The Industrial Internet of Things

The opportunity no one's talking about.


Photo: Kipp Bradford. This industrial burner from Weishaupt churns through 40 million BTUs per hour of fuel.

A few days ago, a company called Echelon caused a stir when it released a new product called IzoT. You may never have heard of Echelon; for most of us, they are merely a part of the invisible glue that connects modern life. But more than 100 million products — from street lights to gas pumps to HVAC systems — use Echelon technology for connectivity. So, for many electrical engineers, Echelon’s products are a big deal. Thus, when Echelon began touting IzoT as the future of the Industrial Internet of Things (IIoT), it was bound to get some attention.

Admittedly, the Internet of Things (IoT) is all the buzz right now. Echelon, like everyone else, is trying to capture some of that mindshare for their products. In this case, the product is a proprietary system of chips, protocols, and interfaces for enabling the IoT on industrial devices. But what struck me and my colleagues was how really outdated this approach seems, and how far it misses the point of the emerging IoT.

Although there are many different ways to describe the IoT, it is essentially a network of devices where all the devices:

  1. Have local intelligence
  2. Have a shared API so they can speak with each other in a useful way, even if they speak multiple protocols
  3. Push and pull status and command information from the networked world

In the industrial context, rolling out a better networking chip is just a minor improvement on an unchanged 1980s practice that requires complex installations, including running miles of wire inside walls. This IzoT would have been a breakthrough product back when I got my first Sony Walkman.

This isn’t a problem confined to Echelon. It’s a problem shared by many industries. I just spent several days wandering the floor of the International Air Conditioning, Heating, and Refrigeration (AHR) trade show, a show about as far from CES as you can get: truck-sized boilers and cooling towers that look unchanged from their 19th-century origins dotted the floor. For most of the developed world, HVAC is where the lion’s share of our energy goes. (That alone is reason enough to care about it.) It’s also a treasure trove of data (think Nest), and a great place for all the obvious, sensible IoT applications like monitoring, control, and network intelligence. But after looking around at IoT products at AHR, it was clear that they came from Bizzaro World.[1]


Photo: Kipp Bradford. Copeland alone has sold more than 100 million compressors. That’s a lot of “things” to get on the Internet.

I spoke with an engineer showing off one of the HVAC industry-leading low-power wireless networking technologies for data centers. He told me his company’s new wireless sensor network system runs at 2.6 GHz, not 2.4 GHz (though the data sheet doesn’t confirm or deny that). Looking at the products that won industry innovation awards, I was especially depressed. Take, for example, this variable-speed compressor technology. When you put variable-speed motors into an air-conditioning compressor, you get a 25–35% efficiency boost. That’s a lot of energy saved! And it looks just like variable-speed technology that has been around for decades — just not in the HVAC world.

Now here’s where things get interesting: variable-speed control demands a smart processor controlling the compressor motor, plus the intelligent sensors to tell the motor when to vary its speed. With all that intelligence, I should be able to connect it to my network. So, when will my air conditioner talk to my Nest so I can optimize my energy consumption? Never. Or at least not until industry standards and government regulations overlap just right and force them to talk to each other, just as recent regulatory conditions forced 40-year-old variable-motor control technology into 100-year-old compressor technology.

Of course, like any inquisitive engineer, I had to ask the manufacturer of my high-efficiency boiler if it was possible to hook that up to my Nest to analyze performance. After he said, “Sure, try hooking up the thermostat wire,” and made fun of me for a few minutes, the engineer said, “Yeah, if you can build your own modbus-to-wifi bridge, you can access our modbus interface and get your boiler online. But do you really want some Russian hacker controlling your house heat?” It would be so easy for my Nest thermostat to have a useful conversation with my boiler beyond “on/off,” but it doesn’t.

Don’t get me wrong. I really am sympathetic to engineering within the constraints of industrial (versus consumer) environments, having spent a period of my life designing toys and another period making medical and industrial products. I’ve had to use my engineering skills to make things as dissimilar as Elmo and dental implants. But constraints are no excuse for trying to patch up, or hide behind, outdated technology.

The electrical engineers designing IoT devices for consumers have created exciting and transformative technologies like z-wave, Zigbee, BLE, wifi, and more, giving consumer devices robust and nearly transparent connectivity with increasingly easy installation. Engineers in the industrial world seem to be stuck making small technological tweaks that might enhance safety, reliability, robustness, and NSA-proof security of device networks. This represents an unfortunate increase in the bifurcation of the Internet of Things. It also represents a huge opportunity for those who refuse to submit to the notion that the IoT is either consumer or industrial, but never both.

