Hanover Fair Sees IT/OT Convergence

Overview

At the recent Hanover Fair in Germany, ARC Advisory Group analysts were encouraged by the strong presence and clear messaging of companies actively driving the convergence of IT and OT. Industrie 4.0 and IIoT have moved beyond the hype phase and are being adopted with various degrees of success by industry suppliers. More importantly, end users are implementing digitization strategies and looking to suppliers, machine builders, and integrators for modern, competitive solutions.

The Fair in Numbers

Hanover Fair 2017 featured 6,845 exhibitors and attracted over 225,000 visitors, up from 217,000 in 2015 (the last comparable year that included Motion, Drives & Automation).  A third of the visitors came from outside Germany, a new record. Moreover, the show recorded significantly increased attendance from China and partner country, Poland. The largest number of foreign visitors (9,000) came from China; followed by the Netherlands (6,200), India (5,300), and Poland (5,000, a new partner country record). Three thousand visitors came from the US, last year's partner country.

Plans for Hanover Fair 2018

Hannover Messe AG, the show’s organizer, announced that starting in 2018, the annual Industrial Automation show and the biennial Motion, Drive & Automation (MDA) show will merge. The resulting annual show will be called Integrated Automation, Motion & Drives (IAMD) to reflect the entire spectrum of industrial automation, power transmission and fluid power. The integration of and increased frequency for the MDA show is a logical step.  Now, it remains to be seen if the exhibitors will follow the new rhythm. The last comparable merger was the absorption of the Interkama process automation show into the Industrial Automation show, a failed strategy that saw the departure of many process exhibitors and a loss of process focus at the Hanover Fair.

The other big change is the return of the CeMAT show. Starting next year, the intralogistics trade fair will be staged every two years in parallel with Hanover Fair.

Clouds on the Horizon

Just a few years ago, the Cloud was not at all well-accepted in manufacturing. Since then, industry heavyweights such as Siemens and General Electric have introduced viable solutions for analytics in manufacturing.  This has proven to be the “killer app” that industry has been waiting for. For manufacturers, the Cloud comes into play when a third party is contracted to collect and remotely analyze plant floor data. This makes the Cloud part of the required infrastructure.

Now, in 2017, suppliers are rushing to create their own clouds, while veteran IT providers like Microsoft and Amazon offer their services and experience to industrial users.  This is leading to some confusion, but ARC expects a rapid cloud-consolidation once the initial hype has passed.

IT/OT Convergence

Last year’s Hanover Fair was an inflection point for the convergence of commercial information technology with automation-related operational technology.  It is exciting to see how fast industry is changing and profiting from technologies from companies like Intel, SAP, Microsoft, HP, and Cisco. This year, it was obvious that a growing number of commercial IT suppliers find Hanover to be the right show to demonstrate their solutions for industry. Many had large partner booths that allowed automation companies demonstrate how their automation solutions run on commercial IT platforms like SAP HANA or Microsoft Azure.

Microsoft

At Microsoft’s booth, industrial suppliers presented industry solutions running on the Microsoft Azure cloud platform.  These included Bosch Rexroth, Daimler Trucks, Tetra Pak, Siemens, ThyssenKrupp, and Volkswagen. While Microsoft did not design Azure specifically with industrial companies in mind, this cloud platform provides flexibility in terms of updates and platform maintenance, making it suitable for many industrial applications. Microsoft leverages its strong presence at industry trade fairs to strengthen awareness of its commitment to the plant floor.

Intel

Intel showed solutions for connected workers.  These included smart glasses and remote video, plus drone technology designed for inspections, mapping, and surveying. Furthermore, the company presented applications in cooperation with partners in areas such as cloud computing and analytics.

Cisco

Together with partners, Cisco showcased a portfolio of products, solutions, services, design guides, and industry standards leveraging the company’s Digital Network Architecture (DNA) for manufacturing. Furthermore, the company highlighted its position regarding the industry standard for Time- Sensitive Networking (TSN).

Amazon

In a cloud-shaped tent, Amazon Web Services presented global cloud-based products including compute, storage, databases, analytics, networking, mobile, developer tools, management tools, IoT, security, and enterprise applications. Many industry observers still regard Amazon as an online platform for shopping and watching films, but the company has long since expanded into new areas and is keen to make the industrial world aware of its cloud offering.

Deutsche Telekom

Emphasizing connectivity, Deutsche Telekom presented itself as a driving force for 5G and NarrowBand-IoT technology (NB-IoT), a low-power wide area network (LPWAN) radio technology standard that the company plans to offer in Germany this year. The company also presented cloud-based applications for condition monitoring.

Collaborative Robot (Cobots)

So-called “cobots,” or collaborative robots, were first seen at the fair two years ago when Kuka introduced its first product in this new category. Collaborative robots for industry are designed to work together safely with human beings in a shared environment. Cobots support human workers by assisting in tasks that mostly require human skills, such as assembly. These robots fulfil the relevant safety requirements in the EN ISO 10218 standard, allowing them to operate in close proximity to human workers.

