When IoT goes Industrial

As Per IndustryARC research (June 2016), the industrial IoT market is estimated to reach $123.89 Billion by 2021 at a high CAGR.

The market opportunity of the IIoT is huge. The driving philosophy behind the IIoT is that smart machines are better than humans at accurately, consistently capturing and communicating data. This data can enable companies to pick up on inefficiencies and problems sooner, saving time and money and supporting business intelligence efforts. In manufacturing, specifically, IIoT holds great potential for quality control, sustainable and green practices, supply chain traceability and overall supply chain efficiency.

IIoT incorporates machine learning and big data technology, harnessing the sensor data, machine-to-machine (M2M) communication and automation technologies that have existed in industrial settings for years. It could create a number of new “smart” paradigms, such as smart power grids and smart healthcare, as well as lead to the development of new manufacturing ecosystems that are driven by self-aware, autonomic machines.

McKinsey estimates that IoT will have a potential economic impact of up to $6.2 trillion by 2025 and the potential to drive productivity across $36 trillion in operating costs across multiple industries, including manufacturing, health care, and mining.

When IoT goes Industrial
Size and market impact of the Industrial Internet of Things – source: Morgan Stanley, IndustryARC, Accenture and Research and Markets.

But it would not be wrong to say that “the devil is in the details”. Devices that can connect to one another and over the web potentially threaten our Industrial Control Systems (ICSs). More specifically, as business requirements necessitate that industries move beyond “smart” devices merely as a means of control, they might run into obstacles as they seek to incorporate IIoT into their industrial environments.

There are some big challenges that industry will have to deal with before the benefits of IIoT can be maximized.

Interoperability

Concept of IIoT (or even IoT, in this case) is fairly new and making sure that different IIoT devices will work together is still a fairly complicated task. To achieve full interoperability, the industry will have to build and implement standard protocols, compatible interfaces and architectures.

Security:

Virtually everyone agrees that security is a critical issue for Internet-connected industrial systems. Dell Inc., a member of the Industrial Internet Consortium, listed security at the top of its list of IIoT challenges. The technical challenge is to secure Internet-connected devices from cybernetwork attacks, as well as local physical attacks.

Adaptability and Scalability:

Adopting the Industrial Internet of Things will require a change in the way organizations design and augment their industrial systems. IIoT systems must be adaptive and scalable through software or added functionality that integrates with the overall solution, notes Eric Starkloff, executive vice president of Global Sales and Marketing for NI.

Maintenance and Updates:

Industrial Internet components need to be built with maintenance and updates in mind. Industrial systems need to be continually modified and maintained to meet changing requirements.

Flexibility:

Industrial infrastructure is no small investment. To be capable of adapting to changing requirements over time, the need is to build on open, integrated hardware and software platforms, and a real-time network that can scale with new technologies.

Despite this challenging scenario, the Industrial Internet of Things (IIoT) is a major trend with significant implications for the global economy. It spans industries representing 62 percent of gross domestic product (GDP) among G20 nations, according to Oxford Economics,1 including that depend on durable physical goods to conduct business, such as organizations that operate hospitals, warehouses and ports or that offer transportation, logistics and healthcare services.

IIoT Benefits

  • Vastly improved operational efficiency (e.g., improved uptime, asset utilization) through predictive maintenance and remote management
  • The emergence of an outcome economy, fueled by software-driven services; innovations in hardware; and the increased visibility into products, processes, customers and partners
  • New connected ecosystems, coalescing around software platforms that blur traditional industry boundaries
  • Collaboration between humans and machines, which will result in unprecedented levels of productivity and more engaging work experiences

Future of IIoT

The good news is the Industrial Internet of Things is already here, at least among the most forward-thinking companies. We should soon see IoT machines who not only have Ethernet connectivity, but also support 3G and LTE Modules. Apart from that, we will also be seeing new IoT protocols as well as improved classic ones which will result in faster, easier data transfers between more compatible devices.

The challenge is that most businesses are not ready to take the plunge. But amid the new, an old truth remains: business customers need products and services that create more value for them than those on offer today. The emerging Industrial Internet will unleash new energy into the world of industrial products and services. To be a viable stakeholder as well as partner in the digitally contestable future—and thus generate new revenues—companies will need to make the necessary changes. The time to push is now.