For HVAC, innovation in 2014 means solving problems from 1983 with 1984 technology because the government told them so. The general attitude can be summed up as: “We have all the market share and high barriers to entry, so we don’t care about your problems.” Left alone, this industry (like so many others) will keep building walls that prevent us from having real control over our devices and our data. That directly contradicts a key goal of the IoT: connecting our smart devices together.

And that’s where the opportunity lies. There is significant value in HVAC and similar industries for any company that can break down the cultural and technical barriers between the Internet of Things and the Industrial Internet of Things. Companies that recognize the new business models created by well-designed, smart, interconnected devices will be handsomely rewarded. When my Nest can talk to my boiler, air conditioner, and Hue lights, all while analyzing performance versus weather data, third parties could sell comfort contracts, efficiency contracts, or grid stabilization contracts.

As a matter of fact, we are already seeing a $16 billion market for grid stabilization services opened up by smart, connected heating devices. It’s easy to envision a future where the electric company pays me during peak load times because my variable-speed air conditioner slows down, my Hue lights dim imperceptibly, and my clothes dryer pauses, all reducing my grid load — or my heater charges up a bank of thermal storage bricks in advance of a cold front before I return home from work. Perhaps I can finally quantify the energy savings of the efficiency improvements that I make.

My Sony Walkman already went the way of the dodo, but there’s still a chance to blow open closed industries like HVAC and bridge the IoT and the IIoT before my Beats go out of style.

[1] I’m not sorry for the Super Friends reference.

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  • Ed Manlove

    As I read this I am reminded of the the article 88 Acres which tells about Operations and Facilities group at Microsoft bringing together the differing and wide range of environmental systems to improve efficiencies and reduce costs. No this is not cutting edge solar panel roofs or LEED certified development but basic improvements that stand to make significant improvements.

    • DCMilwaukee

      Ed, you are going somewhere. However, examine the VDI model for room automation and discover where the appropriate design model exists for a highly efficient and comfortable building design.

  • Bryan Kester

    Kipp, this is a plug but cloud technology can solve the standards problem and connect deep commercial systems with a nest thermostat and automate everything. Our company SeeControl has built in 90% of the protocols out there from Modbus to MQTT to HTTP to CoAP and beyond and can serve as an IFTTT-like engine for distributed/disparate systems automation and intelligence. We’re managing boilers and thermostats today.

    • DCMilwaukee

      So are hundreds of other manufacturers. You can “manage”. That’s only one small part of the big picture.

  • The next problem is that when manufacturers finally do begin looking at
    IoT, they usually don’t get it. Instead of Internet of Things, they
    build Proprietary Networks of Things Connected to the Mother Ship. There is highly organized consumer resistance to “smart” meters polling at 15-minute intervals. Consumers are embracing Neurio’s smart whole-house meters and Ube sub-metering devices, even though these meter in real-time and are potentially MUCH more invasive. Why? Because these things give the data *directly* to the homeowner.

    The type of integration Bryan mentions with SeeControl is great but I hope they are advising their manufacturing customers that a) the device *must* work just like the one its replacing if there’s no Internet connection; and b) the device owner is the *first* owner of the data and *must* have the option to withhold that data from the manufacturer without penalty. The manufacturer can offer compelling services and a trusted reputation to earn access to that data but the business model must *not* rely on it.

    The types of integration we’d like to do cannot be done so long as manufacturers close the device, close the API and design the devices to require communication with the mother ship to function. That’s not IoT in any meaningful sense of the word. It’s just more walled gardens and unhappy customers.

    • DCMilwaukee

      Smart meters can poll real time.They also can be remotely disconnected real time among other functionality. You were just presenting market information where you were informed “smart” is only every 15 minutes.

      • No, I was presenting the contract to which the utilities pledge to adhere. The point being that 15 minutes is considered too invasive a) when the homeowner doesn’t get the information in a useful way; and b) when we don’t trust the utility to live up to their pledge and have no means to verify. But real-time data is actually what we’d want if it were available – as proven buy the success of homeowner devices that do exactly that.

        So, getting back to Kipp’s point, it isn’t enough for the utilities and industrial equipment manufacturers to join the 21st century. They need to skip over the current popular #IoT architecture as instantiated by the likes of LG whose TVs phone home with all your info. That architecture will be obsolete soon, either because start-ups replace it with what we actually want, or because existing manufacturers get tired of being beaten about the head and shoulders with a clue stick.

  • DCMilwaukee

    It would have been good for you to visit more vendors at the show.

