To become part of the business world, the machines making up the Industrial Internet will have to give data to and receive commands from software applications that help them optimise their performance.
Platforms-as-a-service (PaaS), which provide computing platforms that developers can use to build and deploy new software in the cloud, could be the new way to construct and operate these applications. According to Transparency Market Research, the PaaS market could grow 25% annually over the next five years, reaching $8bn by 2020.
A driving force behind this growth is the rapid evolution of the Industrial Internet, which relies on PaaS and associated applications to provide solutions that will help entities such as airlines, railroads, hospitals and utilities to optimise productivity. An example is Cloud Foundry, an open-source platform where developers from both large and small corporations share ideas and software to craft solutions for Industrial Internet issues. The 2015 Cloud Foundry Summit, which concludes today in San Francisco, attracted more than 1,500 developers — 50% more than last year.
The main challenge to developing PaaS platforms “is that they have to ingest data from multiple sources, including streaming data, and then filter it, assure data quality, perform data integration, process it, analyse it and then distribute their findings”, says Yefim Natis, a vice president and research fellow at Gartner Research. “It’s a very complex matter”, he notes, adding that “it’s a very demanding undertaking to provide all the capabilities required to be an intermediate between the world of devices and the world of business applications”. What is required, he says, “is a comprehensive, multifunctional platform-as-a-service, and that’s something only a big company can deliver in the long term.”
No wonder, then, that major players such as GE, Intel or Cisco — all of which are founding members of the Industrial Internet consortium — have entered the space. In 2013, for example, GE debuted its Predix platform, partnering with AT&T, Cisco and Intel to expand its wired and wireless connectivity. “GE makes most of its money from maintenance of the hardware they sell and to do that efficiently and productively requires a lot of sensors and analysis of the data that comes from those sensors,” Mr Natis says. The investments are already paying off, with more than 40 applications now available and nearly $1bn of additional revenue generated in 2014, according to GE. Competition for industrial leadership remains fierce, however, and traditional actors with strong IT experience are also well-positioned in the short term, says Mr Natis. “No one has gotten a complete handle on the field yet,” he notes.
The rise of PaaS for the Industrial Internet will also prove disruptive to the IT market. “IT vendors have just gotten a handle on the wave of innovation from mobile, and before that cloud and social, and now there’s a whole new wave of the unknown coming their way,” Mr Natis says. “This will stress market leadership among IT vendors — for example, GE is in the running in this field now, and it was not in this business before. Some formerly large vendors will not have enough capacity to keep competing in this.”
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: Charles Choi is a writer at GE LookAhead.
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