This year we saw cobots in great numbers at the Kuka, ABB, and Bosch booths, working in perfect harmony with human partners or executing dangerous or heavy tasks.

This year, the fair presented the Hermes Award to the German company SCHUNK, a leading supplier for innovative gripping systems.  The award was given for the company’s JL1 co-act gripper, an intelligent modular gripping system for human-robot collaboration that is capable of directly interacting and communicating with its human operator.

Startups:  Incubators of the Next Big Thing?

This year, the Hanover Fair organized the first dedicated showcase for startup companies. Forty young companies got the chance to present themselves and their ideas and products to the professional audience and the established companies through matchmaking services and co-working spaces. ARC was encouraged to see the willingness of industry suppliers to nurture startups. This was a clear acknowledgement that, even with their large R&D budgets, large companies are not that well-positioned to invent the “next big thing” and that truly game-changing technology often comes from small companies that are free of the groupthink present in established suppliers.

Siemens (Next 47)

In 2016, Siemens set up a separate unit to foster disruptive ideas and accelerate the development of new technologies. Called next47, this separate unit will couple the agility, speed, and independence that characterize tech startups, with Siemens’ global customer base, experience, credibility and financial strength.

Trumpf and Axoom

Trumpf, a machine tools maker, founded a venture capital firm to finance startups. This led to the creation of Axoom, an IT service provider for manufacturing companies. Axoom addresses the growing complexity of manufacturing technologies with IIoT solutions. It will be interesting to observe how Axoom’s platform grows and establishes itself. ARC finds it remarkable that this initiative came from this conservative Swabian machine builder.

KUKA and Connyun

KUKA-backed startup, Connyun, exhibiting for the first time in Hanover, demonstrated how it uses cloud technology to network robots and machines.  Fledgling company Roboception, partly owned by KUKA, highlighted 3D perception for robot systems.

Market Outlook:  Views of the Automation Market

The following section summarizes the market outlooks of various local industry consortia.

ZVEI

According to ZVEI, (German Electrical and Electronic Manufacturers' Association), the German electronics industry had a good start in 2017 with a production growth rate of 4.4 percent compared to the same period last year. For 2017, ZVEI expects growth of 1.5 percent and an increase in revenues to €182 billion. Special mentions include political insecurities as the reason for cautious expectations, particularly in the USA, UK (Brexit), Turkey, and Italy -- four countries that represent 20 percent of the sector’s exports and 25 percent of direct investments.

For the automation sector, ZVEI saw a clear increase in business since last autumn, with 7.2 percent growth rates for the beginning of 2017. For 2017 as a whole, the association expects growth of 3 percent. The struggling process automation sector in particular saw clear improvement. After growth of 2.2 percent in 2016, ZVEI expects a growth rate of 4-6 percent this year.

VDMA

According to VDMA (German Mechanical Engineering Industry Association), after a stagnant 2016 with just 0.1 percent growth, the target market is expected to grow by 1 percent in 2017.  The association emphasized the importance of the European market for the mechanical engineering companies in Germany as they account for somewhere between 46 to 60 percent of the sector’s exports. VDMA is calling for companies to anchor Industrie 4.0 in their strategy and stressing the importance of a qualified workforce. VDMA expressed a preference for OPC UA as an open industry standard and published a “Guideline to Industrie 4.0 Communication with OPC UA.”

VDE

VDE (Association for Electrical, Electronics, and Information Technology) observed that Germany lags behind the USA and Asia in digitization. The association recommends a rapid expansion of the information and communication infrastructure and a “digital offensive” for the education system in Germany. The greatest hindrances to creating a Digital Germany, according to VDE, are cybersecurity and the lack of a qualified workforce.

BDI

BDI (Federal Association of German Industry) expects moderate growth for 2017, but this will depend on the worldwide economic scenario. For Germany, BDI expects growth of 1.5 percent and the creation of 500,000 jobs. BDI president Dieter Kempf expressed clear support for the European Union and warned against protectionism. Furthermore, he asked for political and tax support for research activities and to press ahead in the expansion of digital infrastructure, such as broadband and 5G.

Automation Suppliers:  An Overview

A short summary of major announcements and product showings by various automation suppliers follows.

ABB

ABB exhibited this year in a large open booth with minimalistic exhibits. At the heart of the presentation was ABB Ability, the company’s recently launched integrated industrial internet platform and cloud structure that includes flexible robotics, drives, virtual commissioning, and predictive maintenance solutions. ABB promises customers that they will “Know More, Do More, Do Better, Together” by turning data insights into direct action. ABB (along with most other suppliers) highlighted its cooperation with Microsoft and IBM).

B&R

The acquisition of B&R by ABB is currently in a quiet phase until the deal’s expected completion in the summer of 2017.   

