Cover design: Paul McCarthy

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      Copyright © 2017 by Maciej Kranz. All rights reserved

      Published by John Wiley & Sons, Inc., Hoboken, New Jersey

      Published simultaneously in Canada

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      Foreword

      We are inundated with hype around Internet of Things (IoT) today. There is a need for a book like this – a practical guide that separates the hype from reality – to direct us to what's practical and immediately valuable about IoT and how we can start today and derive tangible benefits tomorrow.

      Today's reality is that in a world of more than 7 billion people, there are 70 million who are joining the middle class annually. This growing middle class generates $8 trillion in consumer spending, and their demands require manufacturing companies to be more productive, more sustainable, more flexible, and more cost competitive. Manufacturers must also ensure global compliance and effectively manage enterprise risks while improving the connectivity across their business enterprises.

      The Internet of Things will significantly impact and change how global companies conduct business. IoT technologies will transform the manufacturing environment; it will change more in the next 10 years than it has in the past 50 years. Cisco estimates there is $3.9 trillion of value in manufacturing alone for IoT, one of the largest sectors to benefit from this technology.

      The convergence of information technology (IT) and operations technology (OT) has brought us to an inflection point for realizing a vision that we call The Connected Enterprise. The foundation of this vision is our belief that the future of manufacturing is based on standard unmodified Ethernet and open systems. The combination of information in the two worlds of IT and OT – seamlessly and securely connecting production data with business data and information – results in transformational benefits. And IoT accelerates The Connected Enterprise.

      Manufacturers still have a long way to go to realize the full benefits of The Connected Enterprise and the fast-emerging IoT. In a January 2015 Industry Week survey of 581 manufacturing executives and managers, fewer than 28 percent said their plant floor was Internet-enabled. Only 8 percent of larger companies with sales over $1 billion described their organization as “completely ready” to benefit from the new IoT technologies. Thus, we need to accelerate the adoption of IoT technologies.

      IoT starts with smart assets that are securely networked over an open, standard network (Ethernet). We realize the full value of IoT by complementing smart, networked assets with contemporary technologies such as scalable computing, information management, analytics, and mobility, to create high-value outcomes such as zero downtime and reduced energy consumption. The Connected Enterprise accelerated by IoT technologies delivers unprecedented benefits in productivity, sustainability, and global competitiveness.

      Rockwell Automation is proud to be an early pioneer of IoT since 2005. Working with Cisco, we knew that this new technology would lead the industry through a major transformation, and we are committed to leading this transformation together. Through innovative collaboration on products, services, and educational initiatives, we are helping companies achieve successful convergence.

      Our collaboration adopted a phased approach. In Phase 1, we initiated joint product development. So far, we have developed more than 50 products together. We joined forces to drive network migration to Ethernet/IP. We actively engaged with the standards bodies to chart the migration plans, combining the best of both IT and OT worlds.

      In Phase 2, we worked on joint architectures – first a converged plant-wide Ethernet (CPwE), then more recently the Secure Industrial Network. In Phase 3, we moved to building joint solutions. Subsequent phases enabled new business models (CAPEX to OPEX), including pay-for-production performance approaches. Now we are working together to address the skilled workforce gap with joint certification programs. The history of our engagements alone present a good set of lessons learned for anyone working through the adoption of IoT.

      Over the past 11 years of working with Maciej Kranz, Rockwell Automation and Cisco have successfully deployed joint products, architectures, and solutions to over 10,000 customers globally. In this book, Maciej has taken the lessons learned from our IoT journey and shares them with readers from all industries. Maciej, one of the pioneers of IoT, has masterfully captured best practices and combined them with practical guidelines to help readers begin their own IoT journeys.

      Our customers continue to be inundated with IoT discussions. This practical guide helps differentiate the excitement from reality and provides pragmatic advice on starting your own journey along with advice on planning for the future. I recommend business and technical managers from every industry read this book to understand how to achieve faster innovation and higher productivity from a successful implementation of IoT.

      Part 1

      A Secure and Transformative IoT Now

      1

      Beyond the Hype – All You Actually Need to Know About IoT for Business

      Like it or not, the Internet of Things (IoT) will change your organization unlike anything before. It will change your organization more than business process reengineering (BPR), Six Sigma, lean manufacturing, agile computing, or any of the other business concepts that periodically pop up, experience success, and are forgotten when the next big thing arrives. Granted, to date most of