Transcript
Jason: ...international. I am the VP of Sales over the Accelerated Division, and here to talk to you a little bit about IoT deployments and some considerations you should make before you make any changes or move to any type of IoT solution. First, I think we need to talk a little bit about the value of IoT and what is really "the big deal" here, right? So, from a benefit standpoint to customers, they find typically productivity will improve, as well as automation, as well as optimizing any kinda value chain that is being used with whatever application the IoT solution will work for.
The other benefit you will find is, overall, in a customer experience for your end customers will typically improve as well as provide you with a competitive differentiation. The other thing that we find very valuable with IoT-type solutions is access particularly into new business models, ways to make money that might not have otherwise been available to an organization. And from a Gartner, a consultant standpoint, the overall economic value to IoT-type solutions is gonna get near $2 trillion in 2020 alone. So, the net effect I'd like to bring out here is that the concept of it's really about money, the savings as well as efficiencies, new opportunities for growth, and competitive advantages that you get.
So, I wanted to go into a quick discussion, if we could, on a sample IoT-type application. And this was a customer that we worked with a couple of years ago that had a problem. They were down in South Florida, so selling ice, you know, can be more of a complicated business because of the heat. But what they were finding is a couple of problems. They were sending out drivers, and these drivers were going out refilling these ice boxes, let me call them. These ice boxes obviously would store ice, and then, they would sometimes have problems or challenges in terms of non-functioning.
So they wanted to find a better way to optimize the routes so that they maintain inventory of these different ice machines, as well as make sure that these ice machines were operational, so they retained the product appropriately. So, what they decided to do is they implemented a very simple sensor kind of arrangement at these different ice boxes, a sensor to measure weight. You might kinda think, "Well, why are we measuring weight here?" But the concept was they knew the weight of each of the bags of ice inside of these ice machines, so they would just attach that to the bottom of the machine to detect the overall weight, as ice packets rise, was being pulled out of the machine, that the weight would actually go down. So, they would have a good estimate, based on the weight of that machine, how many ice bags were remaining in that machine.
The other thing they were able to do is put a sensor in there to measure temperature. Obviously, as the temperature falls or goes above freezing, obviously, the ice bags would melt. So, in order to protect their product, they would be able to send an alert based on the performance of that icebox. So, the value proposition of this particular customer was really multi-fold. Number one, they always made sure that the product was available and stayed in inventory. They wouldn't have situations where they would come up and find specific ice boxes would be sold out and therefore not have ice available, so they were able to increase revenues.
They were also able to save costs as well by optimizing the route. So, if a machine was operating appropriately and it had sufficient inventory, they would not even need to roll a truck to that location. And then, the other big benefit, obviously, if there was any kind of failure or problem with the ice machine typically related to the temperature, in which that ice machine is maintaining its ice, they would be able to roll a technician out there to resolve any type of problems before it became a major disaster. So, this is just one example of something that it's extremely simple. You think about in our everyday life, you know, little, you know, applications like this can typically be found and applied into most businesses or organizations.
With that, I wanted to kinda outline what I came up with as a seven-step process that any customer ought to consider or at least go through before initiating or building any type of IoT solution. First and foremost, I think, with anything that you do in business, you have to find that business need that you're trying to solve. Meaning, what is gonna be the so what, why are we gonna do this? So, if you have a reason or a business justification on doing something, I think that's the first thing that needs to be defined.
Number two, you need to have a general sense of how you're gonna design the overall solution. What I mean by that is that, if you're dealing with an ice machine, or if you're dealing with a situation where you're in a parking lot, or if you're dealing with an application where you're in a retail store, or whatever the situation is, you need to understand what the overall technology requirements are gonna be to be able to drive an overall solution.
