Why the time is now for the Industrial Internet
Clive Stringer, Business Development Director for Pitney Bowes, argues that the “Industrial Internet” is powering a new industrial revolution. By 2020, 38.5 billion devices will be connected to the internet – a predicted increase of more than 286% over just five years1. We’ve all heard of the Internet of Things, and indeed many of us may already be benefitting from it with wearable fitness monitors, remote TV programming or services such as Hive Active Heating, with which you control your heating and hot water from your mobile device. But the 38.5 billion figure doesn’t just refer to these consumer technologies. In fact, the industrial and public services sector comprises its majority. This is the Industrial Internet. It’s a hugely disruptive force, and it’s the new industrial revolution. Businesses worldwide are harnessing its power to drive vast cost savings and create massive productivity improvements across all sectors.
$6 trillion will be spent on the Industrial Internet between 2015 and 20202, as it brings together powerful machines, smart processes, skilled people and advanced analytics across manufacturing and commerce, connecting them across a global network. The collated insight solves issues and answers questions relating to production downtime, resource allocation, investment, productivity speed, service levels, cost of operations, capacity management, job scheduling, forecasting – the list goes on.
Where the Internet of Things is about convenience and time-saving, the Industrial Internet facilitates far-reaching change with a huge impact on commerce and society – from dramatically-increased potential of production mail facilities to the manufacturing of more powerful engines, safer cars, smarter medical equipment, and better wind turbines creating cleaner energy.
There’s never been a better time to make the most of the raw power the internet generates, and integrate it into our organisations. As well as the practical reasons why the time is now – widespread access to faster, better connectivity – there are many other reasons why the Industrial Internet is currently generating huge impact:
- Data. Big data has become huge data. We generate incredible, unprecedented amounts of data every moment of every day. Businesses now understand and appreciate the value and potential of this data, and are developing new ways to capture and optimise it. Think of Nintendo. In its first week of launching Pokemon Go, Nintendo’s share price increased by 86%, with almost $15 billion dollars added to the company’s market value. By fusing location data with augmented reality, the firm has created a new channel for data capture, and its potential is vast. Businesses need to be able to ensure their data is an asset, clean, current, accessible and insightful.
- Cloud platforms. Cloud or SaaS platforms are seen as integral parts of a business operation due to their agility, and their ability to enable users to manipulate, flex, manage and disseminate data. Businesses are looking to cloud-based technologies and analytics to transform their go-to-market strategies and reinvent their businesses.
- A reduction in the cost of sensors. A sensor is a remarkable feat of engineering, and has become the foundation on which the Industrial Internet is built – think of them as the rocket boosters of NASA’s space shuttle. These small but powerful pieces of technology assimilate vast amounts of data. Production of sensors has become far more cost effective, so they are becoming far more affordable, and businesses are building them into their equipment to generate deep analytics.
- Real-time: in order to make meaningful decisions with strong outcomes, and to drive intelligent, accurate forecasting, businesses need precise information delivered in real-time. Diagnostics with a lag of even a few minutes are not as effective as precise, accurate and instantaneous data.
- Renewed emphasis on businesses generating new revenue streams. They need to do more, with the same. They need to find different ways of working that don’t involve huge capital investments. And they need to drive innovation, to help them become truly world class and gain a strong competitive edge.
- The empowered consumer: in business-to-business and business-to-consumer organisations, consumers see a great service experience as their right, and businesses are doing whatever they can do deliver it, whatever their industry. With access to in-depth analytics, providing an outstanding service experience is achievable
- The rise of the agile business: to succeed, businesses need to be responsive, swift and agile. This flexibility is a feature of today’s service-led organisations, structured to respond quickly to changing market conditions and customer demand. It’s a culture that integrates perfectly with the benefits generated by the Industrial Internet.
- Better understanding of the Industrial Internet and its potential: business are realising that it isn’t just about connectivity, but about identifying ways to unlock maximum value from the data they generate, and using the actionable insight gleaned to transform their business operations. As a PwC report3 cites, “While all current IoT implementations focus on the ‘data delivery’ architecture, a robust ‘operations’ architecture is also needed in order to maximise customer engagement”. Businesses understand this, and are transforming the structure and strategy of their operations to maximise the opportunities the Industrial Internet presents.
The Industrial Internet is a perfect example of using digital insight to monitor, maintain, integrate and, connect businesses, and to drive improved physical power, on an industrial scale. It’s time for us to make the most of the third industrial revolution.
1 Source: Data from Juniper Research
2,3 Source: PWC Report