‘Monitoring is one of the key elements in the digital transformation’

Germany's Paessler, a provider of network monitoring solutions for IT and industrial assets, landed in Latin America in 2007.

Since then, the company has sought to expand its operations through integrators and hardware suppliers, and in the last three years has doubled down on industrial internet of things (IIoT).

Paessler reports roughly 20,000 clients in Latin America, or around 7% of the group's customer base. 

Among the main segments the company is betting on in the region are mining, renewable energy and smart cities.

In this interview, David Montoya, the company’s global business development manager for IoT, talks about Paessler's Latin American operations, digital transformation, ongoing projects and business perspectives.

BNamericas: How is Paessler structured to serve its Latin American clients? What are the company’s main markets and where is it seeing the most opportunities in the region?

Montoya: I’m responsible for the entire operation in the Americas and within that area the United States is our biggest market. Next comes Canada, Brazil, Mexico and Chile. These are our five biggest markets in the region.

Our growth has been exponential in the last five, six years. We’re reaching more and more users, who are adopting monitoring [of networks and systems] as a good practice to be proactive, rather than reactive.

Much of this growth is related to the digital transformation, which the region is now making great strides in.

For a long time this was a little slower, but the pandemic in many ways forced companies to create strategies in this direction and quickly move towards this scenario. And monitoring is one of the key elements in the digital transformation. Why? Because companies can know that everything is going well with their infrastructure.

BNamericas: Have you noticed any changes in the type of companies that turn to Paessler's solutions with this new pandemic dynamic? In which verticals and company size are you concentrated on?

Montoya: Usually, most of our customers are in the telecom side. They are providers, cellphone operators, this is our main market.

Then comes other markets such as health, with hospitals and clinics. The educational segment is also very important to us, especially in the Americas, even more so than in Europe. We have a very strong performance with universities and educational institutions.

We also have the financial part, with banks, insurance, etc.

What started to change a little bit was that we got to have a much larger number of clients who are doing professional IT services. People who use our PRTG tool [network monitoring platform, the company's core product] as a tool to do business. 

We also start to see small, very small companies embracing technology. Before, monitoring was something more visible and relevant mostly for mid-sized and large companies. But the digital transformation has also came to smaller companies, that now need to keep track of their up and running operations. For us this was a very interesting change.

BNamericas: You have a very strong focus on the convergence of IT networks with OT [operational technologies]. How are you working on this integration in the face of new trends, such as hyper-automation, private networks, edge computing and 5G?

Montoya: We prepared ourselves for all these changes. We started about three years ago to make changes to our product in order to move from being just IT to being able to more comprehensively monitor OT and the internet of things, sensors.

We did a market study to understand what key technologies were coming in terms of protocols and connectivity. Then we started doing research and being part of some standardization groups and entities, such as the OPC foundation, which is very focused on industry 4.0.

We have become technology allies with Sigfox, which is a leading provider of IoT connectivity, also in the Lora [long range network protocol, with low power consumption] alliance. 

In sum, we started to be much more active in this type of alliance with the objective of having a tool that could connect with more and more devices and facilitate the convergence of IT and OT for professionals in charge of technological management.

It’s a difficult and complex issue. These networks are completely different networks, in many aspects incompatible. A clear example: in the IT network, each thing that is connected has a unique, specific [IP] address. 

In OT networks, addresses are the same. Because the thinking in the OT network is that if I have a problem with a specific device, I can simply switch from one to another.

We’re talking about two worlds that are very different and at the same time are under a lot of pressure to converge. What we are doing is at least facilitating visualization, monitoring and also data collection. We aim to be able to monitor more and more devices.

BNamericas: What kind of partnerships do you have in hardware, which you don't do but is a fundamental part of the ecosystem in which you operate?

Montoya: The first issue is that we need to know the type of connectivity in the project. We have partnerships for different flavors. In Brazil we are partners of WDL, which is the local operator of Sigfox. 

They partner with companies that manufacture the sensors locally. It’s very important for us to help reduce the costs of industrial IoT projects.

We always try to recommend companies that are local to reduce project costs and to boost IoT in Latin America.

So we partner with some other operators like Sigfox, NB-IoT, and they have an ecosystem of companies that create sensors that are compatible with these technologies. 

We don't manufacture hardware, but we need to have these strategic partnerships with companies that supply the hardware and implement the project.

BNamericas: What other partners have you been working with to operate in other markets in Latin America?