And then, number three, once you've identified the need and an overall solution, you've gotta start the process of selecting equipment. Typically, there's, you know, some type of hardware design or hardware kind of equipment that is gonna be used as part of that overall solution, and selecting and designing that solution around that equipment becomes very important. The next one is deployment. Sometimes deployment is overlooked, and the reason that's overlooked is because, typically, when you're building or standing up a project for the first time, most of the people involved with that project are intimately familiar with that project, and they understand everything that needs to happen. And they sometimes just start doing things without understanding that when you go to a deployment where you're rolling this out to hundreds or even thousands of locations, you've gotta turn that into a cookie-cutter type of environment.
So, you really have to put real good planning and thought process around what that deployment plan is gonna be so that you can give that to pretty much anybody. And we like to say, it's probably a negative phrase, but a trained monkey, right, needs to be able to implement the service so that you don't run into any kinda problems or challenges. So, again, something that is many times overlooked but extremely important to the success or failure of your project.
Number five is the monitoring and the reporting. A lot of times you look at this as simple device management, but, you know, sometimes customers will sit back and decide, "Hey, do we need monitoring? Do we do we need any kind of management on a solution?" And my answer is that if you are multi-site, you know, designed with your solution, meaning if you're at multiple sites and you do not have the feet on the street capabilities to be able to resolve or work with any issues real-time, then you must. It is an absolute must to have some type of management system around whatever designed application you've come up with.
And then, number six, which sometimes is also related to number five, is how are you collecting the actual data, right? So, you have your connectivity information typically coming to you from a device management standpoint, and that may or may not include the collection of the data points. And the example of our truck rolling out to ice machines, right, the data is, what's the temperature at each one of these ice machines? What's the weight? How much product do I have in each one of these ice boxes? That data needs to be collected and then provided, if you will, so that it can be acted upon.
And then, number seven, last of all, is really how to analyze that data. So, once you've collected it, how do you analyze that data, and how do you make it actionable so that it becomes an economic or a value proposition from the business? And that really comes down to, a lot of times, business intelligence. You can think of many different environments, you know. Sometimes you're collecting information on people, movements, and other things, but being able to take the data that you're collecting and apply it to some type of business logic or business sense, that a lot of times relates back to the overall customer that's implementing this solution, and that's why it's important for them to have some type of business proposition or business need they're trying to solve.
So, with that, I wanted to kinda go through just, you know, the title of the slide, "Rationalizing the Complex," right? So, really, this slide is really meant to give you an overall feel for, you know, what is possible from an IoT standpoint. And you can see here that we have a chart that kinda goes through more of an even printed material all the way to kind of satellite transmissions, right? So, how is that data being collected and stored? And I like to look at it, and I know this diagram is a little more complex, but I kinda look at things more as the LAN and the WAN type of environment. Obviously, they've got an option here for a PAN, or a personal area network, and a metropolitan area network, which is, in my mind, just kind of a larger LAN.
But the concept here is that you've got, you know, applications that are typically residing on the LAN side or the site side of things, and then, they need some type of connectivity to a "cloud" if you will. And some of the technologies that you're typically using in a LAN environment, you know, are these things in blue here. If you think about Bluetooth technologies, ZigBee, RFID, these are typically wireless or just connectivity technologies generally because even Ethernet is down here. Technologies that you're basically collecting at, you know, a local area level, meaning you're at a specific site, collecting and transmitting the data, if you will, locally.
And then, as you see here, you as you kinda move up the spectrum, you're getting into more of the, I'll call them, LAN-based technologies. And Cellular is one that the Digi, as an organization, focuses quite heavily on. So, we feel like we have a lot of capabilities and supporting products in that type of environment because you pretty much get a ubiquitous kind of class of service and performance across, not only just the nation but also the world. So, from an LTE standpoint, you've got LTE Advanced here, which is a higher speed transmission than standard-type 4G, and then, 3G type services. That's where we, a lot of times, as an organization, again, focus on.
