IoT Is Driving the Third Industrial Revolution
IoT Is Driving the Third Industrial Revolution
Connected machines, data, and APIs will reduce costs and improve the customer experience.
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Great presentation by Frank Gillette of Forrester, IoT Is Driving the Third Industrial Revolution.
We Are Currently Seeing IoT Across a Broad Range of Applications and Industries
- The environment — devices on buoys and antennae providing data for better weather prediction
- Cities — stop lights, waste management, traffic control
- Infrastructure — the power grid, roads, waterworks
- Buildings, stores, factories, and hospitals — know what's occupied and what's not, and by whom
- Industrial and commercial assets — GE is now monitoring the performance of all its jet engines by recreating them virtually in the cloud
- Family assets — automobiles, homes, security systems
- Appliances and consumer products — scales, Nest, Echo
- Personal assets — phones, fitness devices, medical devices
We're well on our way to seeing more information across the physical world with billions of devices saving trillions of dollars.
Fifty-two percent of enterprises are currently implementing, or plan to implement, IoT within the next 12 months. 30% of enterprises are interested but don't yet have formal development or implementation plans. While IoT has been around for decades in the form of M2M devices, the ability to connect to the internet is driving the rapid pursuit of IoT initiatives.
In North America, asset intensive companies have the most aggressive IoT deployment plans, either already using or planning to use IoT in the next 12 months:
- Utilities and telecom = 57%
- Chemical/oil and gas = 55%
- Transportation = 55%
- High-tech/industrial production = 54%
- Primary production = 50%
- Retail and wholesale = 50%
- CPG and pharmaceutical = 49%
- Financial services and insurance = 46%
- Media, entertainment and leisure = 37%
- Healthcare = 32%
- Government and education = 22%
Emerging Markets Are More Likely to Use IoT
- China and India = 75% currently using or plan to use in next 12 months
- Latin America = 51%
- Europe = 42%
- North America = 37%
- Australia/New Zealand = 37%
Gillette did note that China and India are likely more similar to Latin American given that that the enterprises they surveyed were located in municipal areas rather than countrywide.
IoT is enabling a new form of automation by providing a feedback loop to digitize business and improve customer experience and engagement. The elements of the loop include:
- Awareness = cameras, sensors, networks, initiators, GPS, and meters
- Analysis = analytical and big data applications, plus data management
- Automated development alternatives = business intelligence dashboards
- Automated actions = return path, actuators, and microcontrollers
IoT always has a sensor in the real world which drives awareness, analysis, alternatives, and automated actions.
There are three levels of IoT value propositions:
- Optimize physical assets
- Innovate new products and services
- Transform customer engagement and the customer experience
As Russ Fadel, President of ThingWorx says, "We're going from using the customer as a sensor to find out about the product's performance to putting sensors in products to learn about the customer experience."
There are two types of connected world use cases:
- IoT makers of specific connected products are companies that manufacture a discrete product. OEMs in many markets including medical, industrial, food, and consumer goods.
- IoT operators of general connected assets are companies operating connected products or assets for business operations or processes. This includes offices, hospitals, farms, utilities, and governments
Both types of businesses need perspective and help in how to leverage IoT to reduce costs, improve productivity, and customer experience.
There are a variety of B2B IoT use cases involving connected assets:
- Security and surveillance
- Supply chain management
- Inventory and warehouse
- Customer order/delivery tracking
- Facility management
- Industrial asset management
- Smart products
- Smart home management
- Energy management
- Fleet management
All of these enable companies and homes to run better, more efficient processes. IoT is enabling the next industrial revolution based on cyber-physical systems to manufacture efficiently.
Industrial IoT drives multiple business benefits for the smart factory:
- Product customization - dealing with small lot numbers, ability to customize for smaller groups of customers and ultimately individuals.
- Energy efficiency - using machines only as needed, or during less costly energy cycles, to increase efficiency and reduce energy expense.
- Urban production - producing closer to employees and markets thereby reducing transportation costs.
- Resilient architecture leverages processes and technologies across products.
- Dynamic production ecosystem - integrated client and supplier collaboration between OEMs, Tier 1 suppliers, and end-user customers.
Each Part of the IoT Architecture Presents Challenges:
- Things and networks - sensors and devices, gateways, and connectivity.
- Ingestion and delivery - protocol translation, device management, and data conversion.
- Aggregation and integration - data aggregation, API management, and analytics.
IoT and Automation Makes this Work Together By Providing:
- Tremendous opportunities that are diverse and specific to each industry.
- Use cases have potential for customer and competitive impact beyond cost savings.
- A lot of new security and software challenges to solve over the next five years.
Only 52% of companies in the Fortune 500 in 2000 are still there in 2015 because they did make the transition to the digital economy.
I have no doubt we will see the same transition over the next 15 years as companies fail to make the transition to IoT which would reduce costs, improve efficiencies, and customer experience.
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