Montoya: In Latin America, we are mostly with Sigfox, as well as some Lora partners, although in the region we work less with Lora than in the US.

We are also focused on promoting alliances aimed at the hospital segment, which in the US is more advanced in hospital digitization and offers many opportunities here in Latin America.

We want to be able to monitor medical devices, X-ray equipment, tomography equipment, etc. Much of this also depends on connectivity through 5G and through Lora.

I’ve seen a very interesting evolution in the number of possibilities and knowing that 5G is already in Latin America, the potential to make smart agriculture, smart cities, smart transport, is huge.

BNamericas: We’re already seeing a series of pilots and tests with 5G in factories, farms, mines in the region. Are you participating in any of these, do you have conversations for this type of network?

Montoya: Yes, but not in Brazil. We’re working more on this issue in Chile, in the United States. In Chile we’re in a smart metering project for mining. 

In Brazil, the strongest partnership we have is with Sigfox. We need to expand the number of contacts to have more access to this type of 5G project.

BNamericas: What kind of contacts? With operators, integrators?

Montoya: It could be with an operator. The operator will provide the communication, but you hardly see these carriers doing the whole project. 

So what we really need is to get in touch with the systems integrator who has this contact with the operator and can implement the entire project. That is, the platform, the sensors and the communication between them.

BNamericas: And what's missing for that? Why haven't you advanced yet?

Montoya: The truth is, we're getting along really well with Sigfox. We’re trying to grow the ecosystem with Sigfox. What's more, 5G is a technology that promises a lot, but it's still new.

So we’re first working to establish a series of alternative projects, in this case with ‘0G’, and wait a little while until the whole issue of permissions, regulation, effective implementation is matured to then start looking for more alliances around 5G.

What also often happens is that our own integrators look at the market and for the most relevant technological demand, get in touch with the operator or whoever is needed, and then bring 5G technology to the projects in which we’re participating.

BNamericas: Like in Chile.

Montoya: That's it. I can't disclose the name yet, but it's a big mining company that’s looking at 5G as connectivity for their mines. On the operators side, there are projects in this field by Telefónica and Claro.

And in Brazil, we have a partnership with a mining company, but within the scope of Sigfox, of ‘0G’, for internet of things connectivity, not 5G.

BNamericas: What other projects are you working on?

Montoya: We’re working on several fronts. 

In Mexico we’re working on smart building projects, to control the flow of people into the buildings, as well as issues around humidity, temperature and also resources usage management, like water and electricity. All this generates data. And that data needs to be used for decision making.

We also have a project in an important city in Mexico, which I can't reveal yet, in smart lighting. This city offers a very large network of smart poles featuring emergency buttons, cameras, free Wi-fi, etc. 

What we do is monitor these services that are on the different poles, in partnership with the integrator of this project.

We’re also working on smart agriculture, with partners that make devices for UV measurement, temperature measurement, soil moisture, also in Mexico.

We also have ongoing projects related more specifically to the factory floor, mainly in the US but also in Brazil, where we’re working with a large brewery. In this case we're doing tests to automate contingency responses, not just monitoring the networks.

We have partners representing Paessler in almost all Latin American countries, although our main focus is on these three mentioned [Mexico, Brazil and Chile]. We have a good presence in Argentina, Colombia, Guatemala. Guatemala in fact is a very interesting market for us.

We’re working on the automation of a large flower producer and on a coffee farm in the country. Guatemala is not a very large market, but then again we’re working on projects that can be replicated as benchmarks in other markets in the region – such as this one for coffee.

In Uruguay we also have projects for monitoring video-surveillance systems and access controls in soccer stadiums.

BNamericas: Have you noticed greater demand from other verticals? What other segments are important to Paessler?

Montoya: We're seeing potential with multiple verticals. For example, we started a very interesting project with a port in Santa Catarina, Brazil, to monitor refrigeration systems.

Ports is a very interesting vertical for us, because of the amount of technology they’re implementing to make operations more efficient, faster and reduce costs, is just great. Airports too.

The energy generation part, especially wind energy, has also been very interesting. We’re starting to work on some projects in Brazil, Chile and Mexico to monitor wind generators, for example. We also have a few things related to providing power to datacenters.

BNamericas: How many clients do you have in the region and what is the weight of Latin America for the group?

Montoya: We have around 500,000 customers worldwide. Latin America represents around 6-7% of our market, so it must have around 20,000 customers. It’s a region that’s growing a lot within the group.