounted for roughly 20
percent of the revenues in 2017.

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5.1.18 Lantronix
Lantronix is a provider of secure data access and management solutions for IoT assets. The
company was founded in 1989 and is based in California with international offices in China
and India. Lantronix is listed on the NASDAQ Stock Exchange and yearly sales amounted to
US$ 45 million in the financial year ending in June 2018, up 10 percent from the previous
year. Product research and development is primarily performed in-house and supplemented
with outsourced resources, while manufacturing operations are primarily handled through
third-party contract manufacturers based in China. The company has close to 150
employees.

Product portfolio
The product portfolio is divided into three product lines: IoT, IT Management and Other. The
IoT product line comprises a range of embedded products, industrial Ethernet switches, IoT
gateways and management software. The company’s embedded products are delivered in
wired and wireless versions and include embedded device servers and modules, system-on-
modules and system-on-chips, intended to reduce development time and risk for OEMs and
device manufacturers. The IoT gateways are designed to deliver secure wired and wireless
connectivity for virtually any device and are available as embedded and external networking
devices. The solutions can provide network connectivity, remote device management and
edge analytics for brownfield equipment, as well as new devices. The gateways can be
managed through the cloud-based device management service Gateway Central. Other
software products include Lantonix’ new management software platform MACH10, which is
designed to enable OEM customers to develop IoT applications for their own devices.
Additionally, the platform comes with a suite of microservices, as well as ready to use
applications developed by Lantronix.

Business strategy
The company sells its products through a global network of distributors and VARs in
combination with direct sales to OEMs and end users. During 2017–2018, Lantronix has
continued to invest heavily in the development of its software offerings, including the
MACH10 and Gateway Central platforms, to facilitate deployment and management of IoT
solutions. Annual revenues generated through the sales of IoT products amounted to US$ 35

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million in fiscal 2018, up 6 percent year-on-year. The company’s connectivity solutions are
deployed in millions of machines and data centers serving a wide range of industries,
including medical, security, industrial, transportation, retail, financial, environmental and
government. The Americas and the EMEA regions are the company’s main markets, which
account for 55 percent and 30 percent of total revenues respectively. Industrial customers
include Caterpillar, Emerson, ExxonMobil, General Electric. Mitsubishi Electric, Omron,
Rockwell Automation and Shell.

5.1.19 Maestro Wireless Solutions

Maestro Wireless Solutions designs, manufactures and sells modems, routers, gateways,
GNSS receivers and tracking devices under the Maestro and Falcom brands. It is a subsidiary
of the Hong Kong-based China Healthcare Enterprise Group (former Telefield International),
an Electronics Manufacturing Services (EMS) provider and distributor of consumer
electronics products with HK$ 662 million (US$ 82 million) in revenues and 1,600 employees.
Maestro Wireless Solutions’ products are intended for applications such as industrial
automation, SCADA, smart metering, vehicle tracking and fleet management. Headquartered
in Hong Kong, the company was founded in its current form in 2006 but designed and sold
modems under the Fargo Telecom brand already in 2002. Maestro Wireless Solutions has an
additional 10 offices in the US, India, Germany, Spain, China and Japan. The company
currently has around 100 employees and an installed base of 1.5 million active devices
worldwide.

Product portfolio
Maestro’s range of industrial communications devices consist of modems and routers
intended for harsh environmental conditions. The modems run Sierra Wireless’ Open AT
Application Framework. By adding protocols and accessories developed by Maestro, the
software has been adapted to make the modems suitable for usage with industrial equipment
including electricity meters, lifts, alarm systems and programmable logic controllers. Sierra
Wireless is also the main supplier of the modules for Maestro’s modems and routers. The
company’s cellular routers are divided into three series: E220, E210 and E200. The devices
are designed for mission-critical industrial applications and come with cellular, WAN, LAN and
Wi-Fi connectivity. The E210 and E220 series also feature serial interfaces. The routers have

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functionality for automatic failover and over-the-air (OTA) updates. The D2Sphere device
management services allow customers to monitor, diagnose, control and update the devices.
Information such as signal strength, geographic location, battery state, temperature, device
firmware and software versions can be remotely monitored, stored and presented to manage
quality of service and prevent downtime.

Business strategy
Maestro shipped an estimated 135,000 cellular modems and routers during 2017. The main
markets were Europe, Southeast Asia and North America. In terms of shipments, Europe and
Asia accounted for approximately 45 percent and 30 percent of the volume respectively. The
remaining 25 percent were sold in North America. The sales model varies from region to
region, and devices are sold both through direct and indirect sales channels. The company
works with approximately 50 distributors worldwide, of which three have global presence. In
the US, about 80 percent of the devices are sold via distributors, whilst in Europe only 50
percent of the units are sold through this channel. The largest application area for Maestro’s
devices is smart energy and customers include major industrial companies such as Siemens,
Mitsubishi, Schneider Electric, ABB, Mitsubishi Electric and Rockwell Automation. During
2017, 60 percent of the modems and routers sold were 4G LTE devices, 30 percent were 3G
and 10 percent were 2G. Maestro’s routers and modems are sold for around US$ 100 for 2G
versions and about US$ 250 for 3G models. The 4G LTE Cat 4 devices have list prices of
around US$ 300.

5.1.20 MB Connect Line

Headquartered in Germany, MB Connect Line was founded in 1997 with focus on industrial
modems. Today, the company specialises in solutions for remote maintenance of industrial
machinery and equipment. The company has roughly 20 employees and an additional
branch office in the US since 2015 for local training and support. The company offers
industrial routers and gateways, programmable data modems and a web portal for remote
maintenance via the Internet. The mbNET industrial routers feature cellular and Wi-Fi
connectivity. The devices are compact and offer a broad range of interfaces and drivers for
connecting to various control systems. The mbNET.mini is an even smaller router which can
be installed in locations where area is limited and provides connectivity to machines and

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systems via LAN or cellular. The mbSPIDER is a programmable data modem for continuous
logging of counter readings, measurements, logic states and analogue values. The logged
values are visualised via the integrated web server or via the company’s remote service
platform. MB Connect Line’s mbCONNECT24 is a platform for remote access, data logging,
alarming and visualisation. The platform is available as a service on public cloud
infrastructure, hosted on a dedicated server or installed as a pre-configured complete system
on server hardware. The company sells its products directly to system integrators and OEMs,
as well as via distribution partners and resellers in Europe, North America, the Middle East
and Northern Africa.

5.1.21 MC Technologies
MC Technologies was founded in 1948 and is headquartered in Germany. The company has
about 40 employees and generates annual revenues of € 15 million (US$ 17 million). MC
Technologies acts both as a reseller and manufacturer of wireless communications products
for IIoT applications. The main product categories are routers, industrial computers, gateways
and wireless modules, as well as connectors and cable assembly solutions. MC
Technologies also provides professional services to help customers integrate wireless
technology in customised OEM solutions. The cellular products include close to 45 different
devices ranging from basic 2G terminals to 4G LTE routers and industrial computers. MC
MRL is the flagship industrial router with 4G LTE connectivity, 2 SIM Card slots, metal housing
and a stated operating temperature of -25˚C to +75˚C. The new MC100 is a Linux-based
industrial gateway that features a 3G or 4G LTE module, as well as Ethernet, serial, USB and
GPIO interfaces. In addition, both 3G HSPA+/UMTS and 4G LTE industrial computers are
offered. All LTE models are downwardly compatible with HSPA+/UMTS/EDGE/GPRS. The
company’s main partner for cellular modules is Gemalto and the largest single market is
Germany which accounts for 70 percent of total sales.

5.1.22 Moxa
Founded in 1987, privately owned Moxa is a Taiwanese company that offers solutions for
industrial networking, computing and automation. Annual revenues are in the range of
US$_300 million and the company employs more than 1,000 people. Moxa has its design and
engineering headquarters in Taiwan, but the sales and marketing headquarters are now

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located in the US. In total, the company has 12 different branches with the additional offices
located in Brazil, China, France, Germany, India, Russia, South Korea and the UK. Moxa’s
products enable manufacturers to connect legacy equipment to control systems, monitor
harsh environmental conditions at production facilities in real-time, and convert data between
proprietary and open protocols.

Product portfolio
The portfolio contains over 1,800 products across five product lines: Industrial Ethernet
Solutions, Industrial Computing, Serial Connectivity, IP Surveillance and Remote Automation.
Wireless solutions include industrial WLAN access points, bridges and clients, wireless device
servers and cellular devices. The company also offers a number of modular devices, mainly
embedded computers and remote I/Os with Mini PCIe sockets to fit optional cellular modules.
For example, the ioLogik 2500 I/O series features cellular connectivity, dual SIM failover and
dynamic IP to provide reliable cellular connectivity in IIoT applications. Moxa’s range of
industrial cellular devices include routers, gateways and modems. The industrial gateways in
the Oncell series are available in 2G, 3G and 4G LTE versions with serial and Ethernet
interfaces. The devices come with a rugged hardware design and meet stringent industry
standards such as ATEX Zone 2 and IECEx, making them well suited for applications in
hazardous locations. Secure VPN communications is also provided in both server and client
roles. Network protocols such as IPSec, GRE and OpenVPN are supported to facilitate secure
and reliable connections between two networks. The company’s new OnCell G3150A-LTE
gateway is designed to provide continuous connectivity and features dual SIM slots and
power inputs, which ensure power redundancy and connection reliability. The OnCell Central
Manager solution enables users to access, configure, manage and monitor devices remotely.

Business strategy
Moxa targets companies in market verticals including factory automation, transportation, oil
and gas, energy, maritime and mining. The company primarily sells its solutions through
system integrators and distributors in more than 70 countries worldwide. Moxa has
established a global service network to be closer to the customers in order to better
understand their needs and respond faster to their requirements. A direct sales model is
employed for strategic accounts. The company holds a strong position in the Industrial

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Ethernet market and works with many of the large industrial automation companies. Wireless
solutions today account for roughly a quarter of Moxa’s business. At the end of 2017, the
company had shipped more than 50 million devices worldwide.

5.1.23 MultiTech Systems

MultiTech Systems was founded in 1970 and is headquartered in the US with an additional
EMEA office in the UK. The company designs, develops and manufactures communications
devices. MultiTech offers a comprehensive portfolio of M2M products and services for
connecting physical assets to business processes in order to deliver enhanced value. The
company is also a founding member of the LoRa Alliance and highly active in the LoRa
ecosystem. MultiTech is privately held and generates annual revenues in the range of US$ 75
million. Including its subsidiary Connected Development, the workforce comprises roughly
250 employees.

Product portfolio
MultiTech offers solutions and networking products for wireless industrial automation
applications such as wireless failover, wireline replacement, remote monitoring and control,
facility automation and secure data transfer. The company offers a variety of external and
embedded modems and gateways to enable cellular, LoRaWAN, Wi-Fi, Bluetooth and GPS
capabilities. Embedded networking products include cellular modems and LoRaWAN
modules, which are designed to require minimal engineering efforts in order to allow for quick
deployment. External networking products include modems, SMS servers, USB modems,
wireless converters and programmable IoT gateways. These devices can connect virtually
any serial or wireless device to the Internet or IP network for remote monitoring, control and
configuration. MultiTech’s routers are simple networking devices while the gateways are
programmable. The gateways cost between US$_300–500. The MultiConnect Conduit series
was released in 2015 and is a modular gateway series with two slots for accessory cards.
Accessory cards can be used to add for example USB, serial, Ethernet or GPIO ports as well
as LoRaWAN, Bluetooth, Wi-Fi or GNSS. The option to use IBM’s graphical drag-and-drop
interfaces Node-RED or mLinux Yocto make IoT application development possible for users
with varying experience.

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MultiTech’s DeviceHQ is a cloud-based device management solution that simplifies and

scales the management of the company’s networking devices. It allows users to remotely
monitor, upgrade and configure an entire device population from a single location. A suite of
security services has been added to enable device authentication, certificate management,
end-to-end encryption and software-defined wide area networking. The DeviceHQ also
provides an application marketplace, allowing users to browse, customize, build and deploy
IoT applications. MultiTech Systems also offers lifecycle management for M2M/IoT solution
services covering engineering, design, development, manufacturing and support.

Business strategy
MultiTech Systems has in recent time transitioned from an entirely horizontal strategy to more
proactively define and target use cases in its core markets including energy, industrial,
transportation, agriculture and healthcare. Moreover, direct sales activities have grown to
account for close to half of total sales for the traditionally channel-focused company. The
main markets are North America and Europe, followed by APAC where Australia is the main
market. In terms of shipments, North America and Europe accounted for 60 percent and 20
percent of the sales in 2017 respectively. Berg Insight estimates that the company shipped
around 100,000 cellular modems, routers and gateways during 2017 at a total value of US$
18 million. Approximately 50 percent of the routers sold were 3G, 40 percent were 4G LTE
and 10 percent 2G. Virtually all gateways sold were 4G LTE devices. The range of routers are
available in 2G, 3G and 4G LTE versions, starting at US$ 225 for a low cost 2G model and
ranging up to US$ 400 for the most expensive model. The device management services
provided in DeviceHQ are available for free. While being a pioneer in integrating LoRaWAN
technology in its range of gateways, MultiTech Systems also has initiatives related to LTE-M
and NB-IoT. In September 2017, the company announced the availability of its first modems
based on LTE-M and NB-IoT technologies in the MultiConnect Cell 100 series. The LTE-M
devices were approved for use on the AT&T LTE-M network in January 2018.

