Unrestricted © Siemens AG 2016 siemens.com
Siemens Industry Analyst Briefing CallSiemens Digitalization Strategy & Sinalytics PlatformDr. Horst J. Kayser, Chief Strategy Officer Siemens AGDr. Norbert Gaus, Head of Siemens Research and Technology Center | Munich, January 20, 2016
Unrestricted © Siemens AG 2016January 2016Page 2 Corporate Strategy / Corporate Technology
– 26 high-speed trainsat Renfe Spanish RailCompany (Madrid-Barcelona-Malaga)
– Performance contractwith availabilityguarantee
– Passengers arereimbursed for delays>15 mins
– On-time rate of 99.9%
– 60% passengersswitched from aircraftto train
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Demographic change
Urbanization
Climate change
Globalization
Five Megatrends shaping our world of tomorrow –changes in the markets are accelerating
1 UN World Population Prospects (2015)2 Met Office Hadley Centre observations (2014)
3 McKinsey Global Institute Cityscope (2011)4 UNCTAD (2013)
5 Cisco: The Internet of Everything (2013)6 IDC: The Digital Universe (2012)
Digital transformation
Trend to increaseinvestment abroad
Growing and ageingpopulation
Cities as main driverof GDP growth
Global warming andweather extremes
Contribution to global GDP growth,2007-20253, in %
Foreign direct investmentvs. global GDP, in %4
World population1, in bn Annual mean temperaturevariations 1950-20142 (in °C)
Connected devices5, in bn
-0,3
0
0,3
1950 1970 1990 2010
0.3
-0.3
0
2
4
6
1970 1976 1982 1988 1994 2000 2006 20122013
Other citiesand rural areas38%
Cities >10mn
5mn – 10mn
2mn – 5mn
150k – 2mn
50
239
2012 20202016
Exponentialgrowth ofconnecteddevices ...
… anddigital data6
2.8 ZB40.0ZBZB = Zettabytes = 109 Terabytes
9.000.16
1.92 0.836.10
0.12
2015
1.25 -0.010.00 1.36
2050
Developingcountries
Industrialcountries 15-65
65+
0-14
Age
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Global trends
Siemens strategy – ‘Ingenuity for Life’
Market development (illustrative)
DigitaltransformationNetworked world of complexand heterogeneous systems
GlobalizationGlobal competition drivingproductivity and localization
UrbanizationInfrastructure investment needsof urban agglomerations
DemographicchangeDecentralized demand of agrowing and aging population
Climate changeHigher resource efficiencyin an all-electric world Efficient Energy
ApplicationPower Transmission,Distribution &Smart Grid
PowerGeneration
Imaging &In-VitroDiagnostics
Today Mid term – 2020
Electrification ~2–3%1Market growth
Automation
Digitalization~4–6%1Market growth
~7–9%1Market growth
Innovating along the electrical value chain
1 Est. market growth (CAGR) over cycle
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Siemens Digitalization
Siemens Digitalization –Leveraging digital technology trends for concrete customer benefits
Connectivity andWeb-of-systems
Collaborationand mobile
Smart data andanalytics
Cloudtechnologies
Cyber-Security
Maintenance &services
Automation &operation
Design &engineering
Improved productivity &time-to-market
Higher flexibility &resilience
Increased availability &efficiency
Combining the virtual & physical world …… across entire customer value chains
Unrestricted © Siemens AG 2016January 2016Page 6 Corporate Strategy / Corporate Technology
Digitally enhancedelectrificationand automation
#1 automation player in industry,buildings, grids, power plants, and rail
€0.6 billion revenue in FY15
+15% yoy growth FY15
>300k devices– Remotely monitored and administered– Data driven– Analytics enabled
Digitalservices
€3.1 billion revenue in FY15
+16% yoy growth FY15
Leading provideracross verticals
Verticalsoftware
Customer benefit translates to substantialrevenue growth for Siemens – Siemens Digitalization
XHQ
Unrestricted © Siemens AG 2016January 2016Page 7 Corporate Strategy / Corporate Technology
Digitally enhancedelectrificationand automation
#1 automation player in industry,buildings, grids, power plants, and rail
€0.6 billion revenue in FY15
+15% yoy growth FY15
>300k devices– Remotely monitored and administered– Data driven– Analytics enabled
Digitalservices
€3.1 billion revenue in FY15
+16% yoy growth FY15
Leading provideracross verticals
Verticalsoftware
Customer benefit translates to substantialrevenue growth for Siemens
XHQ
Unrestricted © Siemens AG 2016January 2016Page 8 Corporate Strategy / Corporate Technology
Sinalytics Platform powers Siemens Digital Services
Connectivity
300,000+connected devicesincluding wind turbines,buildings, trains
Advanced analyticsCreating new insightsfrom smart data byleveraging world-classtechnologies
Customer outcomes─ Higher availability─ Lower costs─ Increased
performance─ More security
Know-how─ Product, domain and
data science know-how─ Overall IT know-how
with about 17,500software engineers
─ 160 Data Scientists
Unrestricted © Siemens AG 2016January 2016Page 9 Corporate Strategy / Corporate Technology
The Digital Transformation of Services
Improving efficiency of classical services
Performance & Outcomebased Contracting
Classical Time &Material Maintenance
NetworkPlatforms
E.g. Digitaldiagnostics
