Why the Internet of Things is also Industry 4.0
Robert Bosch is a German-based global leader in brake and automotive technology that has established a 500-person subsidiary, Bosch Connected Devices and Solutions, to develop sensors and actuators for the Internet of Things (“IoT”). Bosch is already a leader in the MEMS, or Michroelectromechanical Systems space, which initially developed in the automotive electronics sector in the 1980’s and then had a second major wave of incorporation into smartphones, tablets and game consoles. Bosch sees this latest major wave of development around the Internet of Things and an era they call Industry 4.0.
On a large scale, IBM has the Smarter Planet, and on a much smaller scale, IBM developed software for a kit that makes the IoT possible, along with hardware developed by Libelium that connect a series of sensors that collect and distribute weather, moisture and soil data that is being used in a Viniculture deployment in Spain.
Boeing now has a sensor in virtually every part of their new 787, and from all of those connected sensors, Virgin Atlantic expects to create more than half a terabyte of data from every flight, enabling performance metrics and service to be anticipated before a flight touches down, with any parts needed to be present upon landing. Microsoft, not to be left behind, has declared Bing as the “Intelligent Fabric” behind the IoT, and is attempting to distinguish their search engine as a tool for building actionable connections, relative to Google, which is a search engine optimized for generating advertising revenues. Microsoft has opened Bing to 3rd party developers in an effort to create an avenue to the IoT, as “Intelligent Fabric” is used to describe a knowledge base used by connected devices.
There are also some fundamental examples of IoT being deployed in other areas, such as agriculture, mining and product design. On a small scale, Cornell is using geolocation devices on cattle herds to more efficiently manage dairy milk collection. On a larger scale, Caterpillar has developed telematics-based information to provide equipment management, asset management, and remote monitoring. Caterpillar also has a fleet of autonomous mining trucks that are unmanned machines operating in hazardous conditions on continual shifts at a mining site in New Mexico. Lastly, on a local basis, PTC just announced the acquisition of Thingworx, which is an IoT platform acquisition, that is thought will extend PTC from computer-aided technologies, product data management and service lifecycle management to support manufacturers seeking to create smart, connected products, which strikes me as being very logical, strategic and forward thinking.
The common theme underlying several of these examples is that sensors are increasingly being imbedded into products with connectivity and it is blurring the lines for products and service. Boeing is thought to be headed towards a model of providing airlines with hours of flight time. On a similar theme, Caterpillar is thought to be headed towards a model of providing mining capacity, or hauling capacity, in exchange for a variable-based revenue model. This thematic approach would certainly be supported by the broader trend that we have seen in terms of the Software as a Service (SaaS) models in numerous software and enterprise applications. It is also being supported by software companies that are increasingly imbedding agents and sensors to monitor user characteristics and identify unauthorized copying of software programs. Our portfolio company V.i.Labs is a good example of this.