Navigant Research Blog

Ericsson Presents Its Future Vision for the Neural Grid

— February 13, 2018

At its London-based industry analyst event, Ericsson detailed areas for future growth. Its primary customer base (communications service providers [CSPs]) is looking for growth in an age of flat revenue from existing services. Ericsson believes this future growth will be made possible by the rollout of 5G communications—by 2026, Ericsson predicts 5G will contribute to a potential 36% of revenue growth for CSPs.

Ericsson cites the utilities industry as the largest opportunity for digitization. With a $101 billion addressable market likely in 2026, utilities present the second largest Internet of Things (IoT) opportunity (after manufacturing). The energy transformation is central to this growth. As the industry shifts toward a distributed future, connected asset deployments will increase exponentially. In addition, regulatory focus on advanced network flexibility requires significant improvements into a distribution utility’s visibility of loads and supply. All things being equal, the energy industry presents a juicy opportunity for CSPs.

Cellular Carriers to Prosper in Utilities with a Group of Technologies

Ericsson stated that CSPs will only succeed with a combination of technologies, and presented the reasonably compelling proposition of IoT services, supported by network-slicing-enabled 5G communications, and a concept it calls the distributed cloud.

IoT is often cited as the next big thing for CSPs. The term IoT has failed to gain traction in the utility industry primarily because the industry was comfortable with the technology long before the term was used to describe it. But this experience also presents a problem for telcos chasing profits in energy—the industry has to be convinced to switch from the proprietary, self-built, and decades old IoT communications networks to public carrier networks. The critical question is how Ericsson, and its CSP clients, can profit from the utilities industry.

Existing infrastructure may be difficult to convert to a public carrier, particularly for utilities rewarded for CAPEX on new assets. However, the sheer volume of low value assets that will become connected in the future pose many problems to utilities. Passing responsibility onto a third-party provider could well be an attractive proposition, if issues surrounding scalability, security, cost, and network availability are overcome.

5G may be the answer to this, particularly when connecting lower value, less critical assets (such as customer owned distributed energy resources (DER) or network equipment on low voltage networks). 5G offers much greater bandwidth than previous communications, while the ability to create virtual slices of the same physical network communications will help utilities overcome concerns regarding network availability for more valued assets.

Ericsson’s Distributed Cloud Approach Could Help Future Distribution Operation

Ericsson’s distributed cloud concept plays well into utilities’ current and future needs for edge computing. Ericsson has identified an opportunity for CSPs to host cloud servers in their existing real estate. CSPs’ buildings often have underutilized floorspace, yet are in central locations, directly connected to fiber rings and have good power supply. Ericsson believes its distributed cloud could compete as a low cost alternative to utility-owned, grid-edge computing that provides local data filtering and analytics.

Navigant Research has actively defined the technological needs of future transactive markets, in particular real-time visibility into DER, the calculation of hyper-local pricing of network access, the hosting of localized smart contracts for transactive energy participants, and more. The technology proposed by Ericsson has surprisingly close alignment with these requirements. Ericsson’s biggest challenge to convert an opportunity into sales is to overcome the industry’s innate conservatism and the current preference for proprietary IoT infrastructure. Regardless of how attractive the public network is, utilities still have a strong preference to build their own networks. Increasing cybersecurity concerns will only reinforce this attitude.

 

The Evolving Smart Home

— February 6, 2018

The growth of the Internet of Things is continually expanding the number of connected devices in our homes, offices, retail stores, and healthcare facilities, to name a few. According to Navigant Research’s recent report, The Smart Home, global smart home platform revenue is expected to increase from $4.2 billion in 2017 to $39.5 billion in 2026. This significant increase in revenue makes it clear the smart home is here to stay. With the smart home on the rise, what is the real added value these solutions offer to consumers?

Do Smart Solutions Provide Enough Value?

