Why Government Facilities Need Industrial IoT?

A Q&A with Craig Diffie, US Naval Officer (Retired) on the intersection of IoT and government

Introduction

Craig Diffie, a 20+ year veteran of the US Navy (Retired) and Enterprise Sales Executive at Everactive, sits down with Everactive’s Director of Product Marketing Rafael Reyes for a impromptu conversation of the intersection of government and IIoT from a business lens. Below is a transcript of their interview, edited for clarity and length.

Tell me a little bit about yourself - your current position and a brief history of your experience, specifically in government or defense.

I have been with Everactive now for close to 10 months. I came aboard in January of 2021. My role here is in the sales team to drive our engagement with the federal government, primarily the Department of Defense (DoD), because that’s the biggest entity that has the most money. 

Everactive has a large research and development project in progress right now with the US Air Force at Hill Air Force Base, where we’ve got both of our commercial solutions – our steam trap monitoring solution and our machine health monitoring solution – installed at significant scale there. My role is to manage that and grow that hopefully within the next year, as this project comes to an end, so that we get sustained engagement with the Air Force. Then obviously, my other goal is to grow this out into the other services and more broadly within the Air Force.

I’m a retired naval officer. I spent 25 years in the Navy, retired in 1999. And since 1999, I’ve been working in technology, mostly in software, and in sales in the federal space. I live near DC and I have been in a succession of jobs where I was usually engaged as a member of a sales team, usually working with a federal customer set. 

I spent two different stints totaling four and a half years at a company called OSI soft. OSI soft makes a data infrastructure software that’s called the PI System that is broadly used in the commercial industry to aggregate data from machines. And then to use that data for all sorts of process automation, process optimization, preventive maintenance – anything that you can think of that you might want to see data about your machines, understand what’s going on with them, and how you can get them to work more efficiently. I had two stints there for four and a half years. In those times, that was just when the industrial Internet of Things was getting to be “a thing.” We were transitioning from everybody’s marginal understanding of the Internet of Things, and then got to the Industrial Internet of Things. 

I worked significantly there, mostly with the Navy and the Marine Corps on some of their projects, trying to put our data infrastructure underneath their industrial environment to capture data from all their machines.

Have you recently observed adoption of digitally connected or Internet of Things solutions in government facilities?

I know of projects where they are trying to automate their industrial facilities. Most of them are around energy production. DoD has a theme across the board around energy resilience. When you talk about the Department of Defense, you have to realize there are the warfighters who deploy and then there’s the sustaining base back home – all the bases (post bases, bases camps, air bases), and whatever stations that sustain those troops when they’re back home. 

The DoD has the largest footprint of bases and land usage in the federal government. They have lots of old facilities, lots of equipment, aging equipment. They mostly depend on the commercial sector to provide energy, electricity, water, sewage, treatment, those sorts of things. But within the last 10 years, they have realized that they need to have better ways to make sure that they don’t go down on one of those bases. They call that energy resilience. 

So a lot of what they’ve done is to try to modernize their energy infrastructure: build microgrids, have microgrid infrastructure, build new types of energy, capture, geothermal, or they put a lot in solar, as you might imagine. A lot has gone into the automation and control systems and all the things that go with that around their push to achieve energy resilience. 

Where Everactive comes in on that is on the conservation side. Because in an infrastructure as large as the Department of Defense, they waste a lot of energy – a lot of it they don’t even realize that they’re wasting. Our products allow them to better manage the energy that they are using.

In HPI and CPI (Chemicals Processing Industry), it is a whole lot different than in food and beverage and in hospitals due to the intensity of the plant environment. But it’s the largest potential market for IIoT, because it’s the largest installed base of steam traps by far. For example, you have a Dow Chemical plant in Freeport that alone has 40,000 traps.

What's your overall assessment of the state of digitalization in government facilities? Is that a growing trend or slowing trend? An exciting opportunity or a terrifying threat?

