In part 2 of our IIoT Talks interview with Chris Rommel, Executive Vice President of the market intelligence firm VDC Research, we talk about what’s driving the Industrial Internet of Things (IIoT) and where it’s headed. Part 1 of our conversation covered some of the potential challenges and stumbling blocks faced in adopting IIoT initiatives, as well as advice for how to capitalize on the opportunities.
Wendy Toth: How is the IIoT different from M2M (machine-to-machine) communications?
Chris Rommel: The IIoT is evolving out of M2M. M2M and the connected factory concepts aren’t new; they’ve been around for a while. At a smaller scale, and sometimes with more myopic purposes and scope than what we see with the IIoT, people have been experimenting for more than a decade with IoT, M2M, connected devices, and connected factories.
In the industrial setting, connected systems are on a continuum from passive monitoring at the most basic end, gradually moving toward active management of those systems and all the way up to a more service-oriented business approach. At the device level, this continuum moves from discrete, single-purpose, dedicated systems up to interconnected systems.
The IIoT is not a full pivot point in the ecosystem; it is a natural evolution of long-standing M2M. What’s new with the IIoT is the magnitude of the change toward more connectivity, active management, and control—and the recognition in the broader ecosystem of the opportunities borne out of that connectivity. The technology, and the ability to integrate the technology, is catching up with the vision.
TOTH: What are some of the opportunities for industrial companies?
ROMMEL: More industrial organizations are looking at how best to evolve their products to incorporate more connectivity and, beyond that, new forms of connectivity. They’re interweaving higher levels of intelligence not seen in previous generations of their products.
It’s transformative, and not only from a product standpoint. On the one hand, greater intelligence and connectivity of devices enables things like predictive maintenance in industrial settings.
But the trends toward more intelligence and connectivity are also transformative in enabling organizations to change their business models to deliver new levels of value to their end clients. For instance, the change in business model can be as dramatic as going from just selling machines and components to selling uptime on a factory floor.
TOTH: How strongly are industrial companies responding to the potential of these new trends?
ROMMEL: Over the course of a year, VDC surveys thousands of engineering organizations. We did a survey last year focusing specifically on IoT and M2M. More than 70% of the engineering organizations we surveyed said that they had intentions to take advantage of the IoT or M2M.
TOTH: Do you see major differences in IoT or IIoT adoption in various parts of the world?
ROMMEL: There’s generally no geographic difference in the potential or the nature of the challenges in aligning with this next generation of product development. Of course, regulations vary from country to country. Also, trade shows will have different cross-sections of industries and attendees represented: Lots of automotive and industrial automation companies in a show in Germany, for instance, and more consumer electronics booths in San Jose, California.
But the opportunity that organizations see and want to learn about, to bring their products more into the IoT or IIoT fold, is universal—or at least horizontal.
TOTH: In which industries or vertical markets do you see the greatest uptake for M2M or IIoT initiatives, and which are lagging?
ROMMEL: The industrial automation sector has been experimenting with this dynamic for quite some time. But they’re not building as robustly intelligent systems as in some other markets.
The automotive sector is experiencing a fast evolution of their center stack.
Medical is one of the furthest behind. They’re slowed in part by the nature of the medical industry, but also due to the lengthy and costly certification processes required for many of their products.
At a higher level, though, all the industrial markets are moving directionally toward alignment with the IIoT, although the details tell a sector-by-sector story.
IIoT Talks is a conversation between industry luminaries and Echelon Corporation about the opportunities of the Industrial Internet of Things market. Echelon's Chief Marketing Officer, Wendy Toth, will share highlights of these conversations via the company blog. If you are interested in participating, please send an email to firstname.lastname@example.org.