5.1.24 National Instruments

National Instruments (NI) offers an extensive line of measurement, automation and control
products to work either separately, as stand-alone products or as an integrated system.
Flagship products include the systems engineering software LabVIEW NXG and the

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embedded control system CompactRIO. Founded in 1976, NI is based in Texas and listed on
the NASDAQ Stock Exchange. In 2017, the workforce amounted to about 7,400 employees
while annual sales reached US$ 1.3 billion, up 5 percent from the previous year. The
company’s hardware and related driver software products include data acquisition (DAQs),
PXI chassis and controllers, modular instruments, motion controls, image acquisition,
distributed I/Os, industrial communications interfaces, General Purpose Interface Bus
interfaces, embedded control hardware/software and VME Extension for Instrumentation (VXI)
controllers.

NI’s platform-based approach combines modular hardware and software, and delivers the
ability to integrate wireless devices with wired systems to create a complete measurement
and control system. The company’s computer-based data acquisition (DAQ) products are
available in a variety of form factors. NI offers two wireless measurement product lines: Wi-Fi
DAQ devices based on 802.11.x and wireless sensor networks (WSNs) based on 802.15.4.
The two product lines integrate with the company’s LabVIEW NXG software and deliver
advanced customisation options, but differ in specifications such as bandwidth, power and
security. Wi-Fi data acquisition can be used as an extension of PC-based data acquisition in
applications where wiring is difficult or costly. The Wi-Fi DAQ devices combine wireless or
Ethernet communications, direct sensor connectivity and software for remote monitoring of
electrical, physical, mechanical and acoustic signals. The WSN product line includes
measurement nodes and the NI WSN Ethernet gateway, which can connect to a Windows or
LabVIEW Real-Time host controller. The measurement nodes are battery powered and
provide four analogue input channels and four digital I/O channels for sensor connectivity.

The company’s DAQ products are used in a wide range of industries including automotive,
aerospace, electronics, continuous process manufacturing, defence, medical and
telecommunications. National Instruments has over 35,000 customers worldwide and sells its
products primarily through a direct sales organisation. The company also collaborates with
independent distributors, OEMs, VARs, system integrators and consultants as a sales
channel for its products. The most important geographical market is the domestic market,
although sales from international markets accounted for 63 percent of annual revenues in
2017.

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Figure 5.5: National Instruments’ WSN gateway and measurement nodes

Source: National Instruments

5.1.25 NetModule
NetModule was founded in 1998 and is headquartered in Switzerland with additional offices in
Germany, Hong Kong and Australia. The privately-held company specialises in
communications products for the transportation, public transport and industrial sectors. The
offering comprises hardware and software products, as well as professional services. Since
its founding, NetModule has evolved from a provider of embedded professional services for
large customers to mainly a product company. Today, products generate about 90 percent of
total revenues, while services account for the remainder. The headquarters in Switzerland
mainly handles development, production control and administration, while the German
subsidiary is the main revenue driver, accounting for roughly two-thirds of the annual
revenues. The Hong Kong branch serves as a location for sourcing in Asia and provides
support and monitoring of equipment manufacturing by contract manufacturers in China.
NetModule has 55 employees and generated annual revenues of about € 16 million (US$ 17
million) in 2017.

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NetModule provides industrial grade wireless routers and industrial Ethernet products for
industrial, vehicle and railway applications. The company’s new NB800 series of compact IoT
routers are intended for cost-sensitive connectivity applications and feature 3G/4G LTE
cellular connectivity and a VPN protocol suite including OpenVPN and IPsec. Customisations
can also be provided by using the NB800 OEM platform which allows customers to choose
from a variety of wireless modules including LTE, UMTS, Wi-Fi, Bluetooth and BLE. The
industrial routers in the NB1600 series are primarily designed for stationary applications in
harsh environments and are available with optional LTE, UMTS, CDMA and WLAN. The
routers provide multi-WAN-LAN-communications and functions such as data acquisition,
protocol conversion, local data processing and storage. The remote management system
NetModule Connectivity Suite allows for remote device management, auto-setup of VPNs,
and over-the-air firmware updates.

Netmodule’s main markets are transportation and industrial automation. Single unit prices for
the company’s routers range € 240–4,000, with cellular routers starting at approximately €
300. On average, the IoT routers are sold for approximately € 300 and the industrial routers
for roughly € 500. Common use cases in the industrial sector include condition monitoring,
remote access and asset tracking. Europe is the company’s largest geographical market
making up more than 80 percent of the router sales, followed by Australia and the US.
NetModule sold 15,000 cellular routers in 2017 through distributors, system integrators and
OEMs. Annual revenues from router sales amounted to about € 13 million (US$ 14 million).
NetModule offers both 3G and 4G LTE routers, but today virtually all new sales are 4G LTE.
Customers include for example Siemens, Philips, ABB, Volkswagen, Mercedes, Bombardier,
Vodafone, Swisscom, REMTEC and Phoenix Contact.

5.1.26 Newtrax Technologies

Newtrax Technologies provides safety and productivity solutions for underground hard rock
mechanised mines. The privately-held company was founded in 2009 and has today more
than 150 employees. Headquartered in Canada, Newtrax has additional offices in Chile,
Australia and Russia. The product portfolio comprises monitoring and analytics software
along with a broad range of wireless devices, including mobile equipment devices, fixed
instrumentation and control devices, as well as network equipment. The devices can connect

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to any network available in the mine including leaky feeder, Wi-Fi and 4G LTE. Newtrax also
provides solutions based on its proprietary wireless network technology called MineHop to
solve network connectivity challenges in fringe areas of the mine, where wires are unreliable.
MineHop nodes are battery powered with up to three years operational time and the solutions
are offered to customers as end-to-end solutions including hardware, software and service
contracts. For proximity warning and collision avoidance, the company provides another
network called MineProx, which is optimised for low-latency communications between
vehicles, workers and fixed hazards. Newtrax’s solutions can cover all parts of the mining
process, enabling real-time identification of productivity bottlenecks and early warnings of
safety, health and environmental hazards. The company’s main market is mid-sized and large
underground metal mines. Its system has been installed at over 75 mine sites globally and
customers include some of the largest metal mining companies in the world such as Agnico
Eagle Mines, Barrick Gold Corporation, Byrnecut, Cameco, Fresnillo and Gold Fields.

5.1.27 OleumTech
OleumTech was founded in 2002 and is based in the US. The company provides wireless
automation solutions for industrial applications involving process monitoring and control
systems for industries such as oil and gas, refining, petro-chemical, utilities and
water/wastewater. The company has close to 60 employees in offices throughout North
America.

OleumTech’s WIO System comprises wireless sensors & transmitters, wireless I/Os and
wireless gateways. The solution enables wireless remote monitoring and control of tanks,
compressors, separators and wellheads using sensors measuring tank levels, temperature,
pressure and flow. The battery powered sensors and transmitters form a wireless sensor
network which communicates with a wireless gateway receiver via WLAN or proprietary 900
MHz or 2.4 GHz license-free ISM radio which enables communications with any SCADA
system, RTU or PLC. The company has developed integration packages with most major
RTUs and flow computers, making installation and integration with existing automation
systems fast and simple. The gateways can then connect to a backoffice system via cellular
networks. Users can manage connected devices in the company’s BreeZ software solution.
The company has a number of wireless level sensors including ultrasonic, resistive and
hydrostatic. Connecitivty options include radio and Sigfox.

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Process automation is OleumTech’s most important market vertical and wireless digital
oilfield solutions have been a main priority since the inception of the company. The
company’s largest markets are the US, Canada and Mexico and examples of customers
include Encana and Shell. There are today more than 400,000 OleumTech devices deployed
in the field as part of more than 40,000 individual wireless networks.

5.1.28 Opto 22
Opto 22 develops and manufactures products for industrial automation and control, energy
management, remote monitoring, data acquisition and IIoT applications. The company
focuses on delivering open and standards-based technology. The design and manufacturing
take place in the US. Headquartered in California, Opto 22 was founded in 1974 and
introduced a complete line of solid state relays during the same year. The company
introduced the first Ethernet-based I/O units in 1998 and started to address the emerging
M2M market in 2000. Opto 22 today has more than 200 employees.

Product portfolio
Opto 22 provides industrial controllers, I/O modules, solid state relays and software products,
which are designed to run on open communications standards like Ethernet and IP. In early
2018, the company introduced its Edge Programmable Industrial Controller – Groov EPIC –
that combines I/O, control, data processing and visualisation into one edge-of-network
industrial system. The Linux-based controller features gateway functions, an integrated
display and dual USB ports for serial communications, touchscreen monitors and Wi-Fi
adapters. The device mounts on a Groov EPIC chassis with a power supply and up to 16
Groov I/O modules for real-time control, monitoring and data acquisition. The system comes
with a range of software solutions, such as Groov Manage, Groov View and Ignition Edge,
which enable customers to connect Allen-Bradley and Siemens PLCs with OPC-UA drivers.
Groov Manage is a web-based solution that enables users to manage their Groov EPIC
system, while Groov View can be used to build and deploy operator interfaces to monitor and
control systems and equipment. A Groov View app is available for Android and iOS.

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Figure 5.6: Opto 22’s Groov EPIC system

Source: Opto 22

Other products include the SNAP PAC and SNAP I/O processors, which both offer
functionality for wired and wireless LAN connectivity. The company also offers analog, digital,
and serial SNAP I/O modules that can be used either wired or wirelessly. Users can switch
from wired to wireless or back again without changing programming, reconfiguring I/O or
changing field wiring. Moreover, all the standard industrial protocols supported by the wired
Ethernet interface are fully supported over wireless. These protocols include EtherNet/IP,
Modbus/TCP, OptoMMP, SNMP, SMTP, FTP and HTTP/S with JSON through a RESTful API.

Business strategy
Opto 22 primarily employs an indirect sales strategy and works with a global network of
distributors and system integrators in around 50 countries worldwide. A direct sales model is
employed in large scale global projects. The company has a broad customer base in both
factory and process industries and its products are used by automation end users at more
than 10,000 sites worldwide. The installed base of I/O systems amount to over 90,000 units.
Opto 22 entered the wireless field in early 2000, when it became one of the first automation

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vendors to launch a WLAN I/O product. The company however typically no longer embed
wireless technology in its products to increase the products’ life cycles but offers wireless
interfaces via adapters. Key focus areas today comprise edge computing and software.
Important partners in the IoT space include AT&T, IBM and Dell.

5.1.29 Phoenix Contact

Phoenix Contact is a leading manufacturer of components, systems and solutions in the area
of electrical engineering, electronics and automation. The company’s product portfolio
contains more than 60,000 products that are used wherever processes need to run
automatically, such as industrial production facilities, renewable energy production and
infrastructure. Headquartered in Germany, the group comprises 14 companies in Germany,
as well as more than 50 sales subsidiaries. Phoenix Contact is privately-held and employs
roughly 16,500 people worldwide. Annual revenues amounted to € 2.2 billion (US$ 2.4 billion)
in 2017.

The diverse product portfolio ranges from cabling, connectors, controllers, switching devices,
HMIs and industrial PCs to interface devices, PLCs, I/O systems, fieldbus components and
software. Phoenix Contact’s interface devices support industrial data communications via
Fieldbus, Ethernet and wireless. Depending on the distance to be covered and the signals to
be transmitted, various wireless technologies are offered, including WLAN, Bluetooth,
WirelessHART, cellular and the proprietary Trusted Wireless technology. Industrial wireless
products include access points, I/O modules, WirelessHART gateways and adapters, as well
as cellular routers. The new WLAN 1100 access point is a rugged and compact device with
integrated antennas and wireless module. The device has been developed specifically for use
under harsh industrial conditions and can be installed directly on machines, mobile vehicles
or control cabinets. The cellular routers are intended for remote signalling, control and
maintenance applications and are designed with 2G, 3G and 4G LTE connectivity. The TC
CLOUD CLIENT features 4G LTE connectivity and is optimised for use with the mGuard
Secure Cloud solution for remote maintenance. Phoenix Contact also offers the cloud-based
solutions Proficloud that can be used to set up flexible processes that were previously
handled by the local PROFINET network, as well as integrate third-party applications.

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Figure 5.7: Cellular remote connectivity to an RTU via the new TC CLOUD CLIENT

Source: Phoenix Contact

Phoenix Contact is one of the largest manufacturers of industrial network infrastructure

components worldwide. Target markets include the automotive, oil and gas, smart building,
solar and wind, transportation infrastructure, and water and wastewater industries. The
company has also set up a e-mobility subsidiary with focus on the rapidly growing
electromobility market.

