It was not surprising to find the $125 billion conglomerate, GE, betting long-term on embedding intelligence into their products by pouring billions of dollars under Jeff Immelt. The digital thrust will continue under the leadership of John Flannery, the CEO designate.

Products have the potential to emit a gold mine of data. It would be near-sighted not to use this gold mine to make life easier, customer experience better, the environment more sustainable and in the process, generate more revenue for the entire value chain. 

The data can be mined using sensor technologies attached to the machines and using communications technologies and analytics to deliver value through diagnostics, predictions, alerts, automated decisions and actions, strategic insights – all at a speed and cost not available before.

As an example, if you are an industrial machine manufacturer you know that some of the challenges faced by your customers are: preventing failures, reducing unscheduled downtime, extending equipment life, lowering energy and operations cost and so on. 

How good will it be for your customers? If you are able to add sensors which transmit data and your software does run-time diagnostics on parameters such as temperature, vibration, voltage fluctuations, pressure drops, leakages and so on. Potential problems are then flagged off by the analytics software and even time to failure is predicted accurately for the customer to take proactive action. 

What could be driving this strategic push for machine manufacturers?

• Over the last decade costs of sensors have more than halved, bandwidth costs have come down 40 times and cost of processing by 60 times. These costs continue to come down. The payback period on investing to make machines intelligent is getting less and less.
• Technology to handle voluminous, unstructured data (Big Data) has matured over the past decade
• Awareness is growing that this can lead to new products (and services) and therefore new revenue streams. As Ganesh Bell, Chief Digital Officer, GE says – “it is not just about making existing business more efficient but about a whole new franchise”
• Realization is gradually dawning that digitization will be the strategic imperative for survival and growth. And competitive advantage.

Do manufacturers get it? A survey done by the MPI Group found that 63% of manufacturers believe that embedding intelligence in their products will increase profitability. Most are looking forward to increased revenues by adding these innovations to their products, increase in market share, access to data from products from the field and increased profit margins from products as major benefits.

Do customers get it? Here the challenge appears to be less easy. Beth Comstock, head of innovations at GE, who declares “You don’t go digital at your own peril”, admits that convincing GE’s customers about digitizing will take somewhat a little longer since they would like to see examples from others. 

In conclusion, it can be said that, like the Internet, the Internet of Things (IoT) for industrial machines will get pervasive sooner than we think. After all, 50 billion machines are expected to have connectivity by 2020! Instead of trying to ignore it, industrial machine manufacturing companies should start embracing it.