Michael Schallehn: How to Choose the Right Industrial IoT Platform

The biggest opportunity in the Internet of Things is the industrial sector. Michael Schallehn, a partner in Bain's Technology practice, shares the three things executives should consider when deciding how to expand into the industrial IoT sector.

Read the Bain Brief: Choosing the Right Platform for the Industrial IoT

Read the transcript below.

MICHAEL SCHALLEHN: Connected consumer devices are getting a lot of attention in the media, but we at Bain & Company all know that the biggest opportunity is in Enterprise and Industrial IoT, with $300 billion at stake in the year 2020. A lot of this revenue is going to accrue in the industrial sector, but it's also a very difficult one to succeed in just because it's incredibly fragmented, and a lot of the systems have mission critical requirements. So IoT vendors are starting with proof of concept around the more established use cases, such as predictive maintenance and quality control and expanding from there.

And while they are getting traction with their customers, many of them think about launching an IoT platform. There are a couple of options on how to do that. One would be to build a platform on your own. No. 2 would be to embrace some of these emerging platforms in the Industrial IoT, such as GE Predix or Siemens MindSphere. And the third one would be to leverage the cloud service providers who are expanding in the IoT with their established cloud offerings and analytical services.

And there's no right or wrong here, but an executive who's approaching this sector has to keep three things in mind. No. 1 would be to have a clear understanding of the point that they want to accomplish. No. 2 would be security. Security is the No. 1 concern that IoT customers have, so you have to implement from the start, and you have to implement it into the devices, into the network, into your cloud offering.

And third, partnerships are really essential here. In the Industrial IoT, no company has all the capabilities in-house. And when you think partnerships, don't just think about the large companies. Also have the start-ups in your ecosystem on your radar.

Read the Bain Brief: Choosing the Right Platform for the Industrial IoT