E+H feels well positioned, despite CV

The Endress + Hauser press conference that reported their 2019 annual results today also reported minimal effect on output from the necessary measures taken to protect staff and ensure safe working in the face of Coronavirus.

From visits to a few Endress + Hauser locations around Basel, their factories, in marked contrast to most equivalent UK production sites, are spacious, and even historically had a large separation between work stations and production operators.  With this in-built advantage it was probably simpler to impose social distancing on the production floor.

Matthias Altendorf, in his comments on the effects of CV over the last few months, said that at peak times, over 10,000 employees were working from home. This was primarily enabled by their concept of a digital workplace, with an IT landscape based on a cloud based architecture. As standard, even without CV, employees are allowed to spend 20% of work time at home.

The major effect of the coronavirus pandemic seen so far has been a 20% drop in order intake over the last two months: this order intake has been assisted by an increase in orders via their website by 90% compared to last year’s levels.

An E+H diary of the effects of CV

Matthias Altendorf gave a comprehensive account of the effects of CV on the E+H operations.

“Ever since the first reports of the outbreak of a novel respiratory illness in January, the coronavirus has dominated our lives, professionally and privately. So you might be interested in how we are dealing with this situation and what impact the pandemic is having on our business.

We reacted early, and extensively, to the new situation. After all, we and our customers have a deeply ingrained safety and protection mindset. A task force at Group level is coordinating and communicating our measures and guidelines related to the pandemic. This team comes together each day – in a virtual environment – to discuss the situation, just like the Executive Board, which holds a daily video conference.

From the very beginning our motto was that we would rather do too much, too early, rather than too little, too late. Our goal is to protect people and our business. To do that, we are following two basic principles:

First, the health of our employees, customers and partners is our top priority. With our measures, we want to protect people from being infected by the coronavirus. And we want to do our part to prevent the pandemic from spreading further. In this respect, we also have a responsibility to society.

Second, we want to provide our customers with the best possible support. Large parts of our business concern system-relevant sectors. Important infrastructures and systems – such as water and energy supply networks, production of food or pharmaceuticals – must be kept running. We have a responsibility here as well.

After the first cases appeared outside of China, we declared a travel ban for Asia as early as January. We then continued to add measures more or less on a weekly basis. We canceled customer seminars, training programs, international conferences and trade fair events. We first banned international travel and followed this up with bans on domestic travel as well.

We introduced strict hygiene measures at our locations. We made hand sanitizers available and made sure that surfaces people come into frequent contact with are disinfected multiple times a day. We reorganized our work environments and workflows so that employees can maintain the required distances between one another. And we made sure that our employee restaurants maintain proper hygiene.

In mid-March we then required practically all office-based employees to work from home. That even included people in areas such as research and development, who rarely work from home. These measures are also designed to protect those who must continue to work at our facilities. Although there is a lot we can do remotely, manufacturing, repairing or delivering instruments is something you obviously cannot do from home.

At peak times up to 10,000 employees are working from home. Because our internal IT service provider Endress+Hauser InfoServe had already raised our IT infrastructure to a high level in years of dedicated work, everything is running smoothly. Secure and uncomplicated access to our data is possible from anywhere. This is the result of a project we launched five years ago: with the digital workplace we completely restructured our IT landscape and went from pure on-site applications to a cloud-based architecture.

The whole time we have managed to maintain the availability of materials at our plants around the world. And we’ve been able to ensure delivery logistics, despite canceled flights and restraints on shipping. However, there was nothing we could do about government-mandated temporary plant closures such as in Italy, India and South Africa. This aside, Endress+Hauser was and is maintaining its delivery capabilities.

Behind this are the tremendous efforts of our employees. These days you often hear talk of new  everyday heroes. Our heroes work in production, service and logistics. And they are working under difficult conditions in the office or from home, in small apartments, which they were essentially  unable to leave for weeks – for example our colleagues in France, Italy, Spain and Dubai – and sometimes   having to take care of children at the same time. Or they are continuing to work at the company under strict distancing and hygiene guidelines. All of them have achieved great things in recent weeks!

Despite all these challenges, we have managed to continue to provide our customers with excellent, extensive support. We are bridging the physical distances forced upon us by the coronavirus through digital and emotional proximity.

Our website endress.com serves as a high-performance platform for a wide range of transactions. With a personalized account, our customers can select the right product, configure it to their requirements and order it directly from us. Much like we are accustomed to in our private lives with online shops, our customers enjoy full transparency regarding the status of the order. This is a function that has been much in demand in recent weeks. And, of course, they can retrieve the latest documents, data and information for their instruments at any time and anywhere.

Interest from our customers in these options has grown enormously during the corona crisis. We currently have more than one million visitors to our website each month, an increase of 20 percent from 2019. Incoming orders via endress.com are running 90 percent above last year’s levels. Online business makes up more than 10 percent of the business in a dozen countries, a notable figure for our products that require such intensive consultation, and an indicator of where we are heading.

This applies to many areas. We have customer seminars and internal events in virtual space, we are successful with webinars and podcasts. We are also breaking new ground in service. With Visual Support we support customers remotely via an app. Using the camera in the customer’s smartphone or tablet, our employees can gain an insight into the situation. They can then provide precise instructions regarding what the customer has to do. We will offer this service to our customers at no charge for as long as the coronavirus is spreading.

Our colleagues at Analytik Jena are facing special challenges at the moment. As you know, our goal is to support our customers from the lab, to product and process development, all the way to the process itself. One step toward this goal was the acquisition of lab specialist Analytik Jena in 2013. Although the business is focused on industry customers, Analytic Jena has also been supplying customers in the medical industry as well as in research and scientific environments.

As the coronavirus broke out in China at the beginning of the year, our colleagues at Analytik Jena immediately jumped into action. Providing evidence of an infection requires preparing and analyzing the genetic material in the virus. Analytik Jena supplies the required equipment: dependable instruments capable of rapidly generating reliable results.

On short notice our colleagues at Analytik Jena China looked into how available coronavirus tests could be used in our instruments. They informed around 1,000 interested participants via webinars how the genetic material in the virus can be reliably detected. They also furnished several hospitals in China with the corresponding lab technology, including the emergency hospital in Wuhan that became famous because it was erected in just 10 days.

Endress+Hauser China has donated equipment during the corona crisis. Our instruments were installed in a clinic in Shanghai to ensure that it has clean water. Liquid analysis technology from    Endress+Hauser has also been deployed in Wuhan, where it is being used to monitor the wastewater treatment process.

The past weeks have shown that our Strategy 2020+, which we have been pursuing for five years, is focused on the right areas. The emphasis on our products, solutions and services and on the interaction and collaboration with our customers as well as our employees makes us more agile and creates opportunities. If we had not made such solid progress in the field of digitization in recent years, we would not have been in a position to deal with these new challenges so effectively. That’s why we will continue to pursue this path.

The same applies to our focus in the analysis area, from the lab to the process. The continuous  expansion of our sales and production networks has proven its worth, as have the large investments in innovative products. We will continue to work consistently on all of these strategic focal points.

One of these innovative products is the Micropilot FWR30, the first level sensor, which we developed specifically for the Industrial Internet of Things. The FWR30 is a radar-based sensor with 80-gigahertz technology designed for monitoring levels in plastic tanks – so-called intermediate bulk containers, or IBCs for short. These containers are often portable, or they are used at flexible installations. For this reason, refill orders are often placed only after the tank is already empty.

