As Schwab explains, this new industrial revolution is being driven by new Artificial Intelligence (AI), Internet of Things (IoT), and other technologies that fuse our physical, digital, and biological worlds in ways that allow us to increase operational efficiency and otherwise create new types of value. In manufacturing, energy, agriculture and other industrial business sectors we are already seeing this revolution take hold, with a transformation many have described as Industry 4.0.
One of the core requirements of this Industry 4.0 transformation is "the bridging of the physical and digital world through cyber-physical systems.” Companies can build this bridge by using IoT technologies to connect their industrial machines and other physical operational technology (OT) assets to their Enterprise Resource Planning (ERP) systems, Customer Relationship Management (CRM) systems, and other digital Information Technology (IT) assets. This connection enables the collection of data from industrial OT equipment and then its transmission to cloud-based IT systems, where it can be used for new predictive maintenance, equipment-as-a service (EaaS), asset tracking, smart factory process control, and other Industrial IoT (IIoT) applications that transform how manufacturing and other industrial companies do business.
Why is this new industrial revolution finally gaining traction after decades in which Original Equipment Manufacturers (OEMs) first attempted to use machine to machine (M2M) technologies, and later IoT technologies to build a bridge between OT and IT? The reason is that, until recently, OEMs found the process for connecting OT and IT to be very complex, time consuming and expensive.
Specifically, OEMs found it difficult to acquire the wide variety of specialized expertise—including expertise in embedded device firmware, wireless connectivity, IoT cybersecurity, and cloud application development—needed to build solutions that could connect OT to IT. For example, these OEMs needed to be able to extract data from legacy OT equipment using old communications protocols and understand how to make OT to IT connections secure. They needed the expertise to successfully integrate this OT equipment data into cloud-based IT systems. Difficulties in finding this and the other specialized expertise needed to build a secure, reliable, yet flexible connection between OT and IT resulted in many of these OEMs’ IIoT projects failing, or at least never delivering on their full potential.
Today, however, OEMs have access to new, all-in-one IoT solutions, like Octave™, Sierra Wireless’s edge-to-cloud solution for connecting to industrial assets. These new solutions are helping “cloudify” the IIoT, enabling companies to use simple cloud APIs to essentially “plug-in” OT equipment into IT systems rather than build their own solutions for this connectivity from the ground up. These solutions are simplifying the connection of OT with IT to the point where it is almost as easy as signing up for a SaaS application or cloud service. Due to this, in 2020 we expect to see a sharp uptick in manufacturing and other IIoT project activity, as well as many more successful projects. With greater adoption of these solutions, it is no wonder that IoT Analytics’ forecast that by 2020, approximately 50% of industrial assets in factories will be connected to some form of on-premises or remote data collection system.
With IIoT applications that allow companies to fix equipment before it breaks, pay for machines based on how much they use them, and automate complex manufacturing processes, 2020 will demonstrate that the Industry 4.0 is not just a Davos or Hannover Messe conference topic. Rather it is a real-world transformation taking place on factory floors, at loading docks, on the power grid, in farmers’ fields, behind buildings in rubbish bins and everywhere else where industrial equipment and OT assets benefit from being connected with IT systems.