Cape Town Picnic (I): Industrial Internet of Things

eleonoraescalantestrategy 4 Dec 2017 Leave a Comment

Good Morning to all of you.

Hope you had a beautiful weekend. Are you ready to hit the road and enjoy our picnic topics for the week?

Let´s start today with the theme Industrial Internet of Things.

What is the Industrial Internet of Things (IIoT)? Personally, my own definition of IIoT is the application of all the IoT technologies to everything that is related to an industry or business or the government. The IIoT is more than only manufacturing and production, because it includes each of the industries (private or public) in the world related to doing businesses, workplace offices, oil and gas, manufacturing-factories, worksites, cities, banks and financial entities, retail environments, infrastructure, construction, communications, utilities (water, energy, gas, waste disposal), transportation, healthcare (hospitals-public or private), education, agriculture, logistics, the same technology industry itself, and the government sector. When we apply the IoT technologies to any specific industry or economic sector we are talking about Industrial Internet of Things. mcKinsey nine settings.jpg

What is “not” the Industrial Internet of Things? All that belongs to the End Consumer Internet of Things. The Consumer Internet of Things is all IoT technology used at home (appliances, home monitoring, home automation) and in our mobile life (gadgets, personal cars or bikes, tablets, phones, wearables). See the figure below:

IoT two main segments: Business or Industrial, and Consumers.

Given the broad definition of Industrial Internet of Things (from now and then I will use the term IIoT), I am sure you understand why this term is attracting so much massive media and an incredible amount of articles in Youtube or when you Google it.

Where we are right now with the IoT (industrial and consumer)? My answer: WE ARE JUST STARTING. And starting means, we are still in the innovation trigger zone. Around 50% of the IoT group technologies shown at the Gartner Internet of Things Hype Cycle 2017 is in the “Innovation Trigger” zone. If the IoT current spending by technological pioneers and venture capitalists will result in a positive return on their investments, this is something that only time will tell. We really don´t know how it will occur or how long time it will take. It can take us 3 or 5 or 25 years… Believe me, when I say, if the IoT and the rest of digital technologies prove to be successful, we are just starting with a new social, economic and political prototype of our societies. Are we ready for it? That is my “bottom line” question.

As I have understood the scope of IoT (IIoT and consumer IoT), we are just setting up the foundations for a new type of society. It is like looking our society before and after the IoT. Are you ready to give up on the way we currently do business? Are we ready to change our business models by using IoT? Are we ready to spend money on IoT technologies for our companies?

Next, I would like you to perceive where we are actually, with the IoT technology development. Even though what I will show you is just a hype cycle graphics overlap exercise, I thought of using this little trick to explain to you. I have overlapped the theoretical explanation of the Gartner hype cycle and the Hype Cycle for IoT technological categories developed and followed by Gartner (data from July 2017):

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If you wish to download the last set of slides in PDF format, click here: Eliescalante Cape Town Tour Break Other Technologies IIoT.

In addition, there are several media and IT mobile analysts, such as John Koetsier, a Forbes.com contributor, which states now “the IoT represents 2,888 businesses building the Internet of Things technologies, employing 342,000 workers. The IoT sector has raised $125 billion in funding and has created $613 billion in value, 95 of them are now unicorns: billion-dollar startups”. Koetsier shows an IoT Revolution landscape in his article. This is what he says it is happening in the USA. See Koetsier IoT Landscape 1.0 below:

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I wonder what is happening with the IIoT in China? or what is the Europe relation to IIoT? In Europe, they have a clear position: Europeans believe “the Internet of Things has the potential to drastically improve our lives, our workplaces and our industrial efficiencies and capabilities while taking into account security, privacy, and trust requirements. For Europe, the successful Internet of Things deployment implies that all the relevant players, including the users, need to work together and shape the IoT concept of tomorrow based on our European values”.

Half the worldwide population is connected to the Internet.

The more interconnected it is the people and businesses in the world, the more important and relevant is the IIoT and the Consumer IoT. By the year 2015, Gartner stated there were 4.9 billion of connected things in use. For the end of the year 2017, Gartner estimates there are 8.4 billion of connected things: 71% of growth in just two years!. Think of it: we are 7.59 billion population in the world, meaning there are more things connected by the internet than people for the first time in our history. Look at the number of people who are connected to the internet at this specific moment: half of the worldwide population now (51%). How to dismiss the IoT (industrial or consumer) from our future? It can´t be dismissed when half our world population is already connected to the Internet through a device. Even in the scenario where the internet users worldwide growth stay flat (0% growth), we have enough market to create and innovate using IoT Technologies.

Which are the activators or Enablers needed to implement the IoT?: According to an interesting article from McKinsey Global Institute “THE INTERNET OF THINGS: MAPPING THE VALUE BEYOND THE HYPE”, there are five types of enablers which are needed for maximum IoT impact: (1) Software and Hardware Technology: Are the technical enablers; (2) Interoperability: Creation of common connectivity standards; (3) Intellectual Property, Security, Privacy, and Confidentiality: are the trust enablers; (4) Business Organization and Culture (a completely different organizational set up); and (5) Public policy (Regulation and subsidies).

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In conclusion: b2b cloud figure As I mentioned to you previously, it is not my aim to appear as an IT guru, since I am not one. But the IoT (either consumer or industrial) is the base for a new prototype of doing things in the world. How many years will it take to have the right and secure, affordable and safe technologies in place? We really don´t know. Personally, what we should do is to set up the IoT fundamentals right. As far as we do it right, it is better to take all the time needed to create trust and refine the technological IoT landscape. My own perception is: it will take more than 10 years to do it correctly. It will take many trials, failures and continue learning from mistakes. As a consumer or business owner, I will tell you what would I do: I do prefer to buy IoT technology only if it is secure, if it is digitally ethical, if it is affordable and if it is going to help me to be efficient in my business processes without laying off my employees, and if it will help me to become a better human being respecting my company values and improve the quality of life of my employees. Otherwise, I won´t buy the IoT transformation for my company. As simple as that. I also see there is more potential for IIoT than Consumer IoT (given the IoT issues of ethical implications in our current way of doing things, lack of privacy and security). Finally, I believe any Industrial sector or Economic Sector or Business processes may benefit more from IoT technologies in the future. I see many opportunities for the Industrial Internet of Things.