5.1.30 Red Lion Controls (Spectris)

Red Lion Controls specialises in communications, monitoring and control for industrial
automation. Founded in 1972, the company is a wholly-owned subsidiary of UK-based
Spectris since the early 1980s. Spectris is listed on the London Stock Exchange and supplies
instrumentation and controls for industrial applications. In 2017, Spectris generated annual
revenues of £ 1.5 billion (US$ 1.9 billion) and employed 8,700 people in over 30 countries
worldwide. Red Lion Controls is part of Spectris’ Industrial Control segment along with
Omega Engineering. The segment accounted for £ 263 million (US$_325 million) out of the
total revenues in 2017, up 6 percent year-on-year.

Red Lion Controls is headquartered in Pennsylvania and has more than 400 employees at 15
locations spread across the Americas, Asia-Pacific and Europe. The product portfolio
comprises two product lines: Industrial Automation and Industrial Networking. Previously,
products have been offered under the product brands Red Lion, N-Tron and Sixnet, but today
Red Lion is the main brand. N-Tron and Sixnet were acquired in 2010 and 2011 respectively.

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Both companies were providers of industrial Ethernet switches. In addition to switches, Sixnet
offered cellular M2M and automation solutions whereas N-Tron also offered wireless
products.

Product portfolio
Industrial automation products and solutions include PID controllers, data acquisition
devices, RTUs and I/O Modules, signal conditioners, sensors, HMI operator panels, panel
meters, large LED displays and productivity monitoring solutions. Industrial networking
products include Ethernet switches, Wi-Fi radios, cellular routers and RTUs, as well as
protocol and media converters. Red Lion Controls offers software, Wi-Fi radios, cellular
routers and cellular RTUs to enable wireless network connectivity at remote sites. The N-Tron
702-W industrial Wi-Fi radios are specifically designed to operate in industrial environments.
The devices feature rugged enclosure and industrial specifications. The Sixnet RAM 6000 and
Sixnet RAM 9000 series of industrial cellular RTUs provides a flexible platform for remote
connectivity, monitoring and control. The RTUs can connect to existing Modbus or DNP3
devices such as SCADA servers, PLCs, remote I/Os and other automation equipment. The
Sixnet IndustrialPro SN-6000 series of cellular routers are designed for harsh environments
and provide wireless communications between SCADA servers, RTUs, PLCs, remote I/Os and
other Ethernet and serial devices such as security cameras or industrial sensors. The SixView
Manager solution is designed to be used with Red Lion’s cellular devices and enables users
to remotely access, configure and manage critical device information.

Business strategy
The vast majority of Red Lion’s devices are sold through its network of more than 1,000
distributors worldwide, but the company has also a small proportion of direct sales to OEMs.
The main market is North America followed by Europe. The devices are designed for
industrial automation, where key markets include automotive, oil and gas, food and beverage,
water and wastewater, packaging, power and energy, electronics and transportation. In
September 2015, Red Lion established an IIoT Innovation Center, which houses engineering,
product and sales teams focused on developing IIoT solutions. Key to this initiative is
providing industrial automation products that connect disparate systems and enable
communications across a wide variety of industrial protocols. In Q2-2017, the company

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added support for the MQTT protocol in its cellular routers and RTUs to simplify
implementations with pre-configured profiles for the AWS IoT, Microsoft Azure, Cumulocity
IoT and Nokia IMPACT platforms. Red Lion is also a certified device partner of Telit and its
devices can be integrated with Telit’s deviceWISE for Factory IIoT platform. The company
employs a cloud agnostic strategy to support the customers’ platform of choice.

5.1.31 Robustel Technologies

Robustel Technologies was founded in 2010 and is headquartered in China with additional
branch offices in Germany, Australia, Japan, the UK, the Netherlands and Hong Kong. The
company is privately held and provides industrial cellular routers, gateways and modems, as
well as software for managing its devices. The product portfolio also includes solutions for
applications in a variety of market verticals including retail, energy, security, industrial
automation, building automation and transportation. The company has about 150 employees.

Product portfolio
Robustel’s routers run the Linux-based operating system RobustOS, which includes basic
networking functionality and various protocols. Supported connectivity options include 2G,
3G, 4G LTE, LoRa, Wi-Fi and Bluetooth. The models also include interfaces for Ethernet, USB,
RS-232 and RS-485, VPN capabilities and dual-SIM functionality. The company’s SDK
enables users to run application software on the devices. M1000 is a family of cellular
wireless M2M modems for bridging industrial connections and protocols with TCP/IP and
cellular networks. The modular MEG5000 LTE gateway comes with three plug-in cards
supporting various interfaces to meet the demands of IIoT applications. Prices for the
company’s cellular products range US$ 100–1000. The devices are compatible with
Robustlink, a cloud-based device management platform that enables remote monitoring,
remote configuration and over-the-air firmware upgrades of the devices. The platform also
includes dashboards and alert capabilities. In addition, the products support third-party IoT
platforms from Microsoft, Software AG, PTC, Telit and Exosite.

Business strategy
Robustel Technologies has shipped over 500,000 cellular devices in total since its founding in
2010. The company primarily employs an in-direct sales model. Via its distribution network,
Robustel Technologies targets device manufacturers, machine OEMs, system integrators and

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mobile operators. In 2017, the company shipped about 100,000 cellular devices, generating
roughly US$ 20 million in annual revenues. The industrial automation market accounted for
about 10 percent of the shipments and major applications within the segment are remote
machine monitoring and remote PLC management. Customers include major companies in
the industrial and energy verticals such as ABB, Siemens, Honeywell, Swarco, Itron, Fortum
and SSE. The company has shipped products to more than 100 countries worldwide and its
largest markets are Europe and Asia-Pacific followed by Latin America and North America. In
Q1-2018, Robustel Technologies joined the Microsoft Azure Certified for IoT program and its
products can now be delivered pre-integrated with Azure cloud services.

5.1.32 Secomea
Secomea specialises in remote access solutions for industrial equipment. The privately-held
company has 40 employees and is based in Denmark with additional sales offices in the US,
Canada, Japan and China. Secomea’s remote access solution comprises three components:
industrial IoT gateways, M2M servers and client access software. The SiteManager rugged
IoT gateways are available in Ethernet, Wi-Fi and cellular versions. All models include pre-
defined device agents for many brands of PLCs, panels and other industrial devices
connected via Ethernet, Serial and USB. SiteManager also comes as a software gateway –
SiteManager Embedded – that can be installed on a PC, IPC or HMI panel and enables it to
operate as a secure access gateway. The client access software LinkManager runs on
Windows systems and is designed for remote programming and servicing of industrial
equipment. LinkManager Mobile is a light-weight version that can access web, VNC and RDP
enabled devices from a standard web browser. The components are tied together via the
GateManager M2M server that controls user access to devices and manages all connected
SiteManagers in terms of configuration provisioning, firmware upgrades and event logging.
The GateManager M2M server is available as both a cloud-based service and a stand-alone
server. In Q4-2018, the company will introduce a data collection module as a free firmware
upgrade for the SiteManagers, supporting various cloud infrastructure services such as
Microsoft Azure and AWS. Moreover, Secomea plans to introduce its own data collection
cloud platform for building preventive and predictive business applications during 2019.

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The company’s solutions are used for corrective maintenance of industrial equipment in a
wide range of discrete and process industries. Secomea employs an indirect sales strategy
and has a network of over 60 distributors worldwide. In addition, the company holds private
label agreements with Schneider Electric, Pro-face, B&R and Hirschmann/Belden. Denmark
and Italy are the largest markets today and customers primarily includes machine builders.
Examples of customers include Bosch, Danfoss, Engie, Ferlo, Haas-Meinche, Lefort, SPX and
Tetra Pak.

5.1.33 Sierra Wireless

Sierra Wireless is a leading provider of wireless communications solutions for IoT
applications. The company was founded in 1993 and is today the largest cellular IoT module
vendor worldwide by revenue. Headquartered in Canada, Sierra Wireless employs over 1,400
people and has R&D sites in North America, Europe and Asia. The company also has
manufacturing partners in China, Vietnam and Brazil. Annual sales in 2017 amounted to US$
692 million, up 12 percent from the previous year. Sierra Wireless operates its business
through three segments: OEM Solutions, Enterprise Solutions and IoT Services. These
segments accounted for 80 percent, 15 percent and 5 percent of total sales in 2017
respectively. The OEM Solutions business unit comprises AirPrime embedded wireless
modules for IoT connectivity, including an embedded application framework to support
customer applications. The Enterprise Solutions business unit includes routers and gateways,
as well as systems and services for secure gateway management. The IoT Services business
unit comprises three main product lines: the AirVantage IoT platform, managed wireless
broadband services and the multi-operator Smart SIM service, which is supported by Sierra
Wireless connectivity services and managed wireless broadband services.

Sierra Wireless’ expansion in the market for wireless communications solutions has largely
occurred through strategic acquisitions of companies and product lines to add new
technologies to its solutions portfolio. In 2014–2015, the company acquired the vehicle
gateway provider In Motion Technology, the managed connectivity services vendors Wireless
Maingate and Accel Networks, as well as the M2M MVNO MobiquiThings. The acquisition of
GenX Mobile in August 2016 added telematics devices to the portfolio. In November 2016, the
company added Bluetooth and Wi-Fi modules to its portfolio through the acquisition of UK-

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based Blue Creation. In April 2017, Sierra Wireless acquired all the assets of GlobalTop
Technology’s GNSS embedded module business. Most recently, the company picked up the
managed IoT service provider Numerex in December 2017.

Product portfolio
Sierra Wireless’ product range for the IoT market comprises three main families – AirPrime
Embedded Wireless Modules, AirLink Intelligent Gateways and Routers and AirVantage IoT
Platform. The AirLink family of intelligent wireless gateways and routers are built for various
industrial, enterprise and in-vehicle applications. The devices run the ALEOS embedded real-
time OS and support remote management with the AirLink suite of management software.
AirLink RV50 is a low-power industrial gateway and is the most ruggedized device in the
AirLink family, designed to connect critical assets and infrastructure. The AirVantage IoT
platform is designed for operating industrial IoT deployments with its unified device and
connectivity management service. The cloud-based platform communicates natively with the
company’s modules and gateways as well as related application frameworks including
Legato and ALEOS. Support is also included for standard communications protocols such as
HTTP, MQTT and Lightweight M2M. The web-based operations console provides a
customisable user interface to configure, monitor, manage and update SIMs, edge devices
and embedded applications. The platform stores raw time-series data and generates
aggregated data sets for summarised information of connected systems and devices.
Custom alerts and notifications can be created via a rules engine. Features within the
operations console are exposed via a RESTful API for integration with enterprise software
applications for ERP, CRM or billing. Pre-built cloud connectors are also offered for Google
Cloud Platform, AWS Kinesis, IBM Cloud and Microsoft Azure to enable cloud-to-cloud
integration. Users can also use the open standards based AMQP connector to share IoT data
with any cloud-based or on-premise systems. Connectivity management features include SIM
and subscription management, consumption monitoring and usage alerts as well as
connection monitoring and troubleshooting tools. The platform integrates with a number of
major connectivity management platforms, enabling users to manage all SIMs, including non-
Sierra Wireless SIMs, through a single interface. MNO and platform partners include for
example Cisco Jasper, Vodafone, Verizon, AT&T, Sprint, Orange, Telenor, Telus, Rogers and
KPN.

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In addition, Sierra Wireless offers cellular IoT connectivity on a global basis, based on its own
core network infrastructure and strategic mobile operator partnerships around the world. The
Sierra Wireless Smart SIM is designed for mission critical IoT use cases, offering regional or
global subscriptions backed by multi-operator connectivity to ensure quality of service and
best in class network coverage. During 2016, Sierra Wireless added support for the GSMA
Embedded SIM (eUICC) specifications, enabling users to remotely provision and change
service providers over-the-air without physically accessing the SIM card.

Business strategy
Sierra Wireless operates worldwide, serving global OEMs, enterprises, system integrators and
network operators through multiple channels. The company has a global base of blue chip
customers and cumulative shipments of more than 150 million IoT devices worldwide. Sierra
Wireless was the undisputed market leader in the embedded cellular module segment during
2017 with a market share of 20 percent, measured by revenue. The gateways and routers are
sold through channel partners in a two-tier distribution model worldwide. In 2017, the
company signed a distribution agreement with one of the largest technology distributors in
the world, Ingram Micro, which will distribute the Airlink portfolio to its channel partners in the
US. The Enterprise Solutions team also includes a direct sales force and an expert technical
team that engages with key customers in target segments. Geographically, Sierra Wireless
has a direct presence in all major regions. Asia-Pacific accounted for 45 percent of sales in
2017, followed by the Americas with 32 percent and Europe, the Middle East and Africa with
23 percent. Many of the devices sold to Asia-Pacific are however assembled into products
ultimately shipped to Western markets. Sierra Wireless has a broad and diverse customer
base in IoT across all major regions and vertical market segments. Customers in the industrial
space include the top 3 smart meter manufacturers, 4 out of 5 of the top 20 utilities, all of the
top 10 oil and gas producers, 3 out of the 5 top automotive OEMs and all of the top cellular
IoT gateway makers. In February 2017, Sierra Wireless announced an agreement with
Volkswagen to deliver high-speed 4G LTE cellular connectivity for the Volkswagen Car-Net
platform. Production is expected to start in the second half of 2018. Other customers include
for example Itron, Honeywell, Schneider Electric, Atlas Copco, Duke Energy and CNX
Resources.