It’s definitely a growing trend. It’s something that they are getting more familiar with. It’s definitely something that they want to do more of. Anytime you talk about the government, you’ve got to realize that they are almost always about 10 years behind commercial organizations. They are very slow adopters. It takes them a long time to budget for significant infrastructure projects. They’re kind of averse to change. They had a big workforce – still have a very big workforce – and they do a lot of things manually, because they’ve got a lot of people that they’re out and about doing that. But that workforce is going to significantly shrink in the next 10 to 15 years, as a lot of the older workers retire and they’re replaced by a younger engineering generation. In general, the desire by workers to join the federal government is less now than it was in, say, the “60s and “70s, when government was still kind of like a lifelong career. 

So they see the value of automation. They see the value of making things easier for their workforce by doing more with fewer workers. Which is all where automation comes into right, having machine-to-machine communication and rolling the data up. One thing that’s kind of perplexing, especially for us, is that they’ve had a mandate in government – really across the board for about five years now – to be cloud first. In other words, if you have the opportunity to buy servers and bring your data inside your fenceline or send it to the cloud, they are supposed to go to the cloud. If it makes sense for them to do so, they are supposed to put more and more data and processing in the cloud. 

Still, though, they’re not comfortable with that. For Everactive, we’re aggregating all of our data and displaying it in the cloud. That’s still something that DoD specifically always pushes back on: How am I going to get to this data? How am I going to protect it? Who else can see it? Are you gonna charge me for it if I want to get it back? They’re just very uncertain about the cloud.

What are the things that are driving the need for digitization in government facilities?

They have a lot of aging infrastructure, a lot of stuff that’s very old. The desire to modernize and to do modernization in a smart way is definitely there. Again, we talked about the workforce. Their workforce is aging and shrinking. So the ability to do more with fewer workers in a smarter way, and maybe in a more automated way, so that you actually need fewer workers is attractive. 

The ability to share data across services. The DoD is made up of four services, plus the Coast Guard. Until 20 years ago, they were completely isolated from one another. They understand that there’s value in being able to share data more broadly, across the services, and compare notes. Maybe one service manages another service’s infrastructure where it makes sense. But that all involves data sharing, and being able to digitize that data and move it around and position it where it’s supposed to be. And then you can take that down to the macro level down to the micro level and look at an individual facility. Can I get all my data in one place? Can I use it broadly, rather than just have it be single purpose?

The other thing I would mention is – and this kind of goes hand in hand with that – is condition-based maintenance and preventive maintenance. They’ve long had a very manually intensive process. They maintain their equipment on a scheduled basis. So every three months, I’m going to go to this motor and lubricate it, whether it needs it or not. And I’m not going to do it in a month and a half or two months. I’m going to do it in three months, because that’s what the schedule says for me to do. 

So they understand the value really across the board, from their facilities to their warfighting infrastructure – their ships, planes, tanks and those sorts of things – that if you can collect data and really understand what the machine is doing, the machine will tell you when it needs to be serviced. If you can capture the right data, look at it with the right frequency, and understand what’s going on with it. Preventive maintenance and condition-based maintenance programs are also driving the need to sensorize, the need to capture more data. They need to use that data more accurately. That’s another significant driver that we frequently see.

When you're thinking about government facilities, what is working well and providing good value right now?

The supporting function that is very much talked about and is probably the most important thing that the services are trying to do right now, is more agile software development. Everything that we’ve said about machines and the things that monitor machines are supported by software. They have realized that they need to have in-house development capabilities, and they need to be able to go faster. They need to approach something like what you see in the commercial organizations, where you’ve got very rapid iteration. Sometimes things are changed and upgraded and modernized, and the user community doesn’t even know that because it just happens automatically. 

The buzzwords that are flying around are dev ops, dev sec ops. There are significant movements, particularly within the Air Force, to enhance their capabilities. Obviously everything in DoD has a security layer. Cybersecurity is extremely important. That even goes into the IoT world. When you start talking about taking their data, using their data, installing on their machines, or installing in their facilities – they want to know that’s going to be done in a secure way.

Navy has a significant program called smart grid that is all about collecting data from some of their utilities and aggregating that data so that they can use it in the most efficient fashion. For all the things we talked about, such as predictive maintenance, if you’re still getting your utilities from a commercial source, are you able to monitor that? Can you really understand how much electricity you’re using? How much are you being charged for? How might I be able to cooperate with the utility in a better way to reduce my cost or to shed load or maybe even sell electricity back to the grid, if I have a production capability? That Smart Grid program is one example that’s been going on now for four or five years.

