The adoption of Industrial Internet of Things (IIoT) systems for business continues to grow, and in a study of manufacturing, transportation, and oil and gas organizations, a stunning 86% say that they are adopting IoT solutions, and 84% believe they are very and extremely effective.
The global IIoT market is expected to reach a value of close to $1 trillion (not billion!) by 2025, according to a Million Insights report released this month, and while many large enterprises continue to invest in R&D, not all are succeeding given the complexity, ongoing change and collaborative nature of the brave new world of connected systems.
The IIoT is a puzzle worth solving.
Recently, Rocket Wagon Venture Studios (RWVS) announced they have named Jim Gagnard as the Managing Director of their latest studio, focused on IIoT applications.
We caught up with Jim, whose experience in connected systems has been manifest in the development of a company he sold to GE, as well as in non-profit work, most recently as Chairman of the Illinois Technology Association and Member of the Midwest IoT Council.
What attracted you to the venture studio model and RWVS’s in particular?
IIoT is going to affect every industrial company, positively or negatively. The Rocket Wagon Venture Studios model is a compelling way for corporations to have direct access to early-stage IIoT technology with minimal development risk.
The IIoT is vast - what specific kinds of technologies, projects and companies are you considering as part of the new studio?
The RWVS strategy to organize by vertical market is essential because the cyber-physical market is so vast. Initially, we will be targeting industrial companies who have begun the “IoT Journey.” The Industrial Studio plans to “listen” to its corporate investors and proven entrepreneurs to identify our initial projects.
You've been active in Industrial automation technologies and the IIoT for a long time - what has changed?
I started when IIoT was M2M. We sold Closed-Loop architecture solutions that were used to remotely monitor and manage devices. We now have cheaper and smarter devices, cheaper and broader connectivity, seemingly unlimited cloud services, and greatly improved analytic capabilities.
We are evolving from a product-centric IIoT scenario to a much more data-centric IIoT scenario. IIoT will be defined by Open Systems and Systems of Systems. The IIoT model will use an Event-Driven, Publish, and Subscribe architecture.
What are the most critical challenges today for enterprises planning to adopt or adopting IIoT solutions?
As we all know, the IIoT is a broad, complex technology that, if implemented properly, can generate tremendous value for any industrial company. Every company must minimize the same risks – Market/Systems/Structure/Team/Technology – in order to successfully implement any new technology.
Why did HP miss the PC market? Why did Kodak miss the digital revolution?
For most industrial companies, the system is focused on extending what currently works and satisfying the customer.
The traditional company structure (organization, compensation, etc.) is designed to efficiently support incremental innovation and support the systems in place today.
Teams often drive-out serial innovators.
Let’s consider the Lake Wobegone Effect. Most companies think that all of their “children” (Teams) are above average. When they don’t know something, they assume it is easy to figure out. These Teams also have a strong tendency to drive-out innovators.
Are efforts to standardize on frameworks, protocols, security and data sharing and integrity policies working? If so, which organizations are leading in this area?
I think that it is too early to tell what is working and what is not. We need more time and more real-world implementations to cohesively address security and privacy issues.
How can start-up entrepreneurs create meaningful and scalable innovations that will be valued by the very large enterprises with high expectations and significant demands?
In this regard, the start-up challenge has not changed. What problem do I solve? Is it a real problem? What solution am I choosing to provide? And most importantly, what value does the customer receive if they use my product?
For IIoT, entrepreneurs need to define a reasonable “problem set” so that they can deliver clear value to the customer. Focus will be important. In fact, RWVS is being organized vertically for this very reason.
How will RWVS's IIoT vertical studio identify, select and support start-ups? What is your criteria for the entrepreneurs?
Initially, we plan to secure four to six corporate partners who will invest in the IIoT Studio. They will do this to contribute industry specific IIoT ideas to the studio for further development and gain early access to other IIoT ideas that will benefit them.
Ideas developed by individual entrepreneurs will be vetted by the studio team. In general, we need to satisfy three core questions. What is the pain that the idea will address? Is the proposed product idea viable from a technology and market perspective? Does the proposed idea generate real value for industrial companies?
What is your value proposition to large enterprises or technology ecosystem participants - how will RWVS serve them?
We are actively seeking large industrial companies who have implemented IIoT Innovation Labs or are considering doing so. All large companies will face five risks discussed earlier as they endeavor to develop and implement IIoT solutions.
To minimize the risks, the studio team will be comprised of a combination of engineers, developers, architects, and implementation consultants who all possess entrepreneurial, IoT, and industry experience.
These seasoned entrepreneurs collectively bring their experience to helping new corporate or individual product ideas get to market faster. They have “been there and done that” and help make decisions quicker while avoiding many of the strategic mistakes and the System-Structure-Team-Technology-Market risks that account for why so many new technology ideas fail.
Where do systems integrators fit into the innovation equation?
All ideas deserve evaluation regardless of the source. We will seriously consider all IIoT ideas whether they emanate from an individual entrepreneur, a systems integrator, a consulting firm, or a corporation.
Security and connectivity are mission critical to IoT and IIoT deployments - how will RWVS enable investment in these infrastructure/support categories?
IIoT security is both a technology issue and a process issue.
The stakes are high from many perspectives within the IIoT. The technology imperative starts with the IIoT product manufacturers who must include proper basic security in their solutons. From a process perspective, industrial companies should separate their industrial control system networks from the Internet.
RWVS supports Fbest practices, including 1) looking to open standards that tend to be more secure, 2) using private keys inside devices, 3) never trusting 3rd party devices without fully understanding their security characteristics, and 4) implementing network monitoring techniques.
The IIoT studio team will maintain the appropriate staff and use the appropriate support resources to build secure products.
Edited by Ken Briodagh