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How Industry 4.0 technologies are changing manufacturing

Industry 4.0 is revolutionizing the way companies manufacture, improve and distribute their products. Manufacturers are integrating new technologies, including Internet of Things (IoT), cloud computing and analytics, and AI and machine learning into their production facilities and throughout their operations.

These smart factories are equipped with advanced sensors, embedded software and robotics that collect and analyze data and allow for better decision making. Even higher value is created when data from production operations is combined with operational data from ERP, supply chain, customer service and other enterprise systems to create whole new levels of visibility and insight from previously siloed information.

This digital technologies lead to increased automation, predictive maintenance, self-optimization of process improvements and, above all, a new level of efficiencies and responsiveness to customers not previously possible.

Developing smart factories provides an incredible opportunity for the manufacturing industry to enter the fourth industrial revolution. Analyzing the large amounts of big data collected from sensors on the factory floor ensures real-time visibility of manufacturing assets and can provide tools for performing predictive maintenance in order to minimize equipment downtime. 

Using high-tech IoT devices in smart factories leads to higher productivity and improved quality. Replacing manual inspection business models with AI-powered visual insights reduces manufacturing errors and saves money and time. With minimal investment, quality control personnel can set up a smartphone connected to the cloud to monitor manufacturing processes from virtually anywhere. By applying machine learning algorithms, manufacturers can detect errors immediately, rather than at later stages when repair work is more expensive.

Industry 4.0 concepts and technologies can be applied across all types of industrial companies, including discrete and process manufacturing, as well as oil and gas, mining and other industrial segments. 

From steam to sensor: historical context for Industry 4.0

First industrial revolution

Starting in the late 18th century in Britain, the first industrial revolution helped enable mass production by using water and steam power instead of purely human and animal power. Finished goods were built with machines rather than painstakingly produced by hand.

Second industrial revolution

A century later, the second industrial revolution introduced assembly lines and the use of oil, gas and electric power. These new power sources, along with more advanced communications via telephone and telegraph, brought mass production and some degree of automation to manufacturing processes.

Third industrial revolution

The third industrial revolution, which began in the middle of the 20th century, added computers, advanced telecommunications and data analysis to manufacturing processes. The digitization of factories began by embedding programmable logic controllers (PLCs) into machinery to help automate some processes and collect and share data.

Fourth industrial revolution

We are now in the fourth industrial revolution, also referred to as Industry 4.0. Characterized by increasing automation and the employment of smart machines and smart factories, informed data helps to produce goods more efficiently and productively across the value chain. Flexibility is improved so that manufacturers can better meet customer demands using mass customization—ultimately seeking to achieve efficiency with, in many cases, a lot size of one. By collecting more data from the factory floor and combining that with other enterprise operational data, a smart factory can achieve information transparency and better decisions.

What technologies are driving Industry 4.0?

 

Internet of Things (IoT)

The Internet of Things (IoT) is a key component of smart factories. Machines on the factory floor are equipped with sensors that feature an IP address that allows the machines to connect with other web-enabled devices. This mechanization and connectivity make it possible for large amounts of valuable data to be collected, analyzed and exchanged.

 

Cloud computing

Cloud computing is a cornerstone of any Industry 4.0 strategy. Full realization of smart manufacturing demands connectivity and integration of engineering, supply chain, production, sales and distribution, and service. Cloud helps make that possible. In addition, the typically large amount of data being stored and analyzed can be processed more efficiently and cost-effectively with cloud. Cloud computing can also reduce startup costs for small- and medium-sized manufacturers who can right-size their needs and scale as their business grows.

 

AI and machine learning

AI and machine learning allow manufacturing companies to take full advantage of the volume of information generated not just on the factory floor, but across their business units, and even from partners and third-party sources. AI and machine learning can create insights providing visibility, predictability and automation of operations and business processes. For instance: Industrial machines are prone to breaking down during the production process. Using data collected from these assets can help businesses perform predictive maintenance based on machine learning algorithms, resulting in more uptime and higher efficiency.

 

Edge computing

The demands of real-time production operations mean that some data analysis must be done at the “edge”—that is, where the data is created. This minimizes latency time from when data is produced to when a response is required. For instance, the detection of a safety or quality issue may require near-real-time action with the equipment. The time needed to send data to the enterprise cloud and then back to the factory floor may be too lengthy and depends on the reliability of the network. Using edge computing also means that data stays near its source, reducing security risks.

 

Cybersecurity

Manufacturing companies have not always considered the importance of cybersecurity or cyber-physical systems. However, the same connectivity of operational equipment in the factory or field (OT) that enables more efficient manufacturing processes also exposes new entry paths for malicious attacks and malware. When undergoing a digital transformation to Industry 4.0, it is essential to consider a cybersecurity approach that encompasses IT and OT equipment.

