Hitachi’s Insight 2016 Strategy Session in Las Vegas last week focused on the Internet of Things (IoT), the new Hitachi Insight Group (announced in May) and a platform for delivering IoT solutions called “Lumada”. They also reminded everyone why Hitachi Ltd (#79 on the Fortune Global 500) is somewhat unique in their ability to deliver on the promise of the Internet of Things.
According to HDS COO Brian Householder, Hitachi generated $5.4B in IoT revenue in 2015, has 11,000 IoT-related patents and has made $2.8B in IoT investments over the past three years. He went on to say that while IoT already generates zettabytes of data, from trillions of sensors on billions of devices, enterprises are analyzing <5% of this data.
This is due in part to the diversity of the the data sets and the complexity of the job at hand – figuring out which of these data is the most important (what Hitachi has called “the Internet of Things that matter”). There is also a lack of solutions focused on making IoT a simple, repeatable process, one that an IT organization could take on successfully. This is why Hitachi created the Insight group and developed tools like Lumada (more on Lumada below).
At an analyst session in Colorado Springs a couple years ago, Hitachi Data Systems used the term “Social Innovation” to describe what was essentially the Internet of Things concept. They made the point then that Hitachi Ltd, being a leader in the manufacture of large, complex systems for heavy industries, medicine, municipalities, etc., had the understanding to collect the right data from this equipment and could bring HDS in to provide the analytics and infrastructure needed to generate insights that benefit society, as well as companies.
Hitachi has created the Insight division to pull together the knowledge from these various Hitachi Ltd companies with the digital technology of HDS and bring IoT to the market. Lumada seems to be a keystone piece of technology in this effort.
Lumada is a core platform that simplifies the creation of IoT solutions by using intelligent software and the operations technology (OT) applicable to a specific system, process or industry. It runs as a cloud or hybrid cloud infrastructure and combines several Hitachi technologies, including Hitachi Content Platform as a foundational, AI (for machine learning), Pentaho (an Hadoop platform), Hitachi Streaming Data Platform for real-time processing and Hitachi Content Analytics to help zero in on the most useful data.
Hitachi is calling IoT the combination of IT and OT (imagine two circles with the intersection being these three letters). On the IT side, HDS provides the storage, servers and engineering to create the foundation needed for data at this scale. OT is the knowledge that companies accumulate designing, building, selling and supporting complex industrial products. IoT in industry is involved with capturing data from machines and sensors and performing advanced analytics on it. A new solution involving Hitachi Rail in the UK is a good example of this process and the efforts of Hitachi Insight.
Hitachi responded to an RFP from UK Rail for rolling stock, stations, ticketing, traffic management, etc. Using Hitachi’s advanced rail car designs, which have extensive automation and sensors, and Lumada, Hitachi was able to build predictive maintenance models. This allowed them to understand costs and reduce operational problems that could impact availability, providing the insight needed to propose rail transport as a service, and win a 27-year contract.
Driving successful business “outcomes” is a goal of modern IT function, as opposed to just running applications or managing data. In industrial IoT these outcomes would be predictive maintenance, cost optimization and operational efficiency – all activities that can be supported by the analysis of the machine generated data that IoT systems can collect.
Hitachi Insight’s plan is to develop Lumada-based IoT solutions that deliver on these outcomes for customers in some of Hitachi Ltd’s core industries initially, such as transportation, healthcare, water and energy, and create repeatable solutions for other customers and for related use cases. Then they plan to expand into other industries and use cases.
One area in which IoT has already made an impact is in public safety. Video surveillance is becoming pervasive, but the ability to stitch together video from multiple sources, and to overlay it with other sensor data can provide a new source of sophisticated information to improve personal safety, reduce traffic accidents, etc. Hitachi has a division that specializes in this area of IoT.
Another theme of this event was “Digital Transformation”, or “IT Transformation”, concepts that are becoming fairly well known in information technology circles. IoT is a part of this concept, as it focuses companies on the way to use data differently to create insights that can help the business keep up with their markets and stay ahead of their competitors. Like the shift from data to information, the emphasis is on outcomes derived from the analysis of data instead of on infrastructure and the applications that run those analyses.
That said, there does need to be an infrastructure on which to run software, but the infrastructure needs to operate differently than it has in the past. In Hitachi’s vision Digital Transformation encompasses several areas in IT that leverage HDS products and technologies, specifically:
In many respects, industrial IoT is not a new concept. Equipment manufacturers (like Hitachi Ltd.) have been instrumenting their gear since the early days of industrial automation and SCADA (Supervisory Control and Data Acquisition) Systems. What IoT brings is a greater appreciation for how that data can be used and a motivation to collect more data points, activities that can leverage advanced analytics and the capacity of modern IT infrastructures.
While Hitachi has made some significant strides in the IoT space in the past few years, this is still not an off-the-shelf technology. There’s a certain amount of “glue” that’s needed to make an IoT deployment successful. This includes consulting, professional services and support, things that require the resources of a global player like Hitachi. Even with pieces such as Lumada, companies should expect IoT solutions to be semi-custom at best. What the Insight group is doing is creating some templates from these early implementations and then using those to reduce the need for that “glue” in future IoT projects.
IoT solutions are a work in progress, but companies need to get to work on them in order to enjoy the benefits everyone seems to agree are possible. To that end, Hitachi Insight is providing some new options.
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