E.g. AugmentedReality for trainingand MaintenanceRepair andOverhaul
E.g. digitallyoptimised workscheduling
Unrestricted © Siemens AG 2016January 2016Page 10 Corporate Strategy / Corporate Technology
The Digital Transformation of Services
1. Predictive Maintenance 2. Performance-based contracts 3. Outcome-oriented contracts
Performance & Outcomebased Contracting
Classical Time &Material Maintenance
NetworkPlatforms
E.g. Healthcare E.g. Power ServicesE.g. Mobility
Power Services
ObjectivesImprove customerROI through flexibleservice in anymarket condition
ObjectivesPrevent unplanneddowntime of CTscanners causedby tube failures
ObjectivesIncrease availa-bility and reliabilityof trains
PreventiveMaintenance
ReactiveMaintenance
Condition-basedMaintenance
PredictiveMaintenance
PrescriptiveMaintenance
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Digital Service
Siemens Digital Services Portfolio – Overview
Remote servicesbased on deviceconnectivity– Data generated by
connected devices andtransferred for evaluation
Data analytics-enabled services– Value added by additional
insights generated fromavailable data
Network Platforms– Generation of additional
value by bringing togetherrelevant experts and data
Division view (examples)
PGPower generation, transmission & distribution
PSWP EM
– Power Plant optimization, remote support/-operation– Flex LTP, data-driven upgrades of turbines– Fleet statistics of power plants and wind farms– Wind farm optimisation– Performance contracts / consulting– SCADA, WTC3 and vibration diagnostics– Remote Monitoring (Switchgear and Transformers)– Smart Grid Asset performance management / security
services– Smart Grid Asset operation services
BT
– System performance services– Building performance / energy optimisation services
– Smart Guidance– Smart Monitoring– Smart Data Analysts– 3D printing for optimised parts logistics
MO
– Master Asset Uptime– Optimise energy performance– Maximise process efficiency– Enhance Industrial Cyber security
DF PD
– Predictive maintenance– Network platform for diagnostic exchange
HC
Building Technologies
Mobility
Healthcare
Digital Factory & Process and Drives
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Drive train analytics
Industrial NetworkAnalytics
Machine tool analyticsSecurity Assessments andImplementation
Security ManagedServices
Digital Services Example –Digital Factory
Master asset uptime Enhance Industrial Cyber-SecurityOptimize Energy Performance
Maximize process efficiency
Control performanceanalytics
Process event analytics
Dynamic processoptimization
Energy analytics
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Siemens Digital Services demonstrateproven success in diverse industries
US car manufacturerEnergy Analytics
EU car manufacturerAsset Analytics
Global pharma companyEnergy Analytics
Food and Beverages
EU Coffee ProducerEnergy Analytics
Pharma
Higher resourceefficiency
Higher plantavailability
12% energycost savings
Target – 5% energycost savings
EU Manufacturerof asphaltEnergy Analytics
Antea Cement (ALB)Asset Analytics
Pilkington (UK)Energy Analytics
Int. Oil & Gas companySecurity Services
147% RoINo unplannedsystem downtimes
Over £1 millionenergy cost savings
0% incidents within18 months
Minerals Glass ChemicalCement
Automotive
Unrestricted © Siemens AG 2016January 2016Page 14 Corporate Strategy / Corporate Technology
The Digital Transformation of Services
Performance & Outcomebased Contracting
Classical Time &Material Maintenance
NetworkPlatforms
Fieldlevel
NetworkPlatformFocus
Benefit
MindApps
Industrial equipment dataUsage, dose,protocol,image data
– Increased utilization– Improved dose quality– Enhanced fleet management & standardization– Clinical collaboration
– Optimized energy performance– Increased asset up-time– Maximized process efficiency– Enhanced cyber-security
Teamplay – connect, compare, collaborate Mindsphere – Cloud for Industry
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‒ Availability guarantee andshared risk is only possiblewith highly advanced analytics
‒ Trains are fitted with hundredsof sensors to monitor criticalparameters
‒ Siemens Sinalytics providesthe data basis to ensure veryhigh availability and reliability
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Siemens Digital Services powered by Sinalytics – Combiningtechnology with domain and context know-how for customer value
Context of data from installed basis
Installedproducts,systems,processesand sensors
Domainknow-how
+Context
know-how
+Analyticsknow-how
− Improved performance
− Energy savings
− Cost reductions
− Risk minimization
− Quality improvement
= Digital Servicespowered by Sinalytics
Customer valueOptions for actionInformationData analysisData
Unrestricted © Siemens AG 2016January 2016Page 17 Corporate Strategy / Corporate Technology
Siemens Digital Services powered by Sinalytics –Example: Predictive maintenance of trains and locomotives
Results
Improved assetavailability
Avoidance ofunnecessarymaintenance
Reduction ofmaintenance costs
Rail Transport– Market drivers– Rail operator challenges– Rail user demands
