Industrial IoT to gain traction in 2017
This article is part of EDN and EE Times’ Hot Technologies: Looking ahead to 2017 feature, where our editors examine some of the hot trends and technologies in 2016 that promise to shape technology news in 2017 and beyond.
Much of the buzz surrounding the Internet of Things has been centered on the consumer space. But industrial applications ultimately have the greater transformative potential, offering users real returns on investment (ROI) rather than just enhanced convenience or "cool factor." But the industrial sector is conservative and has been slow to embrace an industrial IoT (IIoT). That situation is poised to change in the coming year.
In its broadest vision, the IIoT would allow companies to have their full manufacturing, chemical processing, materials handling line, and the like, fully instrumented and controlled via network-based operations. "Full," in such cases, not only encompasses specific plants or factories, it includes the facilities of all an enterprise's suppliers so that the entire "food chain" for an industrial activity can be linked. That way, a glitch in production of a key component would not catch a later consumer by surprise, but would be known and accommodated as soon as it happens. In the same way, any QA problems or changes in demand that show up downstream can be communicated back to the producer for corrective action as soon as it gets discovered.
Such a global implementation of an IIoT is many years away, of course. There are countless issues of data access (and privacy), interoperability among individual systems, achievement of a critical mass of IIoT implementations, and the like before the production lines of the world can be linked in such a manner. But even before this global vision can be realized, the IIoT can offer users some compelling benefits.
A full IIoT implementation in a production line, for instance, would provide corporate management with real-time information on production activity and efficiency, simplifying planning for supporting activities such as procurement and staffing. In addition, IIoT systems can be designed to enable on-the-fly reconfiguration, allowing rapid response to changes in supply or demand. Even without such full IIoT control, simply instrumenting production equipment can provide valuable insights into operations. Further, equipment sensors can monitor the health of production machinery and allow the prediction of maintenance issues before they devolve into equipment failure. Such predictive maintenance can save money two ways: one by allowing the scheduling of service to prevent disruption of production lines due to failure and the other by eliminating the need for overly conservative (and potentially unnecessary) periodic maintenance programs.
But industrial enterprises tend to be conservative, reluctant to embrace the new and unproven. They also don't like to mess with success; if the system is working adequately, there's little incentive to change things and risk disruption in their production. And the cost of implementing a whole new system while maintaining the current one can be prohibitive. Ideally, then, the IIoT can be implemented in stages primarily as augmentation of legacy equipment rather than requiring replacement.
Clearly, industry is interested in the potential benefits of IIoT. According to several surveys, most industrial organizations know that the IIoT is the way their activities must trend. A Genpact research study, for instance, indicates that more than 80% of large companies believe that the IIoT will be essential to their future success.
The market is certainly poised to grow. In a recent market analysis by Industry ARC, for instance, the projected value of the IIoT market will reach more than $120 billion by 2021. Research firm Markets and Markets is even more optimistic, pegging IIoT growth at a CAGR of 8% to more than $150 billion by 2020. And the benefits will follow. By GE's estimate, the IIoT will stimulate an increase in the global GDP of $10 to $15 trillion over the next 20 years.
But analysts and journalists have for years been saying the IIoT is going to be huge. Still, it has yet to show the "knee in the curve" of adoption that heralds the onset of the predicted growth. By the same Genpact study, despite 80% of companies recognizing the IIoT's importance, less than 24% of them have defined a clear IIoT strategy. So why will 2017 be the year everything begins to change?