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5.1.34 Steute
Steute is a privately held vendor of sensor networks and intelligent man-machine interface
solutions for applications in the industrial and medical fields. The portfolio includes a wide
range of switchgear, sensors and control units. Founded in 1961, the company is
headquartered in Germany with subsidiaries in 11 countries worldwide and sales and service
partners in an additional 30 countries. The workforce amounts to roughly 300 employees and
annual revenues range € 40 million (US$ 43 million). The operations are divided into four
business segments: Wireless, Automation, Extreme and Meditec. The Wireless segment
provides a comprehensive switchgear range, including position switches, command devices,
hand controls, multifunction handles and foot switches. Many of the switches are self-
sufficient and functions through energy harvesting and do not require external energy supply
or batteries. The wireless products incorporate the company’s own sWave wireless
technologies or EnOcean wireless technology for energy harvesting applications. At field
level, the sWave wireless network facilitates variable communications between wireless
switching devices and access points, which function in a similar manner to a router. The
access points receive signals from wireless switching devices, bundle them and then transmit
them by Ethernet or Wi-Fi to one or several application servers. Approximately 100 wireless
switches can be administered per access point. A Steute application server then collects all
information at the field level before communicating it, either directly or via middleware, to the
customer’s IT platform. The wireless portfolio further includes wireless magnetic, inductive
and optical sensors, which are offered as an alternative to mechanically actuated limit
switches.

5.1.35 Wago
Wago is headquartered in Germany and specialises in electrical interconnection, automation
and interface electronic technologies. The company was established in 1951 and today
employs close to 8,100 people. Wago is privately held and generated annual revenues of
€_862 million (US$ 934 million) in 2017, up 13 percent year-on-year. Wago’s automation
products ranges from programmable controllers, I/O systems and HMI devices to industrial
switches, sensor and actuator boxes, and software. Wireless products include industrial
WLAN and Bluetooth Ethernet gateways, as well as components such as radio transmitters,
modules and adapters. The Ethernet gateways can be used as cable substitutes to create
robust WLAN links between automation devices. The devices can wirelessly transmit Ethernet

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protocols such as MODBUS/TCP, EtherNet/IP or PROFINET. The company’s Bluetooth

Ethernet Gateway has the same functionality but uses Bluetooth connectivity instead of
WLAN. The company’s solutions are used globally in industrial markets such as
petrochemical, food and beverage, automotive, power generation and distribution, and
building automation. The products are sold through Wago’s own distribution network in close
to 30 countries and agencies in an additional 50 countries. The largest market is Europe
which accounts for roughly 70 percent of annual sales.

5.1.36 Weidmüller
Weidmüller specialises in industrial connectivity and offers products, solutions and services in
the industrial environment of power, signal and data. The privately-held company is based in
Germany and generated annual revenues of € 740 million (US$ 802 million) in 2017, up 9
percent year-on-year. Weidmüller has three divisions: Cabinet Products, Device and Field
Connectivity, and Automation Products and Solutions. The company has operations in more
than 80 countries and the global workforce amounts to roughly 4,700 people. Weidmüller’s
industrial wireless products provide secure and reliable solutions for a wide range of
industries and applications. In October 2017, Weidmüller acquired a number of sales
companies in the US, Canada and Mexico from Rockwell Automation.

Product portfolio
The company’s line of wireless products includes wireless I/Os and gateways, wireless
Ethernet modems, as well as cellular routers. The MESH I/O system is suitable for large I/O
applications and uses a mesh architecture to automatically detect and route the most efficient
path to the destination node. Weidmüller also provides the 9-X range of wireless I/O as a low-
cost alternative to signal wire installations, over long or short distances. The wireless I/O
devices connect directly to sensor and control signals and transmit the signals via radio. The
signals are either re-created as similar signals or output as data via Ethernet, Profibus or
Modbus. Weidmüller’s wireless gateways provide wireless connectivity between devices that
uses the same or different data buses such as Ethernet, Profibus, DeviceNet and Modbus.
The wireless modems transmit serial or Ethernet data, providing a wireless extension of the
data link. Example applications are PLC to PLC point-to-point connections, connecting a
SCADA solution to a group of PLCs (point-to-multipoint) or forming a wireless PLC LAN
(multidrop). Cellular routers include 3G devices for communications between Ethernet-based

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machines and systems. The routers can be used with the company’s remote maintenance
solution – u-link – as well as other applications such as tank and environmental monitoring.
Weidmüller offers the industrial analytics solution u-mation that was introduced in 2017.

Business strategy
Weidmüller’s target markets comprise machinery, process industry, energy, device
manufacturers, transportation and infrastructure. International expansion is key to the
company’s strategy. China in particular has contributed with the highest growth in recent
time. Europe is however Weidmüller’s largest market, followed by Asia-Pacific and North
America. In recent time, the company has developed numerous communication-capable
components and solutions such as the remote monitoring solution u-link and the industrial
analytics solution u-mation to address the automation industry’s increased focus on Industry
4.0 and digitalisation. Through its focus on connected software-based products, Weidmüller
is increasingly seeing itself as a partner rather than a component supplier to customers.

5.2 IIoT platform and software vendors

The rapidly evolving IIoT platform market has attracted a host of companies, spanning from
small start-ups and individual software vendors to major PLM and enterprise software
providers. In many cases, the offerings provided by the latter category originate from
acquisitions. Few companies can so far be seen as direct competitors. The various
companies have developed offerings that often have specific focus on a set of capabilities
and target a selection of market segments and customer needs. A notable trend is that many
of these companies are moving up the stack by adding pre-packaged solutions on top of
their platform offerings to help customers further reduce time-to-market. The potential of the
IIoT market has also attracted many automation vendors to invest in the development of
software platforms. GE was one of the first industrial companies to consider the industrial
Internet as a key for success and announced its Predix platform in mid-2015. Examples of
other companies that have launched software-based products for IIoT installations in recent
time include ABB, Advantech, Bosch, Emerson, Fanuc, Hitachi, Honeywell, Mitsubishi
Electric, Omron, Siemens and Yokogawa. Many of these are collaborating with the IIoT
platform and software specialists that are presented in this section.

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5.2.1 Altair Engineering

Founded in 1985, Altair Engineering is a provider of engineering software and professional
services. The company specialises in the development and application of simulation
technology and is best known for its computer-aided engineering (CAE) software suite
HyperWorks. Altair is headquartered in the US and employs over 2,000 people across 24
countries. The company is listed on the NASDAQ Stock Exchange since November 2017.
Annual revenues in 2017 reached US$ 333 million, up 6 percent year-on-year. Operations are
divided into two business segments: Software and Client Engineering Services. Altair
participates in five software categories related to CAE and high performance computing
(HPC) including solvers and optimisation, modelling and visualisation, industrial concept and
design as well as IoT and HPC.

The company’s IoT offering comprises an IoT platform, analytics tools, edge applications and
digital twin solutions. Altair Engineering added the Carriots IoT platform to its software
portfolio through the acquisition of Carriots in June 2017. Carriots traces its roots back to the
Spanish IT services company Wairbut’s M2M division that was spun off as a separate entity in
2011. Altair further acquired CANDI Controls in May 2018, thereby adding edge gateway
technology to its IoT platform. Recent acquisitions also include the business software maker
Datawatch in November 2018.

Product portfolio
The SmartWorks suite include the IoT solutions SmartCore, SmartSight and SmartEdge,
where the first two were obtained in the acquisition of Carriots and the latter in the purchase
of CANDI Controls. The solutions are integrated with Altair’s simulation platform Hyperworks
enabling customers to use IoT data collected from connected products in digital twins of
physical assets for model-based development and simulation. SmartCore offers an integrated
set of services for device management, data collection, data storage and rule management to
reduce development time of IoT applications. The platform supports a broad range of
protocols such as MQTT, HTTP, oneM2M and CoAP, enabling users to connect almost any
type of device. Support is also available for devices with Sigfox connectivity. The platform’s
device management capabilities encompass status checks, configuration changes and over-
the-air firmware upgrades. The SDK application engine is based on Groovy scripting

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technology and enables users to build event processing architectures with simple if-then-else
scripts or more complex logic. The SmartCore platform functionality is available via a REST
API and can be used to build custom control panels, integrate IoT data in external data flows
or interact with other systems.

Figure 5.8: IoT solutions in Altair’s SmartWorks suite

Source: Altair Engineering

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SmartSight is the company’s analytics platform that is developed for IoT analytics as well as
traditional business intelligence. The web-based platform supports real-time analytics and
has built-in machine learning models for time series and text analysis. The platform also
supports R and Python which enables users to upload their own models. SmartEdge runs on
IoT gateways and industrial PCs and supports multiple data protocols for communications
with a constellation of IoT devices. The solution can be used to aggregate and normalize
sensor data and forward it via APIs to IoT applications and services.

Business strategy
Altair Engineering focuses on engineering software for product development and
manufacturing. The company has more than 5,000 customer installations globally and holds
a strong position in the automotive, aerospace and heavy equipment verticals. The
acquisitions of Carriots and CANDI Controls complement the company’s digital twin strategy
and enable Altair Engineering to offer a complete software stack to create, simulate and
manage connected products throughout their lifecycle. The SmartCore IoT platform is
available as a PaaS offering for public and private cloud infrastructure deployments. The
company also offers on-premise licenses for large customers and system integrators. In
addition, a free developer account is offered to support prototyping and testing of up to two
devices. The platform is sold both directly and through indirect channel partners such as
system integrators. Mobile network operators also offer white-labelled solutions provided by
the company. Altair Engineering predominantly targets customers in the manufacturing
sector, including engineering firms as well as manufacturing companies. The company’s IoT
solutions is also used by customers in the utilities, healthcare and smart cities markets.
Customers include for example ArcelorMittal, Enel, Ferrovial, Gfi, Mahou San Miguel,
Steelcase and Telefónica.

5.2.2 C3 IoT
C3 IoT is a software company that delivers a platform as a service (PaaS) for rapidly
developing and operating big data, predictive analytics, machine learning and IoT
applications. The company, previously known as C3 Energy, was founded in 2009 and
started as a provider of enterprise software for the energy sector. Since then, C3 IoT has
extended its focus to deliver its enterprise platform and software applications to organisations
in a wide variety of data-intensive industries. The company is headquartered in California and

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has about 200 employees. In January 2018, C3 IoT completed a US$ 100 million Series F
round of funding. Investors include Sutter Hill Ventures, Breyer Capital, The Rise Fund,
Wildcat Venture Partners and TPG Growth.

Product portfolio
The C3 IoT Platform enables enterprises to create SaaS applications that leverage large
volumes of disparate data from sensors, enterprise systems, operational systems and third-
party sources using an elastic and scalable architecture. The platform leverages several open
source components such as Spark, Cassandra, Postgres and HDFS, while hiding the
complexity of underlying technologies through a higher-level abstraction layer called the C3
Type System. At the core of the C3 IoT offering, this object-centric abstraction layer binds the
various platform components, including infrastructure and services, and enables developers
and data scientists to access data and processing frameworks without the need to integrate
the complexities of the underlying systems. The C3 Type System provides RESTful interfaces
and programming language bindings to all underlying data and functionality.

The C3 IoT Platform offers a complete set of software engineering and administrative tools for
designing, developing, provisioning, deploying and operating SaaS applications. Users can
ingest data from a variety of protocols and streaming platforms such as HTTPS, MQTT, SFTP
and AWS Kinesis. The platform also includes support for relational databases, no-SQL
databases and third-party enterprise applications via application connectors. Platform
services include for example data persistence, batch and stream processing, time series
normalisation, auto-scaling, data encryption, role-based access control and machine learning
services. A suite of application development and data science tools are available to build
applications, including an integrated development environment and a range of visual
interfaces that facilitate analytics design using data from the C3 IoT Platform and any
additional arbitrary data sets.

C3 IoT also provides a range of pre-built cross-industry enterprise AI and IoT applications
operating on its platform to support use cases in various industries. C3 IoT Applications
include solutions for predictive maintenance, sensor network health, inventory optimisation,
energy management, fraud detection, AI-enabled CRM as well as supply chain optimisation.

