Last week I had the fortune to attend an event hosted by a large private equity firm focusing on the Industrial Internet of Things (IIoT). This was a private event so I'm not going to name any names, but the attendees included at least four CEOs of publicly traded companies, senior executives at some of the largest companies in America, and a handful of technology providers (yes, that's how I got in). The point is, it was a fairly senior and mainstream crowd. In this post I'll summarize some of my observations based on the conversations.
Big Companies Are Paying Attention to IoT
As I mentioned during my quasi-name-dropping intro, this was a senior crowd, and not a tech crowd. The goal of the event was to bring roughly 40 senior people together to learn from each other. It was clear that these large companies are devoting serious resources to programs in the IIoT space and not just talking about it (and attending conferences about it). Several of the companies presented case studies on recent programs, including:
- An electric utility deploying sensors to remote equipment to anticipate failure and optimize maintenance
- An automaker replacing all it's lightbulbs with sensor-enabled LEB bulbs that can act as a backbone for an IoT network
- An pharma company using sensors to streamline compliance procedures
Security Came Up Again and Again
Two of the participants came out of the security space and pretty much every time they opened their mouths they scared the pants off of half the room. The recent IoT-based DDOS attack on Dyn was mentioned, but there was even more focus on the more recent "Wannacry" ransomeware attack. That attack had nothing to do with IoT (from what I understand) which suggested to me that in addition to specific concerns about IoT security, there is steady background of fear about what will happen next in the cyber-crime world.
But the concerns voiced around IIoT security were real enough. The poor level of security for industrial devices is a real problem with no obvious solution - many examples were mentioned of machines running antiquated operating systems (Windows 2000? Really?) with no system in place to patch or upgrade them.
On the plus side, several of the executives described how their IT organizations were working with the manufacturing group to get a handle on the various industrial equipment that connected to the network. It's clear that while security is a concern, it's not stopping companies from moving forward with IIoT.
Supply Chain is Second To The Plant Floor
The majority of the discussion centered on fixed assets - shop-floor automation and remote equipment monitoring. There were several supply chain executives in the room, though, and supplier interactions and even (gasp!) logistics came up a few times as areas where IIoT could get early and meaningful traction.
Organizational Change Is Always The Last Topic
After discussing the specific use cases for IIoT, security concerns, implementation programs, and other topics, the discussion came around (as it always seems to) to organizational change, and specifically, employee attraction and retention. As IIoT penetrates these large companies, the existing "we can't hire skilled industrial workers" problem is getting even worse. Several companies are working directly with local universities to create "IoT" programs, including degree programs. For some reason there were a lot of Germans in the room and there was general jealousy expressed about the German apprenticeship educational model, which makes it easier for students to move into skilled industrial roles.
It's A Good Time To Be An IoT Company
I emerged from a long day in a conference room with a strong sense that it's a good time to be in the IoT space (as Tive is). The conversation from these senior people was thoughtful and practical, which is not always the case when trendy tech topics come up (ask me how the topic of "blockchain" is discussed some time). They were aware of the pros and cons of various approaches and were taking a strong experimental approach to IIoT programs - the metaphor of "putting speedboats in the water to help navigate the big ship" came up a lot. In addition to making some new friends, I came out with a better appreciation of what it feels like to be on the "big company" side of this new revolution.