The Battleground for Industry 4.0

Are you involved in digital transformation? IoT? Industry 4.0? Industrial IoT? AI/ML? Any and all of these technology trends have a fundamental commonality – the Edge. There are too many definitions of the “The Edge” to get specific, but there are a number of macro forces that will definitively shape these important technology trends.

McKinsey & Co. states that “…digital, analytics and IoT technologies is worth over a trillion dollars of value for industrial companies.” So, knowing where the battle will be fought and won is worthwhile (to say the least)!

Let’s start with the incumbents – ABB, Siemens, Schneider Electric and Honeywell. They have won many decades of trust with their reliable, integrated and proven industrial control systems and solutions. With long product cycles and hardware-focused industrial customers, they have won well-earned respectability and have erected barriers to entry for these critical “OT” systems (Operational Technology).

Edge Clouds will enable new levels of process automation on the plant floor

But with the shift to digital and data, the market landscape has begun to change. Data processing has become indispensable to modern industrial processes and manufacturing. “IT” systems are now common in every aspect of industrial systems, leading to a belief that a new industrial revolution, Industry 4.0, is emerging. And this has brought about formidable challengers like Amazon, Microsoft, and Google with their tremendously powerful and sophisticated data processing tools and infrastructure.

But a gulf separates these two – the centralized data processing of the Public Clouds are far away from the data generating OT systems in factories, plants, cities, and building. So the focus in on the battleground – where the IT and OT systems meet and integrate and divide the work of control, safety, monitoring, productivity, and maintenance — the Edge.

So, here is my list of important issues to focus on to understand who will “win” dominance of Industry 4.0:

  1. There is a shift from hardened RTOS (real-time operating system) solutions to Linux-based, cloud-enabled, DevOps-managed IT technologies. This is a fundamental force influencing this competitive battleground.
  2. The entrance of non-traditional competitors like Amazon and Microsoft threatens to disrupt the value-chain for industrial OEM suppliers. Suddenly, connectivity to public clouds, with all of the security concerns for dangerous industrial processes, is critical. And the public cloud vendors are coming with their own Edge solutions like Greengrass and Azure Edge.
  3. The tight linkage between software and hardware for OT technologies will be a thing of the past. The rigid, top to bottom integrated systems will be displaced (see point 4 below).
  4. Open and interoperable systems are becoming the norm. Standards bodies like the Open Forum’s Open Process Automation Standard will drive this trend.
    The rapid rise in importance and volume of data collection and processing is overwhelming. Industrial companies have huge data lakes that they are paying a fortune to store. They have to make use of this data.
  5. Industrial customers are more pressed than ever to find and retain skilled engineering talent. As IT/OT systems get more integrated, the skillset of the industrial customers is falling further behind. Either they are going to choose a dead-simple offering from a Cloud provider, or the industrial controls OEM’s are going to have to give them usable tools.
  6. Lastly, as in every market, technology refresh cycle will get shorter by the demands of Industry 4.0, thus creating new opportunities for vendors, service providers and system integrators.

It is an exciting time to be thinking about Industry 4.0! Contact us and let’s talk about how Edge Clouds can accelerate your digital transformation strategy.

Brandon Williams, CEO, CPLANE.ai

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