So, I won't spend too much time on this, but I wanted to just point out the fact that there's a lot of things to think about, and some technologies may be better than others when it comes to building an overall solution. So, let's talk a little bit about your equipment selection. Once you've determined the technology that you wanna use, then you've gotta select the equipment. This is where I'd like to say, "Hey, just pick up the phone and call Digi. We'll set you up." We have a lot of experience in working with customers in many different environments, but we feel it's extremely important to pick the right gear. Is this gear gonna be used in an indoor environment? Is gonna be in an outdoor rugged? Does it need to be rugged? These are things that need to be kind of considered. What's the use case and capability of this device in the application that you're trying to use?
Now, one of the things that we also like to point out, it's not necessarily always about the one-time upfront costs because there's always gonna be a total ROI that's gonna need to be considered. So, if you're deploying, you know, equipment that's gonna be less stable, less reliable, and that equipment is gonna have to be, you know, replaced at a 10% per year rate, that can very quickly destroy the total ROI of the solution. Because not only are you replacing, you know, hardware that you weren't expecting to spend, but more importantly, in my mind, you're also rolling trucks. Typically that's gonna have a dramatic impact on the ROI.
And then, also think about the time and the energy that your resources are gonna have to put in to troubleshoot and resolve issues associated with equipment. So, picking the cheapest equipment typically is not the best answer. You wanna be able to look at the long-term picture of the expected ROI on that equipment long term. So, reliability is extremely important. The overall commitment that that vendor has in terms of warranty is something that needs to be considered.
So, with that, I'll move right into deployment. So, deployment, again, I don't wanna minimize this. Typically, you know, as a hardware provider such as Digi, you know, we might even sometimes dismiss this need or this requirement as part of your overall solution, but it is extremely important to make sure that you're building a process and a plan that's gonna allow you to, you know, exponentially grow your project as needed or, at least, as it's needed to grow. So, going from hundreds to thousands of devices is an easy transition if you build that success criteria, that planning, and that documentation upfront on how the installation is gonna go.
In other words, your implementation cost really has to stay under what the overall benefit is gonna be, including the equipment. So, keeping your installation cost under control is extremely important. I believe that it is critical, especially, again, in a large project, to have a proof of concept, some type of way that you can do a rollout at a certain number of sites. And then, once you complete that process, you kinda stop, take a deep breath, you look at the process that you used, see if there's anything that needs to be improved upon before you go to the full-scale rollout.
Again, that's one of the best practices, I believe, that customers should have when they're doing a very, very large deployment. And, again, the net effect we're looking for here is a repeatable installation process, something that you can throw anybody into the mix. Because when you're doing nationwide deployments, you're gonna be dealing with a pretty diverse group of individuals that will be doing the installation process in most instances. I mean, it's not typically, you know, cost-effective to put your own folks on planes and fly them all out as they're doing this installation.
The other thing that I would like to mention is finding that optimal partner, I think that is very important. You will find some installation partners that specialize in certain type of deployments, some that might cover certain parts of the world, that might be very beneficial to either use or not use, but considering the partner that you're using, I think, is very important.
I'll talk a little bit about, you know, an installation example that we have. And, you know, you'll see the product here is labeled Accelerated, but this is a Digi product. The concept here is that we realize that installation of Cellular is typically occurring in a customer's, you know, equipment room, you know. And if you go back to, you know, days of Ethernet, typically, you would wanna terminate everything into a single network closet or network room, and then, all your equipment typically is installed there.
And the reason you're doing that is because you're trying to keep that equipment safe. It's typically, you know, from a building mechanic standpoint, it's typically in a centralized or, you know, a back part of the building just to keep that area safe and protected. Well, in the Cellular world, that's usually the worst place possible to do Cellular. You can't touch, smell, see or taste Cellular RF signals. So, the concept here is that we wanna be able to provide an installation process that's repeatable, that customers can understand.
So, if you can see here, we've got a little battery pack here. This little battery pack is not for backup power. This little battery pack is designed to plug into one of our devices here. The device comes online, you see what the signal strength is. You now have a mobile process or way in which you can do a site survey in a very elegant, easy process. So, simply walking the perimeter of the building, typically even walking outside the building first just to see what the signal strength is. If you're not getting signal strength outside of the building, it's pretty much no hope to get that signal strength inside the building, so you might need to switch to a different carrier.