When you think of the smart home, it’s not uncommon to first picture Amazon’s Alexa-enabled voice activated devices, which allow users to play music, listen to the news, receive weather updates, and control compatible devices like a Philips Hue smart bulb all through voice. While devices like smart bulbs do provide additional benefits outside of voice control—such as dimming, color changing, and reducing energy use—how much additional value are these solutions really providing? Philips Lighting recently announced new software features that will sync Philips Hue lighting with gaming, movie, and music content. While this update does include additional features, how much value is this really adding? Is it helping to carry the smart home market forward? Is voice control, dimming, syncing with video games and movies, and energy savings enough? I would argue no. The added convenience of voice control and color-changing or dimming features through devices like smart bulbs do not provide enough of an advantage over more traditional products, like LEDs, for many consumers to justify paying the additional costs. The concept of voice control and changing the color of lighting through a mobile app are novel ideas that provide enough of a wow factor to intrigue consumers, but these features are not enough to carry the momentum of the smart home into the future.

Security as a Value Proposition for the Smart Home

Smart home vendors realize the need to provide additional value propositions for their products to appeal to the mass market and increase adoption of smart solutions. One of the top key trends expected in 2018 by Consumer Reports for the smart home industry is security. To be sure, this is not the only trend of the smart home this year; others range from additional connected devices to increased artificial intelligence to home healthcare, covered in a recent Navigant Research blog. Many of the trends anticipated for 2018 are about providing additional value to consumers for smart home solutions.

The desire for security is a universally shared need and one the smart home market can capitalize on. A recent example of this is Ring, a smart video doorbell company, acquiring Mr Beams, an LED lighting company offering indoor and outdoor LED fixtures. As a result of Ring’s first acquisition, the company launched a line of outdoor security lights. The new line includes pathway lights, step lights, and spotlights that will work jointly with Ring’s security cameras and doorbells. This acquisition not only highlights the growing significance of security as a use case driving progress in the smart home market, but also the importance of providing additional value to smart home products. Lighting integrated with security systems are a natural fit that can better highlight the value of smart home solutions for consumers than features like voice activation and remote control, and more logical partnerships will emerge. Security is just one example of a use case that can transform the smart home from providing additional convenience and a novelty features to a becoming a necessity for consumers.

 

Market Heats Up for IoT Energy Management Solutions

— February 1, 2018

Managing energy grids has grown ever more complex as the number of connecting devices has risen sharply. Millions of two-way communicating smart meters, pieces of advanced substation automation equipment, and distributed generation assets have come online in recent years, creating an intricate Internet of Things (IoT) network that can challenge even the best of grid managers. Connecting all these devices is a challenge, and is by no means trivial.

How Best to Organize and Interpret Data from Connected Energy?

The real test comes when trying to organize, make sense of, and glean valuable insights from the huge data volumes generated by these IoT devices and sensors. From there, the objective becomes turning those insights into useful and lasting applications for today and tomorrow. Solutions vendors have worked hard to meet their grid customers’ need for advanced technological tools to manage the data and applications. Lately, the vendors have developed some new offerings.

Platforms for Smart Cities and Utilities

Landis+Gyr launched its Gridstream Connect IoT platform, which is aimed at utility, smart city, and consumer applications. The platform is designed to integrate a variety of smart devices and utilize various communication protocols, including radio frequency mesh, LoRa, and cellular. The platform’s IPv6-based architecture can work independently with third-party devices and software to control street lights, solar inverters, EV charging stations, environmental sensors, and an array of distribution assets. The overarching idea is to provide utilities a way to leverage sensor technology at the grid edge for smart community and smart home applications, while also laying a foundation for future distribution strategies.

IoT Analytics

SAS and Trilliant joined forces to create a harmonized system that targets analytics for IoT. Under the agreement, SAS will contribute its event stream processing capabilities for structured and unstructured data, and provide machine learning technology for event detection, distributed energy resources optimization, and revenue protection. The SAS pieces will be matched with data from Trilliant’s real-time, multi-technology, multi-application networking platform. The two firms are already working jointly with the town of Cary, North Carolina, where they are in the middle of deploying analytics-based applications for street lighting, with the goal of improving public safety and boosting energy efficiency throughout the town.

