How can we scale up the industrial internet?

Delivering on the $15trn potential of the Industrial Internet requires building success across the board. It includes everything from fostering an active and productive developer ecosystem to securely integrating software with hardware devices. Platforms-as-a-service (PaaS)—software that sits between end users, businesses, developers, factories and machines—can provide the glue that connects these desultory needs, allowing the Industrial Internet to scale across domains.

Developing them is no easy task, however. Platforms not only require significant human, intellectual and financial capital to deploy, they also require a latent capability to bridge wide-ranging underlying necessities, such as data security and hardware integration. And they have to do this in a way that is scalable. It should come as no surprise then that some of the world’s largest companies—GE, IBM and Cisco, to name a few—are taking on the challenge. GE, for instance, launched its Predix platform last August and will be showcasing it at its fourth annual Minds + Machines symposium in San Francisco.

This PaaS will allow businesses to connect industrial sensors and hardware devices with artificial intelligence applications, such as machine learning and cloud infrastructure, to effectively collect, store, transmit and analyse industrial data in real time. It also allows the open-source developer community to build applications on top of the platform; for example, fuel-efficiency algorithms for airlines.

While Predix is only now available to a wider audience, GE has been piloting the concept since 2013. According to the company, more than 40 applications are already available on Predix, generating more than $1bn of additional revenue from Industrial Internet offerings in 2014 . Overall, the global PaaS market could grow 25% p.a. over the next five years, reaching $8bn by 2020, according to Transparency Market Research.

Establishing an open-source platform is the first step in actualizing the potential of the Industrial Internet, however, one also needs to develop the right mix of different players to create a viable ecosystem for the PaaS. Big players like Microsoft, Cisco and GE each have venture capital arms devoted to partnering with accelerators and investing in early-stage companies, often with the intention of securing the most attractive sets of industrial apps for their platforms.

While smaller than their corporate counterparts, start-ups are helping build Industrial Internet ecosystems as well, sometimes in very similar spaces. Founded in 2013, Altizon Systems, based in Pune, India, developed an Industrial Internet PaaS called Datonis, which allows companies to connect industrial devices, process and store data, and deploy analytics systems across a range of industrial settings. According to data-analytics firm Quid, more than 650 Industrial Internet companies have been birthed since 2010, with $5bn invested into the space. Not all provide PaaS, but competition will be strong.

Start-ups that develop security programs for the Industrial Internet will also inevitably play a critical role in scaling up PaaS, if only because controlling the spread and use of data becomes harder as the number of connected devices increases. In addition, while many firms offer encryption of bulk data at rest and in motion, few can offer protection once data leaves the premises.

Getting security protocols in place in a way that enables to scale will thus be crucial for the Industrial Internet. One way, explored by startups like Ionic Security and Mocana, consists of setting up platforms that can decide which devices can access the cloud, what information they can access and who can access it, all the while ensuring that all data is encrypted and that it remains easy for the user to use the system.

Mocana, which received strategic investment from GE in 2013, recently announced a series of partnerships with mobile and security-platform providers Apperian and Sensors.com. For each partnership, the goal is to offer customers of both companies the best of both platforms by combining them and delivering more secure mobile app management with a larger set of complementary offerings.

To make good on its promise, the Industrial Internet will need to capitalize on such innovations and approaches, even if they exist outside of the largest industrial players. PaaS like Predix offer unprecedented opportunities to scale, but the reason the Industrial Internet can and will change the future of business is because value can be created by any and all.

As large-scale PaaS like Predix come to life and new PaaS creators like Altizon and Ionic continue to mature, the Industrial Internet PaaS ecosystem should focus on collaboration. Doing so will bare fruit to more than just the companies involved.

This article is published in collaboration with GE Lookahead. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Andrew Trabulsi is a consultant, author, and entrepreneur with a background in technology forecasting, geopolitics, and economic development policy.

Image: Internet LAN cables are pictured in this photo illustration. REUTERS/Tim Wimborne.