But if you do get, say, for example, five bars outside, you go back to the equipment room and you're getting one bar, this is the perfect, you know, use case for this type of solution. Because what you would simply do is find an optimal place in your facility where you can mount the device. And then, we use simple Ethernet because we're using a PoE Injector to inject power across a single wire back to where the router or device is mounted. So, you're basically moving the Cellular radio outside of the equipment room, moving to where signal strength is optimal.
Instead of having to use antennas that cause attenuation or degradation in signal, you can mount the device where the signal strength is best, convert that RF signal into IP, and then, you're just simply sending those packets back in your equipment room as IP packets as opposed to attenuated RF signals. So, that's just a quick concept of something that we put a lot of thought into. When we describe this process to customers, they love it because they realize that we have put some thought in there. And our goal is to make the signal strength better at all the customer locations. We can make even good connections great. Going from, you know, three bars to five bars can have a dramatic improvement on performance and, more importantly, in our case here, reliability.
So, I wanted on to the next discussion point. And this is talking a little bit about monitoring management. Again, I believe that the monitoring management is no longer a should we do it kind of a discussion. It is what are we going to do and, you know, who we're going to use, right? You need to have management of your overall solution so that you could, at a single dashboard, see exactly what's going on. We provide, from a cellular standpoint as an example, full signal strength, noise, location information, show you even on a map.
It's amazing to me when you start rolling out cellular projects, how devices "get lost." And what happens is, they typically will get plucked up, moved to a different location, and nobody documents that because of the flexibility and ease of doing business, you turn up Cellular in a different location very quickly and easily. We can, you know, render that on a map, show you where that device is at, giving you remote access back into your site regardless of the technology. Doing simple things like creating management tunnels out to the device would allow you to get back into that device even if you're not using a public static IP address.
So, it provides you with, you know, real-time access to those devices, alerting, monitoring, centralized configuration. I can't tell you how important that is. I've seen customers do large-scale deployments, roll out 1,000 sites, realizing they need to make a settings change to their devices. And when they're not using centralized management, they're literally doubling the cost because they have to roll a truck out to every single one of those locations to make that change as opposed to one person behind a keyboard, making a simple config change. And then, in our example, overnight, picking up that config or, you know, pushing that config down real-time, whatever is more appropriate to the customer. So, again, our goal is to roll the solution out one time and not have to roll a truck again. And that's what I believe that this type of management system can provide for you. The other thing is, of course, a lot of times, you're using some of the reporting that's coming from a management tool such as, you know, the Digi Remote Manager tool that is available for our product. Again, this is a critical success factor for customers.
And we talked a little bit about configurations, but what about software updates? A firmware update, you know, Cellular, the rate of change is dramatic. And we all know this when you walk into a cell store and you buy your next greatest smartphone, you walk out of the store and you're already outdated. So, the concept from a cellular update standpoint is we need to be able to push a firmware update out to all of our locations, again, without rolling a truck, again, critical to the success and viability of your project long term.
Here's an example of, you know, dashboard for health reports. I know this is not showing a dashboard, but giving you the ability to pull reports on exactly what's going on with your network, again, a critical success factor. This is just showing you, you know, some different health charts...sorry, I didn't mean to go forward, on what's going on with your connectivity, whether the devices are connected, not connected, or even never connected. And then, the next step is...or I think this was the sixth step, is collecting and analyzing the data.
So now you have the data, you know, or you're trying to get the data, you know, what are you gonna do with that data being the last point? But being able to collect the data that you need to use in a real-time basis becomes critical depending on your application. Sometimes, you know, we have customers that allude deployments. They want check-ins, you know, once a month just to see if a remote site is checking in and reporting. But, most of the time, our customers want more real-time data as much as possible. So, building that process by which that device is reporting how that information is being collected and how it's being transmitted into the network, again, this may or may not be related to the management system that you use as part of the overall solution, but if it is not related to that management system, you have to put special attention to collecting the data that's appropriate.