Trains/Locomotives– Rail vehicle engineering– Mechanical vibrations– Sensor properties– Maintenance operations
Data Science– Pattern identification– Machine learning– Automated alert generation
Domainknow-how
Contextknow-how
Customervalue
Analyticsknow-how
Siemens
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Siemens Digital Services powered by Sinalytics –Example: Optimization of gas turbine operations
Results
Reduced NOxEmissions
Extension ofservice intervals
Energy System– Market drivers– Customer needs– Product cycles
Gas Turbines– Mechanical Engineering– Thermodynamics– Combustion chemistry– Sensor properties
Autonomous Learning– Neural Networks– Smart Data Architecture
processes data from 5,000sensors per second
Domainknow-how
Contextknow-how
Customervalue
Analyticsknow-how
Siemens
Unrestricted © Siemens AG 2016January 2016Page 19 Corporate Strategy / Corporate Technology
Sinalytics: Our new platform architecture for data-based services
We build on common technology platforms …+ Latest technology for all Siemens businesses+ Reduction of technical complexity in the company+ Leveraging synergies through scaling+ Faster development
… and use the customer proximity of ouroperating units to develop applications
+ Know-how regarding large installed bases of productsand systems
+ Deep know-how of customer processes and challenges+ Many existing applications that already generate value
for our customers
ProcessIndustries& Drives
DigitalFactory
EnergyManagement
Healthcare
Power and Gas,Power Generation
Services
Wind Power
Mobility
BuildingTechnologies
SinalyticsData analyticsData visualization
Modeling/Analysis
Data management
Data integration
Cloud/ConnectivityCyber Security
Availability Security
Productivity Energy efficiency
Unrestricted © Siemens AG 2016January 2016Page 20 Corporate Strategy / Corporate Technology
…EnergyIPMindsphere
Sinalytics builds on a strong technology stack for connectivity,data analytics supported by state-of-the-art cyber security
Variety of data sources and types~300,000 devices cRSP, ISB ...
BTDF PD PG PS WP EM MO HC
Data analysis
Data integration
Data management
Data presentation
On premise Cloud
Usecase 1
Usecase 2 … … … Use
case n
Customizable analytics solution packages
Sinalytics
BU specific use case implementations
Common industrial data analytics platform‒ Several off-the-shelf tools are available in each layer‒ Tools are integrated with each other through “glue code”‒ On-premise and cloud deployment possible
Common data analytics set-up‒ Modular analytics solution packages
Connectivity‒ Build on reliable and secure solutions
e.g. common Remote Service Platform
Cyb
erse
curit
yso
lutio
ns
Industry specific Applications/Platforms
Siemens Digital Services
Unrestricted © Siemens AG 2016January 2016Page 21 Corporate Strategy / Corporate Technology
We continue developing data analytics capabilities of Sinalytics:From predictive to prescriptive analytics
Same functional architecture
Predictive analytics for service
On-premiseand in the cloud
“Data and models at rest”
Streaming analytics and
for decision support
On-premise, in the cloudand in the field
“Data and models in motion”
Operationalprescriptive analytics
On-premise, in the cloudand in the field
“Automated data analytics”
Wave 1 Wave 2 Wave 3
distributed analyticsUsing Webof Systemstechnologies
Unrestricted © Siemens AG 2016January 2016Page 22 Corporate Strategy / Corporate Technology
Siemens leverages the Internet of Thingsto the needs of our customers in industry and infrastructure
+ The Web of Systems puts devices, machines andtheir interactions in the center of digitally-networked industries
+ Devices process data locally and make decisions+ Owners decide what happens with their data+ Devices organize themselves and communicate
with each other+ New functionalities can be installed as with apps on
smartphones+ The installed base can be digitalized with the Web
of Systems+ Siemens delivers infrastructure and industry
solutions characterized by:• Reliability• Durability• Data security
ProcessIndustries& Drives
DigitalFactory
EnergyManagement
Healthcare
Power and Gas,Power Generation
Services
Wind Power
Mobility
BuildingTechnologies
Web ofSystems
Unrestricted © Siemens AG 2016January 2016Page 23 Corporate Strategy / Corporate Technology
Web of Systems technologies already work –Example: The Intelligent Secondary Substation in a Smart Grid
Unrestricted © Siemens AG 2016January 2016Page 24 Corporate Strategy / Corporate Technology
Sinalytics brings together the technologies neededin an increasingly digitalized world
Energymanagement
Powergeneration
Energyconsumers
IQ
IQ
IQ
IQIQ IQ
Data analyticsOn-premise, in the cloud andsoon in-the-field leveragingWeb of Systems technologies
Cyber securityProtecting customer data inopen, interconnected industrialIT systems
ConnectivitySecure and proventechnologies connectingalready ~300k devices
Smart networkeddevices & systemsSystem-aware, autonomousand app-enabled to meetindustry and infrastructureneeds
Sinalytics