With the FWR30, this approach is a thing of the past. Our IIoT sensor is battery operated. It is fast and easy to commission and automatically connects to the cloud via wireless communications technology. The measurement values and the location of the container can be retrieved with a smartphone, tablet  or PC. This service is free of charge for customers who only want to monitor the fill levels. If needed, it can be expanded to a complete inventory management solution including supply chain tracking.

A lot of innovation can be found inside the new Proline Prosonic Flow G300/500. This instrument is an ultrasonic flowmeter for natural and process gas applications in the chemical or oil & gas industries.

Our developers worked on this instrument for six years. What makes the Pronsonic Flow G special is that it measures precisely and reliably even in wet gas applications. And in contrast to the differential pressure method, there is no pressure drop due to an orifice plate that wears over time and requires costly maintenance.

And that’s not all. With optional pressure and temperature sensors and software that we developed in- house, the Prosonic Flow G can calculate additional parameters and process variables such as mass and energy flow, methane content, density or viscosity. No other instrument on the market offers such versatility!

The next product fits in any pocket: the Liquiline Mobile CML18, a multiparameter handheld instrument for liquid analysis. The CML18 can be used to verify online measurement values from the process with sample measurements in the lab. The results from online and laboratory measurements often vary widely because the sensor technology, analysis process or environmental conditions differ.

This is where Liquiline Mobile now builds the bridge. We have taken Memosens, a technology proven in process applications for more than 15 years, and integrated it into a handheld instrument. All the sensor signals are converted into a robust digital signal that is not only resistant to moisture but guarantees data integrity. The Memosens technology also makes swapping out the sensor child’s play. And with our SmartBlue app, the Liquiline Mobile can also be integrated into Industry 4.0 applications.

For laboratory applications, Analytik Jena introduced the PlasmaQuant 9100 to the market. This analyzer utilizes optical emissions spectrometry with inductively coupled plasma – or ICP-OES for short – for routine chemical analyses. A unique feature of the PlasmaQuant 9100 is the high-resolution optics, which provide a high degree of sensitivity, accuracy and precision.

This instrument is designed for high throughput. It’s employed in the labs of our usual customers, such as in the food & beverage, life sciences and mining, minerals & metals industries. The PlasmaQuant 9100 analyzes sunflower oil for heavy metal impurities, tests antibiotics for contamination or determines the percentage of rare-earth elements in rock, for instance.

Product innovations such as these form the foundation of our economic success. But for us that’s not the only benchmark. With everything we do, we want to live up to our ecological and social responsibility as a company. Our goal is to further develop Endress+Hauser in all dimensions of sustainability.

When we erect new buildings, they fulfill demanding standards with respect to energy efficiency. In Canada we are even building a customer experience and process training center that will be energy autonomous. The building, in Burlington in the province of Ontario, will completely cover its energy needs from local regenerative sources and thus be CO2 neutral.

In the past year we launched the Endress+Hauser Water Challenge. With this initiative we’d like to improve access to clean water for people around the world. We kicked off the challenge last October with a charity run in Reinach. 250 employees participated as joggers or Nordic walkers, donating a small amount for each completed kilometer. The company then doubled the final tally.

The first international charity runs took place in Saudi Arabia, Mexico and Argentina. The coronavirus  has unfortunately prevented further events from being organized. But we’re happy to report that we were able to complete the initial aid project in Vietnam, where we permanently secured the  water  supply in a small village. We hope we can continue with the initiative very soon. Other aid projects have been identified in Brazil, India and Cameroon.

How will things proceed from here? The coronavirus will not disappear from our lives quickly. Hopefully, a vaccine and an effective medication will be developed in the very near future. But many months or even years could go by before that happens. Until then we have no choice but to accustom ourselves to the new normal and live with the pandemic.

In many countries we are in the process of returning some of the work-at-home employees to their offices in the company – maintaining the required distance to one another and strict hygiene measures including protective masks for when we leave our desks. Each loosening of the restrictions will require additional measures. This special situation will constantly demand new sets of behavior and novel approaches from us for an indefinite period of time, both at work and in our private lives.

We are still unable to estimate the economic impact of the coronavirus pandemic. But this crisis will no doubt leave its mark – on our customers and us. Furthermore, the coronavirus is not the only issue we are dealing with. The financial consequences of the pandemic are impacting us in an already difficult political and economic environment.

Tariff conflicts and political tensions, the structural crisis in the automotive sector and the pressure to decarbonize industry – all these things continue underneath the current crisis. The debt and low- interest problems were prevalent beforehand, and these issues will again gain momentum due to the measures governments and the central banks have implemented to shore up the economy and cushion the effects of the pandemic. It remains uncertain what the  short-, medium- and long-term   consequences will be for the global economy and our business. But there will be changes.

That can create a lot of concern. But fear and panic are not good advisers, and we cannot let ourselves be guided by them. Instead, we have to address the challenges with a cool head and a warm heart. We have to focus on responsibility and solidarity and reflect on our freedom. Because even in such a situation, we have a wide range of options at our disposal when it comes to taking action and shaping the future. And we will do everything we can to bring Endress+Hauser through this period.

As a company we are focused on safeguarding the health of people, securing jobs, doing our best to serve our customers and maintaining and developing our external network of suppliers, service providers and partners. To do that we are also prepared to accept financial losses in the short term.

Our experience from the 2008/2009 financial crisis will help us during this acute phase. Flexibility and agility are important whenever we find ourselves in a highly dynamic situation – that means moving  only as fast as we can respond to new situations as they arise and adjust the course when required. At the same time, we should not lose track of our long-term objectives. The combination of operational agility and long-term objectives is best mastered by people, our employees.

We can offset fluctuations in the workload of our production and sales centers by adjusting capacities and restructuring resources, by lowering working time accounts – even into the minus – and by making flexible use of vacation and additional company holidays. If necessary, we will also resort to working reduced hours for a while, but only after we have exhausted most of the other options at hand.

It goes without saying that all expenses will be subject to a detailed review. We will avoid expenses that under the circumstances are not necessary or at least not necessary at the moment.  Some minor   projects may be delayed. But we will carry out and complete the large investment projects as planned. We want to continue to develop our future capabilities; we want to maintain and strengthen them.

Because only when we adopt a long-term perspective can we safeguard the interests of our customers, employees and shareholders by strengthening the resilience and longevity of the company.

Endress+Hauser has always emerged from crises stronger. I’m convinced this time will be no different. Why? Because we have always performed solidly and made provisions during good times. Because we have a shareholder family behind us that is loyal to our customers and employees and takes its entrepreneurial responsibility seriously. And because we are an excellent company with enthusiastic customers, tremendous employees, an outstanding infrastructure and a unique portfolio.

But above all, we have a sustainable business model. At Endress+Hauser, everything we do is important for our customers. We can help them become even better and help them make their processes, products and production more efficient – in all aspects – so that they can increase quality, raise productivity and use fewer resources. This brings our customers forward in good times and even more so in difficult  times. And, after all, this makes the world a better place in which to live.

E+H on course for growth in 2020

Endress+Hauser has reported on their 2019 financial year, and confirms they remain on course for growth. In 2019 the Group increased net sales by almost 8 percent, to over 2.6 billion euros. The Swiss measurement and automation technology specialist created 400 new jobs worldwide. At the end of the year the company had more than 14,300 employees.

