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System Integrators Defend Their IIoT Readiness

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A clear sign of a growing opportunity is when people start staking their claims.  Here’s a case in point.  A recent blog in AutomationWorld has caught the attention of system integrators, and from their comments it seems to have rubbed some of them the wrong way.  The blog, The IIoT Integrators Are Coming, by Senior Editor Stephanie Neil, claims that automation system integrators may lose out on IIoT opportunities if they don’t keep up with the technology, leaving the space open for non-industrial IoT companies from the IT world.

Several control system integrators, members of Control System Integrators Association (CSIA), have responded saying that Neil and the people she quotes are mistaken.  They explain the differences between consumer or business IoT and Industrial IoT, and point out that it is easier for a company that knows industrial automation to add IoT to their portfolio than for an IoT company to learn industrial process control. For example, in counter-blog We Are Ready for IIoT, Jeff Miller of Avid Solutions makes the case that his company, at least, is ready.

If nothing else, this conversation provides a useful window into what these potentially key players in the Industrial IoT space are thinking.  On the one hand, some realize that IIoT can be a valuable service to offer their customers, and are gearing up for it.  Others are holding back, questioning the value, reluctant to test the waters, and wondering whether this isn’t just mainly hype that will evaporate in a year or two.  But, according to Neil, if they wait too long, someone else will swoop in and steal their lunch.  And that person or company may be completely outside the traditional world of industrial system integration.

Who is right?

Our take on this is simple.  Both are right.  First, anyone from the IT realm working in IoT needs to know that there is a real difference between regular IoT and Industrial IoT.  An industrial user of the IoT will have special requirements, different and in many cases far beyond what someone might need for a general business or consumer application. At the same time, system integrators must understand that the knowledge required for building an IoT application is highly specialized. It takes a deep understanding of TCP and working with unstructured data, in addition to the critical issue of Internet security.  Above all, we encourage system integrators to keep an open mind, and treat the IIoT as a new opportunity to better serve their customers.

As to the best approach to take, we see at least two: do it yourself, or partner with someone who provides good tools. We won’t stand in the way of the DIY’ers in the crowd, but for those who value tools, we have an easy and cost-effective way to implement the Industrial IoT that works. It does not require integrators to learn new protocols or build security models. It simply connects to in-plant systems and provides the remote data access that automation engineers expect: secure, bi-directional, and real-time, with no open firewalls, no VPNs, and no programming. And it has a revenue-share model for system integration companies that want to enjoy the financial benefits of the IIoT.

Realizing Profits from the IoT

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“Most of us understand that innovation is enormously important. It’s the only insurance against irrelevance. It’s the only guarantee of long-term customer loyalty. It’s the only strategy for out-performing a dismal economy.”

– Gary Hamel, management expert

A recent study from MPI Group, “How Manufacturers are Profiting from the IoT” validates the importance of innovation in IoT technologies.  It shows that there is a strong correspondence between understanding the IoT, implementing the IoT, and benefiting from the IoT.  “A good understanding of the IoT is a strong indicator of better operational performance,” the study said.  “Two-thirds of innovators have fully achieved or made significant progress toward world-class manufacturing status,” the study found.

These “innovators” are defined in the study as those companies most willing to use smart devices and embedded intelligence in their processes, their manufactured products, or both. Contrast that with those in the planning stages, labelled “incipients”, and those with no interest at all, called “indifferents.”  The indifferents, according to the study, “are also indifferent to manufacturing success; a whopping 73% have made—at best—only some progress toward world-class status.”

The take-away here is that those companies that understand the IoT and how to apply it to their businesses have for the most part benefitted, and are realizing profits from the IoT, while those that lag behind risk falling futher behind.

Two Areas for Realizing Profits

The study looks at two main areas of implementation of the IoT among manufacturers—in process and in products.  The process areas offering the most profit-making opportunities, according to survey respondents, were shipping and logistics, warehousing, document management, and manufacturing.  The most profit potential from products included adding IoT capabilities to the firm’s own products, as well as selling these capabilities in technologies, devices, software and/or materials to other companies.

There are challenges, of course.  One drawback is that most companies feel that their network infrastructures are not capable of handling machine-to-machine or machine-to-enterprise communications well.  Other top-of-mind challenges to survey respondents were in finding the budget needed for implementation, and in indentifying IIoT opportunities.