Predictive Maintenance Software Solutions

ABB unveiled its Ability Ellipse software solution, which is designed to help utilities take a more proactive approach to predictive maintenance. The Ability Ellipse software unifies the functionality of ABB’s enterprise asset management, workforce management, and asset performance management packages. The software suite enables customers to better optimize asset utilization, and reduce equipment failures and system outages. Ability Ellipse is the latest offering in the firm’s Ability family, which embeds business processes and leverages real-time equipment data and IoT to connect predictive analytics and asset management systems to mobile workers in the field.

And More

These three examples of the latest solutions are by no means the only ones in the market. Competitors like Itron and Siemens come to mind. Yet these latest moves by the above vendors signify that current tools are inadequate to harness the growing complexity of energy grids. As the digital transformation of energy markets continues, grid managers will need these types of advanced software solutions to seize the opportunities awaiting them as they forge the emerging grid of tomorrow. Without them, the opportunities will be lost, or upstarts will move in with advanced tools and disrupt the incumbents.

 

Hidden Nuggets among the CES Glitz

— January 30, 2018

Sometimes surprises hit you slowly—hidden nuggets overlooked at first glance but demonstrating some hidden or potential value upon further reflection. Such was the case for several companies I met with at the recent CES trade show in Las Vegas. My colleague, Paige Leuschner, covered the major themes at CES in a recent blog: artificial intelligence, home healthcare, and Google everywhere. By contrast, the following firms captured my mind not for hogging the spotlight, but for showing real promise in several technology areas:

iotaBEAM

This startup aims to solve one of the difficult challenges in the Internet of Things (IoT) world—how to secure sensing devices that have limited processing power and run on batteries. Think of a sensor on a remote area of a plant that monitors heat or temperature. Most solutions protect the gateways that gather sensor data, but miss that first hop from the sensor to the gateway. The company’s patent-pending StarDust offering secures that first hop from the sensor with a patented technology that fits into tiny sensors and uses a fraction of battery power. The solution should appeal to many firms deploying IoT technologies, from utilities to manufacturers to healthcare providers.

Kerlink

This French company is no startup. It has been around since 2004, toiling away in the geeky machine to machine space. Lately, however, the company has been riding the strong interest in LoRa technology (also mentioned in a previous blog). Kerlink offers a suite of networking equipment for low power wide area networks (WANs), the type of systems that enable IoT connections at scale. The company announced a nice win during CES, a deal for an additional 800 base stations to be supplied to Proximus, a Belgian telecom company building out its own LoRaWAN IoT network. Kerlink appears poised to take advantage of several IoT use cases, including smart cities, smart buildings, smart health, advanced transportation solutions, and connected agriculture.

Royole

With a larger booth area, Royole was not nearly as subdued at CES compared to the two above. Nonetheless, it could be overlooked among the hundreds of other showy vendors. What caught my eye was Royole’s flexible display and flexible sensor technologies. Royole’s displays are as thin as 0.01 mm, which is about one-fifth the thickness of a human hair; and the company claims its displays are the thinnest in the world. The ultra-slim sensors can be embedded in furniture or the console of a car for controlling a chair or the dashboard electronics. One can imagine other applications for these sensors in an IoT-connected world, such as in clothing, walls, or medical gear. Founded in 2012, the company is poised for growth with the recent completion of its $1.7 billion production facility in Shenzhen, China.

To be sure, these three represent only a handful of the many companies not hogging the spotlight at CES. Competitors could surely surface and outmaneuver them, or the market could simply go sour on their products. The point is that CES is not only a place for the latest gadgets or products from the big brands, but also a place where the wallflowers can take the floor and show off their potential diamonds in the rough.

 

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