In our last article on the Modern Equipment Manufacturer, we sat down with Steve Shaw, VP of Sales and Marketing at Sierra Monitor, to talk about the trends that shaped the equipment and device manufacturing industry in the previous year, and the major initiatives and customer requirements that influenced manufacturer priorities in 2019.
According to Steve, 2019 centered on a need to make devices more connected, make them smarter and more capable, and make their management and maintenance easier and more convenient.
With the new year now upon us, we also asked Steve to do some prognosticating and talk a little bit about where he sees device and equipment manufacturing going in the next year. During the second half of our discussion, we asked him to talk about what 2020 holds for the industry, and what major challenges await manufacturers in this new decade.
What we heard involved a fundamental shift towards services for companies that have traditionally only produced products, and a new threat facing equipment manufacturers that is a direct result of their desire to make their devices smarter and more connected.
Here is what he had to say:
Modern Equipment Manufacturer (MEM): What do you anticipate being the major initiatives and priorities for equipment manufacturers in 2020?
Steve Shaw: There are two significant
trends or challenges that I see facing equipment manufacturers in 2020.
First, I think that there is still a demand from customers that devices be more connected and more capable. Customers want the ability to monitor, manage and maintain their devices more conveniently and remotely. This means that more network connectivity is needed across the entire ecosystem of commercial and industrial devices that are being designed, developed and manufactured today.
This need to make devices more connected and more cloud-enabled will ultimately and intrinsically lead to what I consider the second largest trend or challenge facing equipment manufacturers – cybersecurity. The very nature of connecting their products to the public internet will create security concerns that manufacturers will need to address and that they may not be capable or prepared to handle themselves.
MEM: You said that there is still a demand to make devices more cloud-enabled and connected. However, this is a trend that has been going on for a long time. What devices have yet to be cloud connected? Why?
Steve Shaw: The cost of the sensors that generate device data continues to decrease. So does the cost of adding connectivity to devices. This means that there is a lower barrier to entry for cloud-enabling equipment and devices. Simultaneously, the demand for more data, more predictive analysis of device data and more automation in the management and monitoring of devices is increasingly widespread.
As a result, equipment
manufacturers are looking deeper into the facility and connecting more things.
In the past, manufacturers were only concerned about connecting and gathering data from the most important devices – the ones that were the largest cost centers for their users and equipment owners. A building’s energy costs are dominated by heating and cooling—and lighting, to a lesser extent—so that’s where the focus had been to start.
As you get deeper into the different elements of a building, there are many devices that didn’t make sense to connect to the internet ten years ago, like a boiler for example, because it was hard to justify the investment. But, as costs plummet, it becomes more viable to make that boiler connected. And that’s why there will continue to be more devices that are cloud-enabled in 2020.
MEM: What about service offerings? Will 2020 finally be the year that OEMs turn the corner and become service providers? What will be necessary for that to happen? Is it reasonable to expect that this year?
Steve Shaw: We haven’t seen a wholesale shift in manufacturers
embracing the service provider model just yet. But interest is building.
Manufacturers still have many steps to take and lessons to learn before they can bring services to market. Facilities still don’t have the kind of ubiquitous connectivity you would need to run devices remotely, and that could be because of a combination of the actual cost to connect devices – which we discussed – and the challenges of getting that connection to where those devices are within the facility. For example, it’s hard to get an Ethernet cable to that HVAC unit on the roof or in the basement.
But as we overcome the physical and cost limitations – and when connectivity is not a luxury but a necessity – that’s where we’re going to turn the corner. That’s probably not going to happen this year, but it’s going to happen sooner than we think.
Although the market isn’t ready for service offerings yet, there are still many new software companies building AI and data analytics solutions for, “X as a service,” offerings. To me, that is proof in the market. That’s also an opportunity for the manufacturers. They know their equipment and how it should perform better than anyone else. They’re best qualified to offer proactive maintenance, remote monitoring and other services to the equipment owner.
MEM: Will 2020 see a major commercial and industrial equipment cyberattack? What could that look like? How would it be perpetrated?
Steve Shaw: We’ve already seen industrial and commercial devices
successfully attacked by malicious actors. In 2016, Internet-connected
security cameras were compromised and used in the execution of a DDoS
attack. These things are real, and they’re already happening. And these attacks
are only going to get more sophisticated, more devastating and more frequent in
the coming years. In fact, in the future, I think we’re going to see
cybercriminals look at IoT devices as easy targets and utilize them to shut
down operations in entire buildings.
We haven’t been able to imagine the worst-case scenario yet.
Our job as providers of cloud gateways for equipment manufacturers is to make sure that the next layer of security is baked into our customers’ IoT networks from day one.
MEM: Looking even further ahead, where do you see OEMs in five years? How have the trends advanced? Changed?
Steve Shaw: What I would expect in five years is for the cost of connectivity and cloud service to come down to the point where any manufacturer who wants to have a command center running their equipment across the country – or across the world – could do so. From there, they could benchmark performance, predict failure, and proactively address customer problems and concerns all from a single pane of glass.
And I think the benefit is both to the facility manager and to the boots on the street: the contractors and the installers. I think this gives them the ability to be much more efficient and provide higher value services to their customers since they will be the ones doing the preventative maintenance on these devices.
However, if you’re an equipment manufacturer, you might be scratching your head on how to accomplish this. You may see your competitors doing this, but you may not have a team of data scientists and IoT gadget designers, so you need a partner who’s going to be able to tick all the boxes and get you to market quickly.
However, as I mentioned before, the internet isn’t getting any safer, so as manufacturers connect more of their equipment, they also need to consider how cybersecurity is built into their products moving forward. It’s our job at MSA – as a manufacturer, as a partner, as a leader in the industry – to bake more advanced security capability into our product. This means that our customers don’t have to worry about it.
For even more information on the cybersecurity threat landscape facing IIoT devices and ways in which secure gateways can help keep devices safe, click here.