Over the next decade, the Internet of Things (IoT) revolution is expected to have a major impact on manufacturing, energy, agriculture and other industry sectors, thereby creating the term Industrial Internet of Things (IIoT) which is described as the seamless integration of physical and digital worlds through networked sensors, machine learning and big data.
The explosion of connected products and physical systems is presenting a growing market opportunity for various types of companies. [Why Utilities hit the M2M sweetspot.] and [IoT Heroes of the Year 2015.] and [Cisco Bets US$1bn on UK Internet of Things Market.]
The market is likely to transform and disrupt a wide range of traditional industries such as the utility space, through improved operational efficiency, new business models and opportunities for job creation. There is no doubt that it will also present new risks to business and society.
IIoT, an opportunity for utilities
According to the Blackout Tracker Annual Report, 14.2 million people in the United States were affected by power outages in 2014, at an estimated cost of $150 billion to the US economy. Restoring power to millions of utility customers takes significant manpower to efficiently manage, and sometimes customers within near proximity of each other do not receive service because technicians are not aware they were without power.
IIoT presents a unique opportunity for the energy sector to aggregate and analyze massive amounts of power grid data, and turn it into actionable intelligence that helps utility operators and field workers meet their clients’ needs more efficiently.
Through this assimilation and analysis, utilities will be able to harness the power of grid data and respond quicker and more effectively to power outages by equipping workers at the edge of the enterprise with real time information that will enable them to work smarter while improving customer satisfaction.
The many benefits of IIoT
As the Industrial Internet gains broader adoption, businesses will shift from products to outcome-based services, where businesses compete on their ability to deliver measurable results to customers.
To deliver these outcomes, new levels of collaboration across an ecosystem of business partners, bringing together players that combine their products and services to meet customer needs, will be required.
Emerging software platforms will better facilitate data capture, aggregation and exchange across the ecosystem. These will also help develop, distribute and monetize new products and services at unprecedented speed and scale.
Platform owners and partners, who can harness the network effect inherent in these new digital business models to create new kinds of value, are sure to be the biggest winners in this market.
One company, Bitstew Systems, that created a technology platform which provides rapid integration with enterprise and industrial systems to execute high performance, large scale analytics with complex event processing, was recently named as one of the top 20 innovators architecting the future of the electric power industry by Greentech Media. The company was also recognized on the Gartner Cool Vendors in Energy & Utilities list and as the Frost & Sullivan Entrepreneurial Company of the Year.
BitStew’s event processing is used to deliver end-to-end visibility across all connected devices, sensors and systems within a utility to ensure the efficient operation of large scale power grids by providing real-time alerts to utility workers in the field restoring power.
Beyond these capabilities, the firm’s technology uses machine intelligence to automate key grid functions helping free up time for field employees to focus on customer priorities. This intelligence enables greater field employee safety as workers are also equipped with real-time insight into equipment that may be in critical need of maintenance.
Industrial Internet will also drive growth in productivity by providing new opportunities for people to upgrade skills and take on new types of jobs that will be created. The growing “digital labour” in the form of smart sensors, intelligent assistants and robots will transform the skills mix and focus of tomorrow’s workforce.
The Industrial Internet will also create new, high-skilled jobs that did not exist before, such as grid optimization engineers. Companies will also use Industrial Internet technologies to create a safer and more engaging work environment, thereby increasing productivity.
A risk not to make the IIoT transformation
The World Economic Forum’s recent research into IIoT concludes that the Industrial Internet is highly transformative and will alter the basis of competition, redraw industry boundaries and create a new wave of disruptive companies, just as the current Internet has given rise to Amazon, Google and Netflix.
However, the vast majority of organizations are still struggling to understand the implications of the Industrial Internet on their businesses and industries. Many utilities certainly fall into this category as they refuse to alter their traditional business models and ageing infrastructure in order to catch up with this wave of transformation.
Concerns often include increasing cybersecurity risks, lack of interoperability among existing systems, uncertainty around the return on new technology investments, immature or untested technologies, a lack of data governance rules across geographic boundaries and a shortage of digital talent.
While these concerns and challenges are real for utilities, the risks of moving too slowly are even bigger.
In order to stay ahead in this competitive sector, utilities will need to overcome these challenges with the right leadership, investment and collaborative actions among key stakeholders.