“We have grown across all fields of activity, industries and regions,” said Matthias Altendorf, CEO of the Endress+Hauser Group. The strongest impetus came from the Asian region. However Europe, the Americas, Africa and the Middle East all developed positively, but at a much slower pace. “With good product innovations, we have set a clear benchmark in the industry.”

In 2019, order entry rose faster than sales. “Endress+Hauser has started 2020 with a significantly higher order backlog than the year before,” reported Chief Financial Officer Dr Luc Schultheiss. He confirmed that in 2019 “The Group was able to maintain return on sales at the previous year’s level. We are satisfied with our profit before taxes.”

However E+H has lower growth expectations for 2020. They anticipate sales growth in the mid-single-digit percentage range, and aim to maintain profitability. “However, there are still many uncertainties,” stressed Luc Schultheiss.

E+H will present its audited 2019 financial figures on 12 May 2020, in Basel, Switzerland.

ARC report confirms ABB continuing DCS market dominance

ARC Advisory Group is one of those typically American consultancy organisations that produces reports describing technology trends and competitive analyses that are then sold to the suppliers in the industry. Undoubtedly they are also employed to produce specific reports at the request of single specific clients, but the main reports publicised for public sale are the overall market surveys. Without paying a lot of money, the general public don’t get to see these.

All the data from the reports is generalised, and as ever, subject to interpretation, so hopefully each client can find something that reinforces his optimism about his company’s place in the market. So they are essential sources of backup data for Board presentations and the like.

The ARC DCS market study

The recent ARC report on the “Distributed Control Systems Global Market 2016-2021” report provided ABB with sufficient confidence to issue a Press Release stating that the ARC had confirmed ABB to be the ‘#1 supplier of Distributed Control Systems Globally’, with a 20% market share ‘across industries’, making ABB the leader of ‘digitally enabled control and automation’. This is a continuation of the position they have held according to ARC since 1999.

Peter Terwiesch, President of the ABB Industrial Automation division echoed these findings: “With our installed base of over 70 million connected devices and 70,000 control systems, and an annual investment of $1.5 billion in research and development, ABB is leading the digital transformation of industry.”

Such reports and statistics were the bread and butter, and even the honey, for the reports written for the Industrial Automation Insider newsletter that your editor produced from 2010 to 2015. The focus for such a report would have been that with at most seven major suppliers competing for the top slot, a 20% market share would imply the dominance margin is (still) fairly slim!

The ARC report provides a competitive analysis of the market shares of leading suppliers by geographical region, and broken down into eleven major industry groups, as well as equipment type, project size and style. The ABB release specifically mentions the ABB activity as delivering sustainable progress for power, water and process industries.

The ABB Profile

More interesting in many ways were the specific project examples picked out by ABB as the prime examples of their expertise in several sectors, viz:

“ABB’s leadership in DCS stems from countless ground-breaking projects around the globe. ABB Ability System 800xA plays a key role in securing the success for Sadara, the world’s largest chemicals complex built in a single phase. The monitoring and automating of the entire production process is fully integrated with System 800xA, all coming together in 18 control systems and 260 operator work stations. The integration capabilities also helped the Garpenberg mine to become one of the world’s most cost-effective and modern mines in the world. Hoists, mill drives, ventilation, dewatering, substations, conveyors, crushers, ore storage, and maintenance, as well as document management and communications are seamlessly integrated to the automation system. Very recently Emami Cement has chosen System 800xA to automate its new production plant which will help boost infrastructure growth in India.

“ABB Ability Symphony Plus is, for example, the core solution for integrating new emission control technology at a power plant in Wisconsin, US; for protecting the UNESCO World Heritage site of Venice, Italy from high water by controlling the city’s MOSE flood barrier system; for providing the automation and electrification solution for Adani, the world’s largest solar power plant in a single location, in Kamuthi India; and for enabling the Vietnamese utility Saigon Water Corporation (SAWACO) to control and operate its infrastructure in real time, significantly reducing the amount of non-revenue water.”

Walt Boyes has expanded on this report in the December issue of the Industrial Automation INSIDER, which was published on 11 January 2018.

 

Confusion over radar level measurement

We have learned not to get too confused over suppliers using buzz-words and clever marketing names, but recently it seems the major level measurement system vendors have been introducing new and higher radar frequency systems as their latest development – and therefore, by implication, maybe the best. We were used to 6 GHz, and then 26 GHz radar frequencies, but why should we suddenly go to 80 GHz? Then, perhaps just to add a little excitement to the mix, Endress+Hauser started talking about 113 GHz!

The E+H radar line up that offers 113GHz!

This article was first featured in the journal South African Instrumentation & Control in September 2017, a journal published by Technews

Let’s dispel a few myths. Firstly, in the same way that lasers for fibre-optic communications systems made the technology available to create infrared optical systems for process gas analysers, and mobile phone technology possibly provided the hardware for the first radar level measurement systems; the 80 GHz versions are a result of measurement technology made commercially viable on the back of production investment in the distance measurement systems and parking sensors used in modern cars. So the suppliers take the available sensors and chipsets to create a new industrial product, and then have to find the best applications – in this case, the ones that might benefit from the 80 GHz.

Secondly, E+H do not have a 113 GHz system, this is a marketing statement, made to catch attention – ‘with a wink’ is their expression. They claim a ‘complete radar competence of 113 GHz’ because this is the sum of the many different frequencies their different sensors use! These are 1, 6, 26 and 80 GHz.

So why have different frequencies?

Possibly the best explanation for the applications suited to the different frequencies has been provided by the Rosemount measurement division of Emerson, in their “Engineer’s Guides”. The Emerson expertise stretches back many years, having acquired the Saab Tank Radar business. Per Skogberg, from the Gothenburg HQ in Sweden, separates the devices into low, medium and high frequency, to generalise.

Radar signals are attenuated, i.e. they lose signal strength as they pass through the air, or vapour, above the liquid. High frequencies are more severely affected than lower. When the air has moisture, steam or liquid droplets (from spray or filling) present, the attenuation is higher. Equally in solids applications, dust particles have the same effect. So low and medium frequency radar are best when there is dust or moisture present.

At lower frequencies, the wavelength is longer (30-50 mm), so surface ripples in a tank have a small effect. At higher frequencies, surface ripples and foam on the surface can be a problem. But the shorter wavelength of the high frequency units (4 mm) allows accurate operation over short ranges, for example in small tanks. The higher frequency units can use a smaller sensor construction, so the unit is easier to install. The beam angle is narrower, so it can be aimed at a smaller target area and therefore can be positioned more easily to avoid any obstructions in the tank. But even this can be a disadvantage, as the installation needs to be exactly vertical and any turbulence of the surface during filling or stirring can cause the signal to be lost temporarily, in larger tanks.

When reading these suggestions, it is important to remember that Emerson does not offer an 80 GHz unit yet, so their marketing approach would naturally bias users to look at low and medium frequency units. The suppliers of high frequency units (Vega, Krohne and E+H) would point out that in many liquid storage tanks the surface is undisturbed, since any foam, turbulence and significant ripples (>2 mm) caused by filling or liquid transfer will only cause short-term interference. Plus the small antenna size and short range performance make 80 GHz units very useful for smaller process vessels and tanks.

Radar system types

There are two types of radar systems, Guided Wave Radar (GWR) and Free Space Radar. The GWR systems use a conducting rod, or similar, extending down into the liquid, often working in a stilling chamber attached to the main process tank. These operate at low microwave frequencies, and are independent of surface turbulence and foam. They are useful for shorter range measurements and interface measurement between liquids, as well as long ranges.