    First, going to who ASHRAE sponsors as having innovative technology product is a mistake. The judges don’t have enough knowledge to qualify that. Most equipment manufacturers do not put the effort into comprehensive solutions. They put the minimal effort to meet the most basic specifications. ASHRAE engineers aren’t demanding any more. ASHRAE engineers don’t understand what more is.

    Secondly, distribution and product agreements. The market, (especially lighting) is geared toward complete subsystem sales. Why would they want technologically advanced intercommunication? The A/V world doesn’t even do it. It opens up competitive bidding. ASHRAE engineers would need to specify in a more competent manner to change this issue.

    Third, there were simultaneous multi-protocol communicating products using various IP technologies such as PoE and RSTP along with HTML5 visualization (no apps required). There are people that already do what Echelon is attempting to market at the show. There are even those who have high level security and encryption.

    Even so, this Lonworks, BACnet and OPC communication are doing more for interoperable communication than most other industries already, so please do a little more in depth research next time.

  • ACMilwaukee

    I believe Kipp described the members on this discussion in
    paragraph 9.

    As established members of the Industrial and Building
    automation markets we have blinders on.
    Our industry is dominated by 50+ year old white male engineers still
    living in a serial world, with defined business traditions. 70% of automation
    devices deployed in 2013 were serial. I
    know all the insider reasons why this makes business sense but that is missing
    the bigger picture.

    The world has moved on and the IOT (whatever you define that
    as) is a technology or group of technologies that has advanced to a place it
    can reliably do what our niche industry and protocols have been doing for a
    long time. The kicker is it can probably
    do it better in some way. IOT will be
    the force the finally pushes enterprise/web level technology down the factory
    and building floor.

    Think Google’s newly acquired robotic business will be
    designed to work on BACnet, Profinet, or EtherNet/IP. I don’t.
    There may finally be a company’s with enough weight to create the
    paradigm shift our niche world has been avoiding for years.

    Do I think this will happen overnight. No, we move slower dirt but we are due for
    change or obsolescence.

  • DCMilwaukee

    Other technology that was missed at the show was products with IEC 61499 engines.
    This is some of the most advanced concepts for control right now where even multi-lingual communication takes a backseat to a cloud based system.

    That was another swing and a miss from the writer.

    Nest was really a nothing part on the show compared to how things really work and what data is available.

  • Dave Hofert

    Referred here back from another article and I find this a very narrow, myopic view of industrial systems. There are standards and controls required here before you open these devices to just anyone. Yes, the “Industrial Internet of Things” is somewhat closed off right now because frankly no one needs to be in there playing fun games with controllers via a web browser. The data can and does get out and is analyzed, and new control routines can be created as noted by other commenters. But to go from where we are today and jump to that world where your dryer talks to your TV who talks to the main power grid is missing all of the standards and security work along the way.

    In this way, I think it’s almost too easy to connect the Industrial Internet. But there is a lot of work on security happening with techniques like ARM Trustzone and certainly GE and many other companies such as my own (Oracle) are building the secure infrastructure to safely put the intelligence into the grid and to the devices that live there.

    @T.Rob – I don’t think that LG TV “IoT architecture” will be going away – after all, it’s the Internet. What will get better is more sophisticated access, security, privacy, and integration. You can see a preview of this by stopping by your IT dept. Much of what we want to do with IoT is solve problems that IT in general has been working on for some 20 years. Yes it will be adapted to this broader space, but we do have models to work with. I’m looking forward to the journey.

  • Therese Sullivan

    Big applause for your 2 main points:
    1) a huge opportunity for those who refuse to submit to the notion that the IoT is either consumer or industrial, but never both.

    2) significant value in HVAC and similar industries for any company that can break down the cultural and technical barriers between the Internet of Things and the Industrial Internet of Things.

    But…don’t underestimate the fact that at AHR you’re observing a world where end-product life cycles (buildings, plants) are measured in decades with a mindset that comes from a world where product life cycles (smart devices) are measured in months. Step back, and take a longer view. It’s not the technology that holds back innovation, it’s the vendors. History repeats itself:

    3)rd big applause point: it takes government regulation to force an industry to better collaborate.

    But today’s reality is this:

  • mitch696969

    All data transfer appears to be about language…a closer look reveals it is only the sequence, assignment that gives it relevance…it does make sense for all machines to speak through their own pathway while we enjoy ours with the reserved right to close theirs…. the industrial Internet must use a different protocol and mixing should be prevented…. This would be a good thing to guarantee a rightful place for cloud services, a rightful place for a free,social space of creativity where there is nothing of value to hack for…. Cutting the number of lines in half to protect makes some sense