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When Hardware Met Software: Mining the Value of the Industrial Internet

There is more to the Internet of Things (IoT) than FitBits and smartphone-controlled thermostats. While consumer goods are some of the IoT’s most visible applications, they’re just one part of the vast and game-changing phenomenon that could soon encompass 200 billion connected devices and add trillions of dollars to the economy.

In fact, experts estimate that the IoT will resonate strongly in the “invisible” industrial sector, capturing and analyzing data generated by drilling rigs, jet engines, locomotives and other heavy-duty machines.

This network is called the Industrial Internet and it’s already helping companies shave costs and boost performance. Union Pacific, America’s largest railroad company, has improved productivity by wiring its locomotives with sensors that monitor parts and supply data to algorithms that try to predict whether a component might break down and when. “Industrial data is not only big, it’s the most critical and complex type of big data,” says Jeff Immelt, chairman and CEO of GE. “Observing, predicting and changing performance is how the Industrial Internet will help airlines, railroads and power plants operate at peak efficiency.”

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GE is developing sensors that could be printed inside machines. Top Image: Maintenance crews can already gather data from jet engines like the GEnx.

GE is betting big on the Industrial Internet. The company believes the network could add $10 and $15 trillion – the size of today’s U.S. economy – to global GDP over the next 20 years. Its software arm has developed a software platform called Predix that allows Union Pacific, as well as oil drilling companies, wind farms, hospitals and other customers to perform prognostics, reduce downtime and increase efficiency.

Capturing Big Data and transmitting it to dedicated servers presents its own set of technological and logistical challenges. That’s why GE, AT&T, Cisco and IBM teamed up this spring to launch the Industrial Internet Consortium. The goal of this open, not-for-profit group is to break down technology silos, improve machine-to-machine communications and bring the physical and digital worlds closer together.

To do that, member companies will pool their R&D capabilities to develop common server architectures and advanced test beds to standardize key components of the Industrial Internet.

Bill Ruh, vice president of global software at GE, recently told Mike Barlow of the O’Reilly Radar blog that turning data into usable insights will require an industry-wide effort – channeled by organizations like the IIC – to produce standardized infrastructure and processes that are fast, accurate, reliable and scalable.

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Massive gas turbines are also getting connected to the Industrial Internet.

While the possibilities of the Industrial Internet are just beginning to be harnessed, companies aren’t waiting around. In a speech to power company executives, Wall Street analysts and investors at the Electrical Products Group Conference this spring, GE’s Immelt said that by the end of the year, he expected GE to launch over 40 “Predictivity” industrial analytical applications, which could generate more than $1 billion in revenue for the company.

The Internet is no longer just about email, e-commerce and Twitter, says Joe Salvo, manager of the Complex Systems Engineering Laboratory at GE Global Research. “We are at an inflection point,“ he says. “The next wave of productivity will connect brilliant machines and people with actionable insight.”

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