The Free Space Radar systems are more widely used, since they are top-mounted with nothing in the tank: indeed, some can operate through non-conducting windows in the tank roof. Low and medium frequency radar systems generally transmit a signal pulse and measure the liquid distance by the time delay for the returned pulse. High frequency (80 GHz) systems use an FMCW radar measurement, where the frequency of the transmission is swept, and the frequency difference of the returned signal is measured to assess the distance. The FMCW technique is also used at 26 GHz in some recently launched sensors.

Radar systems can transmit their measurement data using 4-20 mA, fieldbus systems like HART, FF, Profibus PA and Modbus, or indeed via wireless systems like Bluetooth. The low and medium frequency pulsed radar systems generally operate over a two-wire interface: some of the higher frequency FMCW systems require more power and use a separate power connection.

Major applications

Simple low-cost radar level measurement sensors have been specifically designed for water industry use, in sewage sumps and flume flow measurement, by Vega and Endress+Hauser. Vega suggest that 40,000 such sensors are now in use in the water industry, mainly in Europe, and claim their total output of such sensors exceeds 550,000 units over the last 25 years.

Several of these devices use simple Bluetooth interrogation and programming from a handheld PDA: E+H demonstrates this at its facility in Maulberg, working on the stream that runs through the factory complex, as seen below.

Both E+H and Vega produce further industrial units for use on process vessels, and storage vessels for solids and liquids. Recently, E+H has extended its capability to add long-range units, such as the 80 GHz FMR62, working at up to 80 m range, with an accuracy of 1 mm. Other units work up to 125 m range, at 3 mm accuracy. These units will eventually be aimed at the large petrochemical industry storage tank markets, and specifically are working towards use for custody transfer duties.

Krohne have similarly announced a new range of its 80 GHz Optiwave sensors. Some of these can even operate at up to 700°C, for example for use on molten salt vessels in solar power plants. Lower specification units rated at up to 150°C can be used through a tank roof made of plastic, or similar materials. Suitable for small or narrow tanks, the unit can measure ranges of up to 100 m. Krohne also offers lower frequency Optiwave systems for use on solids and powders, or to electronically monitor the float position in magnetic level indicator columns attached to process vessels.

Postscript: Krohne is organising a webinar with the title “80 GHz Radar Level – Allrounder or Overrated?” to discuss their recent developments with such systems. This webinar will take place on 18^th October 2017 at 3pm London time/10am New York time.

Nidec grows its Motor business

Nidec, based in Kyoto, Japan, has expanded rapidly by acquiring many of the world’s major manufacturers of motors, large and small. Established in 1973 by the current CEO and Chairman Shigenobu Nagamori, now a 71 year old billionaire, and three colleagues, they had the objective of “becoming the World’s No. 1”, and designed small precision motors (fractional HP motors for small fans). In 1979, Nidec became the first company in the world to successfully commercialize a direct drive spindle motor for HDDs that used a brushless DC motor. Nidec subsequently established a position as the world’s biggest maker of precision motors for hard-disk drives, acquiring part of the Seagate Corporation in Thailand, and achieving a claimed market share of around 80%. Based on this success, between 1989 and 2007 Nidec invested in the acquisition of 27 companies, mainly based in Japan. Some of these were on the edge of bankruptcy, including units cast-off by Toshiba and Hitachi. Then there was the financial crisis of 2008, and at the same time the personal computer growth shifted away from disc drives to solid-state storage modules for the new top-selling computer tablets and smartphones.

As a result, Nidec started a new international acquisition strategy in 2010, when their group sales were quoted at $8Bn. One of the largest deals was a major move into the North American market with the purchase of the Commercial and Industrial Motors and Appliance Controls businesses from Emerson Electric: combined these businesses accounted for more than $0.8Bn in sales. This was, in fact, the founding business of the Emerson Electric Manufacturing Company, started by John Wesley Emerson, a Civil War Union veteran, in St Louis in 1890.

Overall, Nidec spent $2.9Bn on acquisitions between 2010 and 2016. In their 2016 FY Nidec Group annual sales were quoted as $10.5Bn, which some analysts consider shows a lack of any organic growth over the six year period, the sales figures being enhanced by the acquisitions. Employees in 2016 were approximately 100,000, apparently 20% lower than two years earlier: this lower number still only results in sales of $105,000 per employee. More recently quoted figures have mentioned 140,000 employees.

Fractional Motors Market

A different, outside view (possibly a European biased view) was provided by IMS Research (now part of IHS) in 2012. In their view, driven by the multiple acquisitions made in the fractional HP motor market by major groups like ABB, Regal Benoit (of the US) and Nidec, Ametek of the USA spent $270m to acquire Dunkermotoren of Germany, a consolidation of two of the top ten manufacturers of such motors in the World, particularly concentrating on factory automation and medical markets: Dunkermotoren had sales of $170m. According to Bryan Turnbough, market research analyst with IMS: “Since the [2008] downturn, larger companies have been finding new areas of growth through acquisitions, while smaller companies are struggling to keep up. This is changing the competitive dynamics of the industrial fractional HP motors market, which has a low growth of between 3 and 4 percent annually”. Ametek and Dunkermotoren were considered amongst the market leaders in fractional HP DC motors, particularly aimed at rotary and linear motion applications, and the combination was seen as a threat to the dominance of the top two suppliers, Maxon and Faulhaber.

Nidec markets in 2016

The Nidec 2016 FY report shows small/fractional HP motors now represent only 38% of their total sales: the rest is automotive motors 23%, appliance and commercial motor markets 24%, plus 14% in instruments, factory automation, robots and switch components. Chairman Nagamori said that Nidec had “expanded our range from small precision to supersized motors of all kinds, and from motor peripherals to application products. These components are widely used not only in IT products but also in a wide range of fields including home appliances, automobiles, office equipment, industrial equipment, and environmental energy equipment. We strive to become the world’s No.1 comprehensive motor manufacturer, based on everything that spins and moves”.

Nagamori is known for his eccentric management style, and has been voted Japan’s best CEO. He is driven by ‘ambition and ego’: plus is always obsessed by cleanliness in the factories and of the workers. To him passion matters, and enthusiasm, and tenacity: “Motivated people can do anything if they work hard”. His style has enabled him to retain the backing of the Japanese banks and investors.

The Nidec $1.2Bn acquisition

So in 2016 Nagamori negotiated his largest ever acquisition, a $1.2Bn cash deal to buy two further Emerson businesses, Control Techniques of the UK and Leroy Somer of France. Emerson had been looking at the ‘strategic alternatives’ available to them for their motors and drives, and power generation and storage businesses for over a year, and there were several parties interested in the acquisition of the motors and drives companies – from Europe, Asia and elsewhere. Both had been acquired by Emerson in the 1990s, and employed 9500 people, producing combined sales of $1.7Bn in 2016.

Control Techniques manufacture variable speed drives, servo drives and motion controllers, with AC and servo motors, targeted at industrial applications. Similarly Leroy Somer produce alternators for power generation, diesel generators (at the Kato factory in the USA), and higher power motors and drives for industrial markets. Nagamori has visited the two European HQs, to meet and greet the staff following the acquisition: his normal approach is to look for dirt and grime, walls to paint, anything that can be cleaned up – hopefully he did not find any walls to paint. Whether the staff were reassured by his exhortation to “Look at the expansion in the use of robots, electric vehicles and drones” [as new markets for their motors and drives] is not certain. Nagamori had a very successful acquisition of Sankyo Seiki, a robot company in Japan in 2003, turning in a profit of $180m inside 12 months: Nidec also sells drone motors for the Amazon fleet. They were maybe happier with his statement that Nidec “put great emphasis on research and development”.