By the same token, though, when these companies learn how SkkyHub provides IIoT connectivity on existing networks and can be implemented with no capital expenditure, they may find that the Industrial IoT is within their grasp.  Using an end-to-end, secure-by-design IIoT solution that doesn’t cost an arm and a leg, they may find that realizing profits from the IoT is not as difficult as they thought it might be.

IoT Valued in Aftermarket Services for Connected Machines

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What if your car dealer cared more about your car than you do, and did something about it?  What if your ride was always in tip-top shape, never broke down, and got regular, dealer-sponsored tune-ups while sitting in your garage, or even on the road?  Wouldn’t that be great?  And what if your dealer gave you a discount for letting him service your car that way?  This is the kind of aftermarket service that the IoT is making possible for industrial machine builders.

A recent blog by Sal Spada, Research Director of Discrete Automation at ARC Advisory Group, highlights the value of the Internet of Things (IoT) for machine builders looking to improve their aftermarket services.  The IoT approach to maintenance and service of industrial tools and machinery has already started, and is expected to increase significantly in the coming years.  Spada introduces a number of reasons for this increase.

Cost effective: Real-time remote monitoring done well gives the supplier full access to the machine 24/7, making it easier to spot problems before they arise. When something occurs that needs a technician, they have immediate access to the system and spend their time solving problems, rather than travelling to the site.

Competitive: Industrial customers are in it for the long haul.  Better maintenance and service translates into less downtime for the equipment, making that supplier more competitive in the marketplace.

Company Growth: As his maintenance costs go down, the machine supplier becomes more competitive in his market, and more able to afford to do business.  This can readily lead to company growth.

Using the IoT for service connectivity has found favor with suppliers of large, expensive products that typically require regular maintenance, such as cranes, hoists, elevators, and escalators, and is expected to expand in a number of areas.  ARC Advisory Group recently published a report “Production Machinery Automation” that covers a range of product segments and machinery sectors, and illustrates the growing value of the IoT in providing aftermarket services.

Business Wakes Up to the IoT

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With a blast on the media trumpets and all the blaring fanfare that goes with it, the dawn of the Internet of Things (IoT) is being heralded as the next big thing in computing.  Visionaries marvel, gamers shrug, and homeowners stare up in wonder, while business people get up, make coffee, and do what they do best: check it out to see if there is any real value here.

A recent Intelligence Unit report from the Economist magazine, sponsored by ARM, titled The Internet of Things Business Index (article, video) indicates that, sure enough, “the IoT is on the agenda at most organizations–even if they disagree about its scope.”  Yes, business is waking up to the Internet of Things, and is starting to investigate the opportunities.

EconomistCover2The report’s survey methodology was based on a two-part question: How much is your organization using the IoT externally (eg. product and service offerings) and internally (eg. energy management and production)?  The main finding is that there is a quiet but growing interest in the IoT.  Among the companies surveyed, about 75% of them are at least exploring the possibility of using it internally, externally, or both.  In fact, a substantial portion of them are already moving into the planning and implementation stages, and a significant fraction are using the IoT extensively.

The more cautious companies are watching the early movers, and learning from their achievements and mistakes (42%).  Others are bringing in consultants and outside experts to help them navigate this new field of possibilities (41%).  Still others are doing market research to see what opportunities are to be had in their respective domains (27%).  A few are even releasing test products with an IoT component or tie-in to gauge the response.

One concrete step being taken by most players is to beef up basic capability.  There is some acknowledgement of a lack of knowledge and skills at both the employee and management level regarding the IoT, and so many companies are either hiring people with the know-how (31%), or getting their staff trained (36%).

In addition to this need for better knowledge and skills, respondents to the survey highlighted other areas that could impact the success of the IoT in their businesses.  Among these: infrastructure investment will be costly, many products and services are not inherently IoT-friendly, and consumers will need to be educated.

There is also some concern about developing standards for intercommunication between devices.  “Beyond storing, securing and analyzing these data,” the report states, “companies should also consider how they manage the commercial sharing of the data as the IoT becomes a platform for trading information.”  There is some agreement that the full value of the IoT will only be realized when there is universal participation across the board.  If not we may end up, they warn, with an “internet of silos.”

From our perspective, interconnectivity of data among the players in the IoT is key to its success.  The report says that Liz Brandt, CEO of Ctrl-Shift “envisages the IoT becoming one big trading system for data. The question, she says, is how those data can be traded across the whole ecosystem.”  How, indeed.  That is the challenge, and the opportunity for those who get it right.