Industrial Internet of Things: from talk to reality

Posted on 29 Feb 2016 by The Manufacturer

The Industrial Internet of Things offers manufacturers a host of new revenue and customer connection opportunities. Diego Tamburini, manufacturing industry strategist at Autodesk, explains how.

By now, the mystery surrounding the Internet of Things (IoT) is starting to dissipate as more consumer and industrial products join the connected fray.

Diego Tamburini, manufacturing industry strategist, Autodesk.
Diego Tamburini, manufacturing industry strategist, Autodesk.

But even though the definition of IoT may be known, the implications of the connected future might still seem a bit murky. After all, what is the point of all of this connectivity if it’s not providing value?

Crucially, once products have the ability to connect, manufacturers and third parties can deliver more value to their customers – well beyond the sale of the product – by providing a whole range of solutions and services. In my opinion, manufacturers need to wake up to this opportunity and act now.

Here are a few suggestions:


Manufacturers can provide software applications to allow their customers to remotely connect to, control and monitor their products. They can also provide an application programming interface (API) to allow others to connect to it.

This of course expands the value of the product by offering new functionality and new ways to interact with the product. For example, take Premier Deicers, a Wisconsin-based purveyor of aircraft de-icing equipment. The company’s “Guardian Angel Monitoring System” provides remote access to 29 functions on the de-icers, from fluid pressures to electrical components.

Customers can access live readings of applicable functions on the de-icers from anywhere with internet service; able to monitor and keep a detailed record of exactly how much fluid is being used and how much is on hand at all times.


Another important way manufacturers can add value to products is by offering services attached to them. These services take advantage of the immense value of the data generated by the product when combined with data analytics techniques (which could be the “secret sauce” that gives them the competitive edge).

Two types of IoT-enabled services that represent the biggest short-term opportunity in the industrial sector are predictive maintenance and energy optimisation. For example, ABB connects its robots to provide predictive maintenance services, resulting in reductions of unplanned downtime to their customers.

In the energy optimisation area, GE’s Trip Optimiser is an “intelligent cruise control” that collects real-time information about a train’s geographical location; weight; fuel burn, and terrain information to calculate the optimal speed for a train to travel. This can save millions of dollars in fuel cost.


Taking this further, manufacturers can provide services attached to connected products from the individual product level to a system level – where we connect multiple (and potentially different) products.

Here, a manufacturer or a third party system integrator could monitor the performance of each device in the system and adjust their parameters and behaviour to optimise the performance of the system as a whole.

There are a huge number of opportunities here! To name but a couple, the system could be composed of similar devices (such as a wind turbine farm) or different devices (such as a smart factory, or a smart building).


Another interesting way manufacturers can add value to their customers is by upgrading the products their customers already own. This type of service will increasingly be delivered via software upgrades, and will become more feasible as manufacturers solve more and more design problems with software rather than hardware.

The quintessential example of the upgrade model is Tesla. The electric-car company has been delivering over-the-air updates to its Model S for years, and recently upped the ante with its Autopilot update.

Deployed wirelessly to all Model S’s in the US throughout the course of a week, the update essentially turned each of those vehicles into autonomous, self-driving cars—that still require ultimate human control (for now).


To further continue down this road is the product-as-a-service (or servitization) model. In this situation, the customer doesn’t pay for the product or spare parts, but rather “subscribes” to the product and pays a fixed amount on a predetermined schedule, be that monthly, annually, or quarterly.

An example of this model is Philip’s Lighting-as-a-service used by Washington, DC, to provide 13,000 lighting fixtures in all its parking garages at no upfront cost to the city under a 10-year contract.

Philips gets paid from the savings the LEDs are expected to provide each year. The bulbs will automatically alert Philips when repairs are needed. PaaS puts the onus squarely on manufacturers to keep their products functioning—otherwise, they don’t get paid.

As the IoT becomes even more entrenched, the value in the connected ecosystem and the data collected will become even more apparent. It’s estimated that by 2020, the industrial IoT will comprise 16% of global GDP and manufacturers will spend more than $500bn to seize over $1trn in new ROI.

For manufacturers, I would urge a review of these opportunities alongside their product set to establish potential new lines of revenue but, at the very least, to ensure that they are delivering the best possible service to customers. Those who don’t may risk some more traditional lines of business drying up in favour of connected products.