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Business strategy
C3 IoT has achieved significant growth in recent years and the C3 IoT platform is now used in
nearly 30 large scale projects by enterprises mainly in North America and Europe. In fiscal
2018, annual revenues grew by 60 percent. C3 IoT primarily relies on direct sales but is also
extending its network of channel partners including cloud infrastructure providers,
consultancy firms and system integrators to reach customers in new segments and
geographies. In addition to a strategic partnership with Amazon Web Services, the company
entered into a strategic partnership with Microsoft in Q2-2018. As part of the partnership, C3
IoT will leverage Microsoft Azure as a preferred cloud platform. The companies will also work
on co-marketing and co-selling strategies to rapidly scale distribution globally. C3 IoT targets
a broad range of market verticals including energy, manufacturing, aerospace, automotive,
chemical, pharmaceutical, telecommunications, retail, insurance, healthcare, financial
services and the public sector. Notably, C3 IoT holds a strong position in the smart energy
segment. Major customers include for example the major French energy provider Engie that
selected the company’s platform and applications as the technology foundation for its global
enterprise-wide transformation plan in mid-2016. Other customers include American Electric
Power, Cisco, Duke Energy, Endesa, Enel, Eversource Energy, Exelon, Origin Energy, Pella,
Royal Dutch Shell, SunPower, San Diego Gas & Electric, US Department of Defense and
Westar Energy. Moreover, the company entered a multi-year agreement with 3M in Q2-2018.
3M will use the C3 IoT Platform to develop and deploy AI-based applications, starting with
predictive healthcare and supply chain analytics. At the end of 2017, more than 300 million
sensors and devices were managed with the C3 IoT Platform.

5.2.3 Device Insight

Device Insight is a software solution provider that specialises in IoT and Industrial IoT
solutions for the industrial, telematics, connected products and energy market verticals. The
company was founded in 2003 with focus on industrial automation and is today majority
owned by Kuka. As part of a broader link-up in various industrial projects, Kuka acquired a
share in the company in October 2017. Device Insight is headquartered in Munich and has
more than 80 employees. The company offers the CENTERSIGHT NG IoT platform as well as
a range of professional services related to IoT consulting, project analysis, development,
integration, testing and IT operations.

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Product portfolio
The CENTERSIGHT NG IoT platform provides multiple ready-to-use software modules that
can be adapted to specific customer needs. The main components include the embedded
edge computing software CENTERSIGHT EDGE as well as NG Middleware and NG
Applications. The NG embedded client can run on Linux and Windows operating systems
and features protocol adapters and tools for edge analytics. The middleware layer supports
standard protocols such as MQTT, OPC-UA, CoAP, HTTPS and AMQP for integration with
connected devices and data streams. Key functionalities include user authentication, device
management, data processing, complex event processing, notification reporting, KPI
calculation and industrial analytics. Customisable applications enable device monitoring and
reporting, remote service, asset track and trace as well as data analytics for predictive
maintenance. All applications can be accessed via a web-based interface. In addition, Device
Insight has developed numerous industry specific applications for verticals including
industrial control and automation, building automation, retail, HVAC, vending, commercial
vehicles, energy and smart metering.

Business strategy
Device Insight operates primarily in Europe, but also serves customers in North America and
Asia through channel partners. The company has delivered over 150 IoT projects to
companies in 15 countries. The industrial segment comprises the company’s most important
market and accounts for roughly 30 percent of annual revenues. The CENTERSIGHT NG IoT
platform is offered as a Software-as-a-Service with a usage dependent license fee. The
platform is cloud agnostic and can run on any infrastructure. Device Insight collaborates with
Vodafone to offer secure and reliable mobile communications and Vodafone’s Managed IoT
Connectivity Platform integrates seamlessly with the CENTERSIGHT NG platform, enabling
management of SIM cards and tariffs. Integration with the Cisco Jasper connectivity
management platform is also available. At the end of 2017, the CENTERSIGHT NG platform
had nearly 1 million connected devices. The newly formed partnership with KUKA enables
Device Insight to access KUKA’s global customer base in the industrial automation market.

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5.2.4 Exosite
Exosite is a US-based enterprise software company that specialises in IoT solutions. Founded
in 2009, the company has a strong background in embedded software and about 80 percent
of its 100 employees are engineers. Apart from its headquarters in Minneapolis, Exosite has
three additional offices in Asia and Europe. In June 2016, the company launched its second
generation IoT platform Murano – a hosted solution for rapid creation, deployment and
management of connected products. Exosite is a portfolio company of the technology
incubator Invenshure that has provided the company with growth capital. In addition, Exosite
received a significant minority equity investment from the major manufacturer of motion and
control technologies Parker Hannifin in 2015.

Product portfolio
The enterprise IoT platform Murano allows users to quickly and securely connect devices to
the cloud and route data to IoT applications. The platform delivers advanced device
connectivity that includes provisioning, security and management functionality. Murano
includes device libraries for popular languages and platforms and is designed to be
compatible with almost any embedded hardware configuration, regardless of the constraints
of a device’s onboard capabilities. The platform supports standard protocols such as HTTPS,
MTTQ, CoAP and WebSocket. The ExositeReady Gateway Engine (GWE) software package
enables secure communication between end nodes, gateways and the Murano platform and
allows customers to build and monitor custom gateway applications as well as remotely
install and update firmware. Via Murano’s web-based interface, users are able to develop and
maintain complex data schemes that are based on device metadata, data sources, device
groups, access policies, processing elements, events and alerts. The dashboard builder
enables rapid creation, configuration and deployment of dashboards to visualise device data.
Murano’s integrated user management service provides a powerful permissions scheme that
includes authentication, management and role definition that can be built into application
permissions, reducing complexity and ensuring security. The IoT Exchange marketplace
featured in the Murano platform includes reusable application code templates, APIs, service
definitions, rules, static assets and other downloadable content. The marketplace also offers
numerous integrators with third-party systems and services such as Twilio, Microsoft Azure,
Salesforce, SAP and AWS.

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Exosite’s Micro-Vertical Engine applications are industry-specific managed solutions that

include data routing, user roles, enterprise integrations and application content. The
applications are built for common IoT use cases and can be reused across vertical segments,
allowing customers to significantly reduce time-to-market for IoT solutions. In addition to its
solutions portfolio, Exosite provides professional services to support customers in planning,
developing and executing IoT projects.

Business strategy
Exosite’s product concept designed for modularity and reuse lowers the barriers to entry for
OEMs looking to commercialise IoT solutions, but also reduces the total cost of ownership of
connected products within organisations. The company primarily markets the Murano IoT
Platform to durable goods manufacturers in the consumer, commercial and industrial
markets. Key segments include industrial equipment, smart buildings, smart homes and
mobile assets. The Murano platform is offered as a monthly subscription and can be
deployed on-premise for increased security and control or on any public cloud infrastructure.
Since 2013, the company has a partnership with Parker Hannifin which is also one of its
largest customers. Exosite has deployed IoT programs across several of Parker Hannifin’s
global operating divisions and is also powering Parker Hannifin’s Voice of the Machine IoT
platform that was announced in April 2017. The company mainly markets its solutions and
services through direct sales channels, but also sells its solutions via system integrators. At
the end of 2015, Exosite launched the Exosite IoT Alliance partner programme to reduce the
complexity of developing IoT solutions. The programme comprises over 60 members and
includes chipset and device manufacturers, business system and software vendors, telecom
operators as well as solution providers. Examples of partners include ARM, AT&T, Verizon,
Amazon Web Services, Salesforce, Microsoft, IBM, Qualcomm, Microchip, Texas Instruments,
Artila, Bitwise IO, Digi International, MultiTech Systems, Exceet Secure Solutions, Synapse
Wireless and WT Microelectronics. Exosite has experienced significant growth in recent time
and now supports over 100 clients. At the beginning of 2018, Exosite’s Murano platform
managed over 1 million connected devices.

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5.2.5 FogHorn Systems

FogHorn Systems is a developer of software for edge nodes in industrial and commercial IoT
solutions. The company was founded in 2014 with focus on edge intelligence and today has
more than 50 employees. FogHorn is headquartered in California and has four additional
offices across the US, as well as international offices in the Netherlands, South Korea, Saudi
Arabia, India and Japan. In October 2017, the company completed a US$ 30 million Series B
round of funding. Notable investors include GE, Intel, Dell, Honeywell, Yokogawa, Bosch and
Saudi Aramco Energy Ventures. The company has raised a total of US$ 48 million in funding
to date.

Figure 5.9: The FogHorn architecture

Source: FogHorn Systems

The company’s Lightning portfolio comprises an edge analytics platform that enables real-
time, on-site stream processing of sensor data from industrial machines. The platform is
compatible with a range of edge devices such as PLCs, DCSs, embedded systems, industrial

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PCs and IoT gateways. Additionally, the newest version of Lightning supports 32-bit
implementations of ARM Cortex-A processors, one of the most widely used processor types
for IIoT deployments. The interfaces are designed for OT staff to identify and configure
ingestion streams, data characterisation and cleansing, and algorithm scripting. The platform
helps operators to visualise and act on real-time sensor data streams, asset health statistics
and results of analytics. Data publishing integration is available with public cloud
infrastructure from AWS, Microsoft and Google, as well as external historians. The FogHorn
Manager enables users to remotely manage, monitor and configure their devices and
supports multiple industrial protocols including MQTT, Modbus and OPC UA. FogHorn
targets OEMs, system integrators and end customers in vertical markets such as
manufacturing, power and water, oil and gas, mining, transportation, healthcare and retail.
Partners include industrial system integrators, cloud service providers, software providers,
system integrators and IoT gateway vendors such as ADLINK Technology, AWS, Bosch, GE,
Microsoft, SAP, Yokogawa and Wind River.

5.2.6 IBM
IBM is a multinational technology company with headquarters in New York. The company
offers a diverse portfolio of software, hardware systems, cloud services and consulting
services. The company has more than 380,000 employees and operations in more than 175
countries. In 2017, annual revenues amounted to US$ 79.1 billion, down 1 percent from the
previous year. IBM’s operations consist of five business segments: Cognitive Solutions,
Global Business Services, Technology Services & Cloud Platforms, Systems and Global
Financing. The Cognitive Solutions segment provides solutions software and encompasses
businesses such as Watson, Watson Health, Watson IoT and Transaction Processing
Software. The Technology Services & Cloud Platforms segment includes the company’s
cloud infrastructure and platform capabilities, technical support services and integration
software. Revenues derived from the Cognitive Solutions and Technology Services & Cloud
Platforms segments accounted for US$ 21.1 billion and US$ 34.9 billion respectively in 2017.
In October 2018, IBM announced the acquisition of the open source software company Red
Hat in a deal valued at US$ 34 billion.

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IBM has made inroads into cloud services and artificial intelligence, both through acquisitions
and in-house development. IBM’s cognitive system, marketed as Watson, was first introduced
in 2011 and combines artificial intelligence, machine learning and natural language
processing for processing structured and unstructured data such as texts, audio, images and
video. Besides the core Watson team, the company has established several Watson
businesses, including IBM Watson IoT that combines Watson capabilities with industry
expertise, large data sets and an ecosystem of partners to provide solutions for specific
industries and professional domains. The Watson IoT global headquarters in Germany
opened in February 2017. More than 3,000 researchers, developers and designers are now
involved in the company’s IoT business.

Product portfolio
The Watson IoT Portfolio can be divided into three main components: foundational
capabilities, cross-industry applications and industry content. Foundational capabilities
include horizontal services including IoT platform services, blockchain, AI and analytics, and
digital twin solutions. The IBM Watson IoT Platform allows customers to connect a wide
variety of devices and gateways, perform device management operations, and store and
access device data. The platform provides secure communications to and from devices by
using MQTT and TLS. Web applications can be integrated with the platform using APIs. The
platform’s data management tools enable users to store, normalize, transform and review
device data and integrate the platform with other services. The data can also be monitored via
the web-based console dashboards. Users are able to define rules to monitor conditions and
trigger automatic actions. Additionally, the platform provides client libraries, content and
samples to help developers build and develop code to integrate applications and devices.

The Watson IoT Platform is a service that is available in IBM Cloud, previously called IBM
Bluemix. As an IBM Cloud service, the platform can be integrated with other services that are
hosted on IBM Cloud. The IBM Cloud is a suite of cloud computing services that are offered
both as PaaS and IaaS. The services are available from nearly 60 data centres globally.

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Figure 5.10: The Watson IoT Platform

Source: IBM

In addition to its IoT Platform services offering, IBM provides a range of cross-industry
applications that are divided into three categories: Engineer, Manage and Engage. Engineer
solutions enable customers to engineer software-driven products, connect and analyse
products, as well as create digital twins. Manage solutions are intended for industrial
applications and features tools for data ingestion and connectivity, asset optimisation and
operations optimisation. Engage solutions are designed to help companies interact with their
customers in new ways and expand their business to create new revenue streams.

