The internet of things (IoT) is all the rage, as smart cars, smart devices, and wearables all collect personal data from users and provide massive amounts of complexity to the current internet usage. But the internet of things is not just for step-counting house wives and Audis. These days the IoT is becoming big business as companies begin to take advantage of the potential to have interconnectedness in manufacturing processes. The sign of the changing tide is the sudden and massive investment by SoftBank Group into OSIsoft LLC.
Companies like GE and others have been investing big dollars into software that optimizes and controls the manufacturing process. The recent operating system released last year (Predix) is designed to quickly analyze data from a number of machines and make real time corrections to keep plant production moving without losing the ultra expensive machinery that makes factories tick. GE also is buying up software companies, such as the recent acquisition of ServiceMax last year.
OSIsoft is a private software maker that creates industrial applications to run production plants and factories on the IIoT, or the Industrial IoT. Their flagship software product is a software platform that “enables your business to capture and leverage sensor-based data across the enterprise to improve efficiency, sustainability, quality and safety.” The software allows for data collection from lab equipment, controls, other custom software, or even, dare we say it, manual labor. The software then allows users to access the data and process it to look for areas of concern such as when equipment is in need of maintenance, or comparing performances of different tools in different circumstances. Overall, the company has carved out a comfortable niche in the market space ($400 million in sales).
The SoftBank investment is a bet on the future. The IIoT is only going to continue to grow, and SoftBank is convinced that the way forward is to embrace technology change. In fact the CEO of SoftBank, Masayoshi Son, has famously stated that the IoT is a 1 trillion device market, and clearly wants to use some of SoftBank’s cash to get into the sphere. He may not be that far off, given the meteoric rise in IoT applications for personal use. The IIoT is equally viable in terms of devices and software, and so the investment makes good sense for SoftBank.
For onlookers, it also signals a sea-change in the way companies are looking to do business. When companies are willing to fork over this kind of cash, there are good reasons to follow the industry when it comes to business planning. The IoT provides a place where scalability is virtually limitless, given a large enough number of customers, and the nearly infinite options available for devices. The IIoT, as a subset, may have more limitations in terms of growth, but the devices themselves and the widespread need for continual service and use will make it a more stable marketplace for companies. It appears that SoftBank’s stated strategy is being implemented, and to a great degree of success.