Navigating the Digital Transformation

NavigatingtheDigitalTransformation

KevinSeePh.D.

ResearchDirector

DigitalTransformationisamatterofsurvival

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Reference:nightowltrader.blogspot.com,ClevelandPlainDealer,http://www.plasticsnews.com/,www.nytimes.com,www.gizmodo.com

Released poorly received DC-20, while rolling out a new film line

“Kodak has identified several untapped markets for CD-R, including Internet archiving, in which they will be used to download, store and archive massive content from the World Wide Web, said Larry Zimmer, worldwide general manager, CD/DVD products”

'By 2008, Kodak will be the digital company I came here to run'’ - Kodak CEO Antonio Perez, Investor meeting Sept, 2005

Digitalthreatenstotransformeveryconceivablearena

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Past Future

Security

Transactions

Interfaces

Decision-making

Mobility

Cybersecurity IoTSecurity

Centralizedrepository Blockchain

Buttons VoiceandGesture

Spreadsheets AI

Drivers Autonomy

Factories

Dumb Smart

Source:LuxResearch

Arena

Ecosystems

People Robots

FouractionsfortheDigitalTransformation

  1.Knowyourtoolbox

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DARPAcallsforIoTsecurity

“Thecurrentandprojectedwidespreaduseof[IoTDevices]requirestheexplorationanddevelopmentofnewcybersecuritycapabilitiesthatareconducivetothesedevices’limitations…thegoaloftheLeveragingtheAnalogDomainforSecurity(LADS)programistodevelopnewcybersecuritycapabilitiesbyexploringtheintersectionoftheanaloganddigitaldomains.”

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--LeveragingtheAnalogDomainforSecurity(LADS)Program,DARPA,September2015

IoTSecurity

PFPCybersecurityPhysics-basedapproachforcyberthreatdetection

  Technologyanddifferentiators:

  Physics-basedapproachtodetectingcyberthreatsbyanalyzingtheelectricalpatternsofprocessors

  Usescurrentandinterferencesensorstobuildaprofileofaprocessor'stypicalelectricalbehavior,thenusesmachinelearningtoidentifyanomaliesthatmightindicateathreat

  Strategyandmarkets:

  IdealforIoTdevicesthatcan'tsupportmodernsecuritysoftwareorarelimitedbymemory/computeconstraints

  Workswithchipmakerstoembedsolutiondirectlyintoboards(notablepartnershipswithXilinxandARM)

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Summaryinformation

Foundedin 2010

Location UnitedStates

Revenue $1.6M

LuxTake:StrongPositive

IoTSecurity

Buildingblocksofblockchain

  FirstsuccessfuldeploymentinBitcoin

  Encrypteddatabaseoneachdevice,whichallowsforlargenumbersofnodestoconvergeonasingleconsensusofthemostup-to-dateversionofthedatasetsbeingrecordedbythenetwork

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  Each“block”includesalltherecenttransactions,alongwith“proofofwork”

  Createsaprohibitivelyhighcosttoattempttorewriteoraltertransactionhistory

 Numerousdevelopersbuildingblockchainsolutionsinotherindustries

Blockchain

FilamentSensordeviceswithmeshnetworkingcapabilities

  Technologyanddifferentiators:  Producesasmall,ruggeddevicethatincludessixsensors,916MHzandBluetoothradios,USBports,andproprietarypeer-to-peerprotocolstackbuiltonblockchain

  Decentralizedmesharchitectureallowsdevicestocommunicatedirectlywithoneanother,eliminatingtheneedtoconnecttotheInternetorcentralhub;protocolsensuredeviceIDs,encryptedmessaging,andsmartcontracts


  Workingwithadozenpilotcustomersinmanufacturing,mining,agriculture,andutilities–notablepilotforpluggabilityandsecurityofpharmamanufacturingequipmentintoSCADA

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Summaryinformation

Foundedin 2012


Revenue $200k

LuxTake:WaitandSee

Blockchain

AIforallyourneeds

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Applications Domains Methods