They’ve also gone heavily into advanced metering. So you know, if they’re sub-metering and advanced metering on an installation – if they’re getting their electricity from a commercial source, or even if they’re producing it themselves – breaking it down and monitoring that electricity on a facility-by-facility basis, maybe, or on a zone-by-zone basis within a database, then trying to use that electricity or water more efficiently. 

Again, the commercial world has been doing that for a long time. In a commercial building, you’re going to see the sub-metering. The DoD is a little bit behind on that, but they’re starting to look at it in a way to use energy more effectively.

Are there any other pain points where IoT solutions could provide a benefit that has not been implemented yet in government facilities?

I definitely think so. Everactive technology is a perfect example, if you go into a typical industrial environment. Coincidentally, I spent two days this week in a paper mill and one day in a cheese plant or milk plant. You see them just packed with equipment, machines, motors, pumps, compressors, and fans that all have to be maintained in order to run their processes. They don’t have any way to sensorize those things. There’s no way to understand what those are unless you fall back on your maintenance teams’ tribal knowledge and, and you do a lot of manual inspection. 

Our technology is making it possible to get digitized information about those machines in places where they’ve never been able to do that before. Just the ability to take a machine and put a sensor on it and then remotely monitor that and understand what’s going on with it all the time – that’s a significant capability that they’re going to try to harness. Then they will try to use that data on an enterprise scale as they grow that capability.

What challenges have you observed when it comes to adopting some of those solutions in government facilities?

Yeah, well, let me give you a little bit of a kind of a tangential example. I’d been working for years when I was at OSIsoft to talk to the DoD about enhancing their condition-based maintenance on ships. I’m a Navy guy, you know, so I kind of have a sweet spot for ships. Almost always, even though they had a mandate to do more condition-based maintenance on these ships – when you would go on board and ask them about, how many sensors do you have around the ship? or What if we added some sensors? We told them that you had to have some sensor on the machine to collect that data and push it into the software. And we will add “If you didn’t have a sensor, it is as if you didn’t have a hardware component”. We were always interested in them putting more sensors on more machines and then feeding that data into us. 

However we asked the questions, the answer was almost always: that adds complexity. It adds cost. On a ship, specifically, there’s limited space and everything that they put on there adds weight. They say: space, weight, and power. They’re always looking at: how do I put it on there? How do I maintain it? Does it take up extra space? Do I have to power it? Do I have to add electrical capability in order to power it? 

Everactive is in a very sweet spot in that respect, if you just take the example of monitoring a motor, because it’s a very quick install and you don’t have to run electricity to it. It’s a small, unobtrusive device that goes on quickly. If you want to take it off, it comes off quickly. And it starts producing data for you immediately about that machine. Our solution is one that can overcome those kinds of objections. 

What new challenges are IoT solutions creating for government facilities?

They’re probably two. One is, how do you use the data best? Okay, they’re generating data, but how do I see that data? How do I interpret it? How do I incorporate it into my maintenance plan? We talk about our API and a lot of folks in government push their data on their equipment into Maximo, so that they can automatically generate work orders. The DoD does that also. So how do I make this data actionable? Notifications, alerts. I don’t want to have to have my guys go to the dashboard every day and scan through it and look for faults. I want someone to tell me when something’s going wrong, and where should they go? What tools and stuff should they bring? What are they going to have to do when they get there to repair the machine?

The other one is security. We already talked on that, but whenever you’re taking their data out of their environment, they are many, many rules and regs that you have to comply with in order to make them feel comfortable that it’s going to be protected and that their systems are not going to be compromised by some backdoor or ability to get into the system. That’s particularly true when you’re talking about interfacing with control systems.

How do you see the role of government regulation in relation to the adoption of IoT solutions in federal facilities?

We try to stay away from price, but we also know that in our world, anybody we’re trying to sell to has to sell it to somebody else. In part, it’s a financing decision. Either you pay all right now or you pay little by little throughout. 

