5g in the utility sector

5G in the Utility Sector: What's in it for Offshore Wind Farms?

Phevos Skalidis (Research Manager)

While 5G is at least a couple of years away from widespread availability, interest in its potential in the utility sector is gradually increasing. Offshore wind farms are among the many potential application domains of 5G in the utility sector.

As the name implies, offshore wind farms are installed in the sea at a distance to the nearest shore that usually does not exceed 100km, at a depth of no more than 45m. On the high seas, wind reaches a higher and more constant speed, enabling the newer projects to match the capacity factors of fossil-fueled power plants.

According to the International Energy Agency (IEA), global offshore wind capacity is projected to increase fifteenfold to 2040, becoming a $1 trillion industry over the next two decades. Reliable communication is essential if the industry is to grow as expected.

Offshore Wind Farms Are Ideally Placed for Early 5G Adoption

Several characteristics make utilities that own and operate offshore wind farms candidates for early adoption of 5G technology, as well as their subcontractors. Construction takes place in the absence of fixed communication with the mainland, often in adverse weather conditions, therefore posing significant challenges.

Network reliability is essential, as construction workers need to be connected to easily reach colleagues at company headquarters, as well as emergency services and each other. Beyond voice communication, they require access to data (e.g., construction blueprints), which is also true for maintenance personnel after construction is complete.

The industry’s network options have significant drawbacks. vSat has global coverage, but data connectivity is an issue given low throughput (i.e., 14Mbps) and high installation costs. TETRA/P25 type solutions typically have a range of 30km–60km but have a very low throughput.

When the first offshore wind farms were constructed in the North Sea and the Baltic Sea, these were small and close to the coast. Over the past five years, the number of installed turbines per farm and their nameplate capacity have increased, as has the distance to the shore.

As a result, vessels now transport more construction or service staff and no longer return to the shore daily. Connectivity issues are starting to make themselves evident, even if private LTE networks provide some remedy.

5G networks are increasingly important to the utilities sector given the offshore data consumption and speed requirements. Companies involved in the construction and servicing of offshore wind farms will have to accommodate more than 10TBs of data transfer per month, per vessel, and speeds of several hundreds of Mbps, unless they are willing to compromise with lower quality service toward clients and their staff.

New 5G Applications

As is often the case with new technologies, 5G networks will lead to new sector-specific applications. Capital-intensive assets such as offshore wind farms lend themselves to innovative maintenance approaches, such as drone inspections and AR-enabled head-mounted displays (HMDs) used by field technicians.

In both cases, high traffic capacity is fundamental. Raising the bar on technical requirements once again, a digital twin of the offshore wind turbines would require extremely low latency and high connection density. Doesn’t all that sound like fertile ground for 5G?

If you want to learn more about this topic or have any questions, please contact Phevos Skalidis, or head over to https://uk.idc.com and drop your details in the form on the top right.

 


RPA-Robotic-Process-Automation-

RPA Adoption Looking Strong in a Post-COVID Era

Tomas Doktor (Research Manager)

IDC has been reporting that the COVID-19 pandemic has created a bifurcated IT spending outlook. Legacy on-premises infrastructure and traditional software licensing models are giving way to approaches that enable more flexibility and business agility. There is one exception here  the adoption of smart software apps, such as Robotic Process Automation (RPA) software, that looks strong for both deployment types  on-premises as well as in the cloud. 

With a second wave of COVID-19 (or any other global pandemic) potentially in the air and further economic lockdowns, it has become crucial or companies in all sectors to avoid any further losses. An obvious way would be to minimize dependency on people and adopt machines instead, or smart software apps. 

Robotic Process Automation (RPA) is Really Gaining Traction 

In 2016, 51.8% of all internet users were robots. Currently around 70% of all internet traction is handled by robots. 

RPA software gained traction by taking software robots and pointing them at existing applications to mimic human/keyboard interactions and automate repeatable and well understood processes. RPA, as a whole market, has been growing high-double digits YoY (year on year) for past three years, and three main vendors in the space (UiPath, Automation Anywhere, and Blue Prism) that accounted for slightly more than 50% of WW market share in 2019 show even higher revenue growth and are gaining larger market share. 

Purveyor of software robots, Blue Prism, has hired a new CEO (Chief Executive Officer) and bagged £100 million in funding — proof of market confidence in the technology concept in the face of strong economic headwinds. In January, Blue Prism reported [PDF] an 83% YoY hike in revenue to £101 million for the year ended October 31, 2019, and its strong market position and COVID-19 resilience was confirmed by the latest financial report showing 70% YoY revenue growth to £68.5 million for six months tthe end of April (half of that period was already influenced by economic lockdowns). 

