Industrial IoT offers large opportunities for telcos, but not tomorrow

Thursday 13 April 2017 | 12:09 CET | Background
Telecom operators are working hard to obtain their share of the IoT pie, with some operators pushing harder than others. Although the consumer oriented IoT segments such as smart home prodcuts have gained a lot of media attention, a much larger revolution is taking place in the industrial segment. Many telecom operators have traditionally been involved in M2M sectors and are expanding their focus to the Industrial IoT possibilities. 

The industrial IoT (IIoT) developments have been given various names, such as Industry 4.0 or smart industry. In all cases it entails the connecting of tools, machines and industrial processes to improve the efficiency of the processes and the output through data collection and data analysis. However, it is only when the results of these analyses are acted upon, that the true benefits of the IIoT will become apparent via e.g. faster service, less maintenance requirements or earlier detection of possible problems. 

The sheer size of the industrial market which stands to gain from the developments in industrial IoT of course means that this is a very interesting market for the telecom companies to be involved in. As with consumer IoT the predictions from research companies vary widely, but simply looking at the number of industrial sectors where IIoT is already being used, tested or considered, gives an idea of the possibilities such as in automotive, electricity or waste management. 

Improving the production processes in factories will not only lead to higher efficiency in the factories itself, it also leads to better products. These improved machines/products will be used in a variety of economic sectors such as agriculture, energy, healthcare and transportation.  This in turn will improve the various processes within those industries through data collection and analysis.   

As remote monitoring, controlling activities in real time and forecasting potential issues are a main part of these new manufacturing processes, this requires internet connectivity. That means that the telcos seem well placed to become leading players in the IIoT. Telcos who were already active in M2M can build upon their existing sector specific knowledge and contacts to increase their presence in IIoT. However, generally the telecom companies don’t have a lead role with the manufacturing companies, they are just one of the suppliers. Most of the larger telcos have therefore set up IoT platforms with companies like IBM, Huawei or Ericsson. Many other partnerships are also taking shape, such as between telcos and industrial groups or between telcos and IoT platform operators such as Cisco, Telit or Huawei.  

By forging these various partnerships telcos can integrate themselves deeper into the manufacturing supply chain and focus on building out their existing customer relationships from providing connectivity to providing essential services to the new industrial processes. To cement this deeper relationship, telcos can also choose to effectively partner with the industrial company so as to tailor their IIoT services to the location/plant specific requirements of the customer for example in terms of latency, network back-up but also the level of security. Industrial IoT clearly offers large opportunities for telecom operators, but they need to be in it for the long haul, as machinery is meant to last for decades, meaning manufacturing companies cannot just change their entire processes to include sensors etc. The industrial IoT will not be a revolution but a slow incremental process.

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