With interest in the industrial Internet of Things (IIoT) accelerating at a seemingly breakneck pace, I was caught a bit off guard by an article posted on Quartz.com recently with the headline: Someone forgot to tell Microsoft and Nokia that the Internet of Things is Dead. As I read the article, I saw that it focused purely on consumer IoT and drew its conclusions mostly from customer anger around Alphabet’s shutdown of Nest.
But what about the IIoT? Unlike consumer IoT applications, which are largely driven by convenience or a perceived coolness factor, IIoT is being driven by the real potential to significantly increase operational efficiencies, reduce costs and improve decision-making. Convenience and coolness are just icing on the cake of IIoT’s bottom-line driven reason for being.
To gauge the automation industry’s perception of Quartz.com’s take on the death of IoT, I spoke with representatives from three companies staking big claims around IIoT: GE Digital, Microsoft and Opto 22.
“Internet of Things means different things to different people and companies,” says Sanjay Ravi, worldwide managing director, discrete manufacturing at Microsoft. “Consumer-level IoT offers some very interesting opportunities, but is still catching on and, in some cases, is struggling to do so. To instrument consumer goods and wearables, consumers need to pay for additional value yet to be experienced. The IIoT, on the other hand, is cutting the cost of instrumentation and connectivity some times by more than 90 percent and generating new insights and ideas to run businesses differently, creating new highly profitable service-driven business models and new sources of revenue that couldn’t be realized otherwise.”
Ravi believes that IoT has reached a tipping point in industrial applications and is already proving its value to industrial leaders (read Automation World coverage of industrial companies such as ThyssenKrupp Elevator, Rolls-Royce and Jabil leveraging Microsoft IIoT technology). “Using these companies as examples—and there are many more—you can see how the industry is leveraging IIoT capabilities for quality management, predictive maintenance, production cost reductions, energy efficiency and asset performance improvements. Our customers tell us the IIoT is quickly becoming the single most important success factor for true digital transformation.”
Matt Newton, director of technical marketing at Opto 22, agrees with Ravi that the consumer and industrial IoT sectors are very different from each other. “A lot of new consumer IoT devices are brand new product ideas. So the people coming up with these new products aren’t trying to invent a better mousetrap. Often they’re literally trying to invent the first mousetrap. New ideas that solve real-world problems and deliver real value to consumers are hard to come by,” Newton says.
As manufacturing evaluates IIoT opportunities, Newton says it’s important to understand that “while individual IoT-type consumer products may fail, the underlying technologies in those products—like TCP/IP and wireless communication—have been around for a long time and aren’t going to change any time soon. In fact it might be a better idea to future-proof manufacturing investments by making sure they’re designed from the ground up with the IIoT in mind. IIoT-ready manufacturing assets should have tested protocols like HTTPS, encryption like SSL and TLS, and a RESTful API for communications built in—not added as a bolt-on afterthought.”
From an economic standpoint, Derek Porter, general manager, product manager at GE Digital, notes “for more than 20 years, industrial productivity was at 4 percent globally. But since 2011, those productivity gains have declined to 1 percent. To combat this, many companies are turning to technology. Productivity improvements will grow through digitization and a focus on outcomes facilitated by analytics. This presents a release of economic value in the industrial sector of more than $225 billion, compared to the $170 billion economic value that has been seen through the social and consumer internet.”
Porter further highlights the difference between consumer an industrial IoT saying, “GE realized that the consumer-based Internet was not robust enough to handle our customers’ concerns over security, data ownership, volume and control. GE developed Predix as an Industrial Internet operating system to address these concerns and provide a robust solution designed to manage the world’s critical infrastructure data and information.”
Like Microsoft’s Ravi, Opto 22’s Newton agrees that we’re at a tipping point with IoT technology in manufacturing. “It’s not all that different from when Ethernet started rolling out on the plant floor,” says Newton. “When Ethernet was first being considered for use as a communications bus on the plant floor, there were a lot of people in the manufacturing space who were hesitant to invest in the technology. But today, Ethernet is everywhere. The Internet of Things is the next step.”