To put that in context, in 2017, U.S. RPA company UiPath was valued at $70 million, but just a year later, this had shot up to $3 billion on the back of a $225 million Series C funding round. It sucked up $568 million in a D-round last year, valuing the firm at $6.4 billion. UiPath is rapidly growing business. According to IDC research the company increased its 2019 revenues by 222% from a year ago, which is similar to the performance of another important RPA competitor  Automation Anywhere’s full year 2019 revenue was up 210% from 2018. 

What Does the Future Hold for RPA? 

RPA and intelligent automation will play a pivotal role in addressing business problems and goals globally. COVID-19 will further accelerate the adoption of RPA and intelligent automation as many institutions are now looking at automation to offer business continuity and resilience. 

Intelligent automation will be one of the key technologies to propel institutions through digital transformation. Institutions will invest significantly in automation to achieve business performance and scalability in these unprecedented times. 

Some processes in which IDC expects to see RPA activity after the COVID-19 crisis dissipates include service ticketing, document processing (including customer forms and applications), contact center operations, order processing, data allocation and reporting, and customer management. 

If you want to know more about COVID-19’s impact on the technology sector see more resources here


Global business logistics import export background and container cargo freight ship transport concept

How B2B Market Places Can Make Supply Chain Operations More Resilient

Stefanie Naujoks (Research Director, Manufacturing Insights Europe)

We all saw factory shutdowns in our regions during the peak of the COVID-19 pandemic, due mostly to a lack of supply of raw material, which made it impossible for manufacturers to continue production. What caused these problems and what lessons can manufacturers learn?

Global Supply Chains Alone are Not the Problem

In light of the pandemic, global supply chains were often considered part of the problem, because it takes, for example, four to six weeks to get raw material or components shipped from China to Europe. This then led to severe supply shortages in Europe as Chinese factories shut down.

However, avoiding global supply chains does not prevent a lack of supply. Many manufacturers rely on suppliers for very specialized components or raw materials that are not easy to source quickly from other suppliers.  And even if suppliers are on the same continent, this can be a challenge if country borders are closed.

It might sound like a reasonable measure to avoid risks embedded in global supply chains by shifting supplier capacity closer, but we do not believe this consideration will affect supplier sourcing. In the end, we believe supplier sourcing decisions will be based on price.

What Lessons Should Manufacturers Learn?

To make supply chains more resilient to any unforeseen events in the future, the dependence on just a few suppliers must be tackled.

In addition, not knowing where goods are in-transit and when they will be arriving at the factory makes production planning in times of global supply and demand uncertainties challenging. The same applies to not knowing the real-time delivery capabilities of transportation providers, which doesn’t help when selecting appropriate logistics providers.

I had lots of conversations with manufacturers about their lessons learned during the peak of the coronavirus outbreak. One interesting observation was that the vast majority said there was no way of avoiding what happened; the problem was that they didn’t see it coming. If there had been a higher level of visibility, manufacturers would have been able to react much faster.

Are B2B Market Places Addressing These Challenges?

Cloud-based B2B marketplaces typically connect multiple suppliers with multiple buyers. And there are increasing numbers of B2B marketplaces out there, serving not only the need for basic supply, but also increasingly for industry-specific raw materials and components. Some examples are XOM Materials (steel), merQubiz (recovered paper), and Forstify (timber).

Reducing dependency on only a few suppliers and moving to a broader supplier base by utilizing the growing number of industry-specific B2B marketplaces will help to establish more flexible and resilient supply chain networks.

The same applies for the emerging segment of cloud-based B2B transportation management platforms, which bring together logistics providers with their customers depending on their current needs, case-by-case.

The more we see such industry-specific B2B marketplaces emerging, we also observe that the providers of those platforms start to add analytics and AI capabilities to them. This, for example, enhances manufacturers’ ability to predict potential risks in the supply chain better, well in advance and before any unforeseen events happen, thereby also helping to make supply chain operations more resilient.

Conclusion

From our perspective, utilizing cloud-based and analytics-powered B2B marketplaces will help manufacturers to make supply chain operations more resilient. This is also confirmed by some survey results from our recent supply chain survey, which show that for 38% of manufacturers in Europe, participating in B2B marketplaces delivers benefits related to easier access to suppliers and providers, and for 43% it provides greater supply chain visibility.