Time will tell. His latest (scaled down) target is group sales of 2000 Billion Yen by 2020, which equates to $18Bn, or 70% up on the 2016 figures. Consolidating the Emerson acquisition he has already added 16 of the required seventy points. As the company logo says: “Nidec…. All for Dreams”.

This article was first published in my column in the ‘South African Journal of Instrumentation and Control’, June 2017 issue, published by Technews in South Africa.

E+H reports on 2016 sales

The report that follows was first published on Eoin O’Riain’s Read-Out.net website in Ireland last week. It gives the first report on Nick Denbow’s visit to the E+H European presentation in Basel, which included a tour of the Maulberg manufacturing operation for level measurement products, like the NMR81 radar based systems. Financial results for the 2016 year were discussed with the 70+ journalists and media analysts attending.

This year, Endress+Hauser expanded the presentation of their annual financial results, inviting journalists from not only Germany and Switzerland, but including others from Belgium, the Netherlands and Great Britain. In all 70+ attendees heard Klaus Endress and Matthias Altendorf say that the consolidated Group sales fell slightly between 2015 and 2016, by 0.2%, achieving Euro2.1Bn. This fall was actually only because of currency fluctuations. “Currencies created a headwind for us last year,” said Altendorf. Working from the value of sales in local currencies, sales in total actually increased by 2.1%. Whilst the Group is family owned, their annual report is published and audited to the standards expected of any other international business.

CEO Matthias Altendorf emphasised that “When compared to overall industry growth, we held our own”. E+H performed well in Europe, but sales in America declined. Africa and the Middle East experienced solid growth, but in the Asia-Pacific region business stagnated.

Within Europe, the best performances for E+H came from Ireland, Italy and Finland. The best performing sectors in all countries were food & beverage, life sciences, and water & waste water. Overall business declined in oil & gas, chemicals and primary industries like metals. The power and energy industry sectors showed good performance outside Germany, where E+H also felt the effect of weak German exports and some internal restructuring. The oil & gas decline badly affected sales in USA, UK and Norway, although the UK sales centre gave a good performance by aligning efforts with other active market sectors.

Investment continues.

E+H plans for investment and growth continue for the current year. Earlier in the week a new factory extension was opened in Reinach, where flow products are manufactured. (see Read-out Signpost – “Flowmeter output growth requires new facilities” – 5 May 2017).  The journalists were given a tour of the manufacturing facility in Maulberg (D), where a new extension to the production area is in operation, and a new NMi level measurement system calibration facility for radar based systems has just been completed. This is certified suitable for calibration of the Micropilot NMR81 radar system, working at 80GHz, which achieves a +/-0.5mm accuracy over a 30m range, for use in oil storage tanks and oil terminals. There are plans now to extend this calibration facility to allow such calibration out to 40metres, as well as to extend the factory yet further: 1912 people work at E+H Maulburg, and 5200 people in the Basel region, out of the total E+H staff of 13,000.

Analytical measurements

The biggest growth area in E+H is actually in the analytical instruments that use Raman spectroscopy to analyse liquid and gas streams on-line. The major industries now applying this technique are within the life sciences sector, where immediate analysis of input and both gaseous and liquid effluent streams enables much closer control of biochemical and fermentation processes. Indeed the 2017 issue of the E+H corporate magazine “Changes” features a major focus on new applications in the Life Sciences industries.

Other new analytical techniques are developed for monitoring water treatment processing, for example in the new Swiss plants which by law have to have a fourth stage of purification, to remove hormones, phosphorus and other drug residues. The strength of E+H here derives from their strategic decision a few years ago to invest in the process analytical area, particularly in the field of spectroscopy, acquiring Kaiser Optical, Analytik Jena and SpectraSensors. “Our analytics strategy has been validated by the market,” said Matthias Altendorf.

Bundling IIoT activities

The acquisition of German SensAction AG in early 2017 also ties in with Strategy 2020+ which was rolled out last year. The company, headquartered in Coburg (D), manufactures innovative systems for measuring concentrations in liquids. Endress+Hauser is tackling the challenges of digitalization by bundling a number of activities. A new subsidiary in Freiburg in Breisgau,(D), is working exclusively on products, solutions and services related to the Industrial Internet of Things (IIoT).

The significance of digitalization can also be seen in the growing number of patent registrations. There were 273 first filings in 2016. The intellectual property rights portfolio thus boasts more than 7,000 active patents. R&D spending rose to 7.8 percent of sales. Endress+Hauser introduced 64 new products to the market. “We are investing in innovation for our customers,” underlined the CEO.

Trends in automation.

The focus for E+H sales and their customer base is broadly on automation engineers, so it was interesting to hear Matthias Altendorf comment that the statistics for industrial output show that the Britain has now dropped out of the top 10 countries in terms of automation business activity, whereas they had held a prominent position there some years ago.

The other aspect of interest was that there are distinct differences between countries, in terms of the sex of the engineers involved in the major projects served by E+H. In Germany they are mostly male, whereas the majority of engineers in Turkey are female. In South Korea and India there are high percentages of female engineers (and engineering journalists). Also, by industry, it is noticeable that in the biochemical and life science sectors the engineers are predominantly female.

The value of Specialist Automation Suppliers

Engineers around the world are looking at how to benefit from the various solutions to the IIOT on offer: the article posted on 2 February entitled “How DCS Vendors see their IIOT future” covered the approaches being adopted by some of the major DCS vendors. This follow-up article, written for and first published in South Africa, in the Technews South African Instrumentation & Control Journal, March 2017, covers the approach of some of the smaller, specialist suppliers to their own selected sectors of the process industries.

While the major DCS suppliers try to work out how to provide revenue earning services from the growth of the IIOT, there are many specialist engineering product and systems suppliers who are investing in making their products easier for engineers to use in networks, and operate within the IIOT.

Most of these specialists are primarily focussed on the production of their valves, sensors, controllers or drives: this is their business – and they need their products to work with any interface the customer requires. Their expertise in interfacing their own products is the best available, they have an in-house systems knowledge base and capability. Most now offer this capability to their would-be product users as a service – offering a custom designed system incorporating the products. So look to these suppliers to offer the best engineering at an economic price, within their specialist field.

Typically these single-minded companies were set up by a design engineer with a good original product idea, and this has been developed and refined over the years. Often the company is family owned – and engineering / R&D investment takes precedence over profit distribution. Some such companies still exist in the USA, and a few in the UK, like JCB and Rolls Royce. Several specialist engineering product examples are found in suppliers originating from Germany, Scandinavia and middle Europe, where the culture seems to have encouraged their survival.

Beckhoff Automation

Arnold Beckhoff started his company in 1953: Beckhoff Automation now has a turnover of Euro 620 million, and employs 3350 people. The company implements open automation systems based on PC control technology, scalable from high performance Industrial PCs to mini PLCs, I/O and fieldbus components, plus drive technology and automation software. Supplying systems to many industries, Beckhoff works with and supplies components for over 15 major fieldbus systems. Motion control solutions solve single and multiple axis positioning tasks, and their servomotors offer combined power and feedback over a standard motor cable.

