ni.com
Safe Harbor Warning
During the course of this presentation, we will make projections or other forward-looking statements regarding the future financial
performance of the company or future events, including statements regarding our strategic goals, operating leverage, priorities for cash,
effective tax rates in future periods, revenue from our largest customer, market growth and trends, future product benefits, growth plans,
marketing strategy, non-GAAP operating margin for FY 2015 and Q3/Q4 2015, effect of foreign exchange impact on Q4 2015, dividends for
FY 2015 and long-term dividend target. We wish to caution you that such statements are just predictions and that actual events or results
may differ materially. We refer you to the documents the company files regularly with the Securities and Exchange Commission,
specifically the company’s most recent Form 10-K and our Form 10-Q filed on July 31, 2015. These documents contain and identify
important factors that could cause our actual results to differ materially from those contained in our projections or forward-looking
statements.
Non-GAAP Information
In this presentation, we have included certain non-GAAP financial results with respect to some or all of the following items: revenue, gross
margin, research and development and other operating expenses and operating income. Our non-GAAP results exclude, as applicable, the
impact of stock-based compensation, amortization of acquisition-related intangibles, acquisition accounting for deferred revenue,
acquisition-related adjustments and acquisition-related transaction costs. In each of our quarterly earnings press releases since March 31,
2006, we have included a reconciliation of our GAAP results to our non-GAAP results for the applicable periods and such press releases are
available on our website at investor.ni.com. For periods prior to March 31, 2005, our non-GAAP results are the same as our GAAP results.
We also refer in this presentation to “free cash flow” which is a non-GAAP number that is equal to our cash flow from operating activities
as presented in our statement of cash flows under GAAP, less capital expenditures. A reconciliation of free cash flow to the most
comparable GAAP number is available on our website at ni.com/nati and included in the appendix of this presentation. We also include
information in this presentation about our year-over year (YOY) GAAP revenue growth excluding the effect of our current largest customer
and the impact of foreign currency exchange, which we sometimes refer to as our core YOY revenue growth. We have included a
reconciliation of such core revenue growth to our GAAP revenue growth on our website at ni.com/nati and in the appendix of this
presentation.
.ni.com
2
Conference Agenda
10:30 a.m.
Introduction by Dr. Truchard, President, Co-Founder and CEO
10:45 a.m.
Serving Our Customers Through a Platform-based Approach
Eric Starkloff, EVP of Global Sales, Luke Schreier, Director of Automated Test, and
Jamie Smith, Director of Embedded Systems
Noon
Lunch and Panel Discussion Moderated by John Graff, VP of Marketing
1:00 p.m.
Business and Financial Update by Alex Davern, COO/CFO
1:30 p.m.
Q&A Session with NI Executive Management
2:00 p.m.
Conference Concludes and Expo Tours Begin
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3
NATI Investor Conference Introduction
Dr. James Truchard, President, CEO, and Co-Founder
ni.com
Our Mission
We equip engineers and scientists with systems that accelerate productivity, innovation,
and discovery.
ni.com
5
The Long -Term View
Qualitative
Quantitative
ni.com
100 Year Plan
Core Values
Culture
The NI Way
10 Year Plan
Core Strategic Vision
People
Learning and Development
Platforms
5 Year plan
Products/Markets
Company Goals
Growth Goals
Quality Goals
1 Year Plan
Sales Forecasts
Goal Deployment
Quarterly Plan
Financial Goals
Sales and Profits
Update Goals
6
Evolution of NI’s Core Strategic Vision: First Decade
Self Financing
With GPIB
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Evolution of NI’s Core Strategic Vision: Second Decade
Self Financing
With GPIB
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Virtual
Instrumentation
Traditional
Instruments
1996
NI Products
1996
8
Evolution of NI’s Core Strategic Vision: Third Decade
Self Financing
With GPIB
Virtual
Instrumentation
Measurement and
Control Systems
Traditional
Instruments
2006
NI Products
1996
2006
CompactRIO Systems
PXI Systems
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Evolution of NI’s Core Strategic Vision: Fourth Decade
Self Financing
With GPIB
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Virtual
Instrumentation
Measurement and
Control Systems
10
Platform-Based
Design
Evolution of NI’s Core Strategic Vision: Fifth Decade
Self Financing
With GPIB
Virtual
Instrumentation
Measurement and
Control Systems
Platform-Based
Design
Enterprise-Level
Systems
Cyber-Physical Systems
Big Analog Data™ Systems
Software-Designed Systems
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BIG
ANALOG
DATA
INTERA
CT
COMPU
TE
CONNE
CT
Social Web
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BIG
DATA
Internet of Services
Internet of Things
Business Analytics
Graphical System Design
Test and
Measurement
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Embedded Control
and Monitoring
13
ni.com
Serving Our Customers Through a Platform-based Approach
Eric Starkloff, EVP of Global Sales and Marketing
ni.com
The Industrial Internet of Things
Big Analog Data
Edge Processing
Smart
Measurement
Smart
Automated Test
Smart
Instrumentation
Smart
Grid
Smart
Machines
Enhanced Requirements for the IIoT
Reliability | Latency | Security | Upgradeability
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Smart
Power
Smart
Communications
NI’s Opportunity Areas
Test and Measurement
Embedded Monitoring and Control
Design
Design
Validation & Verification
Prototype
Production
Deploy
Total Market: $21 Billion
Total Market: $36 Billion
Source: Frost & Sullivan, Prime Data, and NI Estimates
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Test and Measurement
Luke Schreier, Director of Automated Test
ni.com
Test and Measurement Opportunity
Estimated Total Market Size: $21 Billion
General Purpose
Instrumentation
Semiconductor
Wireless/RF
Electromechanical
Systems Test
General Purpose
Data Acquisition
$5 Billion
$4 Billion
$5 Billion
$5 Billion
$2 Billion
ni.com
Source: Frost & Sullivan, Prime Data and NI Estimates
Estimates include hardware, software and services.