AI

CitrineInformaticsMaterialsdiscoveryserviceusingdataminingandmachinelearningtechniques

  Technologyanddifferentiators:  Usesmachinelearningtoanalyzematerialsdataforpatterns;canselectmaterialcandidatesbasedonperformancerequirements,estimateadditionalperformanceparametersofknownmaterials,orpredictnovelmaterialswithdesiredproperties

  Extractsdatafrompublicsourcesincludingpapers,patents;claims17millioncomposition/process/propertyrelationshipsindatabase


  Businessmodelaimstouseasmuchpubliclyusablematerialsdataaspossible,supplementwithcustomers'proprietarydata,andprovidepredictiveanalyticstoreducetimeandcostofmaterialsdesignandselection

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Summaryinformation

Foundedin 2013


Revenue $500k

LuxTake:WaitandSee

AI



  2.Establishadigitalbusinessmodel–butrecognizethechallenge

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Robotsforhire

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“AutomataTechnologiesoffersitsproductasarobot-as-a-servicemodelwithamonthlyfeerangingfrom$500to$750;theservicecomeswithanEVAunit,thechoreoGraphsoftware,andincludesmaintenanceandreplacementoftherobot;customerscanexpect4,000hoursofcontinuoususebeforeneedingtoreplaceit”

Digitalisturningtraditionalequipmentmodelsontheirhead

  HistoricallyheavyusersofSAPforoperationsandcustomers.

  Developedconnectedgascompressors,whichstreamtoSAPIoTcloud.  Experimentingwithservice/pay-per-usebusinessmodels.

  Couldsellusagedatatogaschemicalsprovidersorutilities.

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Newbusinessmodelsfromthefactory…tothekitchen

  Thecompany’ssoftwareplatformaimstointerconnecthomeownersandfoodproductsthroughouttheconsumercycle,fromshopping,tostoring,topreparing,andtoeating

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  Planstogeneraterevenuebychargingasoftware-as-a-service(SaaS)feedirectlytoconsumersinabusiness-to-consumer(B2C)model,andbychargingalicensingfeetosmartkitchenappliancemanufacturers

Evolutionofmaintenanceapproaches

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ReactiveMaintenanceFixingequipmentwhenitfails

PreventativeMaintenancePerformingroutinemaintenanceinscheduled

intervals(afteragivennumberofhoursorcycles)

PredictiveMaintenanceMonitoringequipmentandperforming

maintenancewhenthereareforwardindicatorsoffailures

Predictivemaintenancesoundsgreat–intheory

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Answerstothequestion:“Wouldyourorganizationbewillingtoallowyourequipmentproviderstomonitoryourequipmentremotely(overtheInternet)inordertoprovidepredictivemaintenanceservices?”




  3.Thinkaboutproductandprocess

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Followingthesignal–theIoTframework

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Sense

Collect

Connect

Store

Analyze

Act

Improvementsacrossthevaluechain

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PINCSolutionsReal-timelocationsystemforsupplychainintelligence

  Technologyanddifferentiators:  Providesreal-timelocationsystemwithlow-cost,off-

the-shelfcomponentsforyard/warehousemanagement

  Patentedmethodsfortriangulationwithcheapradiofrequencyidentification(RFID)components–claimsorderofmagnitudeimprovementsinlocationaccuracycomparedwithsimilarlypricedplatforms


  Focusesonenterpriseswithlargeyardsandwarehouses–mostcustomersinfoodandbeverage,automotive,andconsumergoods

  Claimsplatformincreasesinbound/outboundvelocity,improvesassetutilization,eliminatesmanualyardchecks,andreducesdemurragechargesforidletrailersby40%

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Summaryinformation

Foundedin 2004


Revenue $12M

LuxTake:Positive

CaseStudy1:PINCSolutions&DaimlerTrucks(Saltillo,MexicoManufacturingPlant)

Overview

  DaimlerusesPINC’syardmanagementsystem(YMS)toimprovevisibilityandperformanceatmanufacturingsites

  Daimlertracksassemblyprocessbeginningwhentrailerswithpartsarrivethroughwhenthetrucksareassembledandleavethesite

ConnectedAssets

  Trailers,Crates,Parts,CompletedTrucks

UseCases

  Yard/Warehouse/PlantOptimization

  EmployeeProductivity

  SupplyChainVisibility

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Followingthesignal

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Sense

Collect

Connect

Store

Analyze

Act

ValueforDaimler

  99%traileryardaccuracyanda50%reductionintrailermovetime,reducingcarrierdetentionfeesby50%.

