Video
While consumer applications in the Internet of Things get plenty of attention, revenues from the industrial and enterprise side of the IoT are expected to double the consumer market by 2020. Peter Bowen, a partner with Bain's Technology practice, outlines three important concepts that will help companies compete in the industrial IoT.
Read the Bain Brief: Choosing the Right Platform for the Industrial IoT
Read the transcript below.
PETER BOWEN: The industrial Internet of Things is, in many ways, the future battleground for most B2B companies out there. While the consumer-connected-device, B2C world has created a lot of hype and generated a lot of interest from the media, we actually think that the industrial and enterprise side of this space is even more exciting. In fact, Bain research suggests that, while that B2C opportunity will be worth about $150 billion in revenue by 2020, the industrial and enterprise side of that equation will be worth almost double: $300 billion in revenue over the next few years. It's an incredibly exciting but important time for both end customers and for the vendors selling to those end customers to understand their industrial IoT strategy and take the opportunity.
It's important to know that much of this B2B spending will be going into complex industrial environments, where you have heterogeneous old systems, data, complex interactions among partners in the ecosystems ... and at the end of the day, the stakes are much higher. A blue screen on a train or a plane engine failing has a much higher impact on our society than some of the B2C applications we know about.
The industrial and technology vendors who are participating in this industrial Internet of Things are focused on many established use cases, like predictive maintenance and asset recovery. And they're starting to think about some of the deeper, more complex and futuristic ones, such as machine learning and advanced artificial intelligence. In all cases, the ecosystem around them is critical.
We believe that the platform and the ecosystem that a vendor, and eventually an end customer, picks is one of the most important choices they can make. It's not enough to sit on the sidelines.
You actually as a vendor in the industrial Internet of Things have a couple options. You can build your own platform, which unfortunately is available to only a few players because of the size, cost and investment. You can partner with others who are building platforms in your ecosystem or outside of it. Or you can go your own way, whether building an application for bespoke specific use cases or sitting out and kind of waiting to see what develops. In all cases, you need to be aware of what's happening in your ecosystem and for your end customer and jump on opportunities as they arise.
As executives think about either the vendor or the end customer side, many of them are focused on three important areas. First is, what's that long-term vision? What am I building toward when I think about the industrial Internet of Things? Second, how do I design security from the very beginning? It's not enough to think about it at the end. The industrial Internet of Things is so complex and the stakes are so high, it has to start at the beginning.
And third and probably the most importantly, this is no longer a world where you can go it alone as an industrial or enterprise customer or even vendor. Partnerships, platforms and the ecosystems around you are critical, and thinking about that and making the smart choices is what will differentiate the winners and the losers in this industry.
Read the Bain Brief: Choosing the Right Platform for the Industrial IoT
First published in November 2017