19
NI’s Platform-Based Approach to Automated Test
Traditional Instruments
PXI Modular Instruments
VS.
Global PXI-based instrumentation module sales in electronic test applications are expected to
experience a compound annual growth rate of 17.6% from 2013 to 2020. By 2020, these sales are
expected to generate over $1,750 million.
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NI’s Platform-Based Approach to Automated Test
Traditional Instruments
PXI Modular Instruments
VS.
Global PXI-based instrumentation module sales in electronic test applications are expected to
experience a compound annual growth rate of 17.6% from 2013 to 2020. By 2020, these sales are
expected to generate over $1,750 million.
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Smarter Test Systems for Smarter Devices
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What is PXI?
PC-based platform optimized for
test, measurement, and control
Leverage from commercial tech
PXI = PCI eXtensions for Instrumentation
Advanced timing and
synchronization features
High-performance capability
PCI Express electrical-bus with the
rugged, modular, Eurocard
mechanical packaging of CompactPCI
Durable enough for production floor
Open specification governed by the
PXI Systems Alliance (PXISA)
Multiple vendors addressing niches
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NI PXI Advantage
PXI Products
600+
Timing and
Sync
Modular
HW
Proprietary Device Synchronization
<1 nanoseconds skew out of the box
<30 picoseconds skew with calibration
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Driver
SW
NI PXI Advantage
LabVIEW is the leader in software
for test automation
Timing and
Sync
Modular
HW
Application
Software
>70% of PXI Users Program with
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Driver
SW
25
NI PXI Advantage
200,000
Sales
Online Members
8,000
Integration
Partners
Example Programs
1,300
Modular
HW
Driver
SW
Integration Partners
Application
Software
800
Applications &
Systems Engineers
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Ecosystem
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Support
Timing and
Sync
Strong Industry Adoption of PXI
2014
PXI Module Sales
$504M
2008
PXI Module Sales
$305M
National Instruments
Other Vendors
National Instruments
Other Vendors Represented:
Keysight Technologies, Pickering, Aeroflex, Astronics Test Systems
(EADS), Marvin Test Solution, ADLINK, Chroma, etc.
Source: Prime Data 2015
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Other Vendors
Building Blocks for Smarter Test Systems
NEW!
PXIe-8880
Processing Power
Octo-Core
Processing
PXIe-8135
PXI-8156
PXI-8176 RT
Intel® Pentium® MMX
166 MHz, 16 MB RAM
Real-Time
Operating System
1997
2002
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PXIe-8106
PXIe-8103
Quad-core
Processing
Dual-Core
Processing
PXI Express
Technology
2003
2007
28
2012
2015
Building Blocks for Smarter Test Systems
“
“
The use of the latest Intel Xeon processors is a
new milestone for our collaboration with NI. The
Internet of Things requires the highest possible
processing power to reduce time to market and
lower the cost of test, and NI’s approach with
PXI is critical toward that goal.
