IOT Field Notes: Whose Cloud is it Anyway? Part 2

Published on Featured in: Cloud Computing

SVP & Chief Information Officer at IDEX Corporation

Strategix cloud hosting solutions provides several attractive benefits for your company by enabling you to consume computer resources as a utility – just like electricity – rather than having to build and maintain IT infrastructures on-premise.  Extending into the cloud should expand your options without adding complexity allowing you to meet changing business needs with greater flexibility.

So even though benefits accrue for everyone, the most impactful value seems to be with component and system manufacturers – the folks that make the equipment. Revenue growth can be more compelling than cost-cutting, especially when significant process change and/or infrastructure build is required. Many, therefore, look to the equipment manufacturers to make the leap; they are the ones that can add the sensors in the most economical manner.

One powerful tactic here would be partnering; component and system manufacturers working together to spec in sensors, data collection, and communications. R&D costs could be shared, spreading the risk a bit; the bigger conversations will be around technology sharing and exclusivity. Yes, a few more complications, but finding a way to co-develop these new capabilities could break the inertia and get things rolling.

It’s All About the Plumbing

Of course, one could argue that eventually, all participants in this value chain will get there in the end. Ubiquitous data availability, universal monitoring, and predictive maintenance down to the component level will be, at the end of the day, table stakes; everyone will have it, and true differentiation will be in the services provided.

So what is the value of being a first mover? Remember that underneath all is the data – and the APIs required to see it, move it, and share it. If your firm can take a significant part in defining the formats, standards, even the storage of the data in your particular market ecosystem, you can have a strong voice in the eventual definition of the industry standard.

The long-term value for anyone and everyone in the value chain is open access to the data; you won’t make money charging for data, you will survive and thrive only by leveraging that data. Especially in the early days, anything built that is “customer facing” (apps, services, web sites, etc.) and revenue-generating is temporary at best. It’s critical to focus on the use of the data, and the free-flow of data through the pipes between the members of the value chain.

If you really want to have a say in that, have any level of control over that conversation, best to get involved early. And there’s nothing earlier than “first mover”.

What about Distribution?

The dealer / distributors present in many industrial value chains have a say here as well – they are typically data savvy, focused on smooth transactions at scale, and very interested in making things “sticky” between themselves and their customers. In addition, Dealers can clearly benefit from incremental volume plus the increased service and training demand that can come from a better informed end customer. Dealer / distributors can and should be looked at as the connecting glue that can broker, participate, even lead conversations around investment, technology, and implementation.

Next Steps

I am having a lot of fun working these issues in a number of industrial markets and niches – and every one has a unique story, and a different “best approach”. There is no one “best practice” for answering this question – just examples from other value chains, and imaginative conversation to find that riff that makes the most sense for your particular value chain.

I’ve got plenty of “beer conversations” stories to share … drop me a line and let’s talk!

Also posted on cazh1.com; check out this series of posts on IOT Field Notes

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