Hannover Messe, the world biggest industrial fair held in Germany, brought Satya Nadella from Microsoft on stage. He didn’t speak about how much Microsoft earned each day from the Office, Windows, and Server software, but He spoke about the core. It means he talks about data.
The data made out of cars, aeroplane engines, elevators and other industrial products, supplying the raw material to turn dumb manufactured goods into what he calls “systems of intelligence”. Microsoft has been making themselves as a center of Industrial Internet of Things which known as IIOT that will be wider that software company.
Data received from all connected device will create new “digital feedback loop”. It will make it possible to apply the same data science that has been developed in other fields, says Mr Nadella. This, he adds, will lead to the same “malleability and analytical power and predictive power in industrial equipment that you had in software products for the mobile web”. The result could be better controls, lower costs and new ways of generating revenue by turning hardware sales into service opportunities.
The industrial Internet will have $225 Billion market in terms of annual revenus by 2020. GE also estimated that some $100 billion will go to small handful companies that provide the central platform for the industrial internet in the new Industrial software market
Only few companies know the business value of data they collected. But today, asset-intensive companies such as power utilities, mining concerns and manufacturers are finally starting to wake up to the potential. Flexible cloud technology has made manufacturers easier in introducing new application.
With the industrial internet market starting to take shape, a gold rush mentality has taken hold in the software world. Venture capital investment in companies involved in the industrial internet of things jumped 76 per cent last year, to more than $1bn, according to CB Insights, the research firm.
Mr Nadella, for instance, rejects the suggestion that Microsoft and GE will be head-to-head competitors. But he adds, of the manufacturing companies: “Some of them maybe have broader ecosystem agendas.”
Even narrow applications, if successful, can provide a springboard that puts companies at the centre of a new emerging market, he says, reflecting the restless evolution of the tech world.
“One person’s platform is the other’s person’s app,” the Microsoft boss says. “That has played out in consumer internet, and it will play out in the industrial internet.”