The digital transformation offered by Industry 4.0 has allowed manufacturers to create digital twins that are virtual replicas of processes, production lines, factories and supply chains. A digital twin is created by pulling data from IoT sensors, devices, PLCs and other objects connected to the internet. Manufacturers can use digital twins to help increase productivity, improve workflows and design new products. By simulating a production process, for example, manufacturers can test changes to the process to find ways to minimize downtime or improve capacity.

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Okta to pay $6.5B to acquire Seattle’s Auth0; identity tech startup was valued at $1.9B last year

Auth0, the billion-dollar Seattle-area startup that is a leader in identity authentication software, is being acquired by Okta, another leader in the space, the companies announced Wednesday. The all-stock deal is valued at approximately $6.5 billion — one of the largest acquisitions of a Seattle tech company.

Auth0 was co-founded in 2013 by Eugenio Pace, who formerly ran the patterns and practices group at Microsoft, and Matias Woloski, a software engineer who remains the company’s CTO. Both hail from Argentina, and Auth0 has built its more than 850-person team through a distributed approach with workers scattered all over the world.

The startup raised a $120 million round in July at a $1.9 billion valuation, making it a rare Seattle unicorn. That step up in valuation from $1.9 billion to $6.5 billion in just eight months is impressive, but not everyone is thinking that Auth0 should have sold so soon.

Even still, the deal is a huge windfall for the company’s founders and early investors, including Pacific Northwest firms Founders’ Co-op and Portland Seed Fund. And it’s a big payoff in Seattle’s startup scene — nearly tripling the $2.25 billion that EMC paid for Seattle data storage company Isilon in 2010.

“We started Auth0 seven years ago,” Pace said last year at the GeekWire Awards, after Auth0 won honors for Deal of the Year. “Sometimes it feels like seven minutes and sometimes it feels like 70 years. But it’s been a great journey.”

GeekWire heard rumblings about a play for Auth0 a few weeks ago, but we were unable to confirm the news. Forbes, which broke the story today, noted that the deal was slow to close because Auth0 was weighing other options, including an IPO and other possible suitors.

Auth0 will continue operating as an independent business within Okta.

San Francisco-based Okta boasts a market capitalization of $31 billion, with 2,800 employees worldwide. The company’s shares fell more than 13% in after-hours trading.

Okta reported its fourth quarter earnings Wednesday, with revenue up 40% to $234.7 million and net losses growing to $75.8 million, up from $50.4 million.

“Okta and Auth0 have an incredible opportunity to build the identity platform of the future,” Pace said in a news release.

Auth0 co-founders CEO Eugenio Pace, bottom left, and Matias Woloski, bottom right, sign acquisition agreement papers via video chat with Okta co-founders Frederic Kerrest and CEO Todd McKinnon, top right. (Okta Photo)

Auth0 is currently ranked No. 4 on the GeekWire 200, our index of top Pacific Northwest startups. However, as is customary with an acquisition or IPO, Auth0 will now be moved off the list.

“We think it’s a fantastic validation of their ‘developer-first’ approach to enterprise software, and of Seattle’s startup ecosystem more generally,” Founders’ Co-op Managing Partner Chris DeVore told GeekWire. “We’re thrilled for the founders and have already seen the knock-on effects of the entrepreneurial culture they built as two of our most recent investments (Fusebit and Zerowall) were both founded by Auth0 alums.”

Salesforce Ventures led Auth0’s $120 million Series F round in July. The funding followed a $103 million round in May 2019. Total funding to date for the 8-year-old company is more than $330 million.

Other Auth0 investors include DTCP, Bessemer Venture Partners, Sapphire Ventures, Meritech Capital, World Innovation Lab, Trinity Ventures, Telstra Ventures, and K9 Ventures. Early investor and first Auth0 board member Sunil Nagaraj, who at the time of the deal was working for Bessemer, writes about the early days of the startup in this blog post congratulating the founding team on the acquisition.

“You will not find another person on Earth that cares more about understanding someone and communicating something clearly than Auth0 CEO Eugenio Pace,” Nagaraj wrote.

Auth0 co-founders Matias Woloski, left, and Eugenio Pace. (Auth0 Photo)

Auth0 combines existing login and identity verification options into a few lines of code that developers can quickly add to their applications. Its platform includes services like single sign-on, two-factor authentication, password-free login capabilities, and the ability to detect password breaches.

The pandemic has put a spotlight on security tech companies with accelerated adoption of digital services. Pace told GeekWire last year that demand for Auth0’s services was “massive” as companies connect more and more with customers in the cloud.

Auth0 processes more than 4.5 billion login transactions per month.

“I’m thrilled by the choice, flexibility, and value we’ll offer customers: Okta and Auth0 address a broad set of identity use cases, and our identity platforms are robust and extensible enough to serve the world’s largest organizations and most innovative developers,” Todd McKinnon, CEO and co-founder of Okta, wrote in a blog post.