Over the last couple of months we have talked about the need to think about your IT model in a new way in order to thrive in the Internet of Everything (IoE).
As we know, the Internet of Everything—the intelligent connection of people, processes, data and things—has exploded in recent months. Alongside that growth, the pace of change across business and technology is occurring faster than ever and IT must innovate at a speed and scale to match. In order to capture the $19 trillion in IoE economic value, IT requires a new model.
This new model is Fast IT. Fast IT transforms and simplifies IT operations. It addresses the requirements IT needs to align to today’s business changes and organizational requirements.
In the IoE era, every company, no matter how venerable its brick-and-mortar roots, must think of itself as a technology company — creating digital capabilities that transform customer experiences, foster new revenue streams, spur productivity gains, or speed execution. Fast IT can drive this transformation.
Recently, Cisco undertook a multipronged research effort. We engaged Global Market Insite (GMI), a division of Lightspeed Research, to conduct a comprehensive global survey on the impacts of IoE on the IT function, and the extent to which Fast IT capabilities have been addressed from both a strategic and an architectural standpoint.
This soon-to-be-released research, the results of a comprehensive survey of more than 1,400 senior IT decision-makers across multiple vertical industries, provides insight into how IT can more successfully prepare for – and capitalize on – the Internet of Everything (IoE).
If cities would set aside dedicated lanes on highways or exclusively autonomous sectors in cities, autonomous vehicles could probably become reality as early as 2015 to 2019 on dedicated highway lanes and 2020-2024 in dedicated city sectors. Mixing with and managing the human errors of drivers in conventional vehicles will move the time horizon for fully autonomous vehicles out to 2018 to 2022 on mixed highway lanes and post 2025 in mixed urban driving sectors.
Today, technology is assisting drivers in preventing crashes (e.g., line keeping assist) and is allowing drivers to delegate driving to the “autopilot” under certain circumstances (e.g., adaptive cruise control). It is available in many premium models and also becoming an option in other vehicle categories for all who are willing to pay a premium for a safer ride. Cruise, a startup just announced plans to launch a $10,000 autonomous aftermarket kit for newer Audi cars early 2015. While the call is still out whether upgrading conventional vehicles to become autonomous is a viable strategy, it is a good example for how quickly the technology is evolving.
Technology companies and automakers have fully autonomous vehicles that have driven hundreds of thousands of miles on our roads to date. The time when we can buy and ride in a fully autonomous vehicle will not only depend on the autonomous vehicle technology the industry is maturing at rapid pace, but even more on the driving space we allow such vehicles to drive in. The options are best described in a four quadrant grid: One axis differentiates highway and city driving, the other axis distinguishes exclusive or non-exclusive driving space, meaning whether autonomous vehicles operate on dedicated lanes or city sectors or have to mix and cope with the mistakes of conventional drivers.
An investment in driverless vehicles will likely break even within one to six years, depending on the readiness of the auto insurance industry to adapt rates to the lower risks of autonomous vehicles and on owners’ willingness to share autonomous vehicles.
The fixed ownership cost of the average U.S. passenger vehicle is approximately $8,700 per year:
$4,300 depreciation, financing
$1,900 license, parking, warranty, etc.
$1,500 crash related cost born by the owner
$1,000 auto insurance
Human error accounts for over 90% of crashes. Assuming autonomous vehicles can eliminate 80% of this risk, the average vehicle owner would save approximately $1,800 (80% x 90% x $2,500) each year.
Conventional vehicles are used less than 5% of their usable time. The convenience of being able to call an autonomous vehicle when it is needed and easily release it for others to use when it is not needed is likely to make autonomous car sharing a much more convenient and cost-efficient mode of transportation for many. Assuming the remaining ownership cost ($6,900) can be shared by 3 users, this would equate to additional savings of $4,600 per user.
For the purpose of this “back of the envelope calculation”, let’s assume that structural design savings and the incremental autonomous cost are a wash. Virtually crash-less autonomous vehicles would require less structural and other safety features (e.g., fenders, airbags) built into vehicles, thus reducing cost and weight.
According to a recent Morgan Stanley study, driverless technology is estimated to initially add about $10,000 to the cost of a vehicle (less than the cost of a battery pack for an average electric vehicle). At the above savings rates, the investment in an autonomous vehicle would pay back in year six at $1,800 crash risk related savings, and in year two at $6,400 savings including the sharing option.
With mass market adoption, the autonomous upgrade cost is expected to go down to about $5,000 per vehicle. At this price point, the investment in an autonomous vehicle would pay back in year three at $1,800 crash risk related savings, and in less than a year at $6,400 savings including the sharing option.
