The problem
The emergence of Industry 4.0 is creating new opportunities to enhance the competitiveness of manufacturing industries, especially in Europe. Factory floors are being equipped with new control architectures, smart machines, software, sensors and automation systems. A key challenge for industries is firstly to interconnect all these elements and any new ones that will be integrated in the future into intelligent manufacturing systems and secondly, to use the data generated to improve operational efficiency and generate growth through unexpected opportunities.
Whilst big players are in a stronger position to face the global competition, SMEs and mid-caps are having difficulties in incorporating industrial automation and control technologies. This is partly because existing proprietary technologies developed by large corporates are too expensive. This is a key barrier for modernising and maintaining the competitiveness of SMEs and mid-caps in the manufacturing sector that currently employs 17.8 million people in Europe.
Parallel to this, there is a clear trend towards the use of Open Source for professional environments, as companies try to avoid costly licences and look for solutions that provide the level of flexibility required in highly dynamic industrial environments. Firstly noticeable in software applications that have now become mainstream (e.g. Linux, OSx), Open Source Hardware was only introduced in 2007 (the first hardware with Open Source licence was a product called Arduino). Even if the concept of Open Source Hardware was initially developed for the purposes of training and “Do it yourself” applications, this market generated $50M in revenues in 2013 and headed towards $1Bn in 2015.
Objectives
Boot & Work Corp S.L. operating under the brand Industrial Shields, is a young SME that develops and commercialises electronic, mechanical and mechatronic solutions for the industry based on the leading Open Source Hardware, Arduino. After an initial phase validating the technology and commercialising semi-professional solutions, the company is now focusing on reaching the wider professional market of industrial automation and control.
At the moment, users of Arduino-based hardware need to be familiar with its Open Source programming software (Arduino IDE). However this programming software is not compatible with the international standard IEC61131, which incorporates ladder, the most common language used by automation engineers and system integrators. Such limitation in its programming language is hindering a major market up-take of Open Source Hardware in professional industrial environments.
The overall aim of the IOTI4.0 project is to bring into the market a technology for industrial automation and control that is based on Open Source (therefore free from proprietary fees) and that at the same time, fulfils all the requirements of professional industrial environments (complies with IEC61131 standard, including ladder as programming language).
As part of Phase 1 of the IOTI4.0 project, Boot & Work has assessed the technical, commercial and financial feasibility of introducing such technology into the market.
Conclusions
The project took place between July and December 2016. The key conclusions of the feasibility study are:
• The new hardware products and software services will meet the Industry 4.0 user needs: higher connectivity, flexibility and reliability. They will also bring significant competitive advantages as regards cost, ease of use and improvement overtime.
• The software platform will fulfill the iIEC61131 standard, including ladder as programming language
• The new products will meet the regulatory and certification requirements of the most stringent markets (EU, US, Canada, Japan…).
• B&W will have “Freedom to Operate” without risk of infringing existing patents in the state-of-the-art.
• The company’s data protection strategy will be based on an Open Source licencing model that ensures a trusted collaborative environment whilst protecting the intellectual property of both users and Boot & Work.
• The market analysis confirms that the key market trends in industrial automation and control are the wider adoption of Internet of Things in industrial environments (IIoT) and the emergence of innovative digital service models applied to industry. It also shows a higher potential for introducing new IIoT technologies in discrete automation rather than in process automation.
• The competitive analysis proves the unique value proposition of the IOTI4.0 solutions compared to three different types of competitors: large corporates, open source-based SMEs, and Chinese companies.
• The market segmentation identifies two types of priority countries: those with the largest markets (US, China, Germany…) and those with the highest growth rate (Indonesia, South Korea…).
• The main market barriers are: the perception of lack of security of open source tools, the lack of IoT standardisation, the industry preference for end-to-end packages and the high initial investment costs.
• The commercialisation strategy will be based on direct sales through e-commerce and sales through distributors (both global and local distributors).
• Marketing efforts will be put into generating and publishing interesting content to increase the users’ trust.