  Manual“spotters”withwrittenreportswerereplacedbythePINCplatform.

  PINCclaimsthatDaimlerrecognizedreturnoninvestment(ROI)in9monthsattheSaltilloplant.

  AnembeddedRFIDgoesinthefinishedvehiclereport,allowingDaimlertotrackthroughinventoryandperformrootcauseanalysis.

  Daimlerhasrolledtheplatformouttoall9ofitsUSandMexicositessincethesuccessatSaltillo.

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MeshSystemsEnd-to-endsolutionforconnectingassetstothecloud

  Technologyanddifferentiators:  Integratesacompletesolution(hardware,software,

networking,hosting,back-endintegration)toconnectcommercialandindustrialassetstocloudintelligenceservice

  HeavilyfoundedonMicrosoftAzuretools–claimscompetitiveadvantageinscalabilitywithoutsacrificingperformanceorcost


  WorksdirectlywithOEMstodevelopandmanufactureproductsthatareconnectedtotheInternet,enabling

newservicesandrevenuestreams

  Hasdeployedonwindturbines,streetlights,smartgridcomponents,retailsystems,beerkegs,andcommercialcoffeemachines

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Summaryinformation

Foundedin 2005


Revenue $7.2M

LuxTake:Positive

CaseStudy2:MeshSystems&BUNN

Overview

  MeshSystemshashelpedBUNNtodeliveralineofconnectedcoffeemachineswithanonlineservicemanagementportal.

  LeveragingMicrosoftAzureMachineLearningtools,theplatformpredictsmaintenancerequirementsbeforemachinesfail.

ConnectedAssets

  CommercialCoffeeMachines

UseCases

  RemoteDiagnostics

  PredictiveMaintenance

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Followingthesignal

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Sense

Collect

Connect

Store

Analyze

Act




  3.Thinkaboutproductandprocess

  4.Bewarethehype!

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Moresensors

Increasednumberofnodes

toconnect

Improvedanalytics

Moresensors=moredata=moreprofits,right?!?

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Dataisdead–allaboardtheAIhypetrain!

  DeepBlue–Chess:1996

  Watson–Jeopardy:2011

  AlphaGo–GO:2016

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  ThechallengeisthatveryfewrealworldapplicationslookanythinglikeChess,Jeopardy,orGO.

  Inpractice,neitherGooglenorFacebookhavefoundawaytousetheir“artificialintelligence”superpowerstoimprovetheircorebusiness

  In2014,IBMputtogethera$100MfundtohelpappdevelopmentforWatson

  Everyoneisgivingawaytheiralgorithmsforfree

Bewaretheallureofthegeneralizedsolution

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“Wearebuildingaunifiedalgorithmicarchitecturetoachievehuman-levelintelligenceinvision,language,andmotorcontrol.”

“Wehaveraised~$70Minfundingandarenotconstrainedbypublication,grantapplications,orproductdevelopmentcycles.”

Strategy1:

Outlook

  SuccessintheDigitalTransformationrequiresacloselookattheproductsyourcompanyprovidesbutalsointernallyattheprocessesituses

  Innovation=growth,andinDigitalitmovesfast

  Whiletheupsideisbig–soisthedownside(seeKodak)

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LuxResearchInc.100FranklinStreet,8thFloorBoston,MA02110USAPhone:+16175025300Fax:+16175025301www.luxresearchinc.com

KevinSeePh.D.

ResearchDirector

[email protected]

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Navigating the Digital Transformation

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