And here's just a graph showing you, for example, you know, collection of data over time using our Digi Remote platform. So, the last thing, obviously, is the analyzing the data. So, from a data standpoint, most of our customers have a unique business model. That unique business model is something that provides them usually a competitive edge in the business environment. So, giving them access to more real-time data and data that they can use becomes extremely important. This is typically something that the client needs to manage themselves in terms of analyzing that data. It is, you know, incumbent upon them to find the right partner and the right solution to be able to make sure that that data can be reliably collected, but analyzing the data is typically something that the customer will do.
I do wanna go through a quick example of an IoT application that kinda piqued my interest. About a week ago, I saw a commercial for IBM. It was actually advertising an IoT-type project that they were running in Africa. They didn't go into a lot of details on the technology that they were using, but the net effect was that they were tagging different groups of herbivores, right? So, they were hitting like, you know, you've got your zebra over here, you've got your antelope over here, and you've got your other species over here. But the net effect was they were tagging certain herbivore individuals inside of groups.
And what they were using or what they were measuring is they were measuring the movements of these groups or these herds, so to speak. And the goal was to find and identify when poachers were particularly in the area, and this was a goal to protect the rhino. So, the concept was, when they saw the herds acting, you know, in certain ways, they could detect whether or not that was a normal behavior or if that was, I'll call it poacher-induced behavior, meaning they were running around.
Now, here's where the discussion of analyzing the data comes into play, right? So, there's obviously researchers, and smarter people, and myself that understand the behavior of these animals. And they can probably detect, based on the way these animals are running around, whether or not it's a lion, for example, chasing them, or if it's more of a danger to the animals by it being some type of man-made event like poachers.
So, if you think about a lion, again, I'm making this up because I'm not sure exactly because they didn't go into detail of how they were analyzing the data, but if you think about a lion, they'll target a single individual. So, you probably see the herd kind of, you know, run, but then, you know, a single individual will probably be targeted. So, the rest of the herd will probably be slowing down while that one individual is obviously still running for its life. Now, I'm making that up because I don't really know exactly how they were measuring that behavior, but they were able to detect the difference between how animals would respond to poachers versus some type of carnivore that would potentially be threatening the life of an individual or individuals.
So, the concept was that they needed to deploy a very complicated solution, and it would be my bet that they were using at least all seven of these steps. If you think about it, you're in an environment in Africa, from an infrastructure standpoint, you're out in the bush, so to speak. And it would be very hard to rely on certain technology. So, I'm sure they had, you know, probably satellite involved in some way, shape, or form. But that being said, you had to use and sit down and come up with your plan of action, and then, how to implement that and think about the tagging process that was part of your installation process, right? You have to go out and tag certain animals and make sure that they have some type of apparatus that's reporting back with sufficient battery life or ability to transmit back over time.
So, this is just, again, one example of kind of a unique or creative way in which IoT deployments are being used. So, again, and just in summary, I'll go back to the original slide of seven points just to make sure that those resonate. Again, we believe that defining your overall business need is number one step that is typically something that the customers, knowing their business, knowing, you know, how they operate in the industry, is something they typically need to do themselves.
It's with the help, we believe, a partner such as Digi, where we could go through some these other steps including helping you design the overall solution, helping you select the right equipment to be able to make that solution a reality. Come up with a plan to deploy. How am I gonna get from point A to point Z? The concept to a fully functional platform. The ability to monitor and report device management is what we're talking about here is, again, extremely important. Being able to collect the data, which may or may not be part of that monitoring tool. And then, finally, the analyzing of the data.
And then, bring it all back to what is IoT all about, it's about saving or making dollars. So, I wanna thank you guys for your time today in reviewing this overall IoT process. If you have any questions, please feel free to speak with me after the conference. Thank you.