When you talk about regulation and government, obviously, there’s lots of rules. They fall into two buckets for me. One is, one is security. Many times you have to have your product approved and vetted before they even let you talk about installing it. 

The second one is to get through the contracting processes. Procurement teams are a very complex set of gates that you have to step through in order to get them to use your product. Is it approved? Can I prove that it’s the best value, the lowest cost? Who are the competitors? And is this one clearly better? Is it on our approved vendors list? Do we know who it’s going to install and interface with our existing systems? Has it been tested? Every time you talk to somebody in DoD about a solution, they want to know: who else in the army is using this? Who else has already used this and installed it so that I can compare notes with them.

On the other side of the coin, how do you see the role of government employees in relation to the adoption of IoT solutions in government facilities?

The government in general does not have the number of engineers that you find in a typical commercial organization. They’re short on hardcore engineering. But there are folks within any organization or community that are tasked with innovation and technology evaluation. Those folks are pushing to do things better and smarter. Part of their job is to find new technologies and bring them into the environment, to find better ways to do work. Not as many as there are on the commercial side, but there are groups whose charter this is at both DoD and particularly the Department of Energy. They have labs to test new technology and understand how it might fit into their environments. So there are folks that are out there looking for the latest and greatest. And it’s not a surprise to people in DoD, that they are behind. They all know they’re behind and they’re all looking to get closer to the leading edge. They’re now almost never on the leading edge unless it comes to weapon systems, but they all have a desire to be more modern and be more like their commercial counterparts, particularly if it makes their life easier and their work more effective.

Who are the target audiences or roles that will be receptive to IoT solutions in government facilities?

There are hierarchical commands that manage the operations and maintenance and sustainment of those facilities. That’s a natural path to go through. There are research and development programs that you can work through. With a new technology like ours that is significantly innovative, those are often ways to get in. There are energy reduction programs that are looking for technologies like ours. The labs I mentioned already, they’re always out there. They have a charter to innovate. That’s a way to show them new things.

What are the target roles that might be skeptical of IoT solutions in government facilities?

That same workforce that’s out there doing things in the same way that they’ve always done things – the guys who maintain the equipment and have their role. Those are the people that you have to convince that this is a better way that it’s going to make their life easier – that it’s not too complex for them to understand. That frontline workforce is the toughest hurdle. You got to show them that what you’re doing is going to improve the way that they do business.

The final question for the $1 million prize: why will government facilities need IoT solutions?

There are no unlimited dollars. We talked at the beginning about the warfighter that goes forward to engage with our friends and enemies around the world. And then the sustaining group that’s behind. There’s a lot of verbiage saying that they’re both equally important and that, without the bases, you can’t adequately train and sustain your fighting force. But everybody knows that the bases are not the most important part, right? 

They’re not adequately funded. They’re not adequately staffed. They don’t have robust funding streams. The infrastructure bill that’s in play right now at the presidential level has the potential to infuse some money into the Department of Defense and to the other government agencies to try to modernize that.

One example – this is not specifically tied to the infrastructure bill that’s in play right now – but the Navy has a 20 year, $20 billion with a B program to modernize their four shipyards. They’ve got four shipyards that primarily serve the nuclear power vessels, because they’re a different animal. And they’re old. Norfolk Naval Shipyard is more than 100 years old, and I guarantee you there are things in that shipyard that they use every day that were installed 100 years ago. They can’t keep doing the things that they need to do – in the Navy’s case, repairing ships – the way that they’re going. They need to do things smarter and use their capital more efficiently, find better ways to do business, in order to save money and increase output. 

Why is Everactive so great?

The company is great. The ideas are great. The things that we’re going to do in the future are going to be great. We’ve got a very innovative platform that’s going to support many new capabilities in the IoT world. And I’m looking forward to seeing how we build those. It’s just a lot of fun to go out and talk to people about what we do. We know the technology is going to work. We know that people are gonna like it. We don’t have many direct competitors, so it’s not like we have to always win the bake off. We’re usually the best in our class. All we have to do is convince them that they should spend the money and that they’re going to get adequate payback. And in most cases, we can show that that’s the case. So it’s a good place to be, as you well know.

Craig, thank you so much for your time

This was a great conversation, thank you