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Can the Industrial Internet Unleash the Next Industrial Revolution?

Setting its sights on the huge optimization potential of connecting nearly everything with sensors, GE begins to assertively position itself around the Industrial Internet concept. Could this be the rallying point that drives a long-term boost for global industry or is just a ruse to sell more products?

This graphic from GE charts its 'power of one percent' concept.
This graphic from GE charts its "power of one percent" concept.

Over the past year, different players in the GE universe have been talking about how businesses need to get serious about creating the Industrial Internet and ushering in a new era of industry by connecting all manner of devices. I saw Bernie Anger, general manager of control and communication systems for GE Intelligent Platforms, present this idea at a Profinet Executive meeting in early 2012. Most recently, Jeff Immelt, GE CEO, brought the concept to life during GE’s Minds and Machines event by presenting a GE jet engine wired with 20 sensors. Immelt said these sensors would collect 1 terabyte of data during a cross-country flight that GE will then analyze to help it build better jet engines.

See a video of the presentation Bernie Anger presented at the Profinet Executive meeting at the end of this article.

Essentially, what GE is calling the Industrial Internet is what others, including all of us here at Automation World, have been calling the Internet of Things. According to a new GE report, “Industrial Internet: Pushing the Boundaries of Minds and Machines”, the Industrial Internet is the confluence of three things:
Intelligent Machines: New ways of connecting the world’s myriad machines, facilities, fleets and networks with advanced sensors, controls, and software applications.
Advanced Analytics: Harnessing the power of physics-based analytics, predictive algorithms, automation, and deep domain expertise in material science, electrical engineering, and other key disciplines required to understand how machines and larger systems operate.
People at Work: Connecting people, whether they are at work in industrial facilities, offices, hospitals, or on the move, at any time to support more intelligent design, operations, maintenance as well as higher quality service and safety.

GE contends the result of combining this three-fold approach with traditional data gathering techniques enables a new level of optimization that can improve business worldwide.

To illustrate this point, the authors of the GE report, Peter C. Evans and Marco Anunziata, point to what they call the “power of just one percent.” This calculation is based on GE’s estimation that the technical innovations of the Industrial Internet have direct application in sectors currently accounting for more than $32.3 trillion in economic activity.

Based on these figures, the report claims that if the Industrial Internet achieves just a one percent efficiency improvement in the industries it is applied to, the results would drive significant advances in global industry as well as the economy. For example, in the aviation industry, a one percent improvement in fuel savings would yield a savings of $30 billion over 15 years. Likewise, a one percent efficiency improvement in the global gas-fired power plant fleet could yield a $66 billion savings in fuel consumption. Freight moved across the world rail networks, if improved by one percent, could yield another gain of $27 billion in fuel savings. And a one percent improvement in capital utilization upstream oil and gas exploration and development could total $90 billion in avoided or deferred capital expenditures.

See a CNBC video of Marco Anunziata, chief economist at GE, discussing the Industrial Internet concept.

Despite the game changing potential of this idea, GE recognizes that the Industrial Internet won’t be in place tomorrow. The report acknowledges “a sustained effort in technological innovation is needed, along with investment to deploy the necessary sensors, instrumentation, and user interface systems. Investment will be a fundamental condition to rapidly transfer new technologies into capital stock.”

The first investment step that GE says must be taken for the Industrial Internet revolution to take off is to outfit all industrial machines with digital instrumentation. The report notes that this step is within reason today because “continued improvements in microprocessor chips have reached a point that now makes it possible to augment physical machines with digital intelligence; the low price point of these digital sensors; and advances in ‘big data’ software tools and analytic techniques provide the means to understand the massive quantities of data generated by intelligent devices. (Editor’s note: not surprisingly, GE Intelligent Platforms offers a “big data” analysis tool, but GE is not the only company to do so. SAP, IBM, Oracle, and SAS are but a few of the other companies offering such analysis tools.)

So is all this talk of an Industrial Internet revolution just a ploy by GE to sell more of its products and services? I can certainly see how someone could viably argue that point, but I don’t think that’s entirely what this is all about. Certainly, GE will benefit handsomely if this idea does take root, but so will every other industrial company that takes part. In the industrial automation space alone, I can think of dozens of companies that would benefit immediately.

From where I sit, I see GE’s positioning as being about two things:

1. Embracing the inevitable. As GE’s report notes, all of the technologies to spur the Industrial Internet Revolution exist today. They’re not asking anyone to put their hopes and money into some new product yet-to-be-released. It’s more about the question: Will we start to truly leverage what our existing technologies already make possible?

2. Stimulus. Our reality is largely what we make it. Sure, economic factors sway things on nearly predictable cycles, but most of the fallout — both good and bad — is due to our emotional and resulting physical reaction to these factors. I don’t want to sound like a motivational poster here, but much of the current economic doldrums we’re experiencing are due to our own mindset. Yes, I recognize we’re in a heck of hole and we could debate endlessly about why and how best to get out of it; but we all know that the way out is through action, not sitting on the sidelines wringing our hands and arguing about the situation, as we’ve largely done for years. A recent editorial in The New York Times argues a similar point saying: “Our workers and machinery are still highly productive, but we’ve been underinvesting in them. In fact, according to the Congressional Budget Office, this investment deficit explains more than a third of the slower underlying growth rate.”

Personally, I think GE is on to something by pushing this idea. What do you think?

Below is a video of the presentation by Bernie Anger that I saw at the Profinet Executive meeting in early 2012. (Below that you will find TheStreetTV’s interview with William Ruh, GE’s Global Software Center Vice President of Intelligence and Analytics.)

The video below features William Ruh, GE’s Global Software Center Vice President of Intelligence and Analytics being interviewed by TheStreetTV.

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