The IoT Is Getting Industrious

Thus far in 2015, three major research reports that probed the Internet of Things came to similar conclusions: The Industrial IoT is where the rubber meets the road.
Published: August 4, 2015

In January of this year, Accenture announced its prediction that Industrial Internet of Things (IIoT) applications could boost the global economy by $14.2 trillion throughout the next 15 years. The company based that forecast on the expected growth of machine-to-machine technology enabling manufacturers to not only fulfill client orders, but also measure and predict the outcomes of industrial systems. Accenture calls this economic boost the “outcome economy.” These outcomes, for example, might include guarantees that end users of IoT-enabled products will save energy or increase yields.

Last month, the McKinsey Global Institute (MGI) reported that the economic impacts from Internet of Things technologies could reach $11.1 trillion by 2025. And at the top of its list of sectors to reap those profits sits factories. Using IoT technologies for such applications as operations management or predictive maintenance, MGI found, could account for anywhere from $1.2 trillion to $3.7 trillion by the quarter-century mark.

Just last week, Juniper Research offered its own rosy picture, predicting that the number of connected devices will grow by 285 percent during the next five years. And the leading applications leveraging those estimated 38.5 billion IoT nodes by 2020? You guessed it: They’re in the industrial and other enterprise sectors.

None of this is to say that more consumer-oriented products and services will not hit pay dirt. In fact, Juniper Research predicts, smart-home, health-related and connected-vehicle applications will churn out higher average revenue per user than industrial and enterprise or public infrastructure applications. But players in the industrial sector, it believes, will see a higher return on investment.

Obviously, it’s far too early to know whether Industrial IoT applications will indeed lead the pack, or if they’ll generate huge savings or revenue streams. But based on what I’ve been seeing, there is a fair bit of energy and enthusiasm behind industrial applications, as well as an eagerness to develop and test standard approaches. To wit: The Industrial Internet Consortium (IIC)—an industry group formed in 2014 by AT&T, Cisco, General Electric, IBM and Intel to accelerate the deployment of networked sensor-based technology—has been rolling out testbeds this year, which are being deployed in order to either focus on best practices, use cases and the identification of areas of business opportunity, or to refine a technology, security or software architecture. All of these testbeds are focused on using open standards.

In March, IIC member Bosch was the first company to publicly announce such an IIC program, known as the Track and Trace Testbed. Bosch is partnering with Cisco, networking and IT consultancy Tech Mahindra and National Instruments (NI) to create the testbed, which will describe a standards-based framework for precisely tracking both the location and usage of automated hand tools within an industrial setting.

Soon after that, Real Time Innovations (RTI), NI and Cisco launched the Communication and Control Testbed for Microgrid Applications, partnering with power utilities CPS Energy and Southern California Edison, as well as representatives from Duke Energy and the Smart Grid Interoperability Panel (SGIP), to create reference guides and develop standards for modernizing the electrical grid using IoT.

Just last month, the IIC, working with IBM and NI, introduced yet another testbed, this one focused on condition monitoring and predictive maintenance.

While jet engines or heavy machinery tend to be the focus of IIoT applications, industrial use cases vary greatly. For example, last month we reported on how Pitney Bowes is using GE’s Predix software and embedded sensors in its equipment for handling and sorting mail, to make data more accessible and actionable.

Players in the IIoT space are dogged by hurdles that are common across the Internet of Things ecosystem, from slow standards development to a failure to think about and embed data-security features into a system from the outset. But from what I’m seeing—at least in the short term—industrial applications seem to have more promise and fewer pitfalls than IoT deployments in other sectors.

Mary Catherine O’Connor is the editor of Internet of Things Journal and a former staff reporter for RFID Journal. She also writes about technology, as it relates to business and the environment, for a range of consumer magazines and newspapers.