The HAVEX worm is making the rounds again. As Cisco first reported back in September 2013, HAVEX specifically targets supervisory control and data acquisition (SCADA), industrial control system (ICS), and other operational technology (OT) environments. In the case of HAVEX, the energy industry, and specifically power plants based in Europe, seems to be the primary target. See Cisco’s security blog post for technical details on this latest variant.
When I discuss security with those managing SCADA, ICS and other OT environments, I almost always get the feedback that cybersecurity isn’t required, because their systems are physically separated from the open Internet. This practice, referred to in ICS circles as the “airgap”, is the way ICS networks have been protected since the beginning of time; and truth be told, it’s been tremendously effective for decades. The problem is, the reality of the airgap began to disappear several years ago, and today is really just a myth.
Today, networks of all types are more connected than ever before. Gone are the days where only information technology (IT) networks are connected, completely separated from OT networks. OT networks are no longer islands unto themselves, cut off from the outside world. Technology trends such as the Internet of Things (IoT) have changed all of that. To gain business efficiencies and streamline operations, today’s manufacturing plants, field area networks, and other OT environments are connected to the outside world via wired and wireless communications – in multiple places throughout the system! As a result, these industrial environments are every bit as open to hackers and other cyber threats as their IT counterparts. The main difference, of course, is that most organizations have relatively weak cybersecurity controls in these environments because of the continued belief that an airgap segregates them from the outside world, thereby insulating them from cyber attacks. This naivety makes OT environments an easier target.
The authors of HAVEX certainly understand that OT environments are connected, since the method of transmission is via a downloadable Trojan installed on the websites of several ICS/SCADA manufacturers. What’s considered a very old trick in the IT world is still relatively new to those in OT.
It’s absolutely essential that organizations with ICS environments fully understand and embrace the fact that IT and OT are simply different environments within a single extended network. As such, cybersecurity needs to be implemented across both to produce a comprehensive security solution for the entire extended network. The most important way to securely embrace IoT is for IT and OT to work together as a team. By each relinquishing just a bit of control, IT can retain centralized control over the extended network – but with differentiated policies that recognize the specialized needs of OT environments.
We’ll never completely bulletproof our systems, but with comprehensive security solutions applied across the extended network that provide protection before, during, and after an attack, organizations can protect themselves from most of what’s out there. A significant step in the right direction is to understand that the airgap is gone forever; it’s time to protect our OT environments every bit as much as we protect our IT environments.
Recently, the second of a two-part Manufacturing.net webcast series on ‘The Internet of Things ’ (IoT) wrapped with a deep dive on the very real business advantages and outcomes that are enabled when IoT is fully applied to Manufacturing operations. One of the speakers, David Gutshall, Infrastructure Design Manager at Harley-Davidson Motor Company, highlighted many advantages he’s experienced with deployments of the Converged Plant-wide Ethernet solution architecture from Cisco and Rockwell Automation. In the webcast, David talked about “greater manufacturing flexibility across the supply chain, where … we can collate data across the factory (and enterprise) … and have experienced a substantial reduction in downtime.” He described that with an IP-enabled Connected Factory, “what used to take hours or days to triage and troubleshoot problems now takes seconds.” Expanding on the topic, David said “when we bring a new machine online, it essentially works with the network out-of-the-box,” yielding greater flexibility and significantly reducing new model NPI (New Product Introduction) cycles and time to market.
Similar companies, like General Motors, have leveraged this industrial automation and controls system (IACS) architecture, which GM calls ‘Plant Floor Control Network’ (PFCN), to reduce downtime by as much as 75% and to drive out hundreds of $millions in plant engineering, operations and maintenance costs associated with factory expansions and modernizations. Both GM and Harley identify one of the biggest advantagesof a standardized yet flexible factory automation infrastructure is the acceleration of NPI offerings and advancement into new markets. Over the past decade, GM with partners has been able to gain a leading share of passenger vehicles produced in China, Brazil and other emerging markets. And as Harley rolls out their recently announced LiveWire electric motorcycle, I suspect that an integral part of their strategy includes the American manufacturing renaissance vision for a dynamic, fun, flexible factory of the future. Take a look at this inspirational video from Harley describing the modernization and transformation of their existing York Manufacturing Facility:
Innovations in mobility have made it possible for us all to connect from pretty much anywhere in the world, turning wherever we are in to our office. And mobile connections show no signs of slowing. By the end of 2014, the number of mobile-connected devices will exceed the number of people on Earth!
As with any technology, mobility is constantly changing, having to meet the demands of an increasingly mobile workforce that desires to conduct “business as usual” from anywhere. And while companies have realized the importance of investing in mobility solutions, critical questions remain that must be answered for them to determine what needs to happen next to remain competitive and maximize their mobility efforts:
How has mobility changed your business?
What do you need to impact your future business initiatives?
How is mobility influencing behavior among workers and customers?
What’s got you excited for the future of mobility in your organization?