Tellingly, most of B&R’s new product announcements this year were IT-related. The “Orange Box” enables machine operators to collect and analyze data from isolated machines and lines. The solution consists of a controller and B&R mapp Technology's  preconfigured software blocks (known as “mapps”). The controller collects operating data from any machine and generates and displays KPIs such as overall equipment efficiency (OEE).  These can be shared with higher-level systems via OPC UA.

Beckhoff

Beckhoff’s most remarkable announcement this year was the company’s move into process automation. Beckhoff now offers automation and process technology in one barrier-free system for Zone 0. The CPX Control Panel series and the EtherCAT terminals of the ELX series offer explosion protection and can be directly integrated into the EtherCAT IO system. Beckhoff also expanded its multi-touch panel offerings with models for Ex zone 2 and presented a hygienic, stainless steel version of the eXtended transport system aimed at the food and pharmaceutical industries.

Bosch Rexroth

Bosch Rexroth presented an assembly line that handled all production steps and requests through fitted RFID chips down to batch size one. The line featured power monitoring and energy management and supports condition monitoring and production monitoring via an OPC UA-connected app. Parent company, Robert Bosch, showcased its automatic production system, the company’s solution for collaborative robots.

Delta Electronics

At its sizeable booth, Delta presented products for energy efficiency and system integration. A live demo on integration and smart manufacturing used the company’s MES system, a robot, vision system, IIoT connectivity, and sensors to produce on-site customer orders.

Festo

The highlight of Festo’s integrated industries-themed exhibit was the Festo Motion Terminal, a standardized, pneumatic automation platform, combining the functionalities of over 50 components using apps. The intention is to develop it into a cyber-physical system through a fusion of mechanics, electronics and software, allowing for a high level of adaptability and flexibility.

General Electric

GE once again exhibited in a hall for energy exhibitors, but with a larger, more representative booth than in the past.  In addition to its strength in the US, US-based GE has a strong presence around the world.  This includes research centers in France and Germany. Despite this, the company’s marketing strategy in Europe remains modest. GE Digital is the new business unit created to concentrate the company’s digitization efforts in a single division. The company has populated this division with many experienced new-hirers in the past two years and set a goal of becoming a top-ten software company by 2020.  Predix, GE’s cloud-based platform as a service, is the centerpiece of the company’s digital offering.

Omron

Omron’s live demonstration featured a further development of the Forpheus robot that invited visitors to play table tennis.  A new introduction is the parallel robot (delta robot) Adept Quattro s650H, a four-arm robot designed for high-speed applications in packaging, manufacturing, assembly, and material handling.

Pepperl + Fuchs

P+F provided a progress update on the development of the “advanced physical layer” (APL), first introduced at the Hanover Fair in 2015. APL is designed to replace existing process fieldbus technology with an IP-based solution for the “last mile” of network to process field devices, including those in hazardous areas. The goal is to provide high-bandwidth end-to-end IP connectivity to data in field devices that are otherwise only accessible via slow and outdated process fieldbuses. According to P+F, work in the standardization committee will continue for another two years.  A specification is expected in 2019, after which chip suppliers can develop and offer the necessary APL chip sets to instrumentation providers.

Rockwell Automation

Rockwell Automation hasn’t exhibited with its own booth in Hanover for many years now, but the company was present at the booths of Microsoft, Cisco, ODVA, and Endress+Hauser, where it highlighted solutions for Smart Manufacturing and The Connected Enterprise. The company’s FactoryTalk TeamOne app, developed in cooperation with Microsoft, transforms mobile devices into smart nodes that combine workers’ knowledge and data from automation devices. Currently, this solution only works with the company’s own products.

Schneider Electric

Schneider Electric introduced EcoStruxure for Industry, a IIoT-enabled, open and interoperable system architecture for plants and machines leveraging the company’s System Platform 2017, powered by Wonderware. System Platform 2017 offers new capabilities for developers and users of the company’s system platform to accelerate open, standards-based development.  According to the company, this offers an alternative to today’s model, where multiple and disparate systems within a process often require complex and significant engineering to leverage the IIoT.

Siemens

Siemens exhibited at its traditionally massive booth under the motto: “Discover the Value of the Digital Enterprise.” Siemens’ offerings aim to connect the virtual and real production worlds through machine and plant simulations, digital twins, and data analytics.

At the heart was Siemens’ MindSphere cloud-based, open IoT operating system. The booth featured multiple demonstrations including the highlighted cube on pharma and a live food & beverage application producing customized smoothies for visitors. The company also presented solutions for additive manufacturing showing applications for products that would have been impossible with conventional production methods. 

Recommendations

For those ARC clients who have never attended a Hanover Fair (or not done so in recent years), ARC strongly recommends that you put this on your future agenda.  Whether you’re a technology supplier, technology end user, service provider, or just curious, it’s an experience not to be missed.  Just be sure to bring comfortable shoes!

 

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Keywords: Hanover Fair, IT & OT, Digitization, IIoT, Industrie 4.0, ARC Advisory Group.