IIoT You Talking to Me?

IIoT You Talking to Me?

Posted by: Varun Nagaraj | Posted on: Thursday, June 4, 2015

If you are a fan of the movies, maybe you remember the classic line that Robert De Niro delivers in “Taxi Driver”. I am of course referring to “You Talkin’ to Me?”.


Some weeks ago, I attended a conference hosted by the Measurement, Control, and Automation Association (MCAA). The MCAA is the trade association of leading companies who manufacture and distribute a wide variety of process controls, field measurement and analysis instrumentation, systems and software used in industrial process control and factory automation around the world. As you would expect at an annual event like this, we had invited guest speakers to inform and stimulate us with data and ideas that we could presumably take back to our companies and apply to the running of our businesses. The speakers all highlighted the Industrial Internet of Things (IIoT), the use of big data, the potential to change business models and add new revenue streams, and so on. They talked about how products would evolve from being not-so-smart and not-so-connected to being smart and connected. Typical stuff you hear at conferences.

What was out of the ordinary was the reaction from the 200 or so attendees representing 150+ companies. The thought many of them seemed to be sharing appeared to be, “seems interesting, but what does this have to do with me.” In other words, “You Talkin’ to Me?”, minus the cool accent and attitude.

At the breakout sessions and over drinks/dinner, I tried to get a handle on why the MCAA members who would surely be instrumental in making the IIoT a reality had this sort of a tepid reaction. Why wasn’t every vendor there excited about the prospect of transforming their product into a “smart connected product”?

Well, here are a few things I learned.

In some cases, it came down to where in the value chain a company sits. For example, a leader of a company that makes flow meters explained to me that his meters do collect data and provide it through simple analog methods to a higher-level Programmable Logic Controller (PLC) in the commercial or industrial facility. Unfortunately PLCs are a different product segment and are made by a different set of companies. So what does the IoT mean for a flow meter company? Could his company compete better if he provided richer data to the PLC? But what specifically would the PLC vendors value? Could he circumvent the PLC in some way? It would be great if he could reach remotely to his installed flow meters behind the PLC to see how his meters were performing, so he could make operational suggestions to his customers or design suggestions to his own engineers. But the flow meters are hidden behind the PLC and inaccessible. Overall, it was unclear if and how the IIoT would change his world. He noted that the PLC vendors are different in that they could access their systems remotely and get more involved in data management, and that some of the “smart connected products” concepts could be more applicable to them. So an important lesson I took away was that a player’s current position in the value chain and future value chain strategy greatly influence their ability to enable or exploit the IIoT trend.

A second conversation with the CEO of a Human Machine Interface (HMI) company shed light on a different challenge. After a few Sangrias, we were able to identify use cases where more data, access to that data, and ability to analyze that data could all conceivably add greater value to his product line. In all cases, we agreed that these capabilities would be enabled by software. The challenge though was his channel. He pointed out that his distribution network knows how to sell hardware. He didn’t believe this channel could articulate and sell the value-add of software and services, which is what a lot of the IIoT is about. And so, he was in no hurry to spend R&D dollars to make his products smarter and more connected in the IIoT context.

These are just two business model barriers that hinder the adoption of the IIoT. More broadly, we in industry need to learn from each other so that the IoT concepts that the keynote speakers and IoT vendors talk about are mapped into actionable plans by each industry. And as outlined in this blog post, how the concepts map vary not just by industry, but by player and circumstance. In the case of the MCAA constituents, I hope that over the next year, we will be able to develop a working group that can discuss this topic on-line, culminating in a workshop on this topic at the next MCAA conference.

I would be remiss without a shout out to Teresa Sebring and her staff at MCAA for organizing a wonderful conference!

Varun Nagaraj

Varun is the President and CEO of Sierra Monitor Corporation