GE discovers that industrial IoT doesnt scale

GE is learning that the industrial IoT isnt a problem that can be tackled as a horizontal platform play.Five years after it began, GE is learning lessons that almost every industrial IoT platform Ive spoken with is also learning. The industrial IoT doesnt scale horizontally. Nor can a platform provider compete at every layer.

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September 5, 2017byStacey Higginbotham6 Comments

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Meanwhile, GEs software and industrial IoT efforts are still impressive. While it planned on revenue of $15 billion by 2020, it is now scaling that down to $12 billion in part to clarify what is software versus connected hardware it sells to industrial clients. Back in 2015, GEs Kate Johnson, then-CEO of Intelligent Platforms,told meGE reported $4 billion in software sales in 2014 and expected $7 billion in 2016. (Johnson left in July to workat Microsoft.)

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Can you recommend of any studies, publications, case studies etc. so I can get a notion of how much does it cost and what are the costs?

Filed Under:Analysis,FeaturedTagged With:C3,dell,Flutura,Foghorn,ge,HPE,intel,Predix,PTC,SightMachine,Thingworx,Uptake

Great insight Stacey, liked it so much I subscribed.

Theres also a role for specialization in building the overall IoT solution for companies. A hospital aiming to connect patient rooms needs a different set of knowledge around regulation and security than a company trying to create connected conference rooms needs. Today, those areas of specialization are ripe for startups.

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This weekReuters did a deep diveinto problems with GEs industrial IoT efforts. The company had taken a two-month time out to fix problems with its Predix software platform designed for the industrial IoT and has asked executives to cut costs. GE is also backing off selling the platform to all industries, and will instead focus on oil & gas, aviation and energy.

So when it comes to the industrial IoT, the opportunity is big. Its just taking a while to figure out how to attack the market. Step one is realizing that its silly to take on the big cloud and connectivity providers. Step two is quitting the platform dreams and focusing on a specific area of expertise.

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Hi Chris, for the commercial buildings vertical take a look at Our company uses one hardware device installed in under 3 hours to connect to almost any existing commercial building. We model all of the Heating, Ventilation & Air-Conditioning equipment, plus all sensors and meters, into our virtual Asset Model and start polling live data within 24 hours. Presenting the data analysis back via the web through our collaboration portal. This rapid low-cost digital makeover means that the time-to-value is short, a matter of months rather than years.

Early days for IIoT and Im learning a lot, interesting from a ground floor perspective as I can see applications where it provides ROI but many that will not.

Since launching its industrial IoT effort five years ago, GE has spent billions selling the internet of things to investors, analysts and customers. The idea of adding sensors to its equipment, analyzing the data captured from those sensors and using that to generate business insights wasnt new, but GE made a huge effort to commercialize it.

Rick Bullota, who founded Thingworx which was sold to PTC, said that he anticipates a lot of M&A in the coming 12-24 months as more businesses embrace the insights and business transformation enabled by the industrial IoT. He also says that the buyers of industrial IoT products are coming more from the business side than the tech side, which means that the overall package of technology will become more important, rather than the individual pieces.

3. cheap yet customisable

4. platforms that come with little or no upkeep that the customer doesnt have to think about?

For example, Samsara, a startup that formed in 2015, aimed tobuild a wide-scale industrial IoT platformthat started with generic sensors. It has since narrowed its focus to fleet monitoring and cold-chain assurance, which is how some of the earliest users of its product used it.

Early adopters may get stung as a disrupting vertical platform springs from nowhere.

2. cheap yet robust

I think well see connectivity also steer toward the big platforms, whether its cable providers offering LoRa networks, cellular companies, or a few of the specialized low power wide area network providers.  The hardware will likely be dominated by bigger companies such as Intel, Dell, HPE and those with established IT credibility. Well also see industrial gateways from the likes of Advantech and Eurotech.

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But its the many areas of specialization here the industrial IoT gets interesting. I think were going to see startups emerge around data analytics and AI such as Uptake, C3, SightMachine, Flutura, and Foghorn.  Many of these will have specific areas of expertise such as C3 with energy and Flutura with oil and gas.

Stacey, useful insight on GE very useful. It seems to be common for hardware companies trying to transition into the IoT market to think of the high volume of potential edge devices they can sell and then making an enterprise pitch with a 3+ year payback. Taking a different approach would mean a fundamental shift in the business model, which would be a high-risk proposition for shareholders. That hardware-first mindset is the starting point rather than asking what is the customer problem, is there existing data and can we put it to better use to deliver value. Once we proven value, then enrich the data set.

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A year ago it decided to stop building out its own cloud data centers and started signing partnerships so customers could run Predix in Amazons or Microsofts clouds. As part of the current refocusing, it appears to be narrowing its customer focus to industries where it already has customers using its equipment.

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A few questions in follow-up to your comment.

Stacey on IoT Internet of Things news and analysis

p.s. I read Jaspers publication. its good but very mobile smart platform oriented.

This makes sense. When I began covering the industrial and enterprise internet of things it quickly became clear that while IT could be generic, the data analytics elements and the real-world devices in the field that were being monitored would require specialized knowledge. What has happened is that at the computing (and even device management layer) larger cloud providers like Microsoft and Amazon are winning.

Im trying to get an assessment of how much does it cost (in a ball park) to transfer a manufacturing plant into smart plant (I know its differ and depends in different parameters)

As a young start-up, Demand Logic, can afford to build up a hardware-light data-first service which focuses on quickly acquiring existing data points from equipment, sensors and meters. In some of the buildings we monitor there are between 180,000-200,000 existing data points under-utilised. In most offices over 50,000sq ft, there are 10,000+ data points. We can show value based on this information and then we go back and have a conversation about new use cases, for instance air-quality sensor monitoring for health, and occupancy sensing for space planning. This adds to an already rich digital picture rather than starting by selling new data, so the improvement programme is already paying for itself.

My money in the short term is plug and play cheap, robust packages that add value straight away, customisable, requires little or no upkeep that the customer doesnt have to think about.

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Helium is another company that had a similar vision. It makes sensors and sends data over a proprietary wireless network to a gateway or (originally) the Helium cloud. The original plan was that companies would buy the sensors and build out rules in the cloud. But that was too open-ended, and Helium now has decided to link data from its sensors to other providers clouds. It is also focusing on managing those sensors from a Dashboard setup.

In Samsaras case, the company went from a broad focus to a few specific industries. In Heliums case, it decided to stop building out a cloud where industrial customers could host their data so it could focus on management software and act as a connector between customers data and their cloud of choice.

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I work for DATTUS ( We check all of those boxes.

Invenergy plans to deploy GEs Predix based reliability management software on 13 GE turbines at six gas-operated thermal plants in the U.S. GE has had success selling Predix into the oil & gas market.

Im betting that you have more experience in this area than I do!

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