Business strategy
The Watson IoT business intends to help clients capitalise on the digitisation of the physical
world by extending its cognitive computing capabilities to connected devices, sensors and
systems. IBM announced a US$ 3 billion investment plan over four years in Q1-2015 to
establish the IoT business and build a cloud-based open platform. Since the launch of its first
generation IoT platform in 2014, IBM has added a broad range of solutions for cross-industry

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applications as well as vertical industries. The Watson IoT portfolio now encompasses
solutions for industries including manufacturing, energy and utilities, transportation, oil and
gas, aerospace and defence, facilities and automotive. The Watson IoT Platform pricing
model is based on three metrics: the average number of devices the customer connects over
the month, the amount of data that devices exchange with the Watson IoT Platform and
associated applications, as well as the amount of data analysed in the cloud. The Watson
business has grown significantly in recent time and more than 100,000 developers worldwide
now work with Watson APIs. In the IoT market, the company aims to derive value through
strong industry partnerships with enterprises such as chipset and device manufacturers,
communications service providers, system integrators and vertical specialist players. More
than 1,400 partners support IBM’s growing ecosystem. In Q1-2018, the company announced
that it has more than 6,000 client engagements in 170 countries. Customers include for
example BMW, Volkswagen and Honda in automotive, ABB, DowDuPont, Honda and Flex in
manufacturing, Whirlpool, Electrolux and Nokia in electronics, Boeing and Airbus in
transportation, ISS and Kone in smart buildings, as well as Schneider Electric and Fingrid in
Energy.

5.2.7 Litmus Automation

Litmus Automation is an edge and cloud IIoT platform provider based in California. The
company’s flagship product LoopEdge enables companies to connect any type of hardware,
device, sensor or machine to the Internet and integrate the data being collected to any third-
party software application or enterprise system in real-time. The company was founded in
2014 and has close to 20 employees with international offices in Canada and Japan. Litmus
offer three complementary products for IIoT installations: LoopEdge, Loop and LoopInsights.
LoopEdge is an edge computing platform that enables users to collect data from industrial
systems such as PLCs, DCSs, CNCs, robotics systems, sensors and historians. The platform
runs on IoT gateways, industrial PCs and VMs and can be used for event processing, asset
management and other edge applications. Loop is an IoT management platform for remote
monitoring of devices and applications at the field level. The analytics solution LoopInsights
allows users to store, visualise, analyse and set triggers and alerts for IIoT scenarios. By
offering unified edge to cloud systems, Litmus aims to facilitate IIoT deployments. Litmus
Automation focuses on the automotive and industrial sectors, and counts some Fortune 500
companies as clients.

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5.2.8 Oracle
Oracle is a global technology company that specialises in database management systems,
middleware and enterprise application software. The company was founded in 1977 and
became the first company to commercialise the relational database. Headquartered in the
US, Oracle is today the second largest software company by revenue worldwide. The
company has 137,000 employees and generated annual revenues of US$ 39.8 billion in the
financial year ending in May 2018. Oracle divides its operations into three business
segments: Cloud and license, Hardware and Services. The cloud and license line of business
accounted for 82 percent of total revenues in fiscal 2018. The cloud computing offerings,
marketed as Oracle Cloud, include a comprehensive stack of application, platform, compute,
storage and networking services in all three primary layers of the cloud: Software-as-a-
Service (SaaS), Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS). Oracle
has strengthened its cloud computing capabilities through a number of acquisitions in recent
time including Netsuite and Palerra in 2016 as well as Apiary in 2017. The company also
offers the Java platform as well as hardware systems such as server, storage and networking
products which were added through the acquisition of Sun Microsystems in 2010.

The company has been active in the IoT market since 2013 and started on the embedded
side with the launch of Java ME Embedded, a client Java runtime stack optimised for
embedded systems. In late 2015, Oracle introduced several enhancements to its Oracle
Cloud Platform for Integration portfolio, comprising a suite of integration services to simplify
application and service integration across cloud and on-premise applications as well as
mobile and IoT devices. The portfolio includes services such as the Oracle IoT Cloud, Oracle
Integration Cloud, Oracle SOA Cloud and Oracle API Manager Cloud.

Product portfolio
The Oracle IoT Cloud Service is a cloud-based PaaS offering that allows customers to
connect devices to the cloud, analyse data from IoT devices and integrate that data with
enterprise applications, web services as well as other Oracle Cloud Services. The Client
Software Libraries enables users to connect devices to the platform with support for industrial
protocols, backhaul WAN technologies and transport protocols such as HTTPS and MQTT.
With the Big Data Cloud Service and the Event Hub Cloud Service, users can develop

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streaming and batch analytics applications and deploy them on big data infrastructure. These
applications can process, learn and analyse big volumes of data collected from sensors and
devices. Integration with Oracle and non-Oracle applications are supported through REST
APIs. Additionally, Oracle has developed a set of IoT applications for enterprises. Built on top
of the Oracle IoT Cloud Service, the solutions enable enterprises to quickly extend their core
supply chain management, customer experience, human capital management and enterprise
resource planning processes with real-time IoT data and analytics. The Oracle IoT Cloud
Applications suite includes solutions for asset monitoring, production monitoring, fleet
monitoring, connected worker and service monitoring for connected assets.

Business strategy
Oracle is a global market leader in enterprise application software and serves about 430,000
customers in 175 countries worldwide. In the IoT market, Oracle primarily focuses on
providing its pre-packaged solutions in the SaaS layer rather than the PaaS Oracle Cloud IoT
Service to help its enterprise customers rapidly deploy IoT solutions and connect them with
their enterprise applications. This comprises one of the main pillars of Oracle’s IoT strategy as
integration between IoT solutions and enterprise applications enables enterprises to use data
from IoT devices in for example digital twin and predictive maintenance applications, as well
as customer satisfaction programs. Apart from integration with its own enterprise application
software, the company’s IoT services integrate with solutions from for example SAP and
Salesforce. The Oracle IoT Cloud service is offered with a usage-based pay-as-you-go pricing
model or a standard subscription model. The company primarily partners with third-party
suppliers to fulfil customers’ requirements for device management. Example of partners in the
IoT space include Advantech, Bosch, Cisco, Dell, Eurotech, Fujitsu, Gemalto, Huawei, HMS
Networks, Mitsubishi Electric, MultiTech Systems and Wind River.

5.2.9 PTC
PTC develops and delivers industrial software products and solutions worldwide. The
company was founded in 1985 with focus on computer aided design software. PTC is
headquartered in the US and employs more than 6,100 people across 30 countries. Annual
revenues for the fiscal year ending in September 2018 amounted to US$ 1.2 billion, up 7
percent year-on-year. PTC is gradually transforming to a subscription-based model and

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discontinued sales of perpetual licenses in the Americas and Western Europe at the
beginning of 2018. The company divides its operations into three segments – the IoT Group,
the Solutions Group and Professional Services. The IoT Group generated annual revenues of
US$ 124 million in fiscal 2018, while the Solutions Group and the Professional Services
segments accounted for US$ 965 million and US$ 154 million respectively. The IoT Group
provides industrial IoT and Augmented Reality (AR) solutions. The Solutions Group offers a
portfolio of Computer Aided Design (CAD), Product Lifecycle Management (PLM) and Service
Lifecycle Management (SLM) solutions. PTC focuses on customers in the discrete
manufacturing industries, including aerospace and defence, automotive, electronics,
industrial equipment, retail and consumer as well as medical devices.

PTC has in recent years made significant inroads into the IoT market both through
acquisitions and in-house development. The purchase of the IoT platform provider ThingWorx
in 2013 marked the first in a series of technology focused acquisitions. The company
acquired the device management platform vendor Axeda in 2014, followed by the predictive
analytics specialist ColdLight Solutions and Qualcomm’s augmented reality (AR) business
Vuforia in mid-2015. PTC acquired Kepware in late 2015 which extended the company’s IoT
offering with communications technology built for industrial automation environments. The
transaction value of these five acquisitions totalled about US$ 550 million. The acquisitions
enable PTC to deliver a technology platform that allows customers to connect products and
rapidly develop their own custom applications for system monitoring and predictive
maintenance. The company has merged the ThingWorx, Axeda, ColdLight, Vuforia and
Kepware businesses under the IoT Group and rationalised the branding, technologies and
products into one cohesive platform offering. The ThingWorx brand is used for all platform
components. The Kepware and Vuforia brands have also been retained and the solutions are
available as standalone offerings.

In June 2018, PTC entered into a strategic partnership with Rockwell Automation to align their
respective smart factory technologies. As part of the deal, Rockwell Automation made a
US$_1 billion equity investment in PTC, representing an approximate 8 percent ownership
interest in the company.

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Product portfolio
PTC launched its most recent version of its IoT platform – ThingWorx 8 – in May 2017,
featuring enhanced platform capabilities, role-specific applications for engineering and
manufacturing, and a new collection of service offerings designed for Industrial IoT customers
and partners. ThingWorx is an end-to-end technology platform that delivers tools for rapid
development and deployment of IoT applications and AR experiences. The platform includes
compatible modules that deliver functionality for industrial connectivity, analytics, application
enablement, cloud orchestration and AR authoring. ThingWorx Foundation comprises the
core of the ThingWorx platform and provides a design and runtime engine for IoT applications
as well as connection services, software agents and toolkits to establish connectivity between
devices and assets. The connection services include a wide range of protocol adapters,
device cloud adapters and integration framework connectors, enabling users to access
industrial IoT and application data from devices, on-premise web servers and cloud
applications. The AlwaysOn tool uses the ThingWorx Edge MicroServer that can be
embedded on a device or run on a gateway to provide bi-directional connectivity between
sensors, devices and equipment, and the ThingWorx server. It is also possible to leverage the
ThingWorx Connectivity module powered by Kepware to connect industrial equipment. The
application enablement platform featured in ThingWorx Foundation aims to simplify the
development process of IoT applications and includes tools to rapidly build applications,
create digital twins, integrate different systems and detect anomalies. The Mashup Builder
enables fast creation of HTML5-based interactive applications, collaborative workspaces,
dashboards and mobile interfaces that integrate data, activities and events without the need
for coding.

The ThingWorx Analytics module is designed to manage the volume, velocity and variety of
data in IoT applications. ThingWorx Analytics enables developers to easily create applications
for monitoring edge devices and data streams through real-time pattern and anomaly
detection as well as automated predictive modelling. ThingWorx Utilities provides users with
several pre-built tools to define, monitor, manage and optimise the performance of connected
products, without requiring developer skills. These tools provide provisioning and asset
management, alert management, remote access and control, software content management,
product relationship management, as well as workflow management. ThingWorx Studio is

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built on the Vuforia platform and provides a solution for creating, deploying and consuming
AR experiences in the enterprise. The experiences provide a composite view of digital and
physical product data, dashboards and alerts presented in 2D, 3D and AR. Featuring a drag-
and-drop interface, the AR experiences can be enhanced with IoT data and real-time product
information via the ThingWorx platform.

Figure 5.11: PTC’s ThingWorx platform

Source: PTC

Business strategy
PTC has identified industrial IoT as a key growth market in the coming years and invests
heavily in research and development to expand the functionality of its products to address
opportunities in this market. The company serves a total of 28,000 customers worldwide in
market segments such as manufacturing, mining, oil and gas, utilities, automotive, medical
equipment, life sciences, agriculture, smart cities and smart infrastructure. In Q1-2018, more
than 1,200 customers used the ThingWorx platform at about 75,000 sites. The platform is
used in approximately 650 major factories. Examples of customers include Abbott

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Laboratories, Airbus, Eaton, Elekta, Fujitsu, Ingersoll Rand, Konica Minolta, Lockheed Martin,
Medtronic, NCR, Noritz, Tomra, Toshiba, Trimble, Tyco and Welch Allyn. At the end of Q1-
2018, about 5 million devices were managed on the ThingWorx platform. Additionally, PTC
supports a growing partner ecosystem through its PTC Partner Network that comprises about
380 partners including independent software vendors, hardware manufacturers, system
integrators, network operators, value added resellers and solution providers. Partners include
for example GE, HPE, Salesforce, AWS, SAP, Dell, Cisco, Hitachi, Vodafone, Telefónica,
Deloitte, Accenture, Cognizant, Capgemini, Tech Mahindra, Texas Instruments and Intel. In
early 2018, PTC announced a partnership with Microsoft to make available the ThingWorx
platform on the Microsoft Azure cloud platform. Central to the collaboration is PTC’s selection
of Microsoft Azure as its preferred cloud platform for manufacturing customers. Moreover,
partners can market extensions, services and applications that they build on the ThingWorx
platform through the ThingWork Marketplace. The Marketplace enables customers to further
reduce the time, risk and effort it takes to build and deploy IoT solutions by assembling the
bulk of their applications from prebuilt, tested and reviewed components. About 50
ThingWorx Ready partners now provide hardware, software and services that are pre-
integrated into the ThingWorx platform and certified by ThingWorx.

