I was speaking to Carlo Nizam, Airbus‘ head of value chain visibility and RFID, during the International Air Transport Association‘s RFID Aircraft Technical Operations Conference, held this month in Toulouse, France. He had just returned from the West Coast, where he had been looking at innovative companies in Silicon Valley. Carlo concluded that while the Internet of Things focused on consumers is getting all the attention, the real value would be created by connecting industrial items to the Internet.
Consumers have a limited number of devices that can be connected to the Internet, he pointed out. A typical home has one refrigerator, one oven, a couple of thermostats and so forth. “But companies have millions of tools, containers, parts, subassemblies and so on that need to be tracked,” he said. “And they will be tracked by RFID.”
Carlo coined a new term, “the Intranet of Things,” noting, “Companies will connect their assets to an internal network, not the broader Internet, where everyone would be able to access them. Companies won’t want most of their data about their assets out on the Internet.”
General Electric has coined the term “the Industrial Internet of Things,” another way of referring to the same idea. Like Carlo, GE believes the biggest value of IoT technologies will not be in Google Glass or the Apple Watch, but in connecting things within a company to the Internet.
In a white paper titled “Industrial Internet: Pushing the Boundaries of Minds and Machines,” GE predicts that increased productivity will boost incomes and improve living standards. “In the U.S.,” the report states, “if the Industrial Internet could boost annual productivity growth by 1-1.5 percentage points, bringing it back to its Internet Revolution peaks, then over the next twenty years through the power of compounding it could raise average incomes by an impressive 25 to 40 percent of today’s level over and above the current trend. And as innovation spreads globally, if the rest of the world could secure half of the U.S. productivity gains, the Industrial Internet could add a sizable $10 to 15 trillion to global GDP—the size of today’s U.S. economy—over the same horizon. In today’s challenging economic environment, securing even part of these productivity gains could bring great benefits at both the individual and economy-wide level.”
I agree with both Carlo and GE. I think the big opportunity is in industrial applications, and I think Carlo is right that a big part of that will be RFID. Virtually all things inside a company’s walls will be tracked via active and passive RFID and RFID-enabled sensors.
This is not to minimize the value of companies adding IoT technologies to their industrial or consumer products. GE has added sensors to its airplane engines, which report on the efficiency of an engine while in-flight, increasing fuel efficiency and reducing downtimes. Trane has done something similar with its heating and ventilation equipment. And, of course, Apple might be adding value by introducing IoT technologies in a consumer watch. That’s great, but for companies looking for the biggest bang for their buck, I’d suggest focusing on the Intranet of Things.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark’s opinions, visit the RFID Journal Blog, the Editor’s Note archive or RFID Connect.