Realising the IIoT opportunity
During this year’s SEMICON Europa, which took place at the same time as productronica, Douglas Rudd from GE Digital gave a presentation entitled ‘realising the IIoT opportunity’.
Software is impacting every single industry. If we look at Airbnb, it is a $20bn hotel service which owns no real estate. If we look at Apple, it is worth $18bn in the consumer app economy, but it creates only a few apps. And then if we look at Uber, it’s a $50bn taxi service with no cars of their own. What do they all have in common? They are hugely successful without any physical goods to their names.
Rudd then explained the difference between Industry 4.0 and IIoT. Industry 4.0 includes automation and data exchange in manufacturing technologies, ‘smart factories’, cyber physical systems, IoT, and cloud computing.
Industrial Internet – otherwise known as IIoT – refers to the integration of machinery with networked sensors and software (IoT) spanning all industrial sectors, not just manufacturing. IIoT encompasses a range of areas, from manufacturing to energy management to shipping and logistics to mining and beyond.
The global IIoT opportunity is huge. According to IDC, there will be 80 billion connected devices by 2020. Another hugely significant number is that companies expect five to ten percent growth or cost efficiency gains. GE estimates that global GDP gains will be in the range of $10-15tn.
How does this compare with the consumer IoT opportunity? Rudd showed us a few examples of consumer versus industrial IoT. The consumer market is worth approximately $170bn, while the enterprise sector is $200bn, and industrial $225bn. “Those are huge numbers so, looking forward, the opportunity is also huge,” explained Rudd.
How is the European Market positioned to take advantage of the IIoT opportunity?
In Europe, the IIoT market is worth 15% of GDP. According to Rudd, this will result in the creation of approximately 33 million jobs in Europe.
Germany, France, and Italy make up over five percent of EU IIoT output, but are only forecasted to achieve one to two percent growth in the next five years. Central Europe, however, is looking at five percent growth.
Since 2007, industrial productivity growth has fallen from four to one percent, while consumer internet productivity growth has risen by 19%, on a yearly basis.
So what is the European market doing? “We’re looking at increasing factory volume by 20% by 2020. We’re looking at digitalisation technologies to make smarter, connected factories a reality.”
Becoming a digital industrial company
“We were looking at GE and how to become more innovative, and we started looking for software. We set a target to become a digital industrial company, otherwise we would disappear – which is something that has happened to a lot of companies,” highlighted Rudd.
“Firstly, GE worked on internal productivity - we created Predix, the world’s first and only Cloud based platform, purpose built for industrial companies. This open system is the foundation to everything we do. Predix was only launched in 2016, but is already effective,” he continued.
GE Digital focuses on three main production stages. The first is ‘GE for GE’ which concentrates on improving internal productivity for all different business units. The second is ‘GE for Customers’, in which the company shares innovation and best practices with all its customers. The third is ‘GE for World’, in which the company makes its Predix platform available to everyone. “To this end, GE just signed a huge partnership with Apple and Microsoft, and are working with their 20,000 developers.”
GE’s mantra is ‘the power of one percent’. Rudd explained: “If you could save just one percent of your costs, or improve your manufacturing productivity by just one percent, and if you could do this year on year on year... What could you do with the value this would unlock?”