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June 3rd, 2016

The Industrial Internet Of Things Is About To Become A Multi-Trillion Dollar Market

“The sheer size of the IoT market in the heavy industries and manufacturing supply chain etc. is clearly much larger than the consumer space for the foreseeable future.”

Companies and manufacturers that don’t have a clear strategy for implementing the Industrial Internet of Things may find business growth restricted in the years to come. Why? Because the Industrial Internet of Things is about to become a multi-trillion dollar opportunity.

A report by the Genpact Research Institute said that 81% of industrial companies believe that adoption of the Industrial Internet of Things is the key to future success.

According to a custom global survey of 173 senior executives by business process services provider Genpact’s internal think tank, the problem is that only 25% have a clear vision of their Industrial Internet of Things strategy. However only 24% of those executives are happy with how this strategy is being executed.

The report found that a number of obstacles have prevented wider adoption of the Industrial Internet of Things. Some of these would be instantly familiar to consumers—data security and privacy—but others are firmly related to the interconnectivity of machines and sensors through data and analytics.

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Genpact said that 35% of people thought that IT staff did not have the skills to implement an ongoing strategy. Around 34% saw the use of legacy systems as another potential roadblock.

The quality of data generated by the Industrial Internet of Things was also an issue; 34% of people said that the information produced problems, not solutions. Cybersecurity was a major concern with over half of the executives citing the Industrial Internet of Things as a conduit for future attacks.

iiot_problems

“The why of Industrial Internet of Things seems clear and solid, but the what and how aren’t,” said Gianni Giacomelli, senior vice president and head of the Genpact Research Institute, in a press release. “This is not unusual with all new technologies that need interoperability with established operations and systems, and is particularly true where technologies use big data to make operations ‘intelligent’—able to sense, act, and learn, at scale.”

Industrial Internet Of Things Can Change The World

The institute, in collaboration with IndustryWeek, the Industrial Internet Consortium and GE Digital, conducted the survey in March to April of this year. A variety of industries were studied which included heavy machinery, commercial equipment, high tech, mining, transportation, power generation and aerospace—most of which are core businesses to GE Digital’s engineering conglomerate parent General Electric.

The involvement of a company in a report that has publicly stated its intentions to digitize the industrial world is hardly a surprise when you consider that GE Digital is aggressively pushing its own Predix cloud-based platform-as-a-service for the Industrial Internet of Things.

See also: The Industrial Internet Of Things Will Predict And Eliminate Points Of Failure

“The next decade will be Industrial Internet of Things,” said GE Digital’s head of engineering for industrial IoT applications Vish Soaji, in a recent interview with ARC at GE Digital’s San Ramon campus. “The last 10 years has been directed at consumer Internet, before that it was enterprise Internet—Salesforce, Oracle, for example. The next wave is all about Internet of Things and how it is going to change our day-to-day lives.”

According to GE Digital, investment in the Industrial Internet of Things will reach $60 trillion by 2030 with over 50 billion assets—machines, equipment, turbines, rolling stock etc.—connected to the Internet. $60 trillion is a massive number, but if you think about the surface area potential for the Industrial Internet of Things—aviation, transportation, power, healthcare, automotive, manufacturing, mining, oil, water, wind—and how much those sectors mean to the world economy, the number may not seem so far fetched.

“If we do it right, we can change the world. Literally,” said Soaji.

iiot_train

One example is the Hitachi Insight Group, which was recently formed to unify its Japanese parent’s Internet of Things business. Much like GE Digital, the Santa Clara-based Hitachi Insight Group recently launched its own IoT platform—Lumada—to address the connectivity challenges being faced by industrial asset owners.

Bloomberg reported that Hitachi would be investing $2.8 billion in the Industrial Internet of Things over the next three years, with the company confident that the industrial version will outstrip consumer-facing products.

“For the man in the street, the idea of the Internet of Things is my fridge talking to my milk bottle or whatever,” said Hitachi Insight Group’s vice president Greg Kinsey, in an interview with ARC. “In industry, we have looked at a number of studies and we have done some on our own … the sheer size of the IoT market in the heavy industries and manufacturing supply chain etc. is clearly much larger than the consumer space for the foreseeable future.”

Successful Implementation Spurs Growth

The Genpact report said that companies were more than aware of the benefits of the Industrial Internet of Things.

The majority of executives (77%) said that the ability to spur growth was part of an effective implementation, with agility—in terms of reacting to market changes—cited by 75% of people. Cost was a priority; 72% of people rated that as a key factor. Regulatory compliance with industry standards was at the bottom of the priority list—only 40% of people said that this would be a factor in implementing an effective strategy.

iiot_priorities

Industrial companies are not displaying the same apathy towards the Internet of Things as consumers, although the report said that 30% of companies would not have a coherent strategy in the next 12 months. In fact, 13% of people said that they would not be implementing the technology at all.

“This survey shows just how critical the IIoT is for the future success of industries such as medical equipment, consumer packaged goods, manufacturing, and many others,” said the Industrial Internet Consortium’s executive director Richard Soley. “The next hurdle for many companies is to develop a clear IIoT strategy, and one that includes protection for sensitive data from cybersecurity attacks. Successful IIoT adoption is expected to have a significant impact on business growth.”

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