IoT Impact on Industrial Automation

  • November 16, 2015
  • Feature

Bill Lydon’s Automation Perspective

By Bill Lydon, Editor

The Internet of Things (IoT) is creating a flood of new technology. As a result, the automation industry is fortunate to have an expanding range of technologies available to solve problems, improve operations, and increase productivity. Fundamentally, the IoT is the connection of uniquely identifiable electronic devices using Internet “data plumbing,” including Internet Protocol (IP), Web services, and cloud computing. The flood of new technology can be overwhelming and will inherently create a desire to try many of them. The challenge is to sort out the options and keep focused on worthy automation goals.

The first impact of IoT technology in the automation industry is the use of tablet computers, smart phones, virtualized systems, and cloud storage of historian data.

Commercial IoT applications are creating a magnitude of new low-cost connected devices due to advancements and ever decreasing costs of sensors, computing, storage and bandwidth. Over time, this will all spill into the industrial automation industry.

A great example of a commercial IoT application is the fitbit ( which incorporates processing, sensors, display, and wireless communications supported by a cloud application. A teardown analysis performed by IHS Teardown Services ( that the Fitbit Flex which retails for $99.95, costs $17.36 to make, including both materials and manufacturing costs. This includes wristband, enclosure, 32-Bit ARM Cortex-M3, 32 MHz CPU, 128KB Flash, 16KB SRAM, 24 Channel x 12-Bit analog to digital converter (ADC), Bluetooth wireless, 3 axis accelerometer, battery, and vibration motor. This is essentially a wireless SCADA system. It provides a glimpse into future industrial automation possibilities with end devices such as sensors, actuators, motors, and valves having embedded processing and communications.

An estimated 25 billion Internet connected devices will exist in the world by the end of 2015. By 2020, that number is expected to jump to 50 billion, which equates to nearly seven Internet connected devices per person. What are the driving forces behind this growth? For starters, the cost of computing power, as measured by the price per million transistors, is nearly 4,000 times lower today than it was two decades ago. Similarly, the costs of storage and Internet bandwidth have fallen dramatically. Storing one gigabyte of data now costs no more than a couple of cents. Internet bandwidth costs have fallen by 98% in just over a decade. The implication is dramatically lower industrial automation cost enabling more meaningful applications.

The industrial automation industry has always leveraged commercial technologies after they become main stream in commercial applications. Examples include PLCs displacing banks of relays, commercial PCs displacing custom build CRT consoles, Windows operating system displacing proprietary OS, digital control displacing pneumatic/analog electronic, Ethernet (802.11) displacing proprietary communications, and 802.15.4 wireless sensors. The bottom line is the application of new technology over the years has reduced the total cost of automation system ownership while increasing the value delivered.

Over the last 18 months, I have attended more than thirty events that include presentations by analysts, futurists, and vendors talking about how cloud computing, big data, and the Internet of things/everything will dramatically change industry. So far there has been little in the way of new products and services leveraging IoT technologies. This is a pattern I have seen over the years when there are major new technologies. In the first phase, vendors exclaim that their products meet the spirit of the new technology, so don’t worry about the technology being used in their products. In the second phase, disruptors (vendors from outside industry) bring out new products based on the latest technology, illustrating there is a better way. There are usually many industry arguments about what are the best solutions. Over time this all melds into the fabric of the industry.

I expect that over the next 24 months there will be many new products leveraging new technologies. The challenge users will face is sorting out which ones are worth making an investment. Every vendor has their view about the best automation system, but what is the ultimate goal of automation? Rather than getting mesmerized by new technology it is important to focus on high level goals to improve quality, uptime, efficiency, and drive out labor cost of production. The IoT is not an industry but a set of concepts and technologies to interconnect, orchestrate, and optimize across the entire value chains of industry, including suppliers, manufacturers, logistics, and users.

The big question users should consider, to be competitive in their industry, is which new IoT technology-based solutions are stable and add value. Those will be the worthwhile investments.

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