Industrial Internet of Things – beyond the hype

November 6, 2016
Posted in IIoT trends
November 6, 2016 optio3inc

Industrial Internet of Things (IIoT) devices and complementary technologies are being applied to solve enterprise problems across multiple verticals that have a material impact on a company’s bottom line. These issues include ever-increasing operational costs, waste of energy and other resources, employee productivity and customer, tenant or guest satisfaction. While the Consumer IoT sector is going through its trough of disillusionment per the Gartner Hype Cycle. Why is the IIoT not subject to similar headwinds?

Large Hotel Management Groups and Commercial Facilities Groups report that labor represents 51 percent of their operating cost, yet two-thirds is wasted reactive maintenance, dealing with outages, and performing manual processes associated with maintenance, device asset management, and control. Energy Star reports that 30 percent of energy is wasted in commercial facilities due to mismanagement of lighting, heating, or cooling. That energy waste accounts for $30 billion per year.

There are burning pains associated with maintenance & operations cost reduction in the commercial sector;  the existing solutions or keeping the status quo is not sufficient. Proper visibility, management, and monitoring of all connected devices can address most of these labor and power management related inefficiencies, but a fundamental challenge to providing cost-effective, high-ROI maintenance management to mid-sized buildings is the lack of interoperability between devices.

The interoperability problem is compounded by the need to interconnect both legacy equipment in buildings with next-generation devices such as sensors and switches. Companies such as GE,  Johnson Controls, Philips, Samsung, and Honeywell, create great devices, but to realize the benefits of the IIoT one needs to be able to coordinate the different elements: lighting, heating, cooling, security, etc.  Furthermore, information available about mean time between failures for specific devices, weather patterns, benchmarking and other public available data sources should be processed alongside the signals from these sensors to enable intelligent actions in the building management space.

The opportunity to create new technology that helps to realize the promise of the IIoT is rather large, and Investment in IIoT startups has quadrupled since 2014. By the end of 2015, Venture Capital invested over one billion in IIoT ventures as per CB Insights; the trend continued in 2016 with half of the investments in IIoT focused in early (seed, Series A). That money is fueling software innovation needed to take the IIoT to its next stage.


Thanks to the rapid evolution of IIoT devices, commercial buildings are increasingly generating massive amounts of data available for analytics, predictive control and machine learning to take energy savings to the next level. Today, just in Commercial Buildings, there are over one billion IIoT devices such as connected light bulbs, HVAC, and building management systems deployed for purposes of cost saving, and that number is projected to grow by 400 percent by 2020. Furthermore, the number of sensors is expected to be in the trillions by 2020 as per data from Gartner, IDC, IMS Research and the leading manufacturers of such devices.


sensor forecast for the IoT go well into the trillion on devices. source: lux research

Monitoring industrial and commercial environments for improvements in resource consumption isn’t new and is probably one of the core focus areas of the industrial IoT, but we have very present the issue of fragmentation and lack of common visibility.

Beyond the cross-manufacturer aggregation and integration challenges, there is the problem of normalizing data and delivering it accurately and securely to cloud-based services for the purpose of advanced analytics, data mining, and predictive control. There are dozens of protocol standards and hundreds of different implementations just among the best-in-class of these devices and services.

While tenants, customers, and guests are the ones that would enjoy the benefits of IIoT, at the center of the storm, we have the technicians and the facility managers in charge of the major commercial buildings. They suffer the unintended consequences of the explosion in the number of devices and the fragmentation among vendors. They are dealing with 60 percent of their time devoted to manual tasks, reactive maintenance and time lost in inefficiencies even when they have an increasing number of smart sensors and connected devices in their facilities.

Fueled by growing and diverse sources of funding, innovation in the IIoT sector started to move from sensing into taking action, to address the many inefficiencies in the operations of industrial and commercial facilities, making solid progress beyond the hype.

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