The Beckhoff TwinCAT 3 engineering and control automation software integrates real-time control with PLC, NC and CNC functions in a single package, and then all Beckhoff controllers are programmed using TwinCAT in accordance with IEC 61131-3. While the built-in TwinCAT condition monitoring libraries allow the on-site controllers to monitor the status of the sensors, to reduce downtime and maintenance costs, it also allows wider comparisons with connections to such cloud services as Microsoft Azure or Amazon Web Services. Other data connections are available, for example a smartphone app enables immediate local and mobile display of a machine‘s alarm and status messages.

Bürkert Fluid Control Systems

Bürkert was founded in 1946 by Christian Bürkert: it now has sales of Euro 412 million and employs over 2500 people. The product base is gas and liquid control valves, systems for measuring and controlling gases and liquids, plus sensors for monitoring such fluids, extending to complete automation solutions and fluid systems – this capability is known as their ‘Systemhaus’. While their products are now applied across many industries, their particular specialisations have been in sanitary, sterile and hygienic applications (food, beverage, biotech and pharmaceuticals), micro applications (medical, inkjet and beverage mixing/vending), and water treatment industries.

From the UK operation, Bürkert provide locally engineered solutions and systems for their pharma, food and brewery customers in particular. Locally made craft beers are a major growth area in the UK, and most start small, with no real automation. One example was Stroud Brewery, who needed to expand production by a factor of 5x, and preferably not increase their staff numbers: Bürkert designed a PLC system and intelligent control panel, which automated the temperature control of the cold and hot liquor tanks, and in the mash pan. In addition a system for controlling the run-off rate from the mash tun simply uses three separate Bürkert level sensors.

Bürkert also have developed their own ‘Device Cloud’, they call this ‘mySITE’. This collects data from Bürkert sensors around the world, using an on-site interface known as mxConnect – which can also accept data inputs from other sensors.

National Instruments

National Instruments was only started in 1976, in the USA, by Dr James Truchard and a colleague, who are still involved in the business. Now sales are $1320 million, and they have 7400 employees worldwide. Their declared Mission is to “equip scientists and engineers with systems that accelerate productivity, innovation, and discovery” – and their focus has always been to supply research establishments and engineers with open, software-centric platforms with modular, expandable hardware. This gives its own logistics problems, with 35,000 customers served annually.

It is difficult for me, as an outside observer, to relate the NI systems to an oil refinery or chemical plant application: but it comes into its own when the data handling grows in complexity – for example in pharmaceutical and biotech applications, and the sort of plants where engineers have a major input in monitoring the application. Mention cyclotron or Tokomak, CERN or the Large Hadron Collider, and NI and its LabView are embedded in their engineering control systems. All 108 collimators on the LHC are position controlled using LabView.

National Grid UK, which controls the distribution and transmission of electric power round the country, has adopted a control system based on the NI CompactRIO for the whole network. With many new power generating sources, HVDC connections, variable inputs from solar and wind farms, and the phasing out of major fossil fuelled plants, National Grid found that traditional measurement systems did not offer adequate coverage or response speed to handle these new challenges and risks. They adopted a platform, based on the CompactRIO, to provide more measurements – and also adapt with the evolving grid for generations to come. This interconnected network includes 136 systems, with 110 permanently installed in substations throughout England and Wales and 26 portable units that provide on-the-go spot coverage as needed.  The associated software systems provide their engineers with customized measurement solutions that can be upgraded in the future as new grid modernization challenges arise.

In terms of IoT developments, NI has just opened an Industrial IoT lab at the NI Austin HQ in the USA, to focus on intelligent systems that connect operational technology, information technology and the companies working on these systems. Many other companies are co-operating in this venture, like Cisco and SparkCognition, and the lab intends to foster such collaboration to improve overall interoperability. In addition NI has partnered with IBM and SparkCognition to collaborate on a condition monitoring and predictive maintenance testbed: this will use the SparkCognition cognitive analytics to proactively avoid unplanned equipment fatigue and failure of critical assets.

(c) Nick Denbow 2017

How DCS Vendors see their IIOT future

Engineers around the world are looking at how to benefit from various IIOT offerings: the survey below covering the approaches being adopted by some of the major DCS vendors was first published in South Africa, in the Technews South African Instrumentation & Control Journal, February 2017. Next month a similar article will cover the approach of some of the specialist suppliers to the process industries.

The last year saw all the major DCS and process control systems suppliers re-assess their business positioning, in the face of the turndown in capital spending as a result of the continuing recession and fall in commodity prices, led by oil. Their problem is that their main business cycles between feast and famine, as it is dependent on investment project business. Harry Forbes of ARC Advisory Group notes that automation companies will do nearly anything to protect their installed user base, because that’s where they believe future revenues will come, and come more easily than winning projects. So the way to survive the famine is to provide on-going services to these asset owners, to maintain the business relationship, and be better positioned when capital investment returns. Plus they stop competitive suppliers gaining a foothold via similar service contracts.

The current area of interest for most manufacturing plants is IIOT, and so the automation vendors have been focusing on this, plus Big Data and analytics, offered by remote ‘cloud-based’ services. The different suppliers come from different market positions, and so their approaches, while offering the same, are tailored in different ways.

Emerson Automation Solutions

Peter Zornio of Emerson expressed his very clear view of this market back in April at their Global User’s Exchange in Brussels. Emerson is involved in the IIOT: this does not include the ‘Smart Cities’ that Siemens and ABB talk about, nor Industrie 4.0, which extends from production back up into design concepts – IIOT is just ‘Manufacturing’. I believe Emerson also recognise that their process control systems cannot be a part of IIOT, they must be fenced off, with firewalls etc, to prevent cyber-security worries, and blocked from external inputs. But this does not stop them transmitting information outwards, and the whole Emerson approach of ‘Pervasive Sensors’ – their major new topic for 2015 – is now an important feed, into IIOT analytics.

The resulting offering is a cloud-based service developed in co-operation with MicroSoft, using their Azure IoT Suite of cloud services. Having worked with MicroSoft for over 20 years, their Windows 10 IoT technology will be incorporated into both the DeltaV and Ovation control systems and in data gateways to serve plant data to the Azure IoT Suite. Emerson will then provide the data analysis services that feed back information and recommendations to the relevant plant personnel, for example about plant performance or equipment maintenance. Zornio described this as a remote service similar to the ‘Monitoring Centre’ typical of the electricity generation industry, or the ‘iOps centre’ typically described in the oil and gas industry – which shows the areas of focus for the Emerson control system business.

Since then, Emerson restructured their widely separated divisions, Process Management and Industrial Automation, into one business, Emerson Automation Solutions, under newly appointed president Michael Train. This brings in some of the factory automation aspects covered by the old Industrial Automation Division, and extends the potential for the same IIOT monitoring into other areas of the manufacturing plant, such as power supplies, packaging and even discrete manufacturing. However, as part of their restructuring, Emerson has sold off significant parts of what was their Industrial Automation business, bringing in significant amounts of cash. In December the Network Power business, serving mainly data centre and telecommunications customers, was sold to Platinum Equity for $4Bn: the business will be rebranded ‘Vertiv’. Then, just this month, the deal to sell the alternators, drives and motors businesses known as Leroy-Somer (France) and Control Techniques (UK) to the Nidec Corporation was finalised: their combined annual sales were $1.7Bn, but of more relevance now to Emerson, the resulting cash payment received from Nidec is $1.2Bn. So Emerson Automation Solutions has probably earmarked part at least of that $5.2Bn of cash for some interesting, relevant acquisitions, maybe in this IIOT services area.

