Sending Out a Smart SOS

By Matthew Hicks  |  Posted 2001-10-22

Sending Out a Smart SOS

Not long ago, Internet visionaries such as Sun Microsystems Inc. Chairman and CEO Scott McNealy were confidently predicting the emergence of smart, Web-connected consumer appliances. You remember the idea: Smart refrigerator detects critically low milk level, sends urgent e-mail to Webvan Group Inc. and, boom, fresh milk on the doorstep the next morning. Breakfast saved.

It turns out McNealy didnt get it quite right. Internet-connected refrigerators are about as common as, well, Webvan vans. A different type of smart, well-connected machine is beginning to emerge, however. Manufacturers of big-ticket, industrial and commercial products ranging from factory-floor freezing tunnels and commercial air conditioners to office copiers and espresso vending machines are beginning to tap the Internet to monitor, diagnose and service equipment. Theyre doing it with a new class of products that includes software and microprocessors embedded into industrial devices. The systems allow devices to connect over the Internet and, for instance, warn about malfunctions and report on their own performance. Makers of the industrial equipment, such as LAir Liquide SA (Air Liquide) and Carrier Corp., save money by reducing expensive service calls while, at the same time, increasing customer satisfaction and even driving new revenue opportunities.

"What youre doing is giving a machine the opportunity to call out and say its hurt," said Erik Keller, principal of IT consulting company Wapiti LLC, in Ridgefield, Conn. "All those servicing type of applications [is] where this will find its greatest use and utility and where companies will get the biggest bang for their buck."

Experts point out that the emergence of smart, Internet-connected industrial machines is just beginning. In fact, analysts havent yet been able to agree even on what to call the category of hardware and software products springing up to address the market. Some call it distributed asset management. Others prefer collaborative asset management and device relationship management. Whatever you call it, a critical mass of deployments is at least five to 10 years away, Keller said.

That doesnt mean that manufacturers and their service dealers should put the technology on the back burner, however, experts say. The first to latch on to the technology should be makers of equipment that carries high-support costs or for which outages mean big customer losses. These would include manufacturers of factory-floor machines; medical devices; HVAC (heating, ventilation and air conditioning) equipment; office equipment; and heavy equipment such as construction trucks, experts say. A broken HVAC unit, for example, could shut down a building in extreme weather and cost a customer lost productivity. At the same time, unnecessary repair visits can cost manufacturers or their dealers hundreds or thousands of dollars for each visit, Keller said.

Old Idea, New Form

Old Idea, New Form

The idea of remote monitoring, diagnosis and servicing isnt new, of course. For at least the past two decades, manufacturers have built or used proprietary systems and networks to gain insight into the performance and status of their most expensive equipment. Those proprietary systems and networks, however, were expensive. The Internet is lowering the cost of providing such embedded connectivity. Whereas before such connectivity wasnt practical unless it supported a product with a value of at least $250,000, now something worth $50,000 or even less could be worth the investment of embedded intelligence and Internet connectivity, said Kevin Prouty, an analyst at AMR Research Inc., in Boston.

"To some extent, the Internet is bringing collaborative asset management to the masses," Prouty said.

Even for companies already involved in monitoring and servicing remotely, the Internet is driving additional cost savings and new revenue opportunities. Air Liquide, the Paris-based industrial gas supplier and equipment maker, introduced last month a line of industrial freezing tunnels using eMation Inc.s Device Relationship Management software to monitor the tunnels via the Internet. Food processors use the tunnels, along with liquid nitrogen, to freeze food.

Since the early 1990s, Air Liquide has been remotely monitoring freezing tunnels and other industrial and medical devices that it makes and often owns and services on behalf of customers using its own system, called Teleflo, said Laurent Ferenczi, head of research and development. Currently, the company monitors equipment at about 10,000 customer sites. That system, however, uses the telephone network and Frances Minitel data network for connecting and monitoring equipment. The new line of products will allow Air Liquide to provide a similar service while eliminating dial-up and Minitel charges. In fact, Air Liquide said it expects to save at least $1 million per year on phone access and network installation charges by tapping into the LAN and Internet connections that already exist at most customer sites. So far, the company has shipped only a few of the new Internet-connected devices.

Beyond the savings, Ferenczi said he expects the Internet-based system to open new revenue possibilities. Air Liquide said it expects to begin offering services to monitor and manage industrial equipment from other manufacturers. Depending on the success of the new Internet-connected freezing tunnels, the company may also add the eMation technology and Internet access into products made by its other core businesses that, for example, supply gases to the medical industry.

