The Future of the Internet of Things: The Industrial Cloud Drives Change

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eg_futureiot_041416Remember when your computer just sat on your desk, with its only connection a cable to your printer? It was when computers got connected together on the Internet, and when Wi-Fi made those connections available everywhere, that the computers changed the way business was conducted in offices and how people interacted with each other. For consumers, the rise of the Internet of Things has now changed how people interact with the physical world.

Industrial computers, the dedicated computers that control industrial processes and assembly lines in manufacturing plants, are mostly still like the computers that sat on your desk and worked alone. That’s changing with the rise of the Industrial Cloud and especially the Industrial Internet of Things. Eventually equipment will be connected to the Internet out of the box. But it’s not that connection alone that will transform manufacturing industries. You need both the control systems and advanced analytics software that can interpret data when it’s sent up to an industrial cloud.

That’s the perspective Rich Carpenter, a Technology Strategist at GE Digital, recently shared with DATAVERSITY®. Carpenter has insight into these changes that comes from spending his career working in industrial automation at GE, where his responsibilities span both hardware and software.

Industrial Internet is a Digital Transformation

To hear Carpenter speak, creating the Industrial Internet is part of a transformation process at GE. The company is shedding its financial products to focus 90 percent on being an industrial company. In the modern age, that means being a digital company.

This need for digital transformation is sweeping all industries, according to the World Economic Forum (WEF). The WEF explains that digital transformation requires finding new business models and new operational models that allow companies to become more agile, leverage data in operations and decision making, and create platforms to support partnerships.

“Part of the strategy of being an industrial company is to be a great industrial company and to move to an environment where the majority of decisions are based on real data, with a rich set of analytics so we can drive the business independent of the really smart people who have all that sort of tribal knowledge,” Carpenter explains.

They’re not keeping the benefits of this transition to themselves.

“Everything that we learn from it internally we’re making available to our customers because in the end we think it’s really the community that has to adopt this, not just the one company,” he continues. “A connected community is smarter than an unconnected community.”

The process is at an early stage. Carpenter offers the analogy of how GPS and navigation systems developed in the consumer-oriented market. Initially, when you were in your car, to get between two points you took out your map and marked out your route yourself. Then you were able to use a device that wasn’t connected but had maps in it and could pick the maps digitally:

“Then all of a sudden you got connected to the Internet and Google and all of us simultaneously are giving our information back to that Google Maps infrastructure and now we’ve got real-time traffic and detours, and so you became a lot smarter.”

Adoption is Just Beginning

Industrial companies are just beginning to adopt this sharing mentality. “People seem fairly comfortable with reliability-oriented Industrial Internet projects,” Carpenter explains, meaning projects that connect to equipment, collect data, and perform analytics to identify indications of failure:

“What they’re not at a point of universally saying is here’s my operational data, which they might consider competitive, and use that to put the data in a cloud environment to drive performance improvements. I think there’s a ton of room to grow.”

GE’s done work that shows the value of the operational side, in projects like their locomotive business’s Trip Optimizer. The Trip Optimizer provides the Cloud with train data like GPS coordinates of the origin and destination, plus what the train’s carrying, and advanced analytics tell the train how fast or slow to go at every point along the trip. The end result minimizes fuel usage while maximizing the overall speed of the train. Customers save millions of dollars.

It’s only the early adopters who are at the point of using services like that though. Most companies need reassurance that their data is secure and private when it’s sent to the Cloud for those analytics:

“The tipping point comes when the value that you get by being part of a community and the benefit exceeds the perceived risk of exposing that information onto the Industrial Internet,” Carpenter says. “We’re not there yet, but it’s inevitable we will get there.”

In many cases, the early adopters are companies that are trying to break into established industries and disrupt the market. Carpenter offers the example of an oil drilling company that used to be a maintenance and service provider. The company changed to become an original equipment manufacturer (OEM) making connected equipment. “By understanding the equipment and by understanding the value of being connected they can produce equipment with a better value proposition than the companies that have always done it.”

GE’s one of the bigger companies committed to disrupting itself, believing that the 110-year old company won’t survive the next 100 years unless they change their business model. The changes involve making Internet of Things and Industrial Internet connectivity a standard part of the control system in the future, and that enables GE to change its selling model.

New Selling Models Require an Industrial Cloud

An example comes from their jet engine business. “We’re saying that we’re going to provide a certain amount of thrust on the wing of the plane, and it’s almost like thrust as a service rather than a jet engine,” Carpenter explains. This isn’t unique to GE:

“It’s a mindset that’s happening with other OEMs. The customer’s saying, ‘I want your equipment, but I want you to keep it running. You need to manage it.’ As that trend continues, the control system from the OEM has to be connected out of the box.”

Providing those services requires a computing environment dedicated to industrial needs. There are a surprisingly significant number of people who’ve accepted the world does need an Industrial Cloud, Carpenter says.

“Amazon, Google, Verizon, and other Cloud providers had not really focused on the infrastructure that industrial companies need. We believe a company like GE understands sensor data is very different from clickstream data; the types of analytics you do is very different from it.”

GE’s been building an Industrial Cloud based on its own needs and sharing it with their customers. They’re willing to work in GE’s environment because it’s secure and offers both the physical and analytical infrastructure they need for problems like working with time series data. Because of GE’s “dogfooding,” using the environment and the Industrial Cloud in its own projects, big industrial companies have confidence in the platform.On its website for GE’s Industrial Cloud product, Predix, the company states that “a truly global Industrial Internet of Things platform requires being able to connect a wide variety of machines, sensors, control systems, data sources, and devices.”

To achieve that, Carpenter says,

“We have to be open and work with other people’s equipment, not just ours, and really make something that’s for the whole ecosystem, the whole community, not just ourselves.”

Once the ecosystem exists, the way analysis is performed changes. With traditional data warehouses, companies know in advance how they’ll use it in analyses. That’s different now. The data is stored and companies can make mini analyses over time. “The days of knowing everything you’re going to ask are over; there’s just too much data and too much interesting to learn,” Carpenter says. And data doesn’t lose its value over time.

“The data is like oil in the ground,” Carpenter continues. “As you come up with new algorithms you get more value out of the data even if it was collected a year ago.”

Because the benefits are so large, GE sees the barriers to adoption coming down. Carpenter compares it to online banking. “Just think about how nervous you might have been to manage your stocks or finances through a website in the past and how you wouldn’t think twice about it today.”

As the initial nervousness fades away, manufacturing companies will realize that, like GE, their future depends on adopting—and adapting to—the Internet of Things.

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