Rockwell Automation

Rockwell Automation has a totally different customer profile, perhaps the reverse of that described for Emerson, having great strength in factory automation, food processing and discrete process control in general. Their product portfolio is strong on motor control, actuators, energy management etc, using Ethernet based systems and controllers, which give simple interfaces to remote data systems. Steven Meyer of SAIC reported that the Rockwell South African MD Barry Elliot commented at the Electra Mining Show that the challenge is ‘to do more with the assets the organisation already owns’. He added that “In most cases the data already exists: our challenge is to implement systems that enable us to turn this into actionable information to streamline productivity and efficiency”. Just what the customer audience wanted to hear.

In November Rockwell launched their ‘FactoryTalk Analytics for Machines’ cloud application, based on – the MicroSoft Azure cloud enabled capability – yes, them again! OEMs using Rockwell/Allen Bradley controllers on their machinery can embed a FactoryTalk Cloud gateway device, to interface to this Rockwell remote analytical service.  Back at corporate level, the new Rockwell CEO is Blake Moret, and his attention is also on developing the oil and gas process systems business that was actually doing well in Rockwell, but is smaller than that of rivals like Emerson: so he has acquired Maverick Technologies, one of their system integrator customers. First this give Rockwell access to the Maverick five years of experience in supplying remote operations support as a service. Second, Walt Boyes of the Industrial Automation Insider has pointed out that Maverick has craftily recruited many otherwise retiring process experts from such companies as Dow, DuPont, ExxonMobil and other first tier companies, amassing a couple of hundred very valuable grey heads with continuous process management expertise. These are very useful for remote service support and advice, supplied even from their retirement homes!

ABB and IoTSP

Maybe ABB will have an alternative approach? ABB has a concept described as the Internet of Things, Services and People (IoTSP). They last year joined the Steering Committee of the Industrial Internet Consortium, an organisation founded by AT&T, Cisco, General Electric, IBM, and Intel in 2014. Then in September they recruited Guido Jouret as their ‘Chief Digital Officer’ – he was at one time the General Manager of the Cisco ‘Internet of Things’ division. October, however, brought them back into line with Rockwell and Emerson, when their new ABB Ability offering was announced as standardised on MicroSoft Azure, “expanding the ABB leadership in energy and the fourth industrial revolution”: ABB will take “full advantage of Azure services such as Azure IoT Suite and Cortana Intelligence Suite to capitalise on insights gathered at every level from device, to system, to enterprise, to cloud”. Although ABB say they have had many years of successful collaboration with MicroSoft, from the website it appears Ability is a new venture – looking for applications in transport infra-structure, digital power substations, fleet management services, Smart buildings etc.

Yokogawa

Yokogawa started 2016 with two acquisitions, first ‘Data-as-a-Service’ provider Industrial Evolution Inc, who provide cloud-based plant data sharing services, followed by KBC Technologies, who specialise in offering oil and petrochemical production plants the advanced software needed for process optimisation and simulation. These two were combined to create their new Industrial Knowledge Division. Executive vp Satoru Kurosu commented that “Key strategic objectives of Yokogawa’s Transformation 2017 plan are to expand the solution service business, focus on customers, and co-create new value with customers through innovative technologies and services”.

They then followed up with a strategic investment in FogHorn Systems Inc, a Silicon Valley specialist in fog computing – said to be the solution to faster processing of IIOT data present in the cloud. At the year-end, Yokogawa made a further significant investment into IIOT technology, first with a $900k investment into Bayshore Networks, who specialise in cybersecurity, and have developed the Bayshore IT/OT Gateway for use in the cloud, separating IT Departments from OT (Operational Technology) infrastructure networks. More than that, Yokogawa announced the establishment of a new Architecture Development Division in California, to pursue the development of the core technologies needed to establish the robust and flexible architecture required to improve operational efficiency and productivity when using the IIoT. Their aim is to expand this US engineering centre to over 50 staff in the next five years.

In February 2017 Yokogawa published their own release describing how these businesses will work together, and introducing another co-operation with Telit IoT Platfoms LLC, who are said to offer “offers unmatched expertise, resources, and support to make IoT on-boarding easy – reducing risk, time to market, complexity, and costs for asset tracking, remote monitoring and control, telematics, industrial automation, and predictive maintenance across many industries and vertical markets worldwide”. The most interesting aspect of their approach is that they seem to be moving towards “Plug-and-play” technology expanding to enable sensors to automatically join and adapt to plant networks, plus cloud reporting and condition monitoring, making the plant engineer’s job a lot simpler!

Obviously Yokogawa have major ambitions to develop and offer IIOT cloud data services with the best in technology and cybersecurity, all with a reduced customer detailed input.

Developments in South Africa

With so many major suppliers stepping up to offer cloud based IIOT data analysis and reporting services, what do the plant managers do? Steven Meyer’s report on the recent conference on the topic organised by the African branch of the Manufacturing Enterprise Solutions Association highlighted the recent PricewaterhouseCoopers report showing that South African companies plan to spend around R6Bn per year, until 2020, to implement the ideas of the fourth industrial revolution. In a keynote speech, local PwC director Pieter Theron made the telling comment that companies will need to find the right collaboration partners in order to improve their business efficiency through the technologies of the fourth industrial era – very few have the capability to go it alone.

These comments ring true for many large businesses all around the World: and it is clear that there are several interesting potential partners for these potential IIOT users to evaluate!

©Processingtalk.info

Yokogawa IIOT Collaboration plans

The following Yokogawa Press release announces that for future IIOT developments Yokogawa will work with Microsoft Corporation, FogHorn Systems Inc, Bayshore Networks Inc and Telit IoT Platforms LLC, to integrate their technology into an industrial IoT (IIoT) architecture for the delivery of new services. With this architecture, Yokogawa aims to transform its business model, expand its business scope, and help its customers run their businesses more efficiently.

Outline of the Tie-up

IIoT technology is now ready for practical use thanks to advances in network technology, the availability of low-cost, large-capacity data communications, and the shifting of corporate information systems to the cloud. However, the use of IIoT technology presents many technical challenges in such areas as sensing, automation, and security, and it is also costly to build such systems and develop the necessary applications. With its wide range of expertise in fields ranging from sensor technology to control logic and applications technology, Yokogawa will be able to help its customers address issues they face in their business by providing end-to-end solutions that incorporate sensing, control, and cloud-based processing.

Through this architecture, business process applications can be configured to enable the use of “plug-and-play” sensors, by providing the ability to automatically detect sensors and other instruments connected to the network, make appropriate settings enabling them to work immediately, sensing clouds with automatic provisioning for the efficient utilisation of cloud platforms to detect and connect sensors and other devices to the cloud and dynamically making the necessary changes for the exchange of data, database clouds, historian (data storage) clouds, and application development environments to work together. These four companies each possess technologies that will be key components of this IIoT architecture.

This undertaking will be led by the Yokogawa Architecture Development Division, based in California, which was set up in November 2016. Yokogawa’s IIoT architecture will integrate the cloud-based Microsoft Azure IoT Suite, FogHorn’s fog computing software, Bayshore’s layer 7 security technology which operates at the application (top) layer in the open systems OSI reference model, and Telit’s communication modules, sensor on-boarding, and device management.