Shahram Mehraban
Director, Market Development for
Industrial IoT
Intel
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Building Blocks for Smarter Test Systems
1.0 GB/S
PER LANE
System Bandwidth [GB/s]
24
PXI Chassis featuring PCI
Express 3.0 and 24 GB/s Total
System bandwidth
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500 MB/S
PER LANE
12
250 MB/S
PER LANE
6
3
132 MB/S
TOTAL
PXI with
PCI
30
PXIe with
PCIe Gen 1
PXIe with
PCIe Gen 2
PXIe with
PCIe Gen 3
Smart System Design Software
Warm LoadTime in Seconds
Features at a Glance
•
•
•
2013
Speed and reliability improvements
Improved development and
debugging tools
Unrivaled hardware integration
2014
2015
3.6X Faster
8.7X Faster
Dynamic Memory Usage
2013
Application Areas
•
•
•
2X Faster
2015
Data acquisition
Embedded control and monitoring
Automated test
LabVIEW
WLAN
VST
Dynamic
Write Code Faster. Write Faster Code.
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Rising Complexity of Wireless Test
5G
5G Candidates
Cellular
GPS
NFC
Bluetooth
802.11
LTE 2600
LTE 2100
LTE 1800
LTE 2600
Protocol Complexity
LTE 2100
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LTE 1800
GSM 1800
GSM 900
GSM 1900
GSM 1800
GSM 900
GSM 850
Bluetooth 2
802.11g
802.11b
2000
2005
GSM 1900
GSM 1800
GSM 900
GSM 850
GPS
Bluetooth 2.1 + EDR
32
LTE 850
LTE 800
LTE 900
UMTS 2100
LTE 850
UMTS 1900
LTE 800
UMTS 2100
UMTS 1900
UMTS 900
UMTS 850
LTE 900
UMTS 2100
UMTS 1900
UMTS 900
UMTS 850
GSM 1900
GSM 1800
GSM 900
GSM 850
Glonass
GPS
NFC
UMTS 900
UMTS 850
GSM 1900
GSM 1800
GSM 900
GSM 850
Galileo
Glonass
GPS
NFC
Bluetooth 4.1 (LE)
802.11ah
802.11af
802.11ad
Bluetooth 4.1 (LE)
802.11ac
802.11ac
802.11n
802.11g
802.11b
802.11n
802.11g
802.11b
802.11p
802.11n
802.11g
802.11b
2010
2015
2020
Life of a Wireless Standard
Design through Test
Finished Device
Production Test
Semiconductor
Production Test
Semiconductor
Characterization
Algorithm
Design
Time
Key Requirements
Time-to-working prototype
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Measurement accuracy,
time-to-market
33
Cost/Speed
(Cost = test time, capital equipment)
Smart Wireless Production Test System
Features at a Glance
•
•
•
Built on the PXI platform
Turnkey test software
Rugged, production-floor ready
Application Areas
•
•
•
Mobile phone test
Tablet test
Infotainment test
NI Wireless Test System
Built on the PXI Platform
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35
HARMAN eCall Wireless Connectivity Test System
“ We tested multiple wireless
technologies ranging from
Bluetooth to Wi-Fi to GPS and
cellular all with the same
equipment using the NI Wireless
Test System.
“
Markus Krauss
Test Manager
Automotive Systems
HARMAN/Becker GmbH
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Customer Example: peiker acustic
"The WTS allowed us to reduce our test costs by more than 25% by
testing four devices in parallel, with three antenna ports each, using
multiple wireless technologies ranging from LTE to Wi-Fi to GPS all
with the same equipment”
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System Integrated by NOFFZ
Measurement Capability
Standalone Instruments vs. Semiconductor ATE



o
o
o
“Rack & Stack”
Optimized for lab/design use
Wide availability
Quick setup time
Bulky, redundant functionality
Slow to automate
No production infrastructure
(handler, STDF, etc.)



o
o
o
Optimized for test throughput
ATE infrastructure elements
Aligned with design tools
Expensive to buy/maintain
Limited selection, proprietary
Difficult to program
Production Floor Readiness
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“Big Iron ATE”
Smart Semiconductor Production Test System
Features at a Glance
•
•
•
Built on the PXI platform
Rugged, production-floor ready
Semiconductor-specific
development environment
Application Areas
•
•
•
RF integrated circuit (IC) test
MEMS IC test
Mixed-signal IC test
NI Semiconductor Test System
Built on the PXI Platform
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NI Semiconductor Test System
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Customer Example: Cirrus Logic
“In the end, we concluded that
Cirrus purchasing STS was cheaper
than renting traditional ATEs.”
John Cooke
Cirrus Logic
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41
Benefits of a Platform-Based Approach
Correlate Measurements from R&D to Manufacturing Test
Common Automation Software
Common Measurement Algorithms
Common PXI Instrumentation
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Qualcomm Reduces Test Times
Previous
Technology
PXI Phase 1
PXI Phase 2
Traditional Box
Instrumentation
NI PXI RF
Instrumentation
NI Vector Signal
Transceiver
Early 2000’s
2007
2012
1X
10X
200X
Year
“We improved test speeds by
more than 200X compared to
traditional rack-and-stack
instruments while significantly
improving test coverage."