Are you already using B2B marketplaces and what benefits are you experiencing from them?  I’d be very interested in receiving your feedback on this. And, please see our recently published IDC PeerScape with several examples of industry-specific B2B market places.

 

If you want to learn more about this topic or have any questions, please contact Stefanie Naujoks, or head over to https://uk.idc.com and drop your details in the form on the top right.


The European Start-up and Scale-up Ecosystem Beyond COVID-19

Naima Camara (Senior Research Analyst, European SMB and Start-up Program)

The start-up economy generates $3 trillion worldwide, and there are 500 unicorns (i.e., start-ups worth more than $1 billion) across the globe. With 100 of these unicorns based in Europe, the continent is undoubtedly one of the most promising start-up and scale-up ecosystems in the world. Europe houses a third of the world’s leading start-up cities, including well-known start-up hubs such as London, Berlin, Amsterdam, and Paris. There are also many nascent ecosystems emerging in other cities (e.g., Stockholm, Helsinki, Lisbon, and Milan) that are showing significant promise. Europe is home to some of the leading companies in fintech (Monzo, Starling, and Revolut), AI (Graphcore and Shift Technology), digital health (Babylon, Sidekick Health, and Alan), blockchain (Everledger and Provenance), and cloud-native ecosystems.

Start-ups and scale-ups have been hit hard by the economic impact of COVID-19. With a smaller customer base than large companies and less cash on hand to cover expenses, they are more susceptible to economic shocks than large companies. However, they can quickly adapt to changing market dynamics by iterating on existing products, shifting monetization strategies, or exploring new markets.

We reached out to a sample of European start-ups and scale-ups over the last couple of weeks to truly understand the impacts of the COVID-19 crisis and here’s what we found out.

impacts of the COVID-19 crisis
(this information was compiled from qualitative interviews with a sample of start-ups and scale-ups)

The Limits of Government Support

While there has been unprecedented government support in Europe during this pandemic, most are geared toward immediate relief for challenges relating to cash flow, staffing, and rental costs rather than innovation. However, some of our respondents were ineligible for the support they required (e.g., they needed to have secured external funding before, or had not been operating for long enough in relevant geographies) or incurred significant delays in getting access to the support they were entitled to. These challenges were further compounded for those that were operating across multiple geographies, as they needed to understand the relevant support schemes of the countries they operated in. A deep-tech CEO mentioned that furlough schemes could have been more flexible in allowing some to work full time, as the schemes created a “lack of talent utilization,” with many hiring highly skilled professionals for roles in which there is more demand than supply.

Though government support schemes aim to keep companies afloat in the early months of 2020, even vendors and partners have crucial roles to play. Many start-ups we interviewed had not received support outside of government support schemes.

deep tech impact of the COVID-19 crisis
deep tech impact of the COVID-19 crisis-2

(this information was compiled from qualitative interviews with a sample of start-ups and scale-ups)

A Hybrid Approach to Remote Work

Most had shifted to remote working without severe impacts to the day-to-day of their businesses. Some had not allowed remote working pre-COVID-19, though they could now see the merits of a hybrid approach that allows flexibility for staff in this new normal. One founder even went as far as stating that: “pre-lockdown we had been building product remotely, then looking for offices in December and now not going to look for offices.” Some — particularly those in the early phases of developing their businesses — will look to work remotely as much as possible to avoid unnecessary costs on rent and transport.

Investor Trepidation

As soon as COVID-19 began to spread globally, investors became much more focused on the impact of the crisis on their portfolio companies, rather than on investing in new start-ups. With many start-ups/scale-ups (even the well-funded ones) having under three months of runway in reserve, investment has become a thorny issue for many. The start-ups and scale-ups we spoke with were no different, as several were on track to raise funds pre-crisis, but have since been unable to.

What Next?

Start-ups are at the forefront of creating products and services that disrupt whole industries. They create net new jobs, bring to light new skills that become instrumental to tech overall, and generate unparalleled gains for the economy (Start-up Genome revealed the start-up economy is growing over 10 percent per year, about three to four times faster than the rest of our economies).

IDC views the start-up and scale-up ecosystem as beyond simple innovators — hence, to explore the interplay of start-ups/scale-ups, incubators, accelerators, enterprise vendors, and the investment community, we have launched IDC’s Tech Start-up & Scale-up Exchange, a networking community for tech start-ups and scale-ups to connect, exchange advice, seek partnering opportunities, and help each other make smarter business decisions for short- and long-term growth. Join Now!