Regarding this business tie-up, Tsuyoshi Abe, a Yokogawa vice president and head of the Marketing Headquarters, commented as follows:

Yokogawa has drawn up a long-term business framework and formulated a vision statement that reads, “Through ‘Process Co-Innovation,’ Yokogawa creates new value with our clients for a brighter future.” The IIoT architecture that Yokogawa will develop under this agreement will revolutionise the way in which value is delivered in sensing and plant information management. By working with these four companies, Yokogawa will rapidly establish its IIoT architecture. Under the corporate brand slogan of “Co-innovating tomorrow,” we will seek to expand partnerships such as these with leaders in each industry.

The Four Companies and their Technologies

– Microsoft Corporation

Microsoft is a worldwide leader in software, services, devices and solutions that help people and businesses realise their full potential. The cloud-based Microsoft Azure IoT Suite platform, which provides businesses with globally scalable, preconfigured IoT solutions, will enable Yokogawa to connect their devices, analyse previously-untapped data, and integrate business systems. The Azure IoT Suite provides the functions required for the construction and utilization of Yokogawa’s IIoT architecture.

– FogHorn Systems Inc

FogHorn Systems is a Silicon Valley-based startup that has been deeply involved in developing core software for fog computing and owns advanced technology in this field. Yokogawa invested in the company in July 2016. Fog computing is an architectural concept designed to avoid communication congestion by establishing a “fog” distributed computing layer between the cloud and devices in the field. Fog computing eliminates communication delays and fluctuations by locating the processing of certain data near the field devices and sending only essential information to the cloud. This technology is expected to lead to a number of new IoT applications.

– Bayshore Networks Inc

Founded in 2012 and headquartered in the Washington D.C. metropolitan area, Bayshore develops industrial cybersecurity solutions offering visibility, control, and protection for operational technology infrastructure and applications. The firm has a number of strategic partners in the IT sector and has gained a reputation for its expertise in IIoT cybersecurity. Yokogawa invested in this company in November 2016.

– Telit IoT Platforms LLC

Telit is a leading enabler of end-to-end IoT solutions. The company offers the industry’s broadest portfolio of integrated IoT products and services, including cellular communication modules, IoT connectivity plans, and IoT platform services. As a pure-play IoT company for over 15 years, Telit offers unmatched expertise, resources, and support to make IoT onboarding easy – reducing risk, time to market, complexity, and costs for asset tracking, remote monitoring and control, telematics, industrial automation, and predictive maintenance across many industries and vertical markets worldwide.

For Editorial comment, see the next article about DCS vendors and their IIOT plans….

Yokogawa invests in IIOT cybersecurity

Yokogawa has made some significant investments in the resources needed to develop future techniques for IIOT cybersecurity, first with a new engineering centre to be established in California, and second, by investing US$900,000 into Bayshore Networks, as a partner in a current round of venture capital funding.

New IIOT Division

The new Yokogawa Architecture Development Division in California will pursue the development of the core technologies needed to establish the robust and flexible architecture required to improve operational efficiency and productivity when using the IIoT. The new division will function as a unit of the Yokogawa Marketing Headquarters Business Development Centre, and will keep up with the new technologies being developed every day in the IIoT sector – as well as facilitate close co-ordination with partner companies. The West Coast of the USA is therefore the correct location for this work. The division will be staffed by engineers from Yokogawa who have an extensive knowledge of Yokogawa systems and services, and locally recruited engineers who are conversant in a range of IT fields. The first employees of the division have been located at the local engineering office of a partner company since November 2016, but their own offices are scheduled to open in April 2017. Subsequently, the division will add functions for planning services that use the IIoT and cloud computing, and it is expected that the number of staff will be increased to around 50 over the next five years.

Investment in Bayshore

A parallel press release from Yokogawa explains that there has also been a $900k strategic equity investment into Bayshore Networks, a company established in 2012 that has gained rapid recognition for its expertise in cybersecurity.

Mike Dager, CEO of Bayshore, commented “Yokogawa shares our vision for a secure industrial internet of things enabling new applications that will increase safety, optimize processes, and drive efficiencies. We are proud and excited to partner with such a renowned global leader in industrial controls.”

This Yokogawa investment is part of the recent US$6.6M Series A funding for Bayshore, arranged by Trident Capital Cybersecurity, and its existing angel investors.

Trident Capital

Trident Capital Cybersecurity is a venture capital firm that invests in early-stage companies leveraging emerging technologies in cybersecurity. The firm is a spinout of (or maybe the successor to) Trident Capital, which in 1998 became one of the pioneers of cybersecurity venture capital investing. Renowned as the venture capital firm with the most valuable network of cybersecurity relationships, Trident Capital Cybersecurity also relies on input from a 40–person Cybersecurity Advisory Council, consisting of industry CEOs, customers and former top-level government leaders.

“We led the Series A Investment because Bayshore has been recognized as an innovator and early leader in an emerging cybersecurity segment that is largely untapped to date,” said J. Alberto Yépez, managing director of Trident Capital Cybersecurity. “We are honoured to have Yokogawa join us in supporting the development of the cutting-edge Bayshore technology and business.”

The Trident Capital Cybersecurity website claims 28 cybersecurity investments and 16 successful exits. These have included the Solera acquisition by BlueCoat in 2013, the Qualys IPO in 2012, the acquisition of Accertify by American Express in 2010, the Sygate acquisition by Symantec in 2006 and the Signio acquisition by VeriSign in 2000.

The Bayshore technology

The Bayshore cloud-based software, called the Bayshore IT/OT Gateway, provides IT departments with visibility into OT (Operational Technology) infrastructure, networks, applications, machines and workers.  These OT networks are undergoing transformation and require services traditionally available for IT networks, such as secure remote access and analytics. Bayshore provides immediate value by preventing OT process disruptions and enhancing operational efficiency and business continuity.   The software is distinguished by extremely granular inspection and filtering of network flows – all the way down to machine sensor values – and the ability to provide security enforcement and application segmentation and isolation via flexible, rapidly deployed policies.  The Bayshore policy engine is capable of supporting common industrial protocols and quickly adapting to new and proprietary protocols.

These capabilities are built from the ground up for Industrial Internet and provide Bayshore customers with future-proof, cloud-based solutions that are complementary to legacy hardware-based industrial firewalls. Designed for IT perimeter security, firewalls look for IP addresses and ports, which means they block attacks according to standard Internet parameters.  Because industrial cyber-attacks are typically based on granular machine instructions that alter sensor values, the unique Bayshore technology is well positioned to detect industrial attacks that are often overlooked by other security technologies.

Bayshore has strategic alliances with leading technology companies including AT&T, BAE Systems, Cisco Systems, and VMware. It is currently based in New York, but intends to relocate the HQ to Bethesda, Maryland. No engineering base is quoted as existing in California.

2017 Business plan comes together

Earlier, Yokogawa had announced the completion of the acquisition of Soteica Visual Mesa (SVM), the leading energy management technology provider, which will be integrated into KBC Advanced Technologies (acquired in April 2016) alongside “Data as a Service” (DaaS) provider Industrial Knowledge (acquired December 2015). Satoru Kurosu, executive vice president and head of Yokogawa’s Solutions Service Business Headquarters, commented that these moves delivered on a number of the key objectives of the Yokogawa Transformation 2017 mid-term business plan: “Key strategic objectives of Yokogawa’s Transformation 2017 plan are to expand the solution service business, focus on customers, and co-create new value with customers through innovative technologies and services.”

(c) ProcessingTalk