"Its generating more value for the customer," Ferenczi said. "Its increasing our service revenue and getting us more involved in the industrial computing systems of the customer."

Manufacturers, such as Air Liquide, looking to wire their industrial devices to the Internet have an increasingly wide variety of off-the-shelf products from which to choose. Vendors in the past two years have begun to introduce solutions that allow embedded chips to connect to the Internet and communicate back to companies using standard protocols such as HTTP and FTP. These include eMation, of Mansfield, Mass.; Questra Corp., of Rochester, N.Y.; and eDevice Inc., of New York. Even stalwarts such as IBM have moved into the space. In June, IBM announced a set of what it calls ServiceAfterSales solutions for industries such as automotive and aerospace.

While the components of the vendors offerings vary, all combine a microprocessor, a real-time operating system and software that can be embedded into a machine to monitor aspects of its operation and allow Internet connectivity. Along with that, eMation and Questra, for instance, both offer enterprise server software that sits at the manufacturers office and receives information from and manages and monitors the connected devices. eDevice doesnt, instead relying on e-mail and such Internet protocols as HTTP and FTP to communicate among devices and companies.

eMation and Questra both price their products on an enterprise server licensing basis. eMation includes the device software in the package, while Questra charges separate server and embedded software license fees. A typical eMation deployment costs between $250,000 and $350,000 for server licensing, while a Questra deployment can cost $150,000 and up, the companies said. These prices dont include professional services.

Not all manufacturers wiring their industrial products to the Internet are using packaged applications, however. About two years ago, HVAC maker Carrier, in Farmington, Conn., launched a set of internally developed software and controls called ComfortLink, which is included on new commercial lines. As part of ComfortLink, customers can sign up to have Carrier monitor performance, control temperatures and remotely repair problems on its HVAC systems. Customers connect ComfortLink either through a LAN and the Internet or through direct dial-up phone connections to the Carrier Comfort Network, a call and monitoring center in Charlotte, N.C., said Joe Summa, manager of customer solutions. The company monitors more than 6,000 commercial systems.

The cost for Carrier to handle the monitoring varies. But, for example, with retailers it could range from about $250 a year per location for a small mall retailer to $600 a year per location for a large retailer, company officials said.

But Carrier has gone further than just providing Internet connections for its large industrial gear. The company is also integrating information it receives about HVAC unit problems and performance into its call center system from Vantive Corp. (now owned by PeopleSoft Inc.) So when a system reports a problem through ComfortLink, it automatically generates a record in the Vantive system. Then a repair technician in the monitoring center can access the remote HVAC systems to determine and possibly fix the problem. With one customer, a large retailer, Carrier can fix about half the problems remotely without sending a technician to the location, Summa said. With ready access to remote service histories, companies such as Carrier can also work on improving specific customer support.

Increasingly, customer asset management vendors are adding connectors into popular CRM (customer relationship management) and ERP (enterprise resource planning) systems. eMation and Questra, for instance, both have built connectors into Siebel Systems Inc. field service applications and are planning to expand to more systems.

So far, though, most manufacturers have concentrated on how to engineer the Internet connectivity into their products and not on how to work with the data once it returns to their systems, AMRs Prouty said. They need to not only integrate the connected devices into their CRM and ERP systems but also make sure they have the data storage and management practices in place to handle what one day could become a flood of data from remote equipment.

"Theyre only beginning to get their hands around the problems that data is coming in and what do they need to do with it," Prouty said.

Manufacturers looking to use the Internet to improve remote monitoring and management of their products havent completely given up on consumer products.

Carrier in April, for example, announced plans for a new service called that would allow consumers to control their home HVAC systems over Wireless Application Protocol phones. Besides improving customer service, the company said it hopes the system will also increase dealer loyalty by giving dealers access to the status and repair needs of consumers air conditioners and heaters. Dealers, in turn, could use that information to gain a greater share of the consumer repair and replenishment business, said Carrier spokesman Jon Shaw.

The first launch of MyAppliance. com, which was developed in conjunction with IBM, is scheduled for next summer in Europe.

Still, the focus of most manufacturers has clearly shifted away from the consumer and toward using the Internet to monitor and service large industrial equipment. That means, despite what you were hearing and reading a few months ago, smart, wired refrigerators probably arent just around the corner.

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