PTC’s LiveWorx event last week showcased all things Internet of Things (IoT): technology, business processes, benefits/drawbacks, change/resistance, new opportunities and old challenges.
There’s a lot to process but these are my key takeaways from 2ish days in IoT-land:
PTC is betting big on IoT, investing hundreds of millions of dollars to acquire technology and people that can help it dive head-first into the deep end. No slow build-up here; PTC is going from 0 to 100 mph in Internet-seconds when it comes to IoT. Since 2013, it has acquired ThingWorx and Axeda for $112 million and $166 million, respectively, both small in revenue but innovative. ThingWorx is a platform on which companies build and run applications designed to leverage the IoT; Axeda developed solutions to securely connect machines and sensors to the cloud. Together, they “collect and organize the world’s machine and sensor data”, according to PTC.
At LiveWorx 2015 PTC announced that it is adding ColdLight, whose Neuron solution analyzes data to detect and predict failures and prescribe solutions. The deal was valued at $105 million for a company with revenue of perhaps $10 million (a Philadelphia paper said ColdLight was valued at $30 million after its latest round of venture capital.) Predictive analytics and corrective action is big, and likely to be where the IoT money is for the foreseeable future — if a plant can keep producing and not coping with a forced shutdown due to a failure, that’s million of dollars in protected revenue per day. It’s why Bentley bought Ivara and C3global, ESI bought Picviz, and the driver behind some of the big data initiatives in PLMland.
Each acquisition brought only a tiny bit of revenue to PTC and PTC’s total IoT-related revenue is, today, also still tiny. One concern voiced by investors at this event and by longtime PTC customers at last year’s PTC Live, which included introduced the IoT strategy to a broader audience, is that PTC is once again going after the shiny new opportunity and leaving core CAD and PLM customers to deal with a slower R&D pace. EVP of CAD products Mike Campbell tried to reassure customers that this isn’t the case, laying out a roadmap that continues to push Creo forward — and that ties IoT technology into Creo. Today your version of Creo (assuming you’re up-to-date) includes Performance Advisor, technology that automates issue reporting, lets admins track uptime and other usage stats — and lets PTC determine which issues cause the most user pain. (That’s IoT in action, people.) Version 1 is out now; V2 comes next month.
What you see in the photo above is CEO Jim Heppelmann talking about the way PTC hopes plans to shake up the CAD/PLM world with IoT: digital twins. At LiveWorx, Mr. Campbell showed off an instrumented mountain bike that closed the loop between design, operations and services. Mr. Campbell sees data coming back from a smart, connected product (like this bike) to show designers how it’s being used in the real world — a link to the product after manufacturing that’s often missing. He sees this combo of IoT, CAD, big data and augmented reality enabling engineering to optimize the next version of the product based on real usage information, and predict when and how it needs to be serviced. This is a technology proof point today that will be made real over the next few years. It’s cool — imagine being able to run your simulation virtually and then recreate it digitally, all from the comfort of your office. You may want to take that mountain bike out for a spin, but I bet you’d rather run that drilling machinery virtually.
Back to IoT. Speaker after speaker tried to both excite about the possibilities and reassure attendees that the concept of connectedness, grabbing lots of data about lots of things isn’t really new in an industrial setting. What’s exciting the imagination (and shareholders, to a large extent) is the potential to tap into millions and billions of consumer devices. Nest thermostats, Wink lights, sensors to tell an app on your phone whether you left the garage door open, all could create great business opportunities if only one could figure them out. LiveWorx had a lot of business/tech consulting types in attendance, many of whom were looking for these kinds of businesses to start.
Grounding all of this were terrific presentations from industrial companies, many of whom have been using ThingWorx or Axeda technology for years. The common themes were
- a specific business problem to solve (poor service performance, dissatisfied customers, expensive roll-the-truck-before-knowing-what-the-problem-is)
- the conviction that there was no other way to solve this problem — and that connecting devices to gather sensor data for analysis was also a way to create new services offerings
- these data-based new offerings cemented the customer relationship, differentiating this supplier from peers by being proactive, cost-effective and more performant
- that implementing IoT is hard, threatening long-time behaviors with real data that replaces “I think” seniority
- this can start anywhere, and doesn’t have to have a magic launch. One speaker had a huge installed base of legacy systems, some connected, some not, some via phone modems, cell signal, WiFi. Thinking through the offering, benefit to customer, and tech hurdles enabled him to blend real-time with on-demand and 0n-record models. All are useful, and each deals with unique customer sensitivities about sharing data and access
- any IoT effort needs to create many levels of benefits — end users (customers) need to understand why their data is being captured, how it’s going to be used and what is safeguarding it; internal users need to be able to create real-time predictions, run simulations, optimize and so on, with tools that can handle the flood of data and yet be easy to use
- everything IoT-related needs to be as straightforward as possible in order to succeed. Dashboards, easy-to-build apps that synthesize data, connectors to the many standards out there — these companies aren’t experts in sensors or protocols and need a platform like LiveWorx to smoothe these connections.
Many of the customers I saw at LiveWorx started down this path a decade ago. They started when there were no ThingWorx platforms and easy-to-implement apps; their job was nuts and bolts IT, connecting sensors and data loggers and algorithms. All are a bit jealous of people just getting to this now — but, make no mistake, they are convinced that they have a competitive advantage over companies starting in 2015.
Also at LiveWorx, PTC announced a new partnership with ServiceMax to give customers access to solutions built atop ServiceMax’s cloud-based field service management, execution, and mobile delivery capabilities; the release of ThingWorx 6.0 and the development of ThingWorx Converge, which uses an IoT hub and more out-of-the-box tools to simplify collecting and adding real-time data into enterprise systems and business processes.
So what’s the magic? The data is already there, in many cases. It’s trapped in a data logger or perhaps transmitted but ignored because it’s all coming faster than we can deal with it. If the clutch in your car starts slipping, you won’t know about it until the orange idiot light comes on, but that’s not specific enough to let you know if you have to pull over stat or can limp into a service bay somewhere. If your car were smart and connected, it might have a digital representation –yes, your specific one with all of the options you selected, knowing which factory produced each component– somewhere for diagnostic purposes. Your data is aggregated with everyone else’s and the manufacturer can say with some certainty that you have 50 miles to get to a service bay. Or, even better, tell you months in advance that you’re likely to see a problem in a certain number of miles, so you can be proactive.
That’s the magic, and the potential power of the IoT. Combining sensors designed into products (something also on PTC’s radar) with the means to grab, aggregate, analyze and present that data is incredibly powerful. It feels like we’re at the very beginning of a wave that’s building. Some of the companies that spoke at LiveWorx are already on their surfboards, some are trying to find them and most are somewhere in between. PTC plans to be right in the middle of it all.
A word: IoT is an overhyped buzzword, since most people think first of consumer gadgets. I like IIoT, the Industrial Internet of Things, much better since it’s more focused. Egg cartons that tell you how many eggs you have in the fridge are a frivolous proof of concept for the cool kids; real IIoT or Machine 2 Machine (M2M) applications have been around for decades and make a real difference in the way manufacturing is done. We’ll keep using IoT when writing about PTC because that’s what they prefer, but …