In recent years, IoT has developed into a major theme in tech. We’ve heard about the potential for connecting millions of devices to the internet to unlock countless opportunities to improve our lives and save billions for businesses. While the promise of IoT is large and very real, there is still a lot of work to be done before that potential is realized. With all the hype out there, it’s easy to assume that change is already upon us, but those of us in the industry know that the reality is actually pretty grey.
In the lead-up to IoT World – the world’s largest IoT conference being held next month in Santa Clara, CA – we set out to answer a simple question: who’s actually buying and deploying IoT in the industrial space?
We sat down with Eric Winsborrow, CEO of Distrix Networks to learn more about the gap that exists between futurism and real IoT revenue opportunities that exist today.
I hear a lot of hype but as a veteran of the Silicon Valley, it smells familiar. How far out are some of these opportunities from becoming reality in the industrial space?
On the consumer side, we’ve already seen some early adoption in the form of smart homes and connected cars, but in the industrial space, most companies are still mainly interested in simple connectivity for remote operations and basic automation.
That’s important because the industrial space is the really big opportunity for IoT – Cisco is predicting a $19 trillion market. Remember, when I say industrial, this includes a much wider scope than manufacturing – non-assembly line enterprise such as utilities, power generation, renewables, and oil and gas broadly fall into the “Industrial” IoT footprint. Basically, anywhere that a business process can be improved with monitoring a device.
People probably say: “It’s 2017, haven’t they figured out all their basic monitoring and industrial automation by now?”
The answer is no, the pain points are still there today. And there’s no point in talking about more sophisticated stuff like Big Data until the foundations have been put in place.
What’s holding companies back from faster IoT adoption? Is it that they don’t know what to do with it?
Not exactly. The issue is that if an entire industry is behind, they don’t have very obvious use cases that come to mind. But most organizations know where lack of connectivity leads to significant costs – longer, more frequent downtime events, needing on-site servicing for remote facilities, and so on. Having a well-connected network gives you better remote monitoring and predictive maintenance, which not only reduces downtime, but also extends the lifespan of capital equipment.
The point is, people know where these cases exist and in many cases have even quantified the cost savings, but are being told that the only path is so capital intensive that they find it hard to justify capital upgrades – basically they’re being told to rip and replace perfectly good equipment.
There has been lots of talk about a chasm between operations and IT that is slowing adoption, have you seen this?
Yes, it’s very real.
The primary reason is that IT deals only with data and software has its roots in a different side of the business. The operations people deal with actual physical machines – industrial automation equipment, valves and sensors. These are different paradigms that have been developing in parallel silos for the past 50 years, but successful Industrial IoT requires a working knowledge of both fields. The companies that will do well with IoT are the ones that hire veterans from the industrial space to complement their IT expertise.
IoT leaders are doing such a good job impressing each other and their investors with the size of the coming opportunity, that they are neglecting to help companies solve real operational problems today in connecting a wide array of legacy devices. When we talk to our customers they simply want their current legacy equipment to be capable of remote monitoring and some machine-to-machine automation. And especially in the case of power, utilities, and oil and gas, it needs to be done in a secure but simple way.