Test Time
Reduction
WLAN
802.11a
802.11a
802.11a
Not
only
do
faster
measurements
reduce
test
cost,
but
Protocols
802.11b
802.11b
802.11b
Tested
Qualcomm802.11g
is also able to better802.11g
characterize their 802.11g
DUT by
collecting more 802.11n
data points
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802.11n
802.11ac
Completing the Platform for Semiconductor
Build compact, PXI-based process characterization systems
• New module extends NI Source Measure Units up to 200V
• Sensitivity down to 100 femtoamps or 100 nanovolts
• Dramatically reduce the footprint of high-channel semiconductor
process measurements
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Life of a Wireless Standard
Design through Test
Finished Device
Production Test
Semiconductor
Production Test
Semiconductor
Characterization
Algorithm
Design
Time
Key Requirements
Time-to-working prototype
ni.com
Measurement accuracy,
time-to-market
45
Cost/Speed
(Cost = test time, capital equipment)
LabVIEW Communications System Design Suite
The Revolution in Rapid Prototyping
“We chose NI a year and a half ago because you
have the most complete and flexible platform for
5G research. All the other vendors only provided
closed 4G-specific solutions.”
Dr. Farooq Khan
President, Samsung Research America
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Platform-based Design Approach for 5G mmWave
mmWave
LabVIEW
Host PC
PXI FlexRIO
Baseband
RF and
Antenna
LabVIEW
RF and
Antenna
PXI FlexRIO
Baseband
Host PC
“Last year at NIWeek we talked about the world’s
first mmWave e-band (73GHz) wireless access link
capable of a peak rate of 2.3 Gbps.
At the Brooklyn 5G Summit this past April, we
have successfully demonstrated a 2x2 MIMO
wireless link achieving a peak rate of 10 Gbps or
over 4 times the rate that we showed last year. ”
Dr. Amitava Ghosh
Head of Broadband Wireless Innovation
Nokia Networks
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Embedded Monitoring and Control
Jamie Smith, Director of Embedded Systems
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NI’s Opportunity Areas
Test and Measurement
Embedded Monitoring and Control
Design
Design
Validation & Verification
Prototype
Production
Deploy
Total Market: $21 Billion
Total Market: $36 Billion
Source: Frost & Sullivan, Prime Data, and NI Estimates
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NI’s Platform-Based Approach to Embedded System Design
Traditional Design Approach
Flexible Off-The-Shelf Solution
VS.
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Embedded Opportunity in Industrial Internet of Things
Estimated Market Size: $36 Billion
Smart Manufacturing
Machines
Energy and
Oil & Gas
Health and
Scientific Research
Transportation and
Heavy Equipment
$14 Billion
$7 Billion
$6 Billion
$9 Billion
Source: IDC & NI Estimates
ni.com
Source: Prime Data52and NI Estimates
The Internet of Things Market
Unit Volume
Smart
Phones
Wearables
Semiconductor
Manufacturing
Smart Grid
Biotechnolog
y
Construction &
Agricultural Equipment
Source: Worldwide Embedded and Intelligent Systems 2014-2018 Forecast and Analysis (IDC #249414, July 2014) and NI Estimates
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Power Plant
Unit Volume
The Internet of Things Market
Semiconductor
Manufacturing
Smart Grid
Biotechnolog
y
Construction &
Agricultural Equipment
Source: Worldwide Embedded and Intelligent Systems 2014-2018 Forecast and Analysis (IDC #249414, July 2014) and NI Estimates
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Power Plant
The Industrial Internet of Things
Big Analog Data
Edge Processing
Smart
Measurement
Smart
Automated Test
Smart
Instrumentation
Smart
Grid
Smart
Machines
Enhanced Requirements for the IIoT
Reliability | Latency | Security | Upgradeability
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Smart
Power
Smart
Communications
Industrial IoT Systems
Cyber Physical Systems
Computation
Communication
Control
Real-Time
Time Synchronization
Adaptive Control
High Performance
Determinism
Design Methodology
Scalability
Interoperability
Models of Computation
Industrial Internet of Things
Big Analog Data
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Data Management
Data Analytics
Systems Management
Transmission and Formatting
Algorithms & Prognostics
RASM
Retrieval and Visualization
Embedded Intelligence
Aging
