Experts say companies are challenged by the volume of data IIoT systems generate, but it's a critical piece to figure out because the data can be as valuable as the product a company makes.

The idea that industrial devices and processes should be connected may be as old as Henry Ford's assembly line. Certainly the rise of factory robotics would have been all but impossible were the machines not connected to some kind of process controller. In that way, the Internet of Things (IoT) is old technology in a new package.

But what's revolutionary about IoT, say participants at a Mobile World Congress panel on the Industrial Internet, is the sheer volume of data that IoT throws off and how ill-equipped most companies are to deal with it.

Mobile World Congress, going on this week in Barcelona, is historically where the world's wireless telecom carriers gather with their suppliers. In recent years, though, MWC has become just as much about the devices and services that connect to wireless networks—which means you're as likely to see a poster about Pokemon Go or a booth of smartphone covers as you are to learn about continent-scale fiber backhaul. Focus, it seems, is for amateurs.

The IoT—be it consumer, industrial, or automotive—is one of the major themes this year, as is the imminence of 5G networks. The two are related: For billions of communicating devices or sensors to be connected, you'll need up-to-date network architectures, fast processors, and speedy connections to and from the cloud. All of those are promised by 5G networks, the first public trials of which are planned for this year.

IIoT challenges

Technology providers on the Mobile World Congress Industrial Internet panel detailed the struggles they have getting clients connected. Where old-style process controls were essentially one-way connections, contemporary sensors in an IoT environment throw off enormous amounts of data. And even big companies are taken aback.

As with all transformational IT projects, IoT first happened in out-of-the-way corners of companies, where a failure wouldn't hurt much. Mike Troiano, vice president of IoT Solutions, a business unit of AT&T Mobile & Business Solutions, says his company was selling to lines of business in large companies at the time. As the impact of what IoT could do became apparent, he says, attention moved upward to chief technology officers and chief marketing officers, and ultimately to CEOs. But executive attention doesn't solve the problem.

The real problem, it turned out, was that the very clients that might have been expected to have their technical ducks in a row turned out not to be so ready. "One of the biggest surprises when you work with Fortune 500 companies is how far behind they are in their data readiness," says Humera Malik, founder and CEO of Da-Uh, a provider of IIoT analytics solutions. The data is so disparate, and they don't have a way to put it together. There's a huge opportunity in putting data together in a way to make the data useful."

The business models are going to evolve into what you're going to do with data sets. You put the sensors in cities, so the cities have access to the data, but the cities can go monetize that data. Mike TroianoVice president of IoT Solutions, a business unit of AT&T Mobile & Business Solutions

Pulling that off frequently requires outside help. "In some cases, we have customers with millions of assets globally," says Troiano. "You've started to see a whole chain of ecosystem partners. One of the business challenges is less about technology and more about business coordination and ecosystem partners."

Not all companies are good at coordination and partnering. Sometimes it's countercultural. Sometimes people will heroically try to step up, even though they may have the wrong skills

"The culture in organizations needs to change," says Enrique Herrera, principal for connected services at OSIsoft, a provider of real-time data management solutions. "Understanding how the data is gathered or the operational context for it isn't there. … A lot of industrial automation engineers fancy themselves as application developers, but they're not."

As a result, Troiano says, responsibility for IoT has moved to "centers of excellence," where large companies gather experts from across the lines of business to centralize expertise. "IoT is not about IT departments anymore," adds Malik. "It's gone beyond that. We're working with process engineers, the heads of maintenance. In some places, there is no human involved. We're getting data from robots and feeding data back to robots."

IIoT data creates value

Several panelists dug deep into the idea that the data thrown off by sensors could be as valuable an asset—if not more so—than the nominal product a company makes.

"I think the business models are going to evolve into what you're going to do with data sets," says Troiano. "You put the sensors in cities, so the cities have access to the data, but the cities can go monetize that data" and use it to more efficiently deliver services.

Thomas Engel, manager of technology innovation strategy at the John Deere European Technology Innovation Center, agrees. "We still sell most of our products," says Engel, "but with that, we create value. If we create additional value through connectivity, we need to get our fair share of that."

Engel adds that all of Deere's large equipment comes heavily instrumented for remote connectivity. "We learn much more [about] how our machines are used and make design decisions. Our customers probably don't fully understand the value that they have. We give the customer the data, and then he can decide who to share the data with. But it all goes through our platform and operations server and back to our machine."

Some services, such as Uptake, collect data thrown off by IoT systems and turn it into recommendations via a predictive analytics solution. But most businesses have more than one vendor to help collect and draw conclusions across an enterprise, points out Brad Keywell, Uptake's co-founder and CEO.

Uptake works with construction equipment maker Caterpillar, going to Caterpillar's clients and helping them with data. Caterpillar "sell[s] machines, they sell parts, [and] I believe they have to sell insights," Keywell says. And if Caterpillar doesn't, he adds, one of its competitors will.

IDC report: 25 analytic and information management technologies that support the IoT Download now

Who owns IIoT data?

At some point, the question of who owns the data the Industrial IoT throws off will come up. Is it the equipment vendor or the customer who's putting it into use? The answer seems to be, it depends. "There are two different kinds of data—machine and agronomic data," says Engel. "For the machine data, we would like to know how this machine is used, and customers have no problem with that. For the agronomic data [such as data about land management for crop production], customers are much more sensitive. On the agronomic data, we say, ‘You own it.' We know that some of our smaller startup companies say, ‘We share that data with you.' We don't go that way. At the moment, we say the customers own the data."

For a company like Uptake, the data may belong to the customer, but the results of the analytics are what really counts. "You don't need to own the data to create insights across industries," says Keywell, illustrating how insights from a tire manufacturer can generate value in construction and transportation businesses.

And if that data can be used to glean business-changing insights, it ought to be treated that way. Keywell believes that most companies vastly undervalue their data and need to keep a closer eye on keeping it reliably flowing. Many data-reliant companies—and what company isn't?—make significant investments to make sure their corporate networks stay up and running efficiently. But when the data itself becomes an asset, the investment hasn't been there.

"Think about the resources that most companies provide to a network operating center," says Keywell. "Think about whether that same approach applies to data integrity. It has to be, very soon. The best companies who are creating insights will protect the quality of the data just as closely as the operation of their network. Every industry and every use case requires knowledge of the data as it comes in."

For Engel, the end product of all that data in his industry has a very tangible result.

"The world needs to double its food output," he says. "It's more or less mandatory that we do the data analytics. It's a prerequisite so that we can feed the world's population in 20 to 30 years."

The IIoT: Lessons for leaders

Responsibility for IoT has moved to "centers of excellence" where large companies gather experts from across the lines of business.

Many companies are behind in data readiness, but significant opportunity exists when data is put together in a way that makes it useful.

Data generated by IoT sensors could be as valuable an asset—if not more so—as the product a company makes.

Related links:

The Industrial IOT Improves the End User Experience and Creates New OEM Revenue Streams

ABB, HPE and Rittal unveil Secure Edge Data Center to drive digitization of Industrial Plants

A quick start for Manufacturing IoT using the new Industrial IoT Starter Kit

HPE partners with ABB for industrial IoT and data analytics

Industrial digitization and IoT discoveries at HPE Discover

Success (and failure) in Industrial Digital Transformation Projects

HPE IoT Innovation Labs: A Powerful New Incubator for Your IoT Transformation