The Industrial Internet of Things: Transforming business models for equipment manufacturers
The basic idea of the Industrial Internet of Things (IIoT) has been around for years: Put sensors on machines, monitor the resulting output, look for anomalies and take action before equipment failure. But not so long ago, sensors were prohibitively expensive, and getting them to communicate remotely was both expensive and difficult—and then someone had to review the output for anomalies. This was a form of predictive maintenance, but it didn’t even begin to approach being real-time analytics.
According to a report by ARC Advisory, only a decade or so ago, the semiconductor industry thought monitoring worth the effort and cost for a machine costing $10 million or more. But now remote monitoring is becoming common in mining equipment costing $1 million. Why? Three main reasons are driving application of this technology:
- Low-cost and small-profile sensors and wifi chips can now be embedded in anything, able to communicate and mesh network–style with the Internet. And small means really small—the size of the little fingernail. Moreover, wifi chip maker Qualcomm is leading the way by creating powerful wifi chips specifically for use in connected devices.
- When such devices start generating data, they generate a lot of data. But nowadays, scalable cloud architecture offers secure connectivity, mobile access, data storage and a connected ecosystem for managed services deployments—and all at relatively low cost, especially considering that corporations once purchased, installed and maintained all needed compute power themselves.
- True advanced analytics capabilities provide an access point to big data using statistical and cognitive models, doing away with worries about how to go about looking at so much data, let alone use it to make decisions.
Whether you call this the Industrial Internet of Things or Industry 4.0, it is transforming business models for equipment manufacturers. Remote monitoring is becoming feasible for equipment costing as little as $10,000—or, soon, perhaps even less.
Consider the two-pass, versus one-pass, repair model outlined in the ARC Advisory report. A customer without remote monitoring in place must call the manufacturer call center, and the manufacturer must in turn dispatch a technician to diagnose the problem on site—after which someone must return with parts and tools to make the repair. But in remote monitoring, a piece of equipment can self-diagnose and alert the manufacturer. Many times, the repair can be made remotely.
In warning about the 82 percent of assets in a given facility that are at risk of failing randomly, ARC Advisory intends to make a strong case for implementing a robust enterprise asset management system and pairing it with powerful analytics for predictive maintenance. The Industry 4.0 and Industrial Internet of Things journey is about business model transformation. What’s more, the journey is just beginning—and the future is exciting.