Industrial IoT – Market Potential & Opportunities
Published on : Monday 30-11--0001
From available estimates, by year 2020, the IoT (Internet of Things) Market will have 50 billion connected devices and the overall market size is likely to be US $110 billion. This is expected to add US $14.2 trillion to the economy. Among these numbers, Industrial IoT will form a major portion for the growth.
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This creates an immense opportunity for various players, and rightly so as this market is also catching up a steam, may be also getting a bit crowded. Currently the market is going through a transformation similar to Y2K (millennial bug) and the era of ERP implementations. This is because at least 60-70% of the companies are either piloting or are implementing one of more of Industry 4.0 solutions. These solutions range from Asset efficiency improvement to Analytics and Machine Learning and AI. These capabilities are enabled by one critical layer called Industrial IoT platform or solutions.
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Who are the players in Industrial IoT and Industry 4.0 Landscape?
Since this area is growing and emerging very rapidly, the space is getting defined. Currently following are the known opportunities for the concerned entities:
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Consulting Digital Strategy
Consulting organisations are among the first to identify opportunities and develop and tap the market potential. However I still do believe there are a lot of opportunities in this area and many unserved and underserved Small & Medium Enterprises (SMEs). Typically any SME would like to focus on its competency, i.e., delivering the product to customer or consumer. The amount of complexity and interfaces needed to start an Industry 4.0 program could be simply overwhelming for an organisation that is not intending to hire a few key top level executives to strategise the program.
Large IIoT Platform Companies
These are the companies who are frontrunners and torch bearers who started the trend and demonstrated value in Industry 4.0 programs. Currently in this space the big platform companies like PTC, GE Predix, SAP, etc., are competing to grab a slice of the pie. The advantage with some of these platforms is the various options for interconnectivity with enterprise data and support system availability. Another set of players in this category are exclusive cloud IoT players line Amazon, Azure and more. They have the unique advantage of completely scalable infrastructure; however they lack the potential solution availability at the "Edge".
On the flip side most of these platforms offer just the ability to connect to various data sources and an environment to develop apps to meet your objectives. One of the most important things which is missing is the ability to drive value with out-of-the-box analytics and readymade apps for the companies from day 1.
Service industry and opportunity
This domain is going to be one of the biggest game changers, probably because of the number of OEMs and organisations going in for implementation of Industry 4.0/IIoT initiatives. The initial period for IT services industry was gone in figuring out the custom pilots and building custom environments and architectures. Going forward, following are the areas which will drive significant value for IT services:
- Supporting the large IIoT platform deployments to develop and maintain the applications, visualisations/mashups, etc.
- Supporting organisations for Cloud developments, deployments and maintenance.
- Consulting and initial handholding of the companies to get started with larger initiatives.
IIoT startup's with niche offering
Most of the funding in IoT startups is being routed to IIoT startups. The startups in this space are offering some of the most focussed capabilities. Typically IIoT startups focus on providing unique value and quicker return on investment. One of the major things to watch out for while leveraging startups is to check for their global presence and scalability.
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Integrators and Connectivity Partners
The Integrators in IIoT space will be playing a critical role. Many of the Small and Medium Businesses (20-30%) do not even have the ability to acquire data or SCADA and MES layers. The integrators are typically smaller service companies focussed on installing additional sensors on equipment or acquiring data from equipment PLCs via Gateways (Wifi). This data then can be stored in historians or databases.
The following graphic shows the typical architecture:
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Overall this domain is evolving very fast and creating a huge business potential for entire ecosystem to evolve.
Captions
Pix1. Industry 4.0 market opportunity. Source: Augmate
Pix2. IoT analytics.
Pix3. Industry 4.0: Where’s my pie?
Pix4. IoT technology services spend by verticals. Data Source: Zinnov
Pix5. Typical architecture.