A few weeks ago I had the opportunity to attend the GE Innovation Summit in Orlando. It was a great opportunity, and despite what some have said, I didn’t just go to Florida to scuba dive. I actually spent more time at the conference than in the water.
GE has an interesting business strategy. If you haven’t noticed, they’ve sold off or are selling all their consumer divisions. GE was big with consumers. They built the electric toaster business. They invented the self-cleaning oven. They sold all sorts of appliances directly to consumers for lots of years. It was a huge business for them.
And now it’s gone. They’ve sold their entire appliance business to Electrolux in Sweden. They only thing left is some light bulb business, and I’m betting that doesn’t last through 2015.
Where are they going? The Internet of Things (IoT), or, as they call it, the Industrial Internet.
They believe that the world is changing and that they have a massive opportunity to take a leadership role in a new paradigm. Jeff Immelt, the GE CEO, expressed that new paradigm like this:
SMART MACHINING + ENABLING TECHNOLOGY + ANALYTICS = EXCEPTIONAL RESULTS
What that equation means is that if you equip machines with smart sensors, you securely collect that data someplace where it can be processed using advanced analytic software so you can achieve exceptional results. Results like a 1% decrease in fossil fuel usage. 1% may not seem like a lot, but for things like aircraft engines and locomotives, it’s a massive amount of money for their customers (and GE).
They detailed at the conference how a single engine on a flight from Orlando to Chicago now generates 2 Terabytes of data. Analysis of all that data has vastly improved the in-service time at Delta airlines. They have decreased the number planes out of service from an average of thirty-five to around fifteen or so. That’s almost a 60% decrease in out-of-service airplanes, meaning they can probably afford to drop the number of planes in their fleet by one or two. I haven’t checked the prices on a 737 or an MD88, but I would bet they’re not cheap to own.
GE is going after results like this in several markets like transportation (aviation, rail), medical and oil and gas. They have the expertise to equip the machinery with sensors, the technology to move the data securely, and the advanced analytic engines to identify actions to generate those exceptional outcomes. It really does look like a good strategy to me.
So what does that mean for all of us who develop, market and sell less glamorous industrial equipment like scales, valves and drives?
The IoT for consumers and the larger market is a question mark. It’s moving fast and what’s going to happen tomorrow won’t really be clear until tomorrow comes. But in our world, that’s not entirely true. Our industry moves slower and more methodically. We don’t drop everything we’re doing today when a new technology appears.
What’s clear to me is that a lot of what we do isn’t going to change. There will still be logic controllers and they’ll still control automation devices with traditional networks like EtherNet/IP, Profinet IO, Profibus DP, DeviceNet, Modbus TCP and all the rest. But what is going to change is that there is going to be a lot more demand to do things like GE is doing in medical, transportation and energy, only on a smaller scale. We’re going to need to move more data from the lowest-level devices to places where advanced analytics can be used to increase quality, machine reliability and operating efficiencies in ways that we haven’t yet seen.
And moving more data means that the kinds of products that RTA is building, products to securely move data into the enterprise, will be needed long into the future. We’re going to be there to help you succeed as technology shifts over the next few years.