Alarming
56
Health Monitoring
Deployment Configuration
Technology Leverage in Embedded Control & Monitoring
Grid Automation
Online Asset Monitoring
NI LabVIEW RIO Architecture
Smart Machine Control
System on Module
Single-Board RIO
USRP Device
PXI
CompactRIO
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New Performance CompactRIO At-A-Glance
Intel Atom
Processor
USB Host
& Device
2X Gigabit
Ethernet
2X Serial
Mini DisplayPort
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Xilinx Kintex-7
FPGA
Modular
C Series I/O
SD Card
58
End-to-End Industrial IoT Solution
Connect to the Enterprise, Internet, and Cloud
Vibration
Turbines
Data Acquisition and
Control Systems
Sensors/Actuators
Temperature
Analog I/O
Digital I/O
FPGA
Specialized I/O
Voltage
IT Infrastructure
Custom I/O
Processor
Real-Time or
PC-Based
The
Edge
Things
Network & Data Explorer
Bus Protocols
InsightCM Enterprise
Pressure
Pumps
Temperature
Thermal Cameras
Transformers
Wired or Wireless
Vibration
Voltage
Analog I/O
Analog I/O
Analog I/O
Digital I/O
Digital I/O
Digital I/O
Specialized I/O
Specialized I/O
Specialized I/O
Custom I/O
Custom I/O
Custom I/O
Bus Protocols
Bus Protocols
Bus Protocols
FPGA
FPGA
FPGA
Data Analytics
Systems Management
User Authentication
Data Management
Data Historian
RF Spectrum
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Processor
Processor
Real-Time
or
Processor
Real-Time
or
PC-Based
Real-Time or
PC-Based
PC-Based
•
•
•
•
59
CMMS
Systems
End-to-End Industrial IoT Solution
Areva Wind – Turbine Condition Monitoring
Data Acquisition and
Control Systems
Vibration
IT Infrastructure
Analog I/O
Digital I/O
Vibration
FPGA
Specialized I/O
Strain
Custom I/O
Processor
Real-Time or
PC-Based
The
Edge
Sensors/Actuators
InsightCM
Enterprise
Network
& Data
Explorer
Bus Protocols
Solution Advantage
•
•
All sensors in
one platform
Consolidate
systems
More reliable
renewable energy
ni.com
Solution Advantage
•
•
•
Custom analytics, signal processing,
and logging
Data reduction
Deterministic and adaptive
monitoring
Move coverage
60
Solution Advantage
•
•
•
Data visualization
Advanced analysis
Systems management
Lower maintainer cost
End-to-End Industrial IoT Solution
Firefly Equipment - Intelligent Turf Harvester
Data Acquisition,
Control Systems, and IoT Gateway
Motor
Analog I/O
Digital I/O
Pressure
FPGA
Specialized I/O
Actuator
Custom I/O
Solution Advantage
>150 different
I/O types…
one
CompactRIO
100% productivity gains
ni.com
Network & Data Explorer
Bus Protocols
Encoder
•
Processor
Real-Time or
PC-Based
IT Infrastructure
The
Edge
Sensors/Actuators
Solution Advantage
•
•
Design freedom for complex control
Brought domain experts closer to the
design
20% faster
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Solution Advantage
•
•
Remote monitoring to
improve reliability
Remote software updates
Half the fuel
End-to-End Industrial IoT Solution
Innovari – Grid Load Balancing
Data Acquisition and
Control Systems
Current Transformer
IT Infrastructure
Analog I/O
Digital I/O
Voltage
FPGA
Specialized I/O
Relay Control
Custom I/O
Processor
Real-Time or
PC-Based
The
Edge
Sensors/Actuators
Network & Data Explorer
Bus Protocols
Solution Advantage
•
•
High-quality
measurements
Custom I/O
Provide power to
more homes
ni.com
Solution Advantage
•
•
•
Time to market
IP for power quality
Lower design risk
Utilities and customers both save
money
62
Solution Advantage
•
•
Grid wide load balancing
Capacity generation
reporting
Easier to integrate
renewables
Industrial Internet Consortium
Mission
To accelerate growth of the Industrial Internet by coordinating
ecosystem initiatives to connect and integrate objects with people,
processes and data using common architectures, interoperability and
open standards that lead to transformational business outcomes.
Launched in March 2014 by five founding members:
Community.
Collaboration.
Convergence.
The IIC is an open, neutral “sandbox” where industry, academia and
government meet to collaborate, innovate and enable.
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63
Industrial Internet Consortium Testbeds
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Lunch and Panel Discussion
Moderated by John Graff, Vice President of Marketing
Ian Langley, Cobham
Michael Reid, Duke Energy
Amtava Ghosh, Nokia
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