5.2.10 Relayr
Relayr is an industrial software company that specialises in enterprise middleware and IoT
solutions. The company was founded in 2013 and initially focused on providing developers
with tools to build their own IoT solutions and connect devices to the cloud. Relayr reoriented
its focus in 2016 by developing a middleware platform geared for IIoT applications. During the
same year, the company acquired the two US-based companies Proximetry and Neokami to
add device management and data analytics to its offering. Following a collaboration that
started in 2016, Relayr was acquired by Hartford Steam Boiler (HSB) for € 300 million
(US$_341 million) in October 2018. HSB is a subsidiary of the major German reinsurance
company Munich Re and provides equipment breakdown insurance and other speciality
coverages, as well as inspection services, loss reduction and engineering-based risk
management consultation. Munich Re, via HSB, has been a shareholder in Relayr since 2016.
Through the acquisition, Munich Re aims to create new business models for the IIoT market,
offering not only technology but also risk management, data analysis and financial
instruments. Though part of Munich Re, Relayr will continue to operate autonomously and

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retain its brand. Relayr has about 200 employees and is headquartered Germany with
additional offices in the UK, the US and Poland.

The company’s offering comprises IoT middleware, customised software and consulting. Its
device agents are capable of running on a wide range of equipment and hardware with
support for most industrial protocols such as OPC UA, Siemens S7 and Modbus. The
middleware supports message routing, device and data management, analytics, as well as
integration with third-party systems. The solution also allows users to deploy and run
applications on edge nodes to reduce overall data costs and support predictive maintenance.
Customers can select their preferred cloud infrastructure provider such as AWS, Google
Cloud Platform and Microsoft Azure, as well as on-premise and hybrid installations. Since
Relayr began to cooperate with HSB in 2016, the offering has been supplemented by
financial and insurance-related components.

Through the combination of software and professional services, Relayr focuses on creating
business outcomes for its customers, including cost reduction, energy efficiency, quality
improvement and business model change. The company targets small and medium-sized
enterprises in the industrial market, including industrial equipment manufacturers, equipment
operators and industrial service providers. Moreover, the acquisition allows Relayr to leverage
Munich Re’s and HSB’s large customer bases to gain access to new customers. Customers
include for example GE Transportation and GROHE. The solutions are sold directly, in
cooperation with consulting partners, and indirectly via technology companies. Partners
include for example Avnet, Deutsche Telekom, AT&T, Cisco, McKinsey and PwC.

5.2.11 SAP
SAP is a leading provider of enterprise application software. Founded in 1972, the company
is headquartered in Germany and has more than 84,000 employees worldwide. In 2017,
annual revenues amounted to € 23.5 billion (US$ 26.5 billion), up 6 percent year-on-year. SAP
operates through the segments Applications, Technology & Services and the SAP Business
Network which accounted for € 21.1 billion (US$ 23.9 billion) and € 2.3 billion (US$ 2.6 billion)
of total revenues respectively in 2017. The Applications, Technology & Services segment
derives its revenues primarily from the sale of software licenses, subscriptions to cloud

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applications and related services. The SAP Business Network generates revenues mainly
from transaction fees charged for the use of SAP’s cloud-based collaborative business
networks and related services. SAP’s core offering – SAP Business Suite – is an integrated
portfolio of business applications that provide integration of information and processes,
collaboration and industry-specific functionality. The fourth generation of the SAP Business
Suite – SAP S/4HANA – was introduced in 2015 and is built on the company’s high-
performance in-memory database platform SAP HANA.

The company’s PaaS solution SAP Cloud Platform was introduced under the name SAP
HANA Cloud in 2012 and includes core platform services such as storage, integration,
analytics and security as well as tools to develop and manage IoT applications. In 2017, SAP
launched SAP Leonardo, a portfolio of IoT, machine learning and analytics solutions built on
the SAP Cloud Platform. During the same year, the company also announced investment
plans of € 2 billion over five years to help business and government entities benefit from the
proliferation of sensors, smart devices and data. To accelerate its IoT strategy, the company
acquired the digital twin specialist Fedem Technology in June 2016 and the IoT platform
vendor PLAT.ONE in September 2016.

Product portfolio
SAP Leonardo IoT is part of the overall SAP Leonardo offering which encompasses
infrastructure, technology, applications and services. Five main components make up the
SAP Leonardo IoT solution: SAP Cloud Platform, SAP Leonardo IoT Foundation, SAP
Leonardo IoT Edge, SAP Leonardo IoT Applications and SAP Leonardo IoT Bridge.

SAP Cloud Platform supports a multi-cloud architecture and is based on Cloud Foundry
technology. The platform provides a rich set of business and platform services such as cloud-
to-cloud and cloud-to-on-premise integration, workflow and business rules, enterprise
messaging, programming languages and runtimes, data storage, API management, machine
learning, analytics and security.

SAP Leonardo IoT Foundation is built on top of the SAP Cloud Platform and includes device
management, connectivity management, data management, event processing, analytics
services, APIs, location services, as well as UI content and event services. The device

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management service provides capabilities to onboard, configure, manage and decommission

any remote device. The service offers support for standard protocols such as HTTP and
MQTT, as well as security standards, including X.509 for public key certificates, to help
ensure operational security and role-based access. SAP Leonardo IoT Foundation further
includes a range of tools, templates and wizards to rapidly build connected solutions. This
includes a time-series store, a configurable time-series archive and an analytics service
powered by SAP HANA. Users are further able to leverage re-usable components and
extension capabilities for IoT applications from SAP and partners.

SAP Leonardo IoT Edge helps optimise business processes at the edge of the network, near
the source of IoT data, to increase asset uptimes, operational efficiency and worker
productivity. SAP Edge Services provides edge computing as microservices that are
optimised for deployment on IoT gateways running Linux or Windows. SAP Leonardo IoT
Applications encompasses a range of solutions for IoT use cases such as predictive
maintenance and service, digital twins, connected goods and vehicle insights. The SAP
Leonardo IoT Bridge closes the gap between different sources of information, such as sensor
data, business processes and operations data into a unified command centre.

Business strategy
SAP is one of the largest business software companies worldwide and serves about 300,000
customers in more than 180 countries. In the IoT domain, the company aims to help
customers improve business processes by integrating data from connected devices. The
product suite is one of the company’s most open solutions and integrates with diverse back-
ends, not only from SAP. SAP Leonardo supports on-premise deployments and can also be
offered as a service hosted on cloud infrastructure from SAP, Google, AWS and Microsoft.
The company mainly employs a direct sales strategy, but the offering is also sold via value-
added resellers. As SAP Leonardo IoT is designed to provide horizontal platform services,
SAP targets all relevant industries in the IoT market. Customers in the IoT space include for
example Caterpillar, BASF, Endress+Hauser, GEA Group, Kaeser Kompressoren, BPW, Hilti,
Trenitalia, Arctic Wind, Pepperl+Fuchs, Red Bull, Kaiserwetter, Krones, MillerCoors and
Hemlock Semiconductor. SAP has also launched the SAP Leonardo IoT partner network. This
global network of partners will provide implementation services for SAP Leonardo IoT

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accelerator packages. Partners include for example Accenture, Capgemini, Deloitte

Consulting, HCL Technologies, Rocket Consulting and Tech Mahindra.

5.2.12 Software AG
Software AG is a major enterprise software vendor that specialises in data management and
application development platforms. The company is headquartered in Germany and employs
about 4,600 people. Software AG is listed on the Frankfurt Stock Exchange and annual
revenues amounted to € 879 million (US$ 993 million) in 2017. The company divides its
operations into three business lines: Digital Business Platform (DBP), Adabas & Natural
(A&N) and Consulting. Software AG’s largest business line – DBP – unites the company’s
enterprise digitalisation products: integration software, process optimisation solutions, as well
as services and analytics tools for big data and IoT.

In March 2017, the company acquired Cumulocity following a cooperation started in 2015
which has entailed Software AG embedding Cumulocity’s IoT Cloud Platform into its DBP
business. Software AG has kept the Cumulocity brand and now provides its IoT offerings
under Cumulocity IoT that combines Software AG’s DBP assets with the legacy Cumulocity
IoT Cloud Platform. The Cumulocity business originated in 2010 when Nokia Siemens
Networks began to develop software solutions based on cloud technology for IoT
applications. During 2012, the resulting Cumulocity platform and the team behind it was
spun-off to an independent company, supported by external investors. Following the
acquisition of Cumulocity, Software AG purchased Germany-based TrendMiner in June 2018.
TrendMiner specialises in visual data analytics for the manufacturing and process industry
and will complement Software AG’s Cumulocity IoT and Industry 4.0 product portfolio.

Product portfolio
The Cumulocity IoT platform includes comprehensive capabilities for device connectivity and
management, user and permission management, streaming analytics, integrations, event
processing and application enablement. The platform is built on a multi-tenant architecture
with strict database separation between tenants, meaning that customers can store their data
completely separated at the database level, which ensures a high level of data security.
Cumulocity IoT includes device libraries for popular languages and platforms and is designed

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to be compatible with a wide range of devices and gateways through plug and play
integrations. The carrier-grade platform supports standard protocols such as MQTT, HTTPS
and LWM2M and integrations are also available with IoT network technologies such as LoRa,
Sigfox and NB-IoT. The device management capabilities enable users to access, manage,
monitor, control and troubleshoot devices remotely, as well as monitor connection availability
and other metrics. Cumulocity IoT also allows users to integrate the functionality of the Cisco
Jasper platform.

Software AG’s complementary Apama platform allows users to act on high-volume event
stream data in real time. Apama’s in-memory streaming analytics enables real-time pattern
detection, complex event processing and predictive analytics. The solution can be used to
create actions, alerts and notifications, as well as interactive dashboards and other
visualisations, for example in digital twin applications. Using the webMethods integration and
API management platforms, customers can integrate and manage applications, services, big
data environments and APIs. The webMethods integration cloud provides hosted integration
capabilities and features a large number of cloud connectors to services from Salesforce,
Google, AWS, SAP, Microsoft, ServiceNow and others. REST APIs can be used to control all
functionality of Cumulocity IoT and allows developers to extend the existing functionality.

Cumulocity IoT’s solution accelerators provide a number of pre-packaged features, plugins

and configurations for a wide variety of use cases, enabling customers to accelerate time-to-
market for IoT solutions. These include for example predictive maintenance, location
awareness, track and trace, condition monitoring and anomaly detection.

Business strategy
Software AG can with its presence in more than 70 countries scale the Cumulocity IoT
business globally. Moreover, the acquisition of Cumulocity enables the company to bundle
the legacy Cumulocity IoT Cloud Platform with its enterprise integration tools, process
management and artificial intelligence services, to deliver an end-to-end offering that spans
from the cloud to the edge. At the time of the acquisition, Cumulocity had more than 100
customers, supporting over 1,000 tenants. The Cumulocity IoT offering is now also supported
by Software AG’s global consulting services. In large scale projects, Software AG also

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contracts external system integrators. Several deployment options are available for
Cumulocity IoT, including cloud, on-premise, hybrid and edge deployments. The platform is
primarily offered as a SaaS based on a usage-based pay-as-you-grow model. A white-
labelled and re-brandable version is available for mobile network operators and other service
providers. In the IoT market, Software AG supports customers in segments such as
manufacturing, fleet and asset tracking, healthcare, smart buildings and retail. Customers
include for example Lycero, Micro Technology, PayPal, Siemens and Octo Telematics.
Siemens selected the company’s technology in Q4-2017 to complement its IoT operating
system MindSphere. In the IIoT space, Software AG is part of the ADAMOS strategic alliance
and Cumulocity IoT powers the ADAMOS IIoT platform.

Software AG has an extensive network of partners, including hardware and device

manufacturers, system integrators, analytics and technology companies, as well as
infrastructure providers. To complement its direct sales activities, the company partners with
a number of mobile network operators and system integrators that act as VARs. The
company has a strategic partnership with Deutsche Telekom that offers the Cloud of Things
IoT platform based on Software AG’s Cumulocity IoT technology. Most recently, Software AG
announced a partnership with Qatar-based Ooredoo in Q1-2018. Additional VARs include for
example Bismark, EE, NTT Communications, Telia Company, Telstra, Tieto, Unlimit and WSP.

5.2.13 Telit
Telit is a global provider of IoT modules and value-added services. The company was
founded in 1986 and launched its first M2M module in 1998. Headquartered in the UK, Telit
has over 1,100 employees worldwide and regional headquarters in Italy, the US, Brazil and
South Korea. The company has ten R&D centres and a global network of sales and support
offices. Telit has been listed on the London Stock Exchange’s AIM market since 2005. Annual
sales in 2017 were US$ 375 million, up 1 percent from the previous year. Telit operates
through two business segments: IoT products and IoT services. The IoT products segment
includes IoT modules, while the IoT services segment comprises the company’s platforms
and connectivity services offerings. The IoT products and IoT services segments accounted
for 92 percent and 8 percent of total revenues respectively in 2017. During the same year, the
Hong Kong-based investment firm Run Liang Tai Fund acquired a 14 percent stake in Telit,

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which increased to 15 percent in March 2018. Run Liang Tai Fund is the largest shareholder
of Sunsea Telecommunications.

Acquisitions are a key element of Telit’s growth strategy. In 2011, the company acquired the
Motorola M2M module business and M2M connectivity services provider GlobalConnect to
establish its services business. Telit entered the M2M connectivity services market in the
following year with the launch of the m2mAIR business in Europe. In 2012, Telit acquired
Navman Wireless OEM solutions, thereby adding GNSS modules to its portfolio. The
company expanded its IoT connectivity services business into North America by acquiring
US-based CrossBridge Solutions in 2013. In the same year, Telit acquired the cloud services
and application enablement IoT platforms provider ILS Technology. The deviceWISE assets
obtained in the ILS Technology deal laid the foundation of Telit’s IoT platform business.
Following the acquisition, the deviceWISE application enablement platform was integrated
into the company’s IoT services offering. In 2016, Telit acquired BLE and NFC assets from
Stollmann Entwicklungs und Vertriebs and a number of cellular module product lines
together with related IP and assets from Novatel Wireless in an US$ 11 million deal.
Furthermore, Telit entered in August 2016 a collaboration agreement with Tech Mahindra to
offer end-to-end IoT solutions, including IoT solution consulting, development and
operations. In February 2017, Telit announced the acquisition of the ultra-low power Wi-Fi
specialist Gainspan. The acquisition augments Telit’s existing portfolio of IoT products and
services and positions the company to deliver on its sensor-to-cloud vision.

In July 2018, Telit divested its automotive chip unit to the China-based developer of
autonomous driving technology, TUS International, for US$ 105 million. The unit traces its
roots back to NXP’s Automotive Telematics On-board unit Platform (ATOP) business that was
acquired by Telit in 2014 for US$ 9.4 million. The sale of the unit enables Telit to reduce its
debt load and focus on its core business in industrial IoT.

Product portfolio
Telit offers a comprehensive portfolio of modules, software and services for business,
commercial and industrial IoT applications. Altogether the company offers more than 180
different module SKUs. Telit is one of a few players to support 2G, 3G and 4G LTE from

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Category 18 - Gbps-class data cards to the rising mobile IoT Cat M1 and NB-IoT standards; in
combination with GNSS (GPS/GLONASS) and non-cellular wireless technologies including
Bluetooth, BLE, Wi-Fi and LoRa. Telit products are divided into families, where members have
the same form factor, functionality and software interface. This means that they can be
integrated and interchanged easily into existing customer designs with only minimal
adaptation. The modules, including cellular, Wi-Fi, Bluetooth, BLE and LoRa, incorporate
software to interface with the Telit IoT Platform via a set of simple AT commands. Telit has
also recently introduced module-embedded SIM technology – simWISE – which eliminates
the need for physical SIMs.

The IIoT platform Telit deviceWISE for Factory is built to offer a complete set of tools for
industrial IoT deployments and includes functionality for device management, connectivity
management, data management and system administration. Apart from Telit’s on-module
API, the platform supports communications via HTTP and MQTT as well as LPWA device
clouds such as LoRa and Sigfox. Device management functionality includes remote
provisioning, remote configuration and over-the-air firmware updates that can be executed
using scheduled or ad-hoc campaigns for a single unit, predefined groups or the entire fleet
of devices. Additional Edge management features include the Asset Gateway software which
can be installed on gateway devices for local data processing and communications with a
wide variety of industrial assets including CNCs, PLCs, robots, sensors and DCSs or any
machine that has analog sensors or discrete outputs. The software is supported by industrial
routers from a group of industry partners. The platform also provides device drivers for widely
used PLCs from companies such as Siemens and Mitsubishi Electric.

Collected data is transferred over highly secure SSL and TLS communication framework and
can be routed to any software applications. Cloud-to-cloud integration is available with AWS,
Microsoft Azure, Google Cloud Platform and SAP Cloud Platform as well as other public or
private cloud services. Moreover, the deviceWISE Enterprise Gateway technology offers
direct data mapping into existing ERP and analytics systems from vendors such as IBM, SAP,
Oracle and Microsoft. Users are able to configure the Asset Gateways and Enterprise
Gateways via the deviceWISE Workbench tool which provides full development capabilities
and the ability to administer and debug an individual device in the field. The Workbench tool

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allows users to build, manage and monitor triggers, configure connections to devices and
sensors as well as configure network settings. Other key features include edge computing,
security management, alert notifications, reporting tools and custom dashboards. A modified
version of the deviceWISE for Factory platform – secureWISE for Factory – is marketed
specifically to the semiconductor industry.

Business strategy
Telit’s strategy is focused on growth and global expansion in the industrial M2M/IoT segment.
The products are available in over 80 countries worldwide from 36 sales offices and 78
distributors. The company has a broad customer base of more than 7,000 direct and indirect
customers including OEMs, solution providers and system integrators active across the entire
landscape of vertical segments in the M2M industry. Examples of customers include
Caterpillar, Ford Motor Company, BMW, Honda Motor Company, John Deere, Mitsubishi
Motors, Magneti Marelli, Danfoss, Sercom, Siemens, Tennat, Landis+Gyr, ResMed, Abbot
Laboratories, Acclaim Energy, Zucchetti and Glaxo Smith Kline. EMEA and the Americas
remain as Telit’s main markets, accounting for 39 percent and 43 percent of the total
revenues respectively in 2017, while Asia-Pacific contributed with 18 percent. The company
has successfully established itself as one of the top three global suppliers of wireless IoT
modules. Although Telit aims to extend the focus of its portfolio to also include software and
services over time, wireless modules will remain the main revenue generating product
category for years to come. During 2017, the company shipped an estimated 24.0 million
cellular IoT modules.

The company partners with a wide range of M2M terminal and system vendors as part of its
deviceWISE Ready program to promote interoperability between third-party devices and the
Telit IoT Platform. Partners include for example Cradlepoint, Danlaw, Dell, DMI, GateTel, Intel,
SAP, Libelium, MultiTech Systems, Option, Red Lion, SAP, Systech and US Robotics.
Furthermore, Telit entered in August 2016 a collaboration agreement with Tech Mahindra to
offer end-to-end IoT solutions, including IoT solution consulting, development and
operations. Telit’s strategy for its IoT platform and services business is focused on the
company’s existing sales channels and relationships to system integrators, distributors and
VARs. The company’s IoT platform has been deployed in industries including semiconductor

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fabrication, automotive manufacturing and smart metering. Moreover, Telit has a strategic
partnership with Wind River that leverages Telit’s foundational IoT technology in its Helix
Device Cloud.

5.2.14 Uptake
Founded in 2014, Uptake is a start-up company that specialises in IoT software for industrial
companies. Headquartered in Chicago, the company has a workforce of around 750
employees and additional offices in San Francisco, Toronto and Dubai. In November 2017,
Uptake completed a US$ 117 million Series D round of funding at a US$ 2.3 billion valuation.
Investors include the venture capital firms Revolution, GreatPoint Ventures and Baillie Gifford.
In April 2018, the company acquired US-based Asset Performance Technologies, adding a
comprehensive library of failure modes of equipment used in power generation,
petrochemical, oil and gas, steel and other industries. Uptake’s value proposition is based on
providing a platform of tools for data management and analytics, as well as industry
solutions. The company targets a wide range of industries including energy, manufacturing,
oil and gas, agriculture and aviation. Customers include Caterpillar, Berkshire Hathaway
Energy, MidAmerican Energy and Magnetrol.

5.2.15 Wind River

Wind River was founded in 1981 and specialises in embedded software. Its flagship product
VxWorks is one of the world’s most widely deployed real-time operating system (RTOS). The
company is part of Intel’s Internet of Things Group that generated annual revenues of US$ 3.2
billion in 2017, up 20 percent year-on-year. In April 2018, Wind River announced that it will be
acquired by the private equity firm TPG, following nearly a decade of ownership by Intel. The
acquisition will establish Wind River as a leading independent software provider with focus on
IoT, intelligent devices and edge computing. Wind River offers a comprehensive portfolio of
solutions for IoT applications that spans from the managed intelligent devices at the edge, to
the gateway, into the network infrastructure, and up into the cloud. Headquartered in
California, the company has in total around 1,800 employees and offices in over 20 countries
worldwide.

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Product portfolio
Wind River Helix is the company’s portfolio of software, development tools and services that
addresses organisations’ challenges of building, managing and securing devices and data in
their IoT infrastructures. The company’s operating systems include the RTOS VxWorks and
the commercial open source platform Wind River Linux. The company introduced a major
update of VxWorks in 2014, featuring a new modular design to address the market
opportunities created by the IoT. In the same year Wind River launched the device
management platform Helix Device Cloud. The latest version of the Helix Device Cloud was
released in October 2017. The platform features tools for managing IoT devices and industrial
equipment during the entire lifecycle. Key device management capabilities include remote
onboarding, remote monitoring, over-the-air firmware updates, alerts, rules, update
campaigns and data management. The open source Device Cloud agent streamlines the
management of a large number of intelligent gateways and devices running different
operating systems. The company offers a set of APIs to simplify contextualisation of device
data and applications. Additionally, the Helix Device Cloud enables developers to implement
security measures across each phase of the IoT device lifecycle via built-in data encryption
and device authentication technologies.

Business strategy
Wind River is a leading provider of embedded software solutions. The company works closely
with a broad range of device makers and its RTOS VxWorks can be found in more than 2
billion products, across all major industrial sectors. Examples of customers include ABB,
Airbus, Boeing, Delphi, BMW, Hitachi, Rockwell Automation and Siemens. In the IoT domain,
Wind River mainly focuses on IIoT implementations, addressing the convergence between
operational technology and information technology. The company has a strategic partnership
with Telit and leverages its foundational IoT technology in its Helix Device Cloud. Wind River
offers flexible deployment options with support for public, private and hybrid cloud
deployments, as well as expanded regional public cloud hosting options. The Helix Cloud
business unit is responsible for developing and providing the Helix Device Cloud product and
targets companies in the manufacturing, energy, medical and transport market verticals.
Notably, the company holds a strong position in the chipset manufacturing segment, where
several large manufacturers have deployed the Helix Device Cloud for device management.
In February 2018, Wind River entered into a partnership with FogHorn Systems, a provider of

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edge analytics solutions, to help organisations manage the large amount of data generated
by edge devices. Additional partners include cloud service providers, system integrators and
independent software vendors.

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INDUSTRIAL AUTOMATION AND WIRELESS IOT GLOSSARY

Appendix

Glossary

2G Second generation cellular mobile systems, narrow band digital

radio technology.

3G Third generation cellular mobile systems, wideband digital radio

technologies.

4G Generic term for fourth generation mobile communications

technologies such as LTE and WiMAX.

802.11x A set of standards for wireless local area networks (WLANs).

AEP Application Enablement Platform.

API Application Programming Interface.

ARPU Average revenue per user (monthly).

Bluetooth Open industry standard for short-range transmission of data.

BSS Business Support Systems.

CDMA Code Division Multiple Access.

CNC Computer Numerical Control.

DCS Distributed Control System.

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ERP Enterprise Resource Planning.

GPRS General Packet Radio Service.

GPS Global Positioning System.

GSM Global System for Mobile communications.

HMI Human Machine Interface.

HSPA High Speed Packet Access.

IIoT Industrial Internet of Things.

IoT Internet of Things.

ISA100 Multifunctional wireless standard for industrial networks.

LAN Local Area Network.

LPWAN Low Power Wide Area Network.

LTE Long Term Evolution.

LTE-M Enhancements to the LTE standard for Machine-Type

Communications (MTC).

M2M Machine to Machine.

MES Manufacturing Execution System.

MRP Material Resource Planning.

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NB-IoT Narrow Band Internet of Things, enhancement to the LTE standard.

OEM Original Equipment Manufacturer.

OS Operating System.

OSS Operations Support Systems.

OT Operational Technology.

PAC Programmable Automation Controller.

PLC Programmable Logic Controller.

PLM Product Life Management.

RFID Radio-Frequency Identification.

RoW Rest Of World.

RTU Remote Terminal Unit.

SaaS Software-as-a-Service.

SCADA Supervisory Control And Data Acquisition.

SMS Short Messaging Service.

UHF Ultra High Frequency (300 MHz–3 GHz).

VAR Value-Added Reseller.

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VHF Very High Frequency (30 MHz–300 MHz).

VPN Virtual Private Network.

WCDMA Wideband Code Division Multiple Access.

Wi-Fi Popular term for a high-frequency wireless local area network based
on the 802.11 standards.

WirelessHART Wireless Highway Addressable Remote Transducer protocol.

WLAN Wireless Local Area Network.

WPAN Wireless Personal Area Network.

WWAN Wireless Wide Area Network.

ZigBee Open global standard for low-power wireless networks operating on